Unit-1

What are human Resources

The term ‘Human Resources’ may be defined as the total knowledge, skills, creative abilities,
talents and aptitudes of an organization’s workforce , as well as the values ,attitudes,
approaches and beliefs of the individuals involved in the affairs of the organization. It is the sum
total or aggregate inherent abilities, acquired knowledge and skills represented by the talents
and aptitudes of the persons employed in an organization.

Meaning of Human Resource Management

Human Resource management is that branch of management which is concerned with the
recruitment, selection, development and the optimum use of the employees.

Definition of Human Resource Management

According to Dessler- Human resource management is the process of acquiring, training,

appraising, and compensating employees, and attending to their labor relations, health, safety,
and fairness concerns.

Nature of Human Resource Management

1. It is related with people- Personnel management is concerned with human resource. Its
scope extends to employees working in an organization at all levels. It includes
recruitment of employees, selection, training, job evaluation, determining of
remuneration, provision of good working conditions etc.
2. It is a pervasive function- Pervasive here means that the function of personnel
management is performed at all levels of management. Managers at all levels perform
this function with respect to their employees.
3. It is a group of personnel activities- Under personnel management comes several
activities concerning employees. It is therefore called group of personnel activities. Main
personnel activities are recruitment, selection, training, job evaluation, fixation of
remuneration etc.
4. It requires the knowledge of psychology- Personnel management is deals with the
human resource of production. Every individual working in an organization has his own
desires, expectations and tastes. In order to get maximum work out of his subordinates ,
a manager has to keep in mind all these things.
5. Inherent part of management- This function is performed by all managers rather than
by the personnel department only.
 6. Basic to all functional areas- Personnel management permeates all the functional areas
of management such as production, management, financial management and marketing
management etc
7. People Centered- Personnel management is people centered and is relevant in all types
of organizations. It is concerned with all the categories of personnel from top to the
bottom of the organization.
8. Continuous Process- Personnel management is not a ‘one shot’ function. It must be
performed continuously if the organizational objectives are to be achieved smoothly.

Scope of Human resource Management

1. Human resource planning i.e. determining the number and kinds of personnel required
to fill various positions in the organization.
2. Recruitment, Selection, and placement of personnel i.e. employment function.
3. Training and development of employees for their efficient performance and growth.
4. Appraisal of performance of employees and taking corrective steps such as transfer
from one job to another.
5. Motivation of workforce by providing financial incentives and avenues of promotion.
6. Remuneration of employees. The employees must be given sufficient wages and fringe
benefits to achieve higher standard of living and to motivate them to show higher
productivity.
7. Review and audit of personnel policies , procedures and practices of organization.
8. Social security and welfare of employees.

The National Institute of personnel Management, Calcutta has specified the scope of HRM
as follows:
1. The Labour or Personnel Aspect: This is concerned with manpower planning, recruitment,
selection, placement, transfer, promotion, training and development, lay-off and retrenchment,
remuneration, incentives, productivity, etc

2. Welfare Aspect: It deals with working conditions, and amenities such as canteen, creches,
rest and lunch rooms, housing, transport, medical assistance, education, health and safety,
recreation facilities, etc.

3. Industrial Relations Aspects: This covers union-management relations, joint consultation,

collective bargaining, grievance and disciplinary actions, settlement of disputes, etc.

Importance and Objectives of Human resource Management

1. Effective Utilization Of Resources

Human resource management ensures the effective utilization of resources. HRM teaches how
to utilize human and non-human resources so that the goals can be achieved. Organization
aiming to utilize their resources efficiently invites the HR department to formulate required
objectives and policies.

2. Organizational Structure
Organizational structure defines the working relationship between employees and
management. It defines and assigns the task for each employee working in the organization.
The task is to be performed within the given constraints. It also defines positions, rights and
duties, accountability and responsibility, and other working relationships. The human resource
management system provides required information to timely and accurately. Hence, human
resource management helps to maintain organizational structure.

3. Development Of Human Resources

Human resource management provides favorable environment for employees so that people
working in organization can work creatively. This ultimately helps them to develop their
creative knowledge, ability and skill. To develop personality of employees, human resource
management organizes training and development campaigns  which provides an opportunity
for employees to enhance their caliber to work.

4. Respect For Human Beings

Another importance of human resource management is to provide a respectful environment for
each employee. Human resource management provides with required means and facilitates
employee along with an appropriate respect because the dominating tendency develops that
will result organizational crisis. Hence, all of them should get proper respect at work. Human
resource management focuses on developing good working relationships among workers and
managers in organization. So, good human resource management system helps for respecting
the employees.

5. Goal Harmony
Human resource management bridges the gap between individual goal and organizational goal-
thereby resulting into a good harmony. If goal difference occurs, the employees will not be
willing to perform well. Hence, a proper match between individual goal and organizational goal
should be there in order to utilize organizational resources effectively and efficiently.

6. Employee Satisfaction
Human resource management provides a series of facilities and opportunities to employees for
their career development. This leads to job satisfaction and commitment. When the employees
are provided with every kind of facilities and opportunities, they will be satisfied with their work
performance.

7. Employee Discipline And Moral

Human resource management tries to promote employee discipline and moral through
performance based incentives. It creates a healthy and friendly working environment through
appropriate work design and assignment of jobs.
8. Organizational Productivity
Human resource management focuses on achieving higher production and most effective
utilization of available resources. This leads to an enhancement in organizational goals and
objectives.

9.Human capital
Assisting the organization in obtaining the right number and types of employees to fulfill its
strategic and operational goals

Functions of Human Resource Management

Functions of Human
Resource
Management

Operative Functions
Managerial Functions
1. Employment
2. Training and Advisory Functons
1. Planning
2. Organizing development
3. Remunberation 1. Advice to top
3. Directing
4. Working conditions management
4. Controlling
5. Motivation 2. Advice to
departmental heads
6. Personnel Records
7. Industrial Relations
8. Separation

1. Managerial Functions-The human resource manager is a part of the organizational

management. So he must perform the basic managerial functions.
a) Planning- To get things done through the subordinates, a manager must plan a head.
Planning is necessary to determine the goals of the organization and lay down policies
and procedures to reach the goals.
b) Organizing- Once the human resource manager has established objectives and
developed plans and programmers to reach them. he must design and develop
organization structure to carry out the various operations.
c) Directing- The plans are to be put into effect by people. But how smoothly the plans are
implemented depends on the motivation of people. The direction function of the
personnel manager involves encouraging people to work willingly and effectivel;y for
the goals of the enterprise.
d) Controlling- Controlling is concerned with the regulation of activities in accordance with
plans, which in turn have been formulated on the basis of the objectives of the
organization. It involves performance appraisal, critical examination of personnel
records and statistics and personnel audit.

2. Operative Functions- These are those tasks or duties which are specifically entrusted
to the human resource or personnel department.

a) Employment- The first operative function of the human resource is the employment of
proper kind and number of persons necessary to achieve the objectives of the
organization. This involves recruitment, selection, placement etc.
b) Development- Training and development of personnel is a follow up of the employment
function. It is a duty of management to train each employee properly to develop
technical skills for the job for which he has been employed and also to develop him for
the higher jobs in the organization.
c) Compensation- This function is concerned with the determination of adequate or
equitable remuneration of the employees of the organization for their contribution to
organizational goals. The personnel can be compensated in terms of monetary as well as
non-monetary rewards.
d) Working Conditions- Merely appointment and training of people is not sufficient, they
must be provided with good working conditions so that they may like their work and
work-place and maintain their efficiency like health, safety, and comfort of the work-
force etc.
e) Motivation- Employees work in the organization for the satisfaction of their needs. In
many of the cases, it is found that they do not contribute towards the organizations
goals as much they can. The human resource manager helps the various departmental
 managers to design a system of financial and non-financial rewards to motivate the
employees.
f) Personnel Records- The human resource department maintains the records of their
training, achievements, transfer, promotion etc.
g) Industrial Relations- These days the responsibility of maintaining good industrial
relations is mainly discharged by the human resource manager. The human resource
manager can help in collective bargaining, joint consultation and settlement of disputes
if the need arises. The human resource manager can do a great deal in maintaining
industrial peace in the organization as he is deeply associated with the various
committees on discipline, labor welfare, safety, grievance etc.
h) Separation- The organization is responsible for meeting certain requirements of due
process in separation, as well as assuring that the returned person is in as good shape as
possible. The human resource manager has to ensure the release of retirement benefits
to the retiring personnel in time.

3. Advisory function- Human resource manager has specialized education and training
in managing human resources. He is an expert n his area and so can give advise on
the matters relating to human resources of the organization.

a) Top Management- Personnel manager advises the top management in formulation and
evaluation of personnel programmes, policies and procedures. He also gives advice for
achieving and maintaining good human relations and high employee morale.
b) Departmental Head- Personnel manager offers advice to the heads of various
departments on matters such as manpower planning, job analysis and design,
recruitment and selection, placement ,training, performance appraisel etc.

Importance of HR in hotels
1. Human resource is a living factor- Employees do not possess only bodies, but also have
souls. They possess thinking capacity and they also have feelings and emotions. They
understand how they are being treated and give the response accordingly. Employees must
be treated properly. Dignity of the employees must be maintained and then only they will
feel like doing their jobs sincerely.
2. Human resource is important because it can help in increasing production and
profitability- Productivity of other factors of production like land, materials, machines, has
an upper limit which can not normally be exceeded. However, productivity of labor has no
such upper limit. Employees can increase production provided they have will and
determination to do so.
3. Human resource is involved in all important activities carried out in hotel- The work of
planning of the various activities which are carried out in hotels, A good plan is necessary
for the efficient and effective working of the hotels. Managers working in the hotels do the
forecasting, take decisions and prepare plans. Human resource is also necessary for
implementation of plans. A plan, however good it may be , will not give the expected results
unless the various phases of the plan are properly completed and various activities are
carried out in a co-ordinate manner. In other words, it is the human resource which helps in
preparation of plan and execution of plan and so human resource is regarded as an
important resource in any organization.
4. Human Beings are unique- They differ from each other in respect of many things like
appearance, height, intelligence, way of thinking , abilities , skills etc. Their behavior
depends upon their needs, motives, impulses, feelings and emotions. It becomes necessary
to treat them very carefully. The willing co-operation from them is required to be obtained
by satisfying their expectations and by taking them into confidence. If they feel they are not
treated on equality basis they may not take interest in the work, but may remain absent,
may leave the organization or may react in a violent way. Those who use the human
resource have to remember this and must take maximum efforts to obtain the co-operation
from them.
5. For optimum use of physical resources- For the success of any hotels the physical resources
like materials, machines, space , money etc. must be used in the efficient manner. Use of
these resources is done by persons working in hotels. They may use the resources to the full
extent or may use them partially. If the resources are not used fully , there will be wastage
of them and for the amount invested in these resources, no sufficient return will be
available to the owners.
6. Important assets of hotels/organization- When an organization grows in size , it needs
more persons at the higher level to act as executives or managers. Such need can be met by
identifying persons from the present staff who are capable of shouldering more
responsibility and by providing suitable training to such persons. These persons develop the
capacity to face the rapidly changing environment either by conquering the new
environment or by adapting to it and make the business successful.
7. For Innovation and Creativity- Human resource available within the organization/hotel
enables it to compete successfully with other organizations. Product innovation and
technological improvements have become essential for staying ahead of competitors.
Persons working in the hotels make it possible to achieve both these things. They use their
imagination power, intelligence and experience in order to design new types of products
and also to invent new processes and methods of production.
 Approaches to managing HR in hotels

 1. "Hard" HR
 2. "Soft" HR

However, it is important to remember that, in reality, these two approaches are somewhat
academic in nature. In real businesses, an HR department or manager would be likely to adopt
elements of both soft and hard HR, and in many cases would not be interested in the slightest
in the distinction!

The key features of the hard and soft approach to HR can be summarised as follows:

1. Hard HRM

Treats employees simply as a resource of the business (like machinery & buildings)

Strong link with corporate business planning – what resources do we need, how do we get
them and how much will they cost

Focus of HRM: identify workforce needs of the business and recruit & manage accordingly
(hiring, moving and firing)

Key features

 Short-term changes in employee numbers (recruitment, redundancy)

 Minimal communication, from the top down

 Pay – enough to recruit and retain enough staff (e.g. minimum wage)

 Little empowerment or delegation

 Appraisal systems focused on making judgements (good and bad) about staff

 Taller organisational structures

 Suits autocratic leadership style

 2. Soft HRM

Treats employees as the most important resource in the business and a source of competitive
advantage

Employees are treated as individuals and their needs are planned accordingly

Focus of HRM: concentrate on the needs of employees – their roles, rewards, motivation etc

Key features

 Strategic focus on longer-term workforce planning

 Strong and regular two-way communication

 Competitive pay structure, with suitable performance-related rewards (e.g. profit share,
share options)

 Employees are empowered and encouraged to seek delegation and take responsibility

 Appraisal systems focused on identifying and addressing training and other employee
development needs

 Flatter organisational structures

 Suits democratic leadership style

Which is best? Soft or Hard HRM?

Which of the two approaches is better? The answer is – it depends!

The "hard" approach to HR might be expected to result in a more cost-effective workforce

where decision-making is quicker and focused on senior managers. However, such an approach
pays relatively little attention to the needs of employees and a business adopting a genuinely
"hard" approach might expect to suffer from higher absenteeism and staff turnover and less
successful recruitment.
 The "soft" approach will certainly appeal to the "touchy-feely" amongst us who like to see
people being treated nicely! And you can also make a good business case for an approach that
rewards employee performance and motivates staff more effectively. However, the danger of
taking too "soft" an approach is that when all the employee benefits are added up, the cost of
the workforce leaves a business at a competitive disadvantage.

Emerging role of Hr manager in hotels sector

HR manager plays a variety of roles . Earlier the main role of HR manager was to procure and
maintain a committed workforce. But with the passage of time, increasingly critical nature of
problems and challenges in the effective utilization of human beings has elevated the status of
HR manager.

Emerging role of Hr manager in hotels sector

Strategic
Administrative Operative Roles
Roles
roles  Recruiter
 Change
 Policy maker  Trainer
agent
 Administrati developer,
 Strateg
ve expert motivator
y
 Advisor  Coordinator
partner
 Housekeeper  Mediator
 Counsellor  Employee
champion
 Welfare
officer

1. Administrative Role- The administrative role includes policy formulation and

implementation, housekeeping, records maintenance, welfare administration, legal
compliance etc.
a) Policy maker- The human resource manager helps management in the formation of
policies governing talent acquisition and retention, wage and salary administration,
welfare activities, personnel records, working conditions etc.
b) Administrative expert- The administrative role of HR manager is heavily oriented to
processing and record keeping. Maintenance employee files, and HR related databases,
processing employee benefit claims, answering queries regarding leave, transport and
medical facilities, submitting required reports to regulatory agencies are examples.
c) Advisor- The human resource manager perform his functions by advising, suggesting,
counseling and helping the line managers in discharging their responsibilities relating to
grievance redressal, conflict resolution, employee selection and training. Human
resource advice includes preparation of reports, communication of guidelines for the
interpretation and implementation of policies , providing information regarding labor
laws etc.
d) Housekeeper- The administrative role of a human resource manager in managing the
show include recruiting, pre-employment testing, reference checking ,employee surveys
,time keeping, wage and salary administration, pension and benefit administration,
wellness programmes, maintenance of records etc.
e) Counsellor- The human resource manager discuss various problems of the employees
relating to work, career, their supervisors, colleagues, health, family, financial, social etc.
and advises them on minimizing and overcoming problems.
f) Welfare officer- Human resource manager is expected to be the welfare officer. As a
welfare officer he provides and maintains canteens, hospitals, crèches, educational
institutes, clubs, libraries, consumer stores etc. Under the factories act. Welfare officers
are expected to take care of safety, health and welfare of employees.

2. Operative Roles- These roles are tactical in nature and include recruiting, training and
developing employees, coordinating HR activities with the actions of managers and
supervisors throughout the organization and resolving differences between employees.

a) Recruiter-“ Winning the war for talent” has become an important job of the HR
manager in recent times in view of the growing competition for people possessing
requisite knowledge, skills and experiences.
b) Trainer developer, Motivator- A part from talent acquisition, talent retention is also
important. To this end, HR managers have to find skill defeciencies from time to time,
offer meaningful training opportunities and bring out the talent potential of people
through intrinsic and extrinsic rewards which are valued by employees.
c) Coordinator- The HR manager is often deputed to act as a linking pin between various
departments of an organization. The whole exercise is meant to develop rapport with
 divisional heads using PR and communication skills of HR executives to the maximum
possible extent.
d) Mediator- The human resource manager acts as a mediator in case of friction between
employees, groups of employees, superiors and subordinates and employees and
management with the sole objective of maintaining harmony.
e) Employee champion- HR managers have traditionally been viewed as ‘company morale
officer’ or employee advocates. Liberalization, Privatization, and globalization pressures
have changed the situation dramatically. HR professionals have had to come closer to
the hearts of employees in their own self interest.

3. Strategic Roles- An organization’s success increasingly depends on the knowledge, skills

and abilities of its employees, particularly as they help establish a set of, changing core
competencies ( activities that the firm perform especially well when compared to its
competitor’s and through which the firm adds value to its goods and services over a long
period of time) that distinguishes an organization from its competitors. The strategic
role of HR focuses attention on how to enable ordinary employees to turn out extra-
ordinary performance, taking care of their ever changing expectations.

a) Changing agent- Strategic HR as it is popularly called now aims at building the

organization’s capacity to embrace and capitalize on change. It makes sure that change
initiatives that are focused on creating high-performing teams, reducing cycle time for
innovation, or implementing new technology, are defined, developed and delivery in a
timely manner.
b) Strategic Partner- HR’s manger role is not just to adapt its activitries to the firm’s
business strategy, nor certainly to carry out fire-fighting operations like compensating
employees. Instead it must deliver strategic services cost effectively by building a
competent , consumer-oriented workforce . It must assume important roles in strategy
formulation as well as strategy implementation.

Human Resource Planning

Meaning Human Resource Planning

Human resource planning may thus be expressed as a process by which the management
ensures the right number of people and right kind of people , at the right place, at the right
time doing the right things for which they are suited for the achievement of goals of the
organization.

Definition of Human Resource Planning

According to Decenzo and Robbins- Human resource planning is the process by which an
organization ensures that it has the right number and kind of people, at the right place, at the
right time, capable of effectively and efficiently completing those tasks that will help the
organization achieve its overall objectives.

Nature of Human Resource Planning

1. Well Defined Objectives:

Enterprise’s objectives and goals in its strategic planning and operating planning may form the
objectives of human resource planning. Human resource needs are planned on the basis of
company’s goals. Besides, human resource planning has its own objectives like developing
human resources, updating technical expertise, career planning of individual executives and
people, ensuring better commitment of people and so on.
2. Determining Human Resource needs:
Human resource plan must incorporate the human resource needs of the enterprise. The
thinking will have to be done in advance so that the persons are available at a time when they
are required. For this purpose, an enterprise will have to undertake recruiting, selecting and
training process also.
3. Keeping Manpower Inventory:
It includes the inventory of present manpower in the organisation. The executive should know
the persons who will be available to him for undertaking higher responsibilities in the near
future.
4. Adjusting Demand and Supply:
Manpower needs have to be planned well in advance as suitable persons are available in
future. If sufficient persons will not be available in future then efforts should be .made to start
recruitment process well in advance. The demand and supply of personnel should be planned in
advance.
5. Creating Proper Work Environment:
Besides estimating and employing personnel, human resource planning also ensures that
working conditions are created. Employees should like to work in the organisation and they
should get proper job satisfaction.

Process of Human Resource Planning

Objectives of Inventory of Demand and Determine Net

Human Resource Human Resource Supply of Manpower
Planning Skills Forecasting requirements

Redeployment
1. Objectives of Manpower Planning- The ultimate purpose of manpower planning is to
relate future human resources to future enterprise needs so as to maximize the future
return on investment human resources. Manpower planning must be integrated with
the overall organizational plans. Manpower planning should be done carefully as it has
got long-term repercussions. Once the wrong forecast of future requirements of human
resources and the wrong analysis of the available manpower inventory are made, it may
not be possible to rectify the errors in the short-term. Therefore, manpower planning
should be more concerned with filling future vacancies with right type of people rather
than with matching existing personnel with existing jobs.
2. Current Manpower Inventory- Analysis of current manpower supply may be undertaken
by department, by function, by occupation, or by level of skill or qualifications.
Appropriate adjustments in these would need to be made in the light of any foreseeable
changes in weekly hours of work, holidays, leave entitlements, etc. It may be noted that
assessment of demand for the operative personnel presents less problems of
uncertainty and current manpower supply can be adjusted accordingly.
3. Demand Forecasting- A proper forecast of manpower required in the future ( say, after
one year, two years, three years and so on) must be attempted. The factors relevant for
manpower forecasting are as follows
a) Employment needs- The manpower planning committee at the corporate level
should make an examination of number of the employees on the payroll during
the past five years to know the trend within each group. With the help of this, it
would be possible to determine whether a particular group has been stable or
unstable and whether it has been expanding or contracting.
b) Replacement needs- The need for replacement arises due to death, retirement,
resignation, and termination of employees. The examination of replacement
needs may relate to specific manpower groups : supervisory, skilled, clerical,
unskilled etc.
c) Productivity- An important area to which the manpower planning is related is
the improvement in productivity. Gains in productivity add to the growth
potential of the organization and can make possible healthy wage increase.
Gains in productivity will also influence the requirements of manpower.
d) Growth and Expansion- Another aspect relevant for manpower planning is
personnel requirements for growth and expansion of the organization. The
 expansion plans of various plants and divisions should be carefully reviewed to
assess their probable effects on the number of employees required in each
group.
e) Absenteeism- It means a situation when a person fails to come for work when
he is scheduled to work. The rate of absenteeism can be calculated by the
following formula:

Absenteeism= Man-days lost

Man days worked +man days lost

f) Work Study- Work study technique can be used when it is possible to apply work
measurement to know how long operations should take and the amount of labor
required.
4. Supply Forecasting- Along with supply forecasting, it is equally important to forecast the
supply of different types of personnel with the organization at the cut off date of human
resource planning. There are 2 sources of supply of manpower- internal and external.
But internal supply is more important for manpower planning. It comprises of the
employees working in the organization who can be promoted or transferred to fill up
various jobs and when they fall vacant.
5. Estimating the Net Human resource Requirements- The human resource planner must
compare the demand forecast for human resources with the projected internal supply
of human resources before coming to any conclusion. This exercise should be carried
out department and skill-wise to know the deficiencies or surplus of various types of
personnel in future.
6. Action plans for Redeployment or Redundancy- The management ahs to plan for
redeployment and redundancy in case of surplus staff position. If surplus is estimated in
some jobs/departments, employees can be redeployed in other jobs/departments,
where the deficit employees are estimated. The management should also plan for
training or re-orientation before redeployment of employees. Redundancy plan has to
be made if the surplus employees can’t be redeployed.
7. Determining job requirements of job position to be filled`- Job analysis is the
qualitative aspect of manpower planning since it determines the demands of a job in
terms of responsibilities and duties and then translates these demands in terms of skills,
qualities, and other attributes. It helps in determining the requirements of jobs and
qualifications needed to fill these jobs.
8. Employment Plan- This phase deals with planning how the organization can obtain the
required number and right type of personnel. In other words there is a need to prepare
 programmers of recruitment, selection, transfer and promotion so that personnel needs
of various departments of the organization are met timely.
9. Training and development Program- The preparation of human resource inventory
helps in identifying the training and development needs of the organization. Training is
necessary not only for the new employees, but also for the existing employees.
10. Appraisal of Human Resource Planning-After the employment and training programmes
have been implemented, an appraisal must be made of the effectiveness of manpower
planning. Deficiencies in the programmes should be pointed out and the catalogue of
manpower inventory should be updated periodically. Corrective actions should also be
taken wherever it is necessary to remove the deficiencies in manpower planning.

Need for Human Resource Planning

1. Replacement of Persons:
A good number of employees are to be replaced in the undertaking because of retirement, old
age, death etc. So there will be a need to prepare and train persons for taking up vacant jobs in
an enterprise.
2. Labor Turnover:
Labor turnover takes place in all enterprises. However, the degree of labor turnover may vary
from company to company but it cannot be eliminated altogether. There is always a need to
recruit new employees to take up the jobs of those who have left the undertaking.
If the undertaking is able to foresee turnover rate properly then efforts in advance are made to
recruit and train employees so that work does not suffer for want of employees.
3. Expansion Plans:
Whenever there is a proposal to expand or diversify the enterprise, more employees will be
needed to occupy new jobs. In such situations the human resource planning is necessary.
4. Technological Changes:
With research and new inventions, technological changes are coming rapidly. There may be
need to give fresh training to personnel. In addition, there may also be a need to infuse fresh
blood into the enterprise. Human resource planning will be helpful in coping to the new
demands of the enterprise.
5. Assessing Future Requirements:
Human resource planning is also needed to assess whether there is any shortage or surplus
employees in the undertaking. If there is less number of employees than needed, it will badly
affect the work. On the other hand, if more persons are working than needed then it will
increase labour costs, etc. Human resource planning ensures the employment of right
employees.
6. Training and Development of Employees: There is constant need of training and
development of employees as a result of changing requirements of the organisation. It provides
scope for advancement and development of employees through training and development etc.
Thus, it helps in meeting the future needs of the organisation of highly skilled employees.
 7. Fulfill Individual Needs of the Employees: It helps to satisfy the individual needs of the
employees for promotions, transfer, salary encashment, better benefits etc.
8. Helps Formulation of Budgets: It helps in anticipating the cost of human resources e.g. salary
and other benefits etc. It facilitates the formulation of human resource budget for various
departments/divisions of the organisation. So, it may also help in, the formulation of suitable
budgets in an organisation.

Human Resource Planning Factors

Internal Factors
External Factors
 Policies and strategies of
 Government Policies company
 Level of economic  Human resource policy of the
development including company
future supply of HRs  Formal and informal groups
 Business Environment  Job analysis
 Level of technology  Time Horizon
 International Factors  Type and quality of
Internal Factors information
1. Company policy and strategies- Company’s policies and strategies relating to expansion,
diversification, alliances etc. determines the human resource demand in terms of quality
and quantity.
2. Human resource policies- Human resource policies of the company regarding quality of
human resources ,compensation level, quality of work life, etc. influences human
resource plan.
3. Job analysis- Fundamentally, human resource plan is based on job analysis. Job
description and job specification determines the kind of employees required.
4. Time horizons- Companies with stable competitive environment can plan for the long
run whereas the firms with unstable competitive environment can plan for only short
term range.
5. Type and quality of information- Any planning process needs qualitative and accurate
information . This is more so with human resource plan, strategic, organizational and
specific information.
6. Company’s production Operations policy- Company’s policy regarding how much to
produce and how much to buy from outside to prepare a final product influence the
number and kind of people required.
7. Trade unions- Influence of trade unions regarding number of working hours per week.
Recruitment sources etc. affect the HRP.
 External Factors
1. Government policies- Policies of the government like labor policy, industrial relations
policy , policy towards reserving certain jobs for different communities etc. affect the
HRP.
2. Level of economic development- Level of economic development determines the level
of HRD in the country and thereby the supply of human resources in future in the
country.
3. Business Environment- External business environment factors influencing the volume
and mix of production and thereby the future demand for human resources.
4. Level of technology- Level of technology required the kind of human resources
required.
5. International factors- International factors like the demand for the resources and supply
of human resources in various countries.

Job Analysis

Meaning of Job Analysis

Job Analysis is a process to identify and determine in detail the particular job duties and
requirements and the relative importance of these duties for a given job. Job Analysis is a
process where judgments are made about data collected on a job.
Types of Job Analysis

Job Job Job Job Job

Description specificatio Evaluation Rotation Enrichment
n
1. Job description - A job description is an organized factual statement of job contents in
the form of duties and responsibilities of a specific job. The preparation of job
description is necessary before a vacancy is advertised. It tells in brief the nature and
type of job.
Job description document discloses what is to be done, how is to be done and why is to be
done.
The contents of job description are :
a) Job title – It is describe that the job title should be short, definite and suggestive of the
nature of job.
b) Job location- It is necessary to give the location of the job. By location we mean the
name of the department where the job under consideration exists.
c) Job summary- A short paragraph succinctly summarizing the tasks performed by the
employees is helpful for subsequent convenient identification of the job.
d) Duties to be performed- Each task performed should be written out and estimate made
of the percentage of the time that is devoted to the performance of each task.
 e) Machines, tools, Materials- The tools, machines, equipments and materials used in the
performance of the job should also be included in the job description.
f) Relation to other jobs- Clear-out relation of the job under consideration with other jobs
in the organization help to understand the nature of job.
g) Nature of supervision- There are certain jobs, particularly unskilled jobs, which require
intensive supervision, while other jobs require less supervision , because people
manning these positions are more committed to the achievement of organization goals.
h) Working environment- The working conditions, hazards and other characteristics of the
physical surroundings within the working area should be described.

2. Job specification- Job specification is a document which states the minimum acceptable
human qualities necessary to perform a job properly. It sets forth requirements sought
in the person who is to be selected to perform a particular job. Job specifications
translate the job descriptions into human qualifications, and sometimes level of
performance , required for successful performance of the job. Specifications are often
appended to the job descriptions.
Contents of job specification
a) The job grade title.
b) Age limit of the job holder.
c) Educational qualification of the job holder.
d) Mental abilities required by the job holder.
e) Experience of the job holder.
f) Skill required in operating the equipment.
g) Maturity, innovation and dependability of the job holder.
h) Leadership qualities if the job required it

3. Job Evaluation- Job evaluation is the systematic procedure for determining the relative
worth of job. Once the worth of the job is determined, it becomes easier to fix the wage
structure that will be fair and equitable.

4. Job Rotation- It implies the shifting of an employee from one job to another without any
change in the jobs. The main advantage of job rotation is that it receives the employee
from the boredom and monitory of doing a single task. The employee gets some variety
of work , workplace and the peers. It also helps to broaden the knowledge the
knowledge and skills of an employee.

5. Job Enrichment – It involves designing a job in such a way that it provides the worker
greater anatomy for planning and controlling his own performance. It is based on the
assumption that in order to motivate employees, the job itself must provide
opportunities for achievement, recognition, responsibility, advancement and growth
Process of Job Analysis
The major steps involved in job analysis are as follows:
1. Organizational analysis- First of all, an overall picture of various jobs in the organization
has to be obtained. This is required to find the linkages between jobs and organizational
objectives, interrelationships between jobs and contribution of various jobs to the
effectiveness and efficiency of the organization. The required background information
for this purpose is obtained through organization charts and workflow charts.
2. Selection of representative positions to be analyzed- It is not possible to analyse all
jobs. A representative sample of jobs to be analysed is deciding keeping the cost and
time constraints in mind.
3. Collection of job analysis data- This step involves collection of data on the
characteristics of job, the required behavior and personal qualifications needed to carry
out the job effectively. Several techniques are available for collecting such data. Care
should be taken to use only reliable and acceptable techniques in a given situation.
4. Preparation of job description- This step involves describing the contents of the jobs in
terms of functions, duties, responsibilities, operations etc. The job holder is required to
discharge the duties and responsibilities and perform the operations listed in job
description.
5. Preparation of job specification- This step involves conversion of job description
statements into a job specification. Job specification is a written document of personal
attributes in terms of traits, skills, training, experience needed to carry out the job.

Uses of job analysis

1. Human resource planning: Job analysis helps in forecasting human resource
requirements in terms of knowledge and skills. By showing lateral and vertical
relationships between jobs, it facilitates the formulation of a systematic promotion and
transfer policy. It also helps in determining quality of human resources needed in an
organization.
2. Recruitment: Job analysis is used to find out how and when to hire people for future job
openings. An understanding of the skills needed and the positions that are vacant in
future helps managers to plan and hire people in a systematic way. For example, a
company might be traditionally hiring MBA students for equity research. A recent job
analysis showed that the positions could be filled by graduates with an analytical mind.
Now, this would help the company hire equity analysts from a greater number of
available graduates by offering even a slightly lesser salary.
3. Selection: Without a proper understanding of what is to be done on a job, it is not
possible to select a right person. If a Super bazaar manager has not clearly identified
what a clerk is to do, it is difficult to find if the person selected must be able to position
stores items, run a cash register, or keep the account books.
4. Placement and orientation: After selecting people, we have to place them on jobs best
suited to their interests, activities and aptitude. If we are not sure about what needs to
be done on a job, it is not possible to identify the right person suited for the job.
Similarly, effective job orientation cannot be achieved without a proper understanding
of the needs of each job. To teach a new employee how to handle a job, we have to
clearly define the job.
5. Training: If there is any confusion about what the job is and what is supposed to be
done, proper training efforts cannot be initiated. Whether or not a current or potential
job holder requires additional training can be determined only after the specific needs
of the jobs have been identified through a job analysis.
6. Counseling: Managers can properly counsel employees about their careers when they
understand the different jobs in the organization. Likewise, employees can better
appreciate their career options when they understand the specific needs of various
other jobs. Job analysis can point out areas that an employee might need to develop to
further a career.
7. Employee safety: A thorough job analysis reveals unsafe conditions associated with a
job. By studying how the various operations are taken up in a job, managers can find
unsafe practices. This helps in rectifying things easily.
8. Performance appraisal: By comparing what an employee is supposed to be doing (based
on job analysis) to what the individual has actually done, the worth of that person can
be assessed. Ultimately, every organization has to pay a fair remuneration to people
based on their performance. To achieve this, it is necessary to compare what individuals
should do (as per performance standards) with what they have actually done (as per job
analysis).
9. Job design and redesign: Once the jobs are understood properly, it is easy to locate
weak spots and undertake remedial steps. We can eliminate unnecessary movements,
simplify certain steps and improve the existing ones through continuous monitoring. In
short, we can redesign jobs to match the mental make-up of employees.
10. Job evaluation: Job analysis helps in finding the relative worth of a job, based on criteria
such as degree of difficulty, type of work done, skills and knowledge needed, etc. This, in
turn, assists in designing proper wage policies, with internal pay equity between jobs.

Methods of Job Analysis

1. Observation Method - Using this method, a job analyst watches employees directly on
the job. Although the observation method provides firsthand information, workers
rarely function most efficiently when they are being watched, andthus distortions in the
job analysis can occur. This method also requires that the entire range of activities be
observable , which is possible with some jobs, but impossible for many-for example,
most managerial jobs.
2. Individual Interview Method- This method assembles a team of job holders for
extensive individual interviews. The results of interviews are combined into a single job
analysis. This method is effective for assessing what a job entails. Involving employees in
the job analysis is essential.
3. Group Interview Method- This method is similar to Individual interview method except
that job holders are interviewed simultaneously. Accuracy is increased in assessing jobs,
but group dynamics may hinder its effectiveness.
4. Structured Questionnaire Method- This method gives workers a specifically designed
questionnaire on which they check or rate items they perform in their job from a long
list of possible task items. This method is excellent for gathering information about jobs.
However, exceptions to a job may be overlooked and opportunity may be lacking to ask
follow-up questions or to clarify the information received.
5. Technical conference Method- This method uses supervisors with extensive knowledge
of the job. Here specific job characteristics are obtained from the experts. Although a
good data gathering method, it often overlooks the job holders perceptions about what
they do on their jobs.
6. Diary Method-This method requires job holders to record their daily activities. This is
the most time consuming of the job analysis methods and may extend over long periods
of time- all adding to its cost.

Limitations of Job Analysis

1. Lack of support from top management- If the employees are not sure that the top
management supports and encourages the job analysis, they might not participate fully
and honestly, because they may feel that the results of job analysis will not be used for
their benefit.
2. Only one method is used for collecting information- Often only one method of data
gathering is used. When a combination of methods would have given better results. If as
much information is gathered as possible, the results of job analysis will be more
complete and accurate.
3. The supervisor and the employee do not take part in the design of job analysis- When
a job analyst takes all responsibility of the job analysis on himself without including the
supervisor and the employee, this can cause distrust and lack of cooperation. They may
feel that their input is not wanted or needed, and that the analysis will not be as
accurate as it could have been had they taken part.
4. There is no training or motivation for employees-Employees are potentially a great
source of information because they are able to give more thorough and detailed in-
depth data about their job than an observer would be able to gather. They are asked to
share this information, but seldom trained to give good quality data because this is not
seen by the employer as necessary for them to do their jobs well. They are also almost
never rewarded for providing good information.
5. Employees are not allowed enough time to complete the analysis- Supervisors and
managers often see the job analysis as a waste of time because they do not always get
to see or experience the results of analysis. They then rush through the process, which
can result in inadequate or inaccurate information and an inaccurate job analysis.
6. Activities may be distorted- Without proper training and communication , employees
may submit distorted data, whether this is deliberate or not. Distorted data is data that
is not the whole truth, but is twisted or changed so that it becomes incorrect or untrue.
 7. There is failure to criticize information- Job analysts just accept reported job
information without investigating whether the job is being done correctly or whether
improvements can be made. This may be because they have too little time in which to
complete the job analysis, and because of poor or limited communication between the
job analyst and employees.
8. Employees fear- In the past , the goal of job analysis was to expand jobs while reducing
the total number of employees, in order to increase production rates and decrease
employees pay. This automatically led to fear among the employees. Involving
employees and having them represented will help to reduce these fears.

UNIT-2

Recruitment
Meaning
Recruitment refers to the overall process of attracting, selecting and appointing suitable
candidates for jobs within an organization, either permanent or temporary

Definition
According to Edwin B. Flippo – Recruitment is the process of searching the candidates for
employment and stimulating them to apply for jobs in the organization.

Process of Recruitment

Requisition of Employees

Identification of the sources of recruitment

Invitation to interested people

Preparing the list of deserving Applicants

1. Requisition of employees- Recruitment process begins with the requisition of

employees. After determining the need of employees in their respective departments
the departmental managers bring it to the notice of human resource manager.

2. Identification of the sources of recruitment- On receipt of requisition letters from all

departments , the human resource manager , by virtue of his knowledge and
 experience, decides about the sources from where to make available employee
possessing different qualifications

3. Invitation to interested People- After finding the sources, the interested people are
invited to apply for different jobs. To this effect , human resource manager prepares a
comprehensive information carrying following detail:

 number of vacancies
 nature of job
 qualification required
 experience
 detail of salary
 conditions of employment
 last date of application
 brief detail of selection procedure
Information must be prepared in a simple and attractive language so that large number of
applicants is received.

4. Preparing the list of deserving applicants – On receipt of the application the same are
verified. During the course of verification, applications are divided into two parts. One
part consists of those applications which fulfill all qualifications required by the
organization and the other parts consists of those applications which do not fulfill all
the requisite qualifications. Such eligible applicants alone are included in selection
process.
Methods of Recruitment

Internal Methods External Methods

 Transfer  Advertisements
 Employment
 Promotion bureaus
 Industry
employees
 Industrial trainee
and apprentices
 Recommendations
 Educational
Institutes
 Direct recruitment
1. Internal Methods – In this method, vacant posts are filled with employees available
within the hotel.

a) Transfer- It involves shifting of an employee from one job to another, one department
to another or from one shift to another. Transfer is a good source of filling vacancies
with employees from overstaffed departments or shifts. At the time of transfer, it
should be ensured that employee to be transferred to another job is capable of
performing it.
b) Promotion- It leads to shifting an employee to a higher position, carrying higher
responsibilities, facilities, status and pay. Many hotels follow the practice of filling higher
jobs by promoting employees who are considered fit for such positions. Filling vacancies
in higher jobs from within the organization has the benefit of motivating the existing
employees.

2. External Methods- External methods of recruitment of employees means inviting

applications, for filling up the vacancies , from candidates outside the hotel.

a) Advertisement- Applications are invited by the hotels for filling higher level and
middle level posts. Advertisement is by means of print and electronic media, i.e.
newspapers, employment news, magazines, journals, T.V etc. Detailed information
regarding number of vacancies, nature of work, essential qualification, salary etc. is
given in the advertisement.
b) Employment bureaus- These bureaus maintain a database of people looking for
jobs. When contacted, the bureaus match the skills required for the vacant jobs
with the skill of candidate listed with them.
c) Industry employees- Employees of other hotel establishments are often on the look-
out for better positions and salaries. These people could be recruited for suitable
positions.
d) Industrial trainees and the apprentices- Industrial trainees and apprentices are one
of the best sources of labor. They have already worked with the organization and
know the procedures, policies and standards to be met.
e) Recommendations- Applications introduced by friends and relatives may prove to
be a good method of recruitment. In fact, many employers prefer to tak such
persons because something about their background is known. When a present
employee or a business friend recommends someone for a job, a type of preliminary
screening is done and the person is placed on a job.
f) Educational Institutes- Hotels maintain a close liaison with the universities,
vocational institutes and management institutes for recruitment to various jobs.
 Recruitment from educational institutions is a well established practice of thousands
of hotels. Reputed hotels which require trainees send their officials to hotel
management colleges for picking up talented candidates.
g) Direct Recruitment- An important method of recruitment is direct recruitment by
placing a notice on the notice board of the hotel specifying the details of the jobs
available Under this method job seekers arrive at the hotels everyday on their own.
They are usually unskilled or semi skilled workers. Managers select the suitable
persons out of them as per requirement.

Advantages and Disadvantages of Methods of recruitment

1. Internal Methods
Advantages
 Increase in morale- Morale of the employees of the organization is boosted when
recruitment is made by internal sources, particularly by promotion. If the know before
hand that their promotion is possible, they will feel inspired.
 Better selection- Organization has full information about the employees working there.
As such, their selection for the higher post involves no risk.
 Economical source-It is the most economical source because the organization has not to
spend any amount on search for sources of recruitment. Nor has it to waste time on
long selection process. However such employees do not require much training.
 Labor turnover is reduced- When employees are aware of the fact that they can be
appointed on higher posts, then they will not have any tendency to leave the
organization. As a result labor turnover is reduced.
 Better labor management relations- Employees remain satisfied when internal sources
of recruitment are made use of. It promotes better labor management relations.
Disadvantages
 It stops entry of young blood- The greatest demerit of internal recruitment system is
that it prevents the young men who are fully equipped with modern technical now-how
from entering the organization. Consequently, old men with old ideas run the
organization and no new concept develop there.
 Reduce the area of choice- Internal recruitment of the employees restricts the area of
choice. Reduction in the area of choice means less availability of eligible candidates.
Selection has to made from among the handful employees working in the organization.
 Encourages favoritism- Under this system, senior managers select their own favorite
employees. Many a time, even less qualified persons are selected. It adversely affects
the interests of the organization.
  Difficulty in rapid growth- because it prevents the entry of young men who have new
ideas , techniques to run the organization efficiently and effectively. However it allows
old men to use their old ideas results difficulty in rapid growth.
2. External Methods
Advantages
 Entry of young blood- Recruitment from outside enables young persons with new and
modern ideas to enter and benefit the organization.
 Wide field of choice- Use of external source of recruitment widen the scope of choice as
the number of applicants is very large. Managers select those candidates whose activity
is tested on the basis of interview.
 Less chance of favoritism-All applicants are new and unfamiliar to the managers as such
chances of favoritism are very little.
 Rapid Growth- As it allows the entry of young blood with new ideas and new techniques
that results rapid growth of the organization.
Disadvantages
 Decrease in morale of existing employees-It leads to end of chances of promotion of
the existing employees. They stand supersede. Where there is no hope of promotion,
the employees are demoralized and they do not work with complete devotion and
loyalty.
 Chances of wrong selection- Because of lack of complete knowledge about the
outsiders, there are chances of wrong selection. A single wrong selection may cost the
organization dearly.
 Expensive source- Heavy expenditure is incurred in external recruitment in the form of
advertisement, long selection process and post selection training etc.
 Increase in labor turnover- When the employees know that all avenues of promotion
are closed for them, they leave the organization, at the first available opportunity.
Consequently the rate of labor turnover increases.

Selection
Meaning of Selection
Selection involves a series of steps by which the candidates are screened for choosing the most
suitable persons for vacant posts.

Definition of Selection
According to ‘ Weihrich and Koontz’- Selection manager is choosing from among the candidates
the one who best meet the position requirements.
 Essentials of Selection Process
The selection process adopted by an organization is mostly tailor made to meet its particular
needs. The thoroughness of the process depends upon 3 factors;
1. The nature of selection, whether faulty or safe, because faulty selection affects not only
the training period that may be needed, but also results in heavy expenditure on the
new employee and the loss that may be incurred by the organization in case the job-
occupant fails on his job.
2. The policy of the company and the attitude of the management. As a practice some
hotels usually hire more than the actual number needed with a view to removing the
unfit persons from the jobs.
3. The length of probationary or the trial period. The longer the period, the greater the
uncertainty in the minds of the select candidate about his future.
The hiring process can be successful, if the following preliminary requirements are satisfied:
1. Some one should have the authority to hire. This authority comes from the employment
requisition, as developed by an analysis of the work-load and the work force
2. There must be some standard or personnel with which a prospective employee may be
compared, i.e. there should be available, beforehand , a comprehensive job description
and job specification as developed by job analysis.
3. There must be sufficient number of applicants from whom the required number of
employees may be selected.

Selection Process

Preliminary Interview

Receiving applicants

Screening of applicants

Employment tests

Physical examination

Checking References

Final selection
1. Preliminary Interview/Screening -It is used to eliminate those candidates who do not
meet the minimum eligibility criteria laid down by the organization. The skills, academic
and family background, competencies and interests of the candidate are examined
during preliminary interview. These are less formalized and planned than final
interviews. The organization will be saved from the expenses of processing him through
the remaining steps of the selection of the selection procedure and the unsuitable
candidates will be saved from the trouble of passing through the long procedure.
2. Receiving Applications- Whenever there is a vacancy, it is advertised or enquiries are
made from the suitable sources, and applications are received from the candidates.
Standard applications forms may be drawn up of different jobs and supplied to the
candidates on request. The application form is useful for several reasons. It gives a
preliminary idea the candidate to the interviewer and helps him in formulating
questions to have more information about the candidate.
3. Screening of applicants- After the applications are received, they are screened by a
screening committee and a list is prepared of the candidates to be interviewed.
Applicants may be called for interview on some specific criteria like sex, desired age
group, experience and qualification. The screened applicants are then reviewed by hr
manager and interview letters are dispatched by registered post or by email etc.
4.  Employment Tests : Various tests are conducted to judge the ability and efficiency of the
candidates. The type of tests depends upon the nature of job. An important advantage
of testing is that it can be administered to a large group of candidates at a time and
saves time and cost. The various tests are : (a) Personality test, (b) Intelligence test,   (c)
Performance test, (d) Stress test, etc
5. Interview : It is face to face exchange of views, ideas and opinions between the
candidate and interviewer(s). There are various types of interviews such as :  (a) Panel
Interview, (b) Individual Interview, (c) Group Interview, (d) Stress Interview, (e) Exit
Interview.  
6. Reference Check : A candidate may be asked to provide references from those who are
willing to supply or confirm about the applicant’s past life, character and experience.
Reference check helps to know the personal character and family background of the
candidate. It helps to guard against possible false information supplied by candidate
7.  Medical Check : Medical examination of the candidates is undertaken before they join
the firm in order to –
 Find out whether the candidate is physically fit to carry out duties and responsibilities
effectively,
 Ensure the health and safety of other employees,
  Find out whether the candidate is sensitive to certain work place such as in a chemical
factory.
8.   Job Offer/Final selection : This is the most crucial and final step in selection process. A
wrong selection of a candidate may make the company to suffer for a good number of
years and the loss is incalculable. Company should make a very important decision to
offer right job to the right person.

Difference between Recruitment and Selection

Basis Recruitment Selection

Meaning It is an activity of It is a process of picking up

establishing contact more competent and
between employers and suitable employees
applicants
Objective It encourages large number It attempts at rejecting
of candidates for job unsuitable candidates
Process It is a simple process It is a complicated process
Hurdles The candidates have not to Many hurdles have to be
cross over many hurdles crossed
Approach It is a positive approach It is a negative approach
Sequence It proceeds selection It follows recruitment
Economy It is an economical method It is an expensive method
Time consuming Less time is required More time is required

Interview

An interview is a conversation between two or more people where questions are asked by the

interviewer to elicit facts or statements from the interviewee.
Interview is the most widely used technique of employee selection. It is an observational and
personal method of appraisal. Interviews are also used for counseling, appraising, grievance
handling and exit employees.
Importance of Interview

1. For Employers
a) Information about job seeking candidate
b) Supplements the application blank
c) Interview helps to select a right person
d) Interview collects useful information
e) Good interview increases goodwill

2. For Job seekers

a) Provides employment opportunity
b) Develop confidence in candidates
c) Helps candidate to accept or reject job
d) Helps job seekers to increase contacts

Types of Interview

1. Directed Interview- It is a straight-forward, face to face question-answer session

between the interviewer and the candidate. Under it, a list of questions related to job is
prepared in advance. Standard answers to these questions are also determined
beforehand. The questions are put to the candidate and answers given by him are
recorded. These answers are compared with the standard answers to decide the
candidate’s suitability for the job.
2. Depth Interview/ Non directed Interview- Under it, no direct or straight questions are
asked. Rather, the candidate is encouraged to express his views on a specific topic. The
interviewer puts a minimum of constraints on the applicant. He plays mainly a listening
role. The method used is informal and conversational so that the candidate feels at
ease. As a result, a more thorough assessment of his personality can be made. .
3. Patterned Interview- In this type of interview, standard procedures are used in
recording, analyzing and interpreting the observations made by a candidate. It yields
more comparable results. It combines the characteristics of both directed and non-
directed approach.
4. Stress Interview- Under it, the interviewer deliberately creates a situation that puts the
candidate to considerable strain. Frequent interruptions, criticism of the candidate’s
opinion, keeping silent or extended period of time are the main methods of creating
stress. For example, the interviewer may become angry, highly critical and offensive.
Alternatively, he may keep quiet when he is expected to speak. The purpose is to know
the reaction of the candidate. The candidate is rejected if he loses balance and get
irritated.
5. Panel Interview- In such a interview there are several interviewer’s. Each interviewer
asks questions about a particular area. For example, one interviewer asks questions
about the candidate’s education, the second about his aptitudes and interests, and third
about his experience etc. The candidate’s suitability is decided on the basis of the
combined performance rating of the entire interviewer’s.
6. Group Interview- Under it, a number of candidates are interviewed simultaneously. A
problem is placed before them and each candidate is asked to participate in the
discussion that follows. An expert observes the candidate and their participation.
7. Exit Interview- When an employee leaves the organization , he is interviewed either by
his immediate superior or by the HRD manager. This interview is called an exit
interview. It is taken to find out why the employee is leaving the organization.
Sometimes the employee may be asked to withdraw his resignation by providing some
incentives. It is taken to create a good image of the organization who are leaving the
organization.
8. Task Oriented or Testing Interview
 This is a problem-solving interview where you will be given some exercises to
demonstrate your creative and analytical abilities.  A company may ask you to take a
short test to evaluate your technical knowledge and skills.  Sometimes a presentation to
a group is necessary to determine your communication skills.  Try to relax as much as
possible.
9. Individual Interview-This is the most common type and often called a “personal
interview.”  It is typically a one-on-one exchange at the organizations offices.  In order to
best prepare you will want to know the length of the interview which can usually range
from 30 to 90 minutes.  If the interview is 30 minutes you have to be concise and have a
high impact with your answers.  If it is 60 or 90 minutes you will want to go into much
more depth and use specific examples to support your generalizations.
10. Telephonic Interview A phone interview is a very cost effective way to screen
candidates.  These can last anywhere from 10 to 30 minutes.  You should prepare for it
like an open book exam.  It is recommended that you have in front of you your resume,
the job description, a list of references, some prepared answers to challenging questions
and perhaps something about the company.  The vast majority of communication is
non-verbal.  Because they can’t see your body language, it is critically important to have
positive and polished answers with energetic tone and inflection.
Promotion
Meaning of Promotion
Promotion means shifting an employee to a higher position, carrying higher responsibilities,
facilities, status and pay.

Definition of Promotion
According to Scott and Clothier, “A promotion is the transfer of an employee to a job which
pays more money or one that carries some preferred status.”

Types of Promotion

1. Limited Promotion- Limited promotion is also known as upgrading. It is the movement

of an employee to a more responsible job within the same occupational unit and with a
corresponding increase in pay. Thus, upgrading means an increase of pay on the same
job or moving to a higher scale without changing the job.
2. Dry Promotion -Dry promotion is a promotion as a result of which there is no increase
in the employee’s pay. Dry promotions are those which are given in lieu of increases in
compensation. It is usually made decorative by giving a new and longer title to the
employee
3. Multiple Chain Promotion -Multiple chain promotion provide for a systematic linking of
each position to several other positions. Such promotions identify multi-promotional
opportunities through clearly defined avenues of approach to and exist from each
position in the organization
4. Up and Out Promotion- Up and Out Promotion often leads to termination of services.
In this type of promotion, a person must either earn a promotion or seek employment
elsewhere
 Purpose of Promotion

 To utilize the employee’s skill knowledge at the appropriate level in the organizational
hierarchy
 To develop competent internal source of employees ready to take up jobs at higher levels in the
changing environment.
 To promote employees’ self development and make them await their turn of promotions. It
reduces labour turnove
 To promote a feeling of contentment with the existing conditions of the company and a sense
of belongingness.
 To promote interest in training, development programmes and in team development areas.
 To build loyalty and to boost morale.
 To reward committed and loyal employees
 To get rid of the problems created by the leaders of workers’ unions by promoting them to the
officers’ levels where they are less effective in creating problems.
 Promotion places the employees in a position where an employee’s skills and knowledge can be
better utilized.
 It creates and increases the interest of other employees in the company as they believe that
they will also get their turn.
 It creates among employees a feeling of content with the existing conditions of work and
employment.
 It increases interest in acquiring higher qualifications, in training and in self development with a
view to meet the requirements of promotion.
 It improves morale and job satisfaction

Transfer
Meaning of Transfer
Transfer means shifting of an employee from job to another, one department to another, or
from one shift to another.
Definition of Transfer
Yoder has defined transfer as “a lateral shift causing movement of individuals from one
position to another usually without involving any marked change in duties, responsibilities,
skills needed or compensation.”

Types of Transfer
1. General Transfer- General transfers are normally affected during a particular period of
the year wherein all employees having completed a given period of service in a post or
at a place are involved. Definite rules and regulations are to be followed in affecting
such transfers. Such transfers are followed in big organizations, quasi-governmental
organizations and government departments
 2. Production -Production transfers are normally made from one department to another
where the need for the employee is more. This type of transfer is made to avoid lay-off
of efficient and trained employees by providing them with alternative positions in the
same organization.

3. Replacement -These are transfers of long-service employees to similar jobs in other

departments where they replace or ‘bump’ employees with shorter service.
Replacement transfers are affected to replace persons leaving the organization, due to
resignations, retirements, dismissal or death.

4. Shift- Shift transfers are transfers of workers from one shift to another on the same type
of work. Workers generally dislike second or third shift as it affects their participation in
community life. To minimise this, shift transfers are effected. Shift transfers also help
workers to be out of routine fatigue.

5. Remedial Remedial transfers are transfers made to remedy some situation primarily
concerned with employee on the job. Remedial transfers provide management with a
procedure whereby an unsatisfactory placement can be corrected.

6. Versatility- The objective of these transfers is to increase the versatility of the employee
by shifting him from one job to another. In this way, the employee is provided a varied
and broad job experience. This transfer is like a rotation transfers. Versatility transfers,
besides resulting in greater satisfaction of the workers through job enlargement, also
creates a work force which can be conveniently shifted to other jobs in time of
necessity.

7. Punishment or Penal- This transfer is made as punishments to erring employees. Quite

often the employees are transferred from one place be another so that they are made
to work in a situation of risks and hazards. Employees are posted to such places as a
matter of punishment for the errors and omissions they have committed.

8. Request Transfers -This type of transfer is done on the request of the employee. It is
normally done on humanitarian grounds to help the employee to look after his family
and personal problems

9. Mutual Transfers When transfers turn out to be mutual between two employees they
are referred to as mutual transfers. Usually the organization concedes to reque

Purpose of Transfer

 To increase the effectiveness of the organization.

 To increase the versatility and competency of key positions.
 To deal with fluctuations in work requirements.
 To correct incompatibilities in employee relations.
 To correct, erroneous placement.
 To relieve monotony.
 To adjust workforce.
 To punish employee

UNIT-4
Meaning of Training
Training is an organized activity for increasing the knowledge and skills of people for a definite
purpose. It involves systematic procedures for transferring technical know-how to the
employees so as to increase their knowledge and skills for doing specific jobs with proficiency.

Definition
According to Edwin B. Flippo- Training is the act of increasing the knowledge and skills of an
employee for doing a particular job.

Need for Training

1. Higher Productivity:
It is essential to increase productivity and reduce cost of production for meeting competition in
the market. Effective training can help increase productivity of workers by imparting the
required skills.

2. Quality Improvement:
The customers have become quality conscious and their requirement keep on changing. To
satisfy the customers, quality of products must be continuously improved through training of
workers.

3. Reduction of Learning Time:

Systematic training through trained instructors is essential to reduce the training period. If the
workers learn through trial and error, they will take a longer time and even may not be able to
learn right methods of doing work.

4. Industrial Safety:
Trained workers can handle the machines safely. They also know the use of various safety
devices in the factory. Thus, they are less prone to industrial accidents.

5. Reduction of Turnover and Absenteeism:

 Training creates a feeling of confidence in the minds of the workers. It gives them a security at
the workplace. As a result, labor turnover and absenteeism rates are reduced.

6. Technology Update:
Technology is changing at a fast pace. The workers must learn new techniques to make use of
advance technology. Thus, training should be treated as a continuous process to update the
employees in the new methods and procedures.

7. Effective Management:
Training can be used as an effective tool of planning and control. It develops skills among
workers and prepares them for handling present and future jobs. It helps in reducing the costs
of supervision, wastages and industrial accidents. It also helps increase productivity and quality
which are the cherished goals of any modern organization.
8. Less Supervision

If the employees are given adequate training, the need of supervision will be lessened. Training
does not eliminate the need for supervision, but it reduces the need for detailed and constant
supervision.

9. Higher Morale
The morale of the employees is increased if they are given proper training. A good training
programme will mould employee’s attitudes towards organizational activities and generate
better cooperation and greater loyalty.

10. Economical Operations

Trained personnel will be able to make better and more economical use of materials and
equipment. Wastage will also be low. In addition rate of accidents and damage to machinery
and equipment will be kept to a minimum by the trained employees.

Types of Training

Induction Job Training Apprenticeship Internship Refresher Training

or Training Training for
Training
Orientation Promotion
Training
1. Induction Training- Induction is concerned with introducing or orienting a new
employee to the organization and its procedures, rules and regulations. When a new
employee reports for work, he must be helped to get acquainted with the work
environment and fellow employees. It is better to give him a friendly welcome when he
joins the organization, get him introduced to the organization and help him to get a
general idea about the rules and regulations, working conditions etc.
2. Job Training- Job Training refers to specific job which the worker has to handle. It gives
information about machines, process of production, instructions to be followed ,
methods to be used and so on. It develops skills and confidence among workers and
enables them to perform the job effectively. It is necessary for the new employees to
acquaint them with the jobs they are expected to perform. It helps in creating the
interest of the employees in their jobs.
3. Apprenticeship Training- Apprenticeship training programme tends more towards
education than merely on the vocational training. Under this, both knowledge and skills
in doing a job or a series of related jobs are involved. The governments of various
countries have passed laws which make it obligatory on certain classes of employers to
provide a apprenticeship training to the young people. The usual apprenticeship training
programmes combine on the job training and experience with class-room instructions in
particular subjects.
4. Internship Training- Under this method, the educational or vocational institute enters
into arrangement with an industrial enterprise for providing practical knowledge to its
students, Internship training is usually meant for such vocations where advanced
theoretical knowledge is to be backed up by the practical experience on the job. The
period of such training varies from 6 months to 2 years.
5. Refresher Training- The refresher training is meant for the old employees of the
enterprise . The basic purpose of refresher training is the acquaint the existing
workforce with the latest methods of performing their jobs and improve their efficiency
further. In the words of “Dale Yoder” Refresher programmes are designed to avoid
personnel obsolescence. The skills with the existing employees become obsolete
because of technological changes and because of the tendency of human being to
forget.
6. Training for Promotion- The talented employees may be given adequate training to
make them eligible for promotion to higher jobs in the organization. Promotion of an
employee means a significant change in his responsibilities and duties. Therefore , it is
essential that he is provided sufficient training to learn new skills to perform his new
duties efficiently.
 Methods of Training

Vestibule Training Off the Job Training

On-the-Job Training
 Lectures
 Coaching
 Conference
 Understudy
Training
 Position
 Case Study
Rotation
 Role Play
 Management
Games

1. On the Job Training Method

On the job training is considered to be the most effective method of training the operative
personnel. Under this method, the worker is given training at the work place by his immediate
supervisor. In other words, the worker learns in the actual work environment.

a) Coaching- Under this method, the supervisor imparts job knowledge and skills to his
subordinates. The emphasis in coaching or instructing the subordinate is on learning by
doing. This method is very effective if the superior has sufficient time to provide
coaching to his subordinates.
b) Understudy- The superior gives training to a subordinate as his understudy or assistant.
The subordinate learns through experience and observation. It prepares the
subordinates to assume the responsibilities of the superior’s job in case the superior
leaves the organization.
c) Position Rotation- The purpose of position rotation is to broaden the background of the
trainee in various positions. The trainee is periodically rotated from job to job instead of
sticking to one job so that acquires a general background of different jobs.
Advantages of on-the-job Training Method
 It is directly in the context of the job
 It is often informal
 It is most effective because it is learning by experience
 It is least expensive
 Trainees are highly motivated
 It is free from artificial classroom situations
 Disadvantages of On the job training Method

 Trainers may not be experienced enough to train

 It is not systematically organized
 Poorly conducted programmes may create safety hazards

2. Vestibule Training

The term vestibule training is used to designate training in a class-room for semi-skilled jobs. It
is more suitable where a large number of employees must be trained at the same time for for
the same kind of work. Where this method is used, there should be well-qualified instructors in
charge of training programme. The purpose of vestibule training is to reproduce an actual work
setting and place it under the trainer's control to allow for immediate and constructive
feedback. Training vestibules are useful because they allow trainees to practice while avoiding
personal injury and damage to expensive equipment without affecting production.

3. Off the Job Training

It requires the worker to undergo training for a specific period away from the work-place. Off
the Job training methods are concerned with both knowledge and skills in doing certain jobs.
The workers are free of tension of work when they are learning.

a) Lectures- Training through special lectures is also known as class room training. It is
more associated with imparting knowledge than with skills. The special lectures may be
delivered by some executives of the organization or specialists from vocational and
professional institutes.
b) Conference Training- A conference is a group meeting conducted according to
organized plan in which the members seek to develop knowledge and understanding by
oral participation. It is an effective training device for persons in the positions of both
conference member and conference leader.
c) Case Study- The case study method is a means of simulating experience in the
classroom. Under this method the trainees are given a problem or case which is more or
less related to the concepts and principles already tought. They analyze the problem
and suggest solutions which are discussed in the class. The instructor helps them reach a
common solution to the problem. This method gives the trainee an opportunity to apply
his knowledge to the solution of unrealistic problems.
d) Role Play- Under this method 2 or more trainees spontaneously act out or play role in
an artificially created situation. They act out the given roles as they would be playing in
real life situation. They are informed of the situation and the roles they are expected to
play.
e) Management Games- Under this method, an actual business situation is presented as a
model. The participants compete with each other to analyse the problem and to take
decision. Their decisions are processed in stages. A performance report is prepared
periodically to measure the success of the participants. This method is useful in
 developing the ability of taking decisions with incomplete data and amid conditions of
uncertainty.
f) Brain Storming- Under this method a problem is put before a group of trainees and they
are encouraged to offer ideas or suggestions. Criticism of any idea is not allowed so as to
reduce inhibiting forces. Each trainee is allowed maximum possible participation. Later
on, all the ideas are critically examined. The purpose is to maximize innovation and
creativity.

Advantages of Off the Job training Method

 Trainers are usually experienced enough to train
 It is systematically organized
 Efficiently created programmes may add lot of value

Disadvantages of Off the Job training Method

 It is not directly in the context of job
 It is often formal
 It is not based on experience
 Trainees may not be highly motivated
 It is more artificial in nature.

Employee Development/ Human resource development

Meaning of human resource development
Human resource development is a process concerned with an organized series of learning
activities designed to produce behavioral changes in the human resources in such a way that
they acquire desired level of competence for present and future roles.

Definition of human resource development

Human resource development may be defined as development of people by providing the right
environment where each individual may grow to his fullest potentialities.

Human resource development may be defined as a continuous process to ensure the

development of employee competencies, dynamism, motivation and effectiveness in a
systematic and planned way.

Purpose/Objective of Employee development

 Provide an opportunity and comprehensive framework for the development of human
resources in the organization for full expression of their talents and manifest potentials
 Develop the constructive mind and overall personality of each employee
 Develop each individual’s capabilities to perform the present job and to handle future
likely roles
 Develop and maintain high motivation level of employees
 Strengthen superior-subordinate relationship
 Develop the sense of team spirit, team work and inter-team collaboration
 Develop the organizational health, culture and climate
 General systematic information about human resources

Process of Employee Development

1. Analysis of organizational development needs- After deciding to launch a employee
development programme , a close and critical examination of the present and future
development needs of the organization has to be made. We should know how many and
what type of employees are required to meet the present and future requirements.
A comparison of the already existing talents with those that are required to meet the
projected needs will help the management to take a policy decision as to whether it
wishes to fill those positions from within the organization or from outside sources.
2. Appraisal of present employee talents- In order of above suggested comparison, a
qualitative assessment of the existing employees talents should be made and an
estimate of their potential for development should be added to that.
3. Inventory of manpower- This is prepared to have a complete set of information about
each employee in each position. For each employee , card is prepared listing such as
data as name, age, length of service, education, work experience, health record,
psychological test results and performance appraisal data etc. The selection of
individuals for a development programme is made on the basis of kind of background
they possesses.
4. Planning of individual development programme- Guided by the results of the
performance appraisal that indicates the strengths and weakness of each of the
employee, this activity of planning of individual development programme can be
performed.
5. Establishment of development programme- Ii is the duty of HR manager to establish
the development opportunities. The HR department has to identify the existing level of
skills, knowledge etc of various employees and compare them with the respective job
requirements. Thus it identifies developmental needs and requirements and establishes
specific development programmes.
6. Evaluation of results- Employee development programme consumes a lot of time,
money and effort. Therefore, essential to find out whether the programmes have been
on track or not. Programme evaluation will cover the areas where changes need to be
undertaken so that the participants would find the same to be relevant and useful for
enriching their knowledge and experience in future.

Components of Employee Development

1. Performance Appraisal- It is the process of determining how well a worker is
performing his job. It provides a mechanism for identification of qualities and
deficiencies observed in an employee in relation to his job performance.
2. Potential Appraisal- It provides necessary data which helps in preparing carrer plans for
individuals. When organization is diversifying its operations or introducing changes,
 capacities to perform new roles and responsibilities must continually be developed
among employees.
3. Feedback counseling- Feedback of performance data can be used to monitor individual
development and for identifying training needs. Career counseling and verbal rewards
are integral parts of review discussions between the superior and the subordinate.
4. Training- The success of any development programme depends on the quality of
training facilities. Training is a process that involves the acquisition of skills, concepts ,
attitudes in order to increase the effectiveness of employees in doing particular jobs.
5. Role analysis- It is a participatory process which aims at defining the work content of a
role in relation to all those with whom the role occupant has significant interaction in
the performance of his job.
6. Career planning- It means helping the employees to plan their career in terms of their
capacities within the context of organizational needs. It is the planning of one’s career
and implementation of career plans by means of education, training, job search and
acquisition of work experiences.
7. Job rotation- The work-tasks should be rotated among the employees so as to broaden
their field of specialization as well as their knowledge about the organization’s operation
as a whole.
8. Quality-Circle- The quality circle is a small group of employees doing similar or related
work who meet regularly to identify , analyze and solve product-quality problems and to
improve general operation.
9. Reward system-Rewarding employees performance over and above their normal wages
and salary is considered to be an important task of the employee development. In any
organization the managers and workers have similar motivations, although the manager
controls the means of achieving need-satisfaction at work and each employee seeks
self-development to go as far as possible on his own ability.
10. Organizational development- It is an organization-wide ,planned effort managed from
top, placing emphasis on making appropriate intervention in the ongoing activities of
the organization.
11. Quality of working life- The conditions under which the workers work and live, assume
the form of another important factor contributing to workers satisfaction or otherwise
and consequently the job satisfaction.
12. Human resource planning- It is the process aimed at ensuring that the organization will
have adequate number of qualified persons, available at proper time, performing jobs
e]which would meet the needs of the organization and also provide satisfaction for the
individuals involved.
13. Recruitment ,selection and placement- Recruitment is generation of applications for
specific positions for anticipated vacancies.
Selection is the process of ascertaining the qualifications, experience, skills knowledge
etc. of applicants with a view to appraising their suitability for job.
Placement is the process of assigning the selected candidate with the most suitable job.
 Methods/Techniques of Employee Development
1. Decision making skills a) In basket training
b) Case study
c) Business games
2. Interpersonal skills a) Role play
b) Sensitivity training
3. Job knowledge a) On the job experience
b) Coaching
c) Understudy
4. Organizational Knowledge a) Job rotation
5. General knowledge a) Special courses
b) Special meetings
c) Specific readings

6. Specific individual needs a) Special projects

b) Committee assignments
7. Other off the job methods a) Conferences
b) Lectures
c) Group Discussion

1. Decision making skills

The job of employee also consists of taking certain decision. His ability to take effective
decisions can be enhanced by developing decision making skills through various techniques:
a) In -basket- In this the participant is given a no. of business papers such as memoranda,
reports, and telephone messages that would typically cross a manager’s desk. The
papers, presented in no particular sequence, call from actions ranging from routine to
urgent handling. The participant is required to act on the information contained in these
papers.
b) Case Study-The case study method is a means of simulating experience in the
classroom. Under this method the trainees are given a problem or case which is more or
less related to the concepts and principles already tought. They analyze the problem
and suggest solutions which are discussed in the class. The instructor helps them reach a
common solution to the problem. This method gives the trainee an opportunity to apply
his knowledge to the solution of unrealistic problems.
g) Business games- Under this method, an actual business situation is presented as a
model. The participants compete with each other to analyse the problem and to take
decision. Their decisions are processed in stages. A performance report is prepared
periodically to measure the success of the participants. This method is useful in
developing the ability of taking decisions with incomplete data and amid conditions of
uncertainty.
2. Interpersonal skills
These skills are also known as communication skills. Employee must interact with people
actively and make them work unitedly. It can be enhanced through various techniques

a) Role play- This is a technique in which some problem-real or imaginary –involving

human interaction is presented and then simultaneously acted our. Participants may
assume the roles of specific organizational members in a given situation and then act
out. For example- a trainee might be asked to play the role of a supervisors who is
required to discipline an employee smoking in violation of the rules. Another participant
assume the role of employee.
b) Sensitivity training - This is a method of changing behaviour through unstructured
group interaction sought to help individuals toward better relations with other. The
primary focus is on reducing interpersonal friction.
In this actual training employed is T group. It is a small group of ten to twelve people assisted by
a professional behaviour scientist who acts as a catalyst and trainer for the group. He merely
creates the opportunity for group members to express their ideas and feelings freely. The
trainer has no leadership role to play. Participants can discuss anything they like. Individuals are
allowed to focus on behaviour rather on duties. They encouraged to learn about themselves as
they interact with others.
3. Job Knowledge
Employees should also possess job knowledge to perform their jobs effectively:
a) On the job experience- On the job techniques most widely used. No other technique
may interest the trainee so much as the location of the learner is not an artificial one in
the classroom technique. The success of these techniques depends on the immediate
supervisor and his teaching abilities.
b) Coaching- Under this method, the supervisor imparts job knowledge and skills to his
subordinates. The emphasis in coaching or instructing the subordinate is on learning by
doing. This method is very effective if the superior has sufficient time to provide
coaching to his subordinates.
c) Understudy- The superior gives training to a subordinate as his understudy or assistant.
The subordinate learns through experience and observation. It prepares the
subordinates to assume the responsibilities of the superior’s job in case the superior
leaves the organization.
4. Organizational Knowledge
Employees should also possess knowledge of various jobs, products, markets, finance creditors
of the organization.
a) Job Rotation- The transferring of employees from one job to another and from one
department to another in a systematic manner called job rotation. The idea behind this
is to give them the required diversified skills and a broader outlook. It increases the
inter-departmental co-operation and reduces the monotony of the work.
5. General Knowledge
Employees should possess general knowledge as the external environment interacts with and
influences the business.
 a) Special courses- Special courses like the seminars for employee development
programmes organized by the institutes, universities and colleges helps the trainee to
acquire general knowledge.
b) Special meeting- Special meetings organized in consumer forums , voluntary
organizations etc.
c) Specific readings- Specific articles published by various journals, specific portions of
important books, are provided to the trainees to acquire general knowledge.
6. Specific individual needs
Some trainees may be weak in some areas. Such trainees are provided with special facilities for
development.
a) Special projects- In this method, a trainee is put on a project related to the objectives of
his department. For example-a new recruit in a property evaluation firm may be asked
to do a small project reviewing the prospects of selling commercial space in satellite
townships near delhi. The project will give a first hand experience of the problems and
prospects in space selling to the new recruit.
b) Committee Assignments- In this method, an ad hoc committee is appointed to discuss,
evaluate and offer suggestions relating to an important aspects of business. For example
a group of experts may be asked to look into the feasibility of developing a software
technology park in an upcoming area by the delhi development authority.

7. Off the job methods

It requires the worker to undergo training for a specific period away from the work-place. Off
the Job training methods are concerned with both knowledge and skills in doing certain jobs.
The workers are free of tension of work when they are learning.
a) Conference- A conference is a group meeting conducted according to organized plan in
which the members seek to develop knowledge and understanding by oral participation.
It is an effective training device for persons in the positions of both conference member
and conference leader.
b) Lectures- Training through special lectures is also known as class room training. It is
more associated with imparting knowledge than with skills. The special lectures may be
delivered by some executives of the organization or specialists from vocational and
professional institutes.
c) Group discussion- In this method, papers are presented by two or three trainees on a
selected topic, followed stimulating discussions. The topics for discussion are selected in
advance and the papers concerning the same, written by various participants , are
printed and circulated beforehand. It is a variant of the lecture method and is generally
preferred where the intention is to give wide circulation and participation to a number
of experts sharing their experiences with a fairly large group of individuals.
 Difference between Training and Development

Basis Training Development

Meaning Training is a learning process Development is an

in which employees get an educational process which is
opportunity to develop skill, concerned with the overall
competency, and knowledge growth of the employees
as per the job requirement
Term Short Long
Focus on Present Future
Orientation Job oriented Career oriented
Motivation Trainer Self
Objective To improve work To prepare employees for
performance future
Number of Individuals Many Only one
Aim Specific job related Conceptual and general
knowledge
 UNIT-4

Performance Appraisal

Meaning of Performance Appraisal

Performance appraisal means systematic evaluation of the individual with respect to his
performance on the job and his potential for development.

Definition of Performance Appraisal

According to Edwin B Flippo- Performance appraisal is the systematic, periodic and an impartial
rating of an employee’s excellence in matters pertaining to his present job and of his
potentialities for a better job.
Thus, performance appraisal is the process of determining and communicating to an employee
how well he is performing the job.

Objectives of Performance

1. To maintain records in order to determine compensation packages, wage structure,

salaries raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on right job.
3. To maintain and assess the potential present in a person for further growth and
development.
4. To provide a feedback to employees regarding their performance and related status.
5. To judge the gap between the actual and the desired performance
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programmes.
8. To reduce the grievance of the employees
9. To improve the performance of organization through improved employee performance
10. To increase productivity in the organization.

Need/Importance of Performance Appraisal

1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion

programmes for efficient employees. In this regards, inefficient workers can be
dismissed or demoted in case.
2. Compensation: Performance Appraisal helps in chalking out compensation packages for
employees. Merit rating is possible through performance appraisal. Performance
Appraisal tries to give worth to a performance. Compensation packages which include
bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on
performance appraisal. The criteria should be merit rather than seniority.
3. Employees Development: The systematic procedure of performance appraisal helps the
supervisors to frame training policies and programmes. It helps to analyze strengths and
 weaknesses of employees so that new jobs can be designed for efficient employees. It
also helps in framing future development programmes.
4. Selection Validation: Performance Appraisal helps the supervisors to understand the
validity and importance of the selection procedure. The supervisors come to know the
validity and thereby the strengths and weaknesses of selection procedure. Future
changes in selection methods can be made in this regard.
5. Communication: For an organization, effective communication between employees and
employers is very important. Through performance appraisal, communication can be
sought for in the following ways:
a. Through performance appraisal, the employers can understand and accept skills
of subordinates.
b. The subordinates can also understand and create a trust and confidence in
superiors.
c. It also helps in maintaining cordial and congenial labour management
relationship.
d. It develops the spirit of work and boosts the morale of employees.

All the above factors ensure effective communication.

6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating

performance of employees, a person’s efficiency can be determined if the targets are
achieved. This very well motivates a person for better job and helps him to improve his
performance in the future.
7. Performance Feedback: Most employees are very interested in knowing how well they
are doing at present and how they can do better in future. They want this information to
improve their performance in order to get promotions and merit pay. Proper
performance feedback can improve the employee’s future performance.
8. Human resource planning- The appraisal process helps in human resource planning.
Accurate and current appraisal data regarding certain employees helps the management
in taking decisions for future employment. Without the knowledge of who is capable of
being promoted, demoted, transferred, terminated, management cannot make
employment plans for the future.

Process of Performance Appraisal

1. Establishing Performance Standards

In this we use as the base to compare the actual performance of the employees. In this step it requires to set
the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their
contribution to the organizational goals and objectives. The standards set should be clear, easily
understandable and in measurable terms. If employee doesn't come up to expectance, then it should be
taken extra care for it.
 2. Communicating the standards
It is the responsibility of the management to communicate the standards to all the employees of the
organization. The employees should be informed and the standards should be clearly explained. This will help
them to understand their roles and to know what exactly is expected from them.

3. Measuring the actual Performance

The most difficult part of the performance appraisal process is measuring the actual performance of the
employees that is the work done by the employees during the specified period of time. It is a nonstop
process which involves monitors the performance all over the year. This stage requires the watchful selection
of the suitable techniques of measurement, taking care that individual bias does not affect the outcome of
the process and providing assistance rather than interfering in an employees work.

4. Comparing the Actual with the Desired Performance

In this the actual performance is compared with the desired or the standard performance. The comparison
tells the deviations in the performance of the employees from the standards set. The result can show the
actual performance being more than the desired performance or, the actual performance being less than the
desired performance depicting a negative deviation in the organizational performance. It includes recalling,
evaluating and analysis of data related to the employees' performance.

5. Discussing Results
The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The
focus of this discussion is on communication and listening. The results, the problems and the possible
solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be
given with a positive attitude as this can have an effect on the employees' future performance. The purpose
of the meeting should be to solve the problems faced and motivate the employees to perform better.

6. Decision Making
The last step of the process is to take decisions which can be taken either to improve the performance of the
employees, take the required corrective actions, or the related HR decisions like rewards, promotions,
demotions, transfers etc.
Performance Appraisal Techniques

Traditional Methods Modern Methods

 Unstructured Appraisal  Management by
 Employee Ranking objective
 Forced distribution  Behaviorally
 Graphic rating scales anchored rating scales
 Check-lists  360 degree appraisal
 Critical Incident  Customer feedback
 Assessment centres
 Paired-comparison
 Human resource
accounting
1. Traditional Methods – These are very old techniques of performance appraisal. They
are based on trait-oriented appraisal. Evaluation of employees is done on the basis of
standards of personal traits or qualities such as attitudes, judgment, versatility,
initiative, dependability, leadership, loyalty, punctuality, knowledge of job etc.

a) Unstructured Appraisal- Under this, the appraiser is required to write down his
impression about the person being appraised in an unstructured way. However, in some
organizations, comments are required to be grouped under specific headings such as
quality of job performance, reasons for specific job behaviours, personality traits, and
development needs.

b) Ranking Method- Under this method an employee is compared with all other employees
in the group and placed in a simple rank order. In this way, all individuals are rated from
the best to the worst. This method is very simple and natural. It is the oldest method.
Advantages – Adaptability, easy to use, low cost, each type of job can be evaluated, large
number of employees covered, no formal training required. Disadvantages – Rater’s
biases
Employee Rank
A 2
B 1
C 3
D 5
E 4
c) Forced distribution method- Under this method certain categories ( grades) of ability
are established and certain percentage of marks are assigned for each grade. The rater
is forced to distribute the ratings fairly among different grades. E.g. poor 10%, below
average 20%, average 40%, above average 20% and outstanding 10%. The employee is
assigned the grade which best represents his caliber.
d) Graphic rating scale- A graphic scale is a chart that presents the list of qualities and the
range of degree for each quality. Numerical values are assigned to each quality on the
scale. Graphic rating scales are widely used for rating employees. These scales provide
information on the size of differences in rating and help to overcome the problem of a
large number of ratings. It is easy to construct and administer the scales.
 Employee name_________
Dept_______
Rater’s name ___________
Date________
_____________________________________
e) Check-list Method- A check-list is a list of statements that describe the worker and his
behavior . Each statement is assigned a weight or value depending upon its importance.
The rater writes ‘yes’ or ‘No’ against each statement depending upon whether it is
applicable to the worker being rated or not
For example
i. He is punctual Yes
ii. He has thorough knowledge of the job No
iii. He can easily locate faults No
iv. He does not discriminate among employees Yes
f) Critical-incident Method- Under this method, certain key factors that make the
difference between success and failure are identified. These critical incidents are
converted into scales. The superior then observes and record instances and events of on
the job behavior falling under any of the identified factors.

For example, the critical incident of career of an employee may be as

i. Suggested improvement in work method 4

ii. Refused to obey orders 3
iii. Violated the established rules 2
iv. Adverted a serious accident 1

g) Paired Comparison method – This is a variation of the ranking method. In this method,
the rater compares each individual in the group with very other individual. The final
ranking of each employee is determined by the number of times he was judged better
than the others. The number of pairs to be made can be determined by the following
formula:

Number of pairs- N (N-1)

 2

where N stands for the number of the persons to be rates. This is an improvement over the
ranking method. One limitation of this approach is that the number of comparisons become
very large. For example, in a group of 50 workers, there would be 1,225 comparisons.

2. Modern Methods

a) Management by Objective- The concept of Management by Objectives’(MBO) was first

given by Peter Drucker in 1954. It can be defined as a process whereby the employees
and the superiors come together to identify common goals, the employees set their
goals to be achieved, the standards to be taken as the criteria for measurement of their
performance and contribution and deciding the course of action to be followed.

b) Behaviorally Anchored Rating Scales ( BARS)- Behaviorally Anchored Rating Scales (BARS) is
a relatively new technique which combines the graphic rating scale and critical incidents
method. It consists of predetermined critical areas of job performance or sets of behavioral
statements describing important job performance qualities as good or bad (for eg. the qualities
like inter-personal relationships, adaptability and reliability, job knowledge etc). These
statements are developed from critical incidents. 

In this method, an employee’s actual job behavior is judged against the desired behavior by
recording and comparing the behavior with BARS. Developing and practicing BARS requires
expert knowledge.
C) 360 ° Appraisal and Feedback – The 360 ° appraisal involves rating of an employee or
manager by everyone above, alongside, and below him. Corporates like Reliance industries,
Wipro, Infosys, and Thomas Cook are all suing this tool to find out truths about their managers.
It is also used to design promotion and reward system in the organization.

Superior

Peers Employee Others

Subordinates

As shown this diagram , besides the employee himself, superior, subordinates and peers play an
important role in the appraisal. Structured questionnaires are used to collect responses abou
the employees from his superiors, subordinates and peers. Several parameters relating to
performance and behavior are used in questionnaires. Each manager is assessed by minimum
of fifteen colleagues, at least two of them being his bosses, four of them peers, six of them
subordinates. Even the important customers or clients of the firm may also be requested to
give their assessment of the concerned employee. The responses are presented collectively to
assess in the form charts and graphs. Comments and interpretations are presented later.
Counseling sessions are also arranged with the employee to remove the weakness identified in
360 ° assessment.

d) Customer Feedback Method

Customer feedback method is used , especially for sales staff who deal with sales activity in the
organization. Under this method of appraisal system customer feedback is directly linked with
employee performance . This method of assessment could be unbiased and reliable since
customers who are outsiders may give correct judgment about employee who are superiors.
Companies like cognizant and wipro software solutions are using customer feedback of their
sales staff in order to hike salaries.

e) Assessment Centers

This method was used to appraise army officers in Germany was back in 1930s. The concept
was adapted from army to business area in 1960s. In India the concept was adopted by various
organizations such as crompton greaves, Eicher, Hindustan lever etc.
This method is mainly used to evaluate executive and supervisory potential. Here employees
are taken to a place away from work and a series of tests and exercises are administers for
example- to participate in ; in basket exercise, group exercise, role play . Performance of the
employee is evaluated in each of these tests and feedback is provided to the ratee, in terms of
strengths and weekness.

f) Human Resource Accounting

Human resource accounting is the activity of knowing the cost invested for employees towards
their recruitment , training them, payment and salaries and other benefits paid and in return
knowing their contribution to organization towards profitability.
 Rewards and benefits of employees- Compensation ( Wage and salary),
Incentives.
Compensationn
Compensation refers to a wide range of financial and non-financial rewards to employees for
their services rendered to the organization.

It is paid in the form of wages, salaries and employee benefits such as paid vacations, insurance,
maternity leave, free travel facility , retirement benefits etc.

Types of Compensation

Direct Compensation Indirect compensation

 Basic pay  Health care schemes

 Variable pay  Insurances
 Leave travel concessions
 Retirement benefits
 Homes

1. Direct compensation- Direct compensation normally includes the amount payable to

the employees as direct cash rewards for the work extracted from them.
a) Basic pay- This is the basic salary received by the employee as a direct compensation
for the work done by him. It is a fixed component in the compensation and it often
forms the basis for the computation of variable components like bonus and other
benefits. It does not include any incentives or allowances.
b) Variable pay- This is a pay which is basically linked to the performance of the
individual, group or the organization,. Organizations normally offer a portion of the
compensation in the form of variable pay to its employees. Variable pay may include
incentives, commissions, profit-sharing, gain-sharing and bonuses.
  Profit-sharing- In this variable type of pay, an organization distributes a part of
its profit to its employees. An important form of a profit-sharing plan is the
bonus plan, in which the employees get a share of profit at the end of the year.
 Gain-sharing- In gain-sharing, compensation is determined on the basis of group
or organizational performance. Normally savings in costs, increase in quality,
productivity and customer satisfaction are the measures used by sharing the
gains made by the organization.
 Equity plans- Equity stock option plans offered by the companies are also one of
the direct compensation schemes. The purpose of ESOP’s is to create an
ownership interest for the employees in the organization. In this form of direct
compensation, employees stand to gain from the overall performance of the
organization.
2. Indirect compensation- Indirect compensation includes the benefits enjoyed by the
employees but paid by the organization .Usually indirect compensations are available to
all the employees irrespective of their performance in the job. Typically the components
of indirect compensation are health care schemes like mediclaim, insurance schemes,
leave travel concessions, retirement benefits and other social security schemes. Etc.

The primary objective of the compensation plans is to satisfy the employee’s needs. These
needs can be classified as monetary and non-monetary

Monetary needs are satisfied through direct and indirect cash compensation. The non-
monetary needs are satisfied through non-monetary rewards.

Elements of Compensation

 Monthly wage and salary or total pay including basic wage, house rent allowance, and
city compensatory allowance.
 Bonus at the end of the year
 Economic benefits such as paid holidays, leave travel concession
 Contribution towards insurance premium
 Contribution towards retirement benefits such as employee provident fund.
 Transport and medical facilities

Wage – The term wage is used to denote remuneration to workers doing manual or physical
work. Thus, wages are given to compensate the unskilled workers for their services rendered to
the organization. Wages may be based on hourly, daily, weekly or even monthly basis.

Salary- It is defined to mean compensation to office employees, foremen, managers, and

professional and technical staff. It is generally paid on weekly, monthly or yearly basis.
 Factors affecting employee compensation

1) Productivity of workers: to get the best results from the employees and to increase the
productivity compensation has to be productivity based.
2) Ability to pay: it depends upon the employer’s ability to pay wages to the workers. This
depends upon the profitability of the firm. If the firm is marginal and can’t afford to pay higher
than the competitors then the employees will go to other firms while if the company is
successful then they can easily pay their employees as they wish.
3) Government: government has also fixed the rules for protecting the interest of the
employees. The organizations are liable to pay as per the government instructions. Wages can
not be fixed below the level prescribed by the government.
4) Labor union: labor union also helps in paying better wages to the workers. Higher wages
have to be paid by the firm to its workers under the pressure of the trade unions.
5) Cost of living: wages depends upon the cost of living if it is high wages will also hike.
6) Demand and supply of labor: it is one of the important factors affecting wages. If the
demand of labor is more they will be paid high wages otherwise vice versa. If the supply of the
employees is more than they will be paid less and vice versa.
7) Prevailing wage rate: wages also depends upon the prevailing wage rate as the organizations
have to pay accordingly to keep the employees with them.

Incentives

Incentive means any act or promise which induce an individual to respond in the desired
manner. An incentive has motivational power because it helps to satisfy a need. Incentives are
the means through which an organization satisfies the needs of its employees.

An incentive scheme is a plan or programmes to motivate individual or group performance, An

incentive programme is most frequently built on monetary rewards but may also include a
variety of non-monetary rewards or prizes.

The need of incentives can be many:-

1. To increase productivity,
2. To drive or arouse a stimulus work,
3. To enhance commitment in work performance,
4. To psychologically satisfy a person which leads to job satisfaction,
5. To shape the behavior or outlook of subordinate towards work,
6. To inculcate zeal and enthusiasm towards work,
7. To get the maximum of their capabilities so that they are exploited and utilized
maximally.

Types of Incentives

1. Financial Incentives
2. Non-financial Incentives

1. Financial Incentives- Those incentives which satisfy the subordinates by providing them
rewards in terms of rupees. Money has been recognized as a chief source of satisfying
the needs of people. Money is also helpful to satisfy the social needs by possessing
various material items. They involve direct or indirect payment or rewards in terms of
money. These may be paid in cash or kind.
Types of financial Incentives
a) Pay and allowances- Salary is the basic financial incentive for any employee. It
includes basic pay, dearness allowance, and other allowances.
b) Perquisites- Several fringe benefits like housing, medical aid, car allowance, leave
travel concession and education of children are offered in addition to the salary.
c) Retirement benefits- Provident fund, pension, gratuity, and other retirement
benefits create a sense of security among employees.
d) Bonus- Bonus is one time reward given for high performance. For example, a
company may offer foreign trip to its top sales people.
e) Profit sharing- In this employees are given share in the surplus profits of the firm
on the assumption that they contribute to profit earning.
f) Co-partnership- In this employees are given company shares at a price which is
lower than market price.
2. Non-Financial Incentives - Besides the monetary incentives, there are certain non-
financial incentives which can satisfy the ego and self- actualization needs of employees.
The incentives which cannot be measured in terms of money are under the category of
“Non- monetary incentives”. Whenever a manager has to satisfy the psychological
needs of the subordinates, he makes use of non-financial incentives.

Types of Non-Financial Incentives

a) Security of service- Job security is an incentive which provides great motivation to
employees. If his job is secured, he will put maximum efforts to achieve the objectives of
the enterprise. This also helps since he is very far off from mental tension and he can
give his best to the enterprise.
 b) Praise or recognition- The praise or recognition is another non- financial incentive which
satisfies the ego needs of the employees. Sometimes praise becomes more effective
than any other incentive. The employees will respond more to praise and try to give the
23best of their abilities to a concern.
c) Suggestion scheme- The organization should look forward to taking suggestions and
inviting suggestion schemes from the subordinates. This inculcates a spirit of
participation in the employees. This can be done by publishing various articles written
by employees to improve the work environment which can be published in various
magazines of the company. This also is helpful to motivate the employees to feel
important and they can also be in search for innovative methods which can be applied
for better work methods. This ultimately helps in growing a concern and adapting new
methods of operations.
d) Job enrichment- Job enrichment is another non- monetary incentive in which the job of
a worker can be enriched. This can be done by increasing his responsibilities, giving him
an important designation, increasing the content and nature of the work. This way
efficient worker can get challenging jobs in which they can prove their worth. This also
helps in the greatest motivation of the efficient employees.
e) Promotion opportunities- Promotion is an effective tool to increase the spirit to work in
a concern. If the employees are provided opportunities for the advancement and
growth, they feel satisfied and contented and they become more committed to the
organization.

Grievance
A grievance is a formal dispute between an employee & management on the conditions of
employment.

Grievances are complaints that have been formally registered in accordance with the grievance
procedure.

A grievance is any dissatisfaction or feeling of injustice in connection with one’s employment

situation that is brought to the attention of the management.

Dale Yoder defines it as "a written complaint filed by an employee and claiming unfair
treatment".

Causes /Sources
The causes or sources of grievance are classified into three categories as follows:

1. Management Policies
The policies and procedures adopted by management give rise to grievance. The autocratic or
bureaucratic style of management, for instance, is hardly liked by educated masses. But
they favor rather a participative style of management. Similarly, management practices also
lead to employee grievance at work as the want to exploit employees through reduction in pays
and other benefits. Grievances resulting from management policies are:

- Wages rates or scale of pay

- Overtime
- Leave
- Transfer improper matching of the worker with the job
- Seniority, promotion and discharge
- Lack of career planning and employee development
- Lack of regard for collective agreement
- Hostility towards a labor union
- Autocratic leadership style of supervisors.

2. Working Conditions
Working conditions are relative to the work environment of the organization. If the working
environment of company is good, employees will get less place for grievance. Grievance
resulting from working conditions are:

- Unrealistic environment
- Non-availability of proper tools, machines and equipments for doing the jobs
- Tight production standards
- Bad physical conditions of workplace
- Poor relationship with the supervisor
- Negative approach to discipline

3. Personal Factors
Personal factors are related to the personality traits of individuals. Sometimes, these
personality traits also cause the emergence of grievances at work. Some important personality
traits that result into grievance are:

- Over ambition
- Narrow attitudes
- Excessive self esteem
- Gambling and fault finding attitude
- Mental tension

Types or Forms of Grievances

1. Factual Grievances- It arises when a legitimate need of an employee has not been met.
 2. Imaginary Grievance- It arises when a employee grievance is based on wrong
perception, wrong assumption, or Incorrect information and is not a legitimate need. It
leads to development of a negative attitude towards the organization.
3. Disguised Grievance- It arises when an employee is dissatisfied due to reasons unknown
to him. These grievances arise when the psychological needs of employees have not
been met.
Effects of grievances
1. Employees
b.) Management
c.) Work

Following are the effects of grievances on each of the above mentioned

parties: 

a. Employees

i.) Frustration
ii.) Demotivation
iii.) Aloofness
iv.) Low productivity

b.) Management

i.) Labour unrest

ii.) Absenteeism
iii.) Indiscipline
iv.) High labour turnover

c.) Work

i.) Low productivity

ii.) High wastages
iii.) Increased costs

The important steps in grievance handling procedure are:

i.) Accepting the grievance and acknowledging it 

ii.) Carefully listening the problem 
iii.) Understanding the redefining the problem to ensure that both the parties are at the same
level of understanding
iv.) Gathering the information – all facts and figures .
vi.) Offering the best solution 
vii.) Follow up

Grievance Handling Procedure in HRM:

A complaint can become a grievance when it is brought to the formal notice of the
management. It is the peak level of dissatisfaction. Grievances may be factual, imaginary or
disguised. Grievance handling is a sensitive task focused to reduce or eliminate employees
dissatisfaction. Grievance when takes a collective form, can destroy organization's image and
sometime challenge its existence. So, it should be addressed on time. Following procedures can
be followed in grievance handling:

1. Open door policy:

Some companies have an informal and open door policy for grievance handling. Employees are
free to walk in any time and express their grievance to higher level of management. This
approach facilitates upward communication from employees to management. This approach
makes aware about the employee grievances to the management. Prompt handling of
grievances is possible at minimum time and cost. This type of approach is suitable for small
organizations where managers are familiar about their employees and working environment.
Management can allocate adequate time for grievance handling in small organizations.

2. Step ladder procedure:

Since the open door policy is not suitable for large organizations. Most of these companies have
followed step ladder procedure for the settlement of grievances. Grievance procedures are
typically designed to resolve grievances as quickly as possible and at minimum possible level in
the organization. Step ladder procedure is a method of solving the grievance from the level of
origin to the highest level in a step wise way. The grievance is not reached to the higher level at
once. Following steps are taken in this procedure:

i. Step one: Grievant to Superior:

If employees have grievances, she/he can convey about it to the immediate supervisor. The
grievance is conveyed verbally. Supervisor has to listen with a priority and has to take certain
step for its solution within a fixed period of time. This step is suitable for 'give and take'
approach. If the grievant is not satisfied with, next step is followed.

ii. Step two: Grievant to Department Chief:

If the grievant employee is not satisfied with the supervisor's decision, she/he will present the
complaint letter to the department head. Department head will study, analyze and solve the
grievance within a fixed time period. If the grievant employee is not satisfied with the decision
of department head, next step is followed. 

iii. Step three: Grievant to Grievance handling committee:

At this step, grievant employee appeals to the grievance committee. Generally, in large
organization, grievant committee is formed of experts in different discipline. This committee
includes the representatives of employers and employees. Committee identifies various
alternative solutions. If required, they can suggest for the chance or revision of the policy and
procedure. The committee gives a decision within a fixed period of time.

iv. Step four: Grievant to Chief Executive Officer:

If grievance handling committee is unable to satisfy the grievant employees, they can present
their grievance to the chief executive officer. Chief executive will mobilize the sources and
execute authority within the boundary of act, law, policy, rules and directives to handle the
grievance. If the grievance is not handled or resolved at this level, it goes outside the control of
organization. So, the CEO tries to solve the problem with full extent. 

v. Step five: Grievant to Arbitrator:

If CEO cannot satisfy the grievant employees, it may take a serious form. With the consent of
employers and employee, reliable and independent person of organization or committee will be
selected as arbitrator to handle the situation. In this mediating committee, mediator and
representative of employees and employers will be included. On the basis of complaint,
mediator will study the problem seriously. Mediator will discuss with the employer and grievant
employees separately. After different serious of discussion, appropriate alternatives will be
identified, agreed by both of the parties. Generally, the solution prescribed by the mediator is
acceptable to both of the parties.

vi. Step six: Grievant to labor court:

If arbitrator is also unable to solve the grievance, it goes to the labor court. In the labor court,
complaint is registered as a case. Both of the parties hire lawyers from their side. Court decides
the date of hearing. On that particular date, lawyers argue for and against the case. Judge
decides on the basis of legal provision, proofs, argument and reasoning presented by the
lawyers. This decision is bounded to be accepted and followed by both of the parties. Party who
do not obey the counts decision is subject to be punished.