EXECUTIVE SUMMARY

This study sheds light on the relationship between Human Resource

Management (HRM) practices with employee satisfactions. The
objective of the study is to analyze the implementation of Human
Resource Management practices in Hospital Industry and its impact
on perception of employees which leads to Satisfaction or
Dissatisfaction. Human Resources Management function includes Job
Analysis, Manpower planning, Recruitment, Selection, Induction,
Training and Development, Performance Appraisal, Compensation
Management and Industrial Relation. The study focuses on four
functions i.e. Recruitment, Selection, Induction, Training and
Development, Performance Appraisal. It is observed that those
hospitals following systematically and scientifically Human Resources
Management practices create high satisfaction level within
employees. These employees are more committed towards better
performance. On the other side in some well – known hospitals, HR
Dept. is seen as a mere Cost Centre that ensures the payroll is on
time and Leave Record tracking is accomplished. In such hospitals
employee satisfaction level is on lower curve. In era of globalization
where hospital sector is booming and there is increasing demand of
hospital services, all employees should be managed efficiently and
effectively by implementing systematically and scientifically Human
Resources Management practices.
As there is an urgent need to reshape HR function in hospitals in
order to have a competitive edge and to be of world class status,
Hospital organizations are direly required to take stock of their HR
practices without losing any further time to mould HR department
as per the need of the hour.

INTRODUCTION OF HUMAN RESOURCES MANAGEMENT

Human resource management is a function in organizations designed

to maximize employee performance in service of their employer’s
strategic objectives. HR is primarily concerned with how people are
managed within organizations, focusing on policies and systems. HR
departments and units in organizations are typically responsible for a
number of activities, including employee recruitment, training and
development, performance appraisal, and rewarding. HR is also
concerned with industrial relations, that is, the balancing of
organizational practices with regulations arising from collective
bargaining and governmental laws.
HR focuses on strategic initiatives like mergers and acquisitions,
talent management, succession planning, industrial and labor
relations, and diversity and inclusion. In startup companies, HR's
duties may be performed by trained professionals.
In terms of the growth rate, the healthcare industry in India is
moving ahead neck to neck with the pharmaceutical industry and the
software industry. Till date, approximately 12% of the scope offered
by the healthcare industry in India has been tapped. The healthcare
industry in India is reckoned to be the engine of the economy in the
years to come. Growing at an enviable rate of 15% every year, the
healthcare industry in India is estimated to be a $40 million by 2012.
There are vast differences in medical expenses in western countries
and that of India; India has become one of the favorites for
healthcare treatments. Due to the progressive nature of the
healthcare sector in India, several foreign companies are intending to
invest in the country.
Existing healthcare organizations are expanding by opening hospitals
in new service areas and new organizations entering with state of art
equipments, latest technology and marketing strategies.
Consequently, competition in the healthcare sector is on the rise.
Increased incomes and awareness levels are driving the customers to
seek quality healthcare.
The providers in turn need to be more innovative in their approach
and offer quality services at competitive price. All this necessitates
the systematic Human resource Management by trained and
professional managers and administrators. Human resource
management refers to the practices and policies needed to carry out
the personnel aspects of management.
CONCEPT OF HUMAN RESOURCE MANAGEMENT
Human resource management is a process of bringing people and
organizations together so that the goals of each other are met. The
role of HR manager is shifting from that of a protector and screener
to the role of a planner and change agent. Personnel directors are
the new corporate heroes. The name of the game today in business
is personnel. Nowadays it is not possible to show a good financial or
operating report unless your personnel relations are in order.
HR Managers should do the following things to ensure success-
Use workforce skills and abilities in order to exploit Environmental
opportunities and neutralize threats.
Employ innovative reward plans that recognize employee
contributions and grant enhancements. Indulge in continuous quality
improvement through TQM and HR contributions like training,
development, counseling, etc
Utilize people with distinctive capabilities to create unsurpassed
competence in an area, e.g. Xerox in photocopiers, 3M in adhesives,
Telco in trucks etc.
Decentralize operations and rely on self-managed teams to deliver
goods in difficult times e.g. Motorola is famous for short product
development cycles. It has quickly commercialized ideas from its
research labs.
Lay off workers in a smooth way explaining facts to unions, workers
and other affected groups e.g. IBM , Kodak, Xerox, etc.
HR Managers today are focusing attention on the following-
 Policies- HR policies based on trust, openness, equity and
consensus.
 Motivation- Create conditions in which people are willing to
work with zeal, initiative and enthusiasm; make people feel like
winners.
 Relations- Fair treatment of people and prompt redress of
grievances would pave the way for healthy work-place
relations. Change agent- Prepare workers to accept
technological changes by clarifying doubts.
 Quality Consciousness- Commitment to quality in all aspects of
personnel administration will ensure success.
Due to the new trends in HR, in a nutshell the HR manager should
treat people as resources, reward them equitably, and integrate their
aspirations with corporate goals through suitable HR policies.
OBJECTIVE OF THE STUDY
To find the relation and effect of Human Resources Management
with organization effectiveness.
 1. To understand the recruitment procedure adopted by the
Indian companies
2. To understand the HR Practices and policies adopted by Indian
companies.
3. To identify the training and development program adopted by
the Indian companies
4. To identify compensation salary increment policy adopted by
the Indian companies
5. To identify the present performance of an employee being
appraised through career advancement.
6. To identify employee welfare scheme launch by the govt.
7. To identify working hours of the Indian companies.
8. To provide better employee health, safety, welfare facilities as
per their standard policies.
9. To understand the quality circle is beneficial for solving the
problem.
10. To understand the reason of employee turnover.
CONCEPTUAL FRAMEWORK ON HUMAN RESOURCES
MANAGEMENT.
In order to achieve the company objectives, Human Resource
Management undertakes the following activities:
1. Recruitment, selection and placement of personnel.
2. Training and development of employees.
3. Appraisal of performance of employees.
 4. Remuneration of employees.
5. Social security and welfare of employees.
1. RECRUITMENT, SELECTION AND PLACEMENT OF PERSONNEL.

Mode of Appointment:
The appointment to various points shall be made in the following
manner:-
By Direct Recruitment:-
a. The qualifications for direct recruitment shall be such as
specified in the staffing pattern.
b. The appointment shall be made according to the merit list
drawn at the time of selection.
c. All appointments except to class-IV services shall be made on
the recommendations of the selection Committee consisting of
the following:-
By Promotion
a. Appointment by promotion to the next higher post in the
respective discipline in any category shall be made on the basis
 of ‘Seniority-cum-Merit’ from amongst the employees working
in the lower category having at least five years service on the
said post in the steel Industry.
By Transfer:
a. By permanent transfer of services of surplus staff of company
the terms & conditions as Prescribed by company and adopted
by the Board from time to time subject to the approval of
Register.
b. By permanent transfer of an employee on his own request and
upon the terms & conditions as prescribed by the company and
adopted by the board from time to time subject to the approval
of Registrar.
COMMENCEMENT OF SERVICE:
Services shall be deemed to have commenced from the working day
on which the employee reports for duty. If he reports for the duty in
the afternoon’ the services shall be deemed to have commenced
from the following day.
ATTENDANCE AND LATE COMING:-
No employee shall enter or leave the premises of the establishment
accept by the gate or gates meant for this purpose.
An employee who is off his duty or has resigned or has been
discharged or declared by the competent Medical Authority to be
suffering from any contagious or infectious disease, shall
immediately leave the premises of the Established and shall not
enter any part of it, except with the express permission of the
competent authority.
All employees shall be liable to be searched both at the time of entry
and exit at the main entrance of the Establishment by an authorized
person of the same sex with due dignity.
If more than one shift is working, the employee shall be liable to be
transferred from one shift to another.
SENIORITY:
The seniority of an employee under these rules shall be determined
in a particular category of post on the basis of the length of service
on that post provided that in the case of employees appointment by
the direct recruitment which join within the period specified in the
order of appointment or within such period specified by direct
recruitment who join with in the period specified in the order of
appointment or within such period as may from time to time be
extended by the appointing authority, subject to a maximum of one
month from the data of order of appointment, the order of merit
determined, shall not be disturbed. Provided further that in the case
a candidate is permitted to join the service after the expiry of the
said period of one month, his seniority shall be determined from the
data he joins the service.
POSTING AND TRANSFERES:Managing Director shall be competent
to post/ transfer any employee within the establishment. He shall
also be competent to transfer an employee against any equivalent
post or along with post.
2. TRAINING AND DEVELOPMENT OF EMPLOYEES.

“Employee Development" was seen as too evocative of the master-

slave relationship between employer and employee for those who
refer to their employees as "partners" or "associates" to be
comfortable with. "Human Resource Development" was rejected by
academics, who objected to the idea that people were "resources"
— an idea that they felt to be demeaning to the individual.
Eventually, the CIPD settled upon "Learning and Development",
although that was itself not free from problems, "learning" being an
over general and ambiguous name. Moreover, the field is still widely
known by the other names.
Training and development (T&D) encompasses three main activities:
training, education, and development. Garavan, Costine, and Heraty,
of the Irish Institute of Training and Development, note that these
ideas are often considered to be synonymous. However, to
practitioners, they encompass three separate, although interrelated,
activities:
 Training: This activity is both focused upon, and evaluated
against, the job that an individual currently holds.
 Education: This activity focuses upon the jobs that an individual
may potentially hold in the future, and is evaluated against
those jobs.
 Development: This activity focuses upon the activities that the
organization employing the individual, or that the individual is
part of, may partake in the future, and is almost impossible to
evaluate.
3. APPRAISAL OF PERFORMANCE OF EMPLOYEES.

An employee performance appraisal is a process—often combining

both written and oral elements—whereby management evaluates
and provides feedback on employee job performance, including
steps to improve or redirect activities as needed. Documenting
performance provides a basis for pay increases and promotions.
Appraisals are also important to help staff members improve their
performance and as an avenue by which they can be rewarded or
recognized for a job well done. In addition, they can serve a host of
other functions, providing a launching point from which companies
can clarify and shape responsibilities in accordance with business
trends, clear lines of management-employee communication, and
spur examinations of potentially hoary business practices. Yet Joel
Myers notes in Memphis Business Journal that "in many
organizations, performance appraisals only occur when management
is building a case to terminate someone. It's no wonder that the
result is a mutual dread of the performance evaluation session—
something to be avoided, if at all possible. This is no way to manage
and motivate people. Performance appraisal is supposed to be a
developmental experience for the employee and a 'teaching
moment' for the manager."
PERFORMANCE APPRAISAL AND DEVELOPMENT
While the term performance appraisal has meaning for most small
business owners, it might be helpful to consider the goals of an
appraisal system. They are as follows:
1. To improve the company's productivity
2. To make informed personnel decisions regarding promotion,
job changes, and termination
3. To identify what is required to perform a job (goals and
responsibilities of the job)
 4. To assess an employee's performance against these goals
5. To work to improve the employee's performance by naming
specific areas for improvement, developing a plan aimed at
improving these areas, supporting the employee's efforts at
improvement via feedback and assistance, and ensuring the
employee's involvement and commitment to improving his or
her performance.
All of these goals can be more easily realized if the employer makes
an effort to establish the performance appraisal process as a
dialogue in which the ultimate purpose is the betterment of all
parties. To create and maintain this framework, employers need to
inform workers of their value, praise them for their
accomplishments, establish a track record of fair and honest
feedback, be consistent in their treatment of all employees, and
canvass workers for their own insights into the company's processes
and operations.
A small business with few employees or one that is just starting to
appraise its staff may choose to use a prepackaged appraisal system,
consisting of either printed forms or software. Software
packages can be customized either by using a firm's existing appraisal
methods or by selecting elements from a list of attributes that
describe a successful employee's work habits such as effective
communication, timeliness, and ability to perform work requested.
Eventually, however, many companies choose to develop their own
appraisal form and system in order to accurately reflect an
employee's performance in light of the business's own unique goals
and culture. In developing an appraisal system for a small business,
an entrepreneur needs to consider the following:
a. Size of staff
b. Employees on an alternative work schedule
c. Goals of company and desired employee behaviours to
help achieve goals
d. Measuring performance/work
e. Pay increases and promotions
f. Communication of appraisal system and individual
performance
4. REMUNERATION OF EMPLOYEES

Employee Remuneration refers to the reward or compensation given

to the employees for their work performances. Remuneration
provides basic attraction to a employee to perform job efficiently
and effectively. Remuneration leads to employee motivation.
Salaries constitute an important source of income for employees and
determine their standard of living. Salaries affect the employee’s
productivity and work performance. Thus the amount and method of
remuneration are very important for both management and
employees.
There are mainly two types of Employee Remuneration
a. Time Rate Method
b. Piece Rate Method
These methods of employee remuneration are explained below in detail
Methods of Employee Remuneration
a. Time Rate Method: Under time rate system, remuneration is
directly linked with the time spent or devoted by an employee
on the job. The employees are paid a fixed pre decided amount
hourly, daily, weekly or monthly irrespective of their output. It
is a very simple method of remuneration. It leads to minimum
wastage of resources and lesser chances of accidents. Time
Rate method leads to quality output and this method is very
beneficial to new employees as they can learn their work
without any reduction in their salaries. This method encourages
employee’s unity as employees of a particular group/cadre get
equal salaries.
There are some drawbacks of Time Rate Method, such as, it leads to
tight supervision, indefinite employee cost, lesser efficiency of
employees as there is no distinction made between efficient and
inefficient employees, and lesser morale of employees.
Time rate system is more suitable where the work is non-repetitive
in nature and emphasis is more on quality output rather than
quantity output.
b. Piece Rate Method: It is a method of compensation in which
remuneration is paid on the basis of units or pieces produced
by an employee. In this system emphasis is more on quantity
output rather than quality output. Under this system the
determination of employee cost per unit is not difficult because
salaries differ with output. There is less supervision required
under this method and hence the per unit cost of production is
low. This system improves the morale of the employees as the
salaries are directly related with their work efforts. There is
greater work-efficiency in this method.
There are some drawbacks of this method, such as; it is not easily
computable, leads to deterioration in work quality, wastage of
resources, lesser unity of employees, higher cost of production and
insecurity among the employees.
Piece rate system is more suitable where the nature of work is
repetitive and quantity is emphasized more than quality.
6. SOCIAL SECURITY AND WELFARE OF EMPLOYEES
PROVIDENT FUNDS:
Employees shall be entitled to the membership of the Employees
Provident Fund and other schemes under the employees Provident
Fund and Misc. Provisions Act’ 1952 irrespective of the pay drawn b
him re-employed persons shall be governed by the terms of their
appointment.
BONUS:
Employees shall b entitled to payment of the Bonus under the
payment of Bonus Act, 1965 as amended or re-enacted from time to
time.
MEDICAL BENEFITS:
An employee, as and when covered under the PSI Act/Scheme, shall
get medical benefits as provided there in. An employee not covered
under the PSI Act/Scheme shall be entitled to medical benefits as
may be decided by the board from time to time with the
concurrence of the company.
ALLOWANCE:
Dearness Allowance, Additional Dearness Allowance, House Rent
Allowance, City Compensatory Allowance, Rural Allowance and
Other Compensatory Allowance Shall be Admissible to the
Employees of the Life Insurance as per the Decision of the Board with
the concurrence of the company.
 BENEFITS ADMISSIBLE IN THE EVENT OF DEATH OF AN EMPLOYEE
DURING
SERVICE:
In case of death of an employee while in the service of company his
family members shall be entitled to the following benefits/ facilities
at the rates/scales and on the teams & conditions as approved by the
board.
Ex-gratia grant.
a. House Rent Allowance.
b. Encashment of P. leaves.
c. Priority for employment of window/dependent of deceased
employee.
d. Special Ex-gratia grant to the family members of an employee
of the company Killed by terrorist action.
LEAVE:
All the employees shall be entitled to the following kinds of leave:-
 PRVILEGE LEAVE (LEAVE WITH WAGES:
One day for every 18 days of service (for the purpose of calculation
of days of services, the period of Privilege Leave availed and leave
without wages/ absence shall not be counted).
 CASUAL LEAVE:
12 days per annum.
 SICK LEAVE:
14 days per annum to those employees who are not covered by the
ESI ct/Schemes.
7 days per annum to these employees who are covered by the ESI
Act/Scheme.
RESIGNATION:
If a regular/permanent employee intends to leave the service of
tendering resignation, he shall have to give one month’s notice in
writing, otherwise, he shall have to deposit on e month’s
notice in writing, otherwise, he shall have to deposit one month’s
salary or salary for the period by which the notice falls short of one
month (for this purpose salary will include basic pay + all other
allowance admissible thereon, experts House Rent/Rural allowance,
Conveyance Allowance and Medical Allowance.)24 hours notice shall
be required for tendering resignation during probation period.
The resignation tendered by the employee may be accepted by the
appointing authority.
SUPERANNUATION / RETIREMENT
Every employee shall be superannuated on the afternoon of the last
day of the month in which he attains the age of 58 years.
Not with standing anything contained in Rule 17.1 above, an
employee may be permitted at his own request to retire room the
service attaining the age of 50 years or after 20 years of service at
any time by the appointing authority provided three months notice.
A thing contained in rule 17.1 and 17.2 above, the appointing
authority shall, if it is of the opinion after reviewing the entire service
record of an employee that he is not fit to be retained in the service
and that it is in the interest of the Life Insurance.
Major misconducts:
Without prejudice to the generality of the term, “misconduct”, the
following acts of communion or omission shall, interlaid, constitute
specific acts of Major Misconduct on the part of the employee:
a. Breach or habitual breach of any standing instructions or rules
regulations, conditions of the appointment letter or orders
issued by the establishment from time to time.
b. Acting in any manner prejudicial to the inertest or reputation of
the establishment, disregard of any operation & maintenance.
c. Negligence or habitual negligence of duty or laziness or in
efficiency or incompetence or malingering or neglect of work or
carelessness in work, poor or unsatisfactory performance
intentionally. Bring narcotic, liquor or other intoxicating things
in premises or reporting.
d. Doing private or personal work during working hours, engaging
in any other trade, business profession, service of the
Establishment without while in the competent authority.
PUNISHMENTS FOR MAJOR MISCONDUCTS:
One or more of the following punishments may be imposed on an
employee who is found guilty of a major misconduct, namely:-
 a. Stoppage of one or more annual grade increments of pay with
or without cumulative effect.
b. Recovery of damages or the amount of loss suffered by the
Establishment on account of misconduct of the employee.
c. Demotion to the Lower post.
d. Termination of service.
e. Dismissal from service.
PUNISHMENTS FOR MINOR MISCONDUCTS:-
One or more of the following punishments may be imposed on an
employee who is found guilty or minor misconduct, namely:-
a. Warning or Censure.
b. Making an adverse entry in his service record.
c. Stoppage of one annual grade increment of pay with or without
cumulative effect for a period of six months.
d. Recovery of loss of goods expressly entrusted to the employee
or more for which he is accountable.
e. Recovery from his pay of the he is accountable, pecuniary loss
caused by him to the establishment by negligence or breach of
orders.
f. Suspension without pay or subsistence for a period not
exceeding 15 days.
APPEAL AGAINST PUNISHMENT:
 An appeal against the orders of the competent authority
imposing punishment, under rules 29 and 30 of these riles shall
 lie to the board of directors of the company. The board shall
constitute a committee consisting of chairman, nominee of the
company, nominee of RCs and nominee of NDDB to examine
the appeal on the basis of records.
 An appeal shall be filled within a period of 30 days from the
data on which the appellant receives a copy of the order
appealed against or is deemed to have received.
 The appellate authority may after consideration of the case and
on recording sufficient reasons yet aside, reduce, confirm or
enhance the punishment and its decides to enhance the
punishment, the accused employee shall be given an
opportunity to show cause against such enhancement.
SUSPENSION:
In a case where it is considered that the employee be suspended
pending enquiry, the competent authority may suspend the
employee pending issues of a charge sheet or subsequent domestic
enquiry or till the final orders are passed on the enquiry case. Where
criminal proceeding against an employee in respect of any offence
involving moral turpitude is pending and the competent authority is
satisfied that it is necessary/desirable to place the employee under
suspension, the competent.
SUBSISTENCE ALLOWANCE DURING SUSPENSION:
 An employee shall be paid during the period of suspension
subsistence Allowance @ 50 % of the wages to which the
 employee was entitled to immediately preceding the date of
such suspension for the first 90 days of suspension and 75% of
such wages for the remaining period of suspension.
 The payment of subsistence Allowance to the suspended
employee shall be subject to his processing a certificate every
month about his having not taken up any other employment
and his having remained at the head quarters.
JOB SATISFACTION
For an individual, Job Satisfaction would mean that something within
him reacts favorably to the job and its environment. Locke (1990)
gives a comprehensive definition of Job Satisfaction as involving
cognitive, affective and evaluative reactions or attitudes and states
that it is a “pleasurable or positive emotional state resulting from the
appraisal of one’s job or job experience.” (Locke, 1990)
Job Satisfaction is defined as, “A sense of personal growth most
often measured by the extent of new challenges and learning
situations experienced.” (Jensen, 2000).
Brown, A., Forde, C., Spencer, D. and Charlwood, A. (2008), Changes
in HRM and job satisfaction, 1998–2004: evidence from the
Workplace Employment Relations Survey.
If the employee feels that his job is secure and he is happy about it
he will have more Job Satisfaction and Organizational Commitment.
The level of Job Satisfaction could be increased by giving the
employee job security, career planning, healthy working
environment, adequate benefits and compensation and good job
prospects.
ORGANIZATIONAL COMMITMENT
Organizational Commitment is the feeling of belongingness, towards
the organization, an employee feels that the organization is his own
and he is ready to work in the organization wholeheartedly. He feels
attached to the organization and in circumstances would he like to
part with it. He fully agrees with the mission and vision of the
organization and works wholeheartedly for achievements of his
goals. It is the desire of the employee to remain a part of the
organization. Organizational Commitment is an unseen bond
between the employee and an organization.
”Organizational Commitment is defined as a state in which an
employee identifies with a particular organization and its goals, and
wishes to maintain membership in the organization. So, high job
involvement means identifying with one's specific job, while high
organizational commitment means identifying with one's employing
organization.”
(Robbins Stephen P., 2005)
The Organizational Commitment is most often defined as
i. A strong sense of bonding or attachment for a particular
organization;
ii. A willingness to work hard at its best for the organization.
iii. Strongly agrees with the mission and vision of the organization
and works wholeheartedly for achievements of the goals of the
organization.
Normative Commitment involves the employee’s feelings of
obligation to stay with the organization. “Workers with a strong
normative commitment feel that they ought to stay within the
organization because he/she believes they should” (Meyer and Allen,
1991). The employee feels that he is obliged to stay in the
organization due to some reason. Organizational Commitment builds
with time. It is generally found more in an employee who has been
serving the organization from a long time. It is generally found in
candidates who have achieved personal success in the organization,
and are happy with the working of the organization. “In particular,
their broader base of job knowledge often translates into loyal
customers who buy more from them, make referrals resulting in new
customers, and even pay a premium price”, (Iver and Roy, 1994).
The factors of employee commitment are fairness, trust and concern
for employees. It is the responsibility of the Employers and HR
managers to with fairness, trust and care; otherwise it becomes very
difficult to gain employee commitment. “Providing right kind of
physical environment (light, temperature, seating, and cleanliness),
communication facilities (e-mail and telephone facility) and creating
social environment (supervisory care, cooperation, team working
and mentoring) can enhance employee's organizational
commitment.” (Bragg, 2002)
‘Organizational Commitment can be built in the following manner
through: Justice and Support, Job Security, Organizational
Comprehension, Employee Involvement and by Trusting employees.
Commitment to an organization, as we have been lead to believe, is
not exclusively a function of the attributes of the organization or its
executive constellation. It is a function of the larger culture. The
larger culture will either support or negate support of the activities
associated with commitment. Specifically, it is suggested that
practicing managers do not create commitment they merely support
the established attitudes and values towards commitment that
already exists in the larger culture and family” (Czander Lee, 2001).
This article explores the relationship between HR practices and
commitment in three health service organizations. The findings
indicate that the HR practices followed in the organization are liked
by employees, and are very different from the lists of big HR
practices that are seen in the other human resource literature. The
research suggests that organizations need to ensure that employee
happiness should be emphasized and that these are not given up in a
hurry to enforce more sophisticated approaches for managing
employees. Conway, E. and Monks, K. (2008)
Janet Chew, Christopher C.A. Chan: Human resource practices,
organizational commitment and intention to stay
Followings were the findings – Organizational commitment was
positively related to remuneration, recognition, and an opportunity
to undertake challenging employment assignments, training and
career development. Surprisingly, training and career development
was not significantly related to organizational commitment and
challenging assignment was not significantly related to intention to
stay.
In the present competitive world, the companies are facing lot of skill
shortage, talent crunch and attrition those reached historically
height ever, that made the companies feel the internal customer also
more important equally with external customers, so every company
try to devise innovative HR practices to attract best talent , giving
them nice environment to work with, that enables the company to
retain talents, the above said practices are conceived and
implemented and found successful by the leading companies in
India. It is found that convergence of practices of different
companies in different HR areas, if any company wants to apply
those practices that will benefit for the company to become more
competitive in the global market.
Hospital: as Service Industry
1 Healthcare Organization
In the healthcare industry, as in most other service industries, the
interaction between patients and healthcare service providers
(professionals and other employees) is an integral part of the service
process (Conway & Willcocks 1997, Benbassat & Taragin 1998).
Health Care Organizations should be encouraged to take the role of
the patient into consideration in the healthcare service process, and
in order to achieve high quality service (White 1999) respond to
patients’ needs and expectations. Another issue that is likely to
challenge HCO management is the central role played by employees
in Service quality achievement. White (1995) reported cooperation
between employees and managers as the key to providing high
quality care, because it can compensate for the constraints imposed
by cost containment and managed care. In pursuit of this objective,
management might seek to implement progressive HRM practices
that encourage service oriented behavior and show concern for
employees’ organizational and personal needs.
2.History, Growth and Classification of Hospitals in India
Since Independence, India has achieved remarkable progress in
social, political and economic fields. After the liberalization, this
progress has been given further fillip and has been recognized by the
advanced countries. In the area of medical science too,
commendable progress has been made during this period.
Unfortunately, however, hospital administration has lagged far
behind. Even the most sophisticated and the so called modern
hospitals in India continue to be governed by the stereotyped system
of hospital administration, viz. appointing the senior-most doctor as
the Medical Superintendent. He is entrusted with the responsibility
of the entire administration of the hospital, irrespective of whether
or not he has undergone any formal (or even informal) training in
hospital administration.
Times have changed and specialization has become the order of the
day. It is, therefore, imperative to have separate specialists for
general administrative and human resource functions in hospitals.
Secondly, with the tremendous expansion in health services, it has
become essential to have specialists or experts not only in these two
fields, but also in other fields of hospital administration, so that
maximum efficiency can be achieved at the minimum cost. Thirdly,
the rapidly rising number of patients and the inadequate expansion
of hospitals and medical services have thrown the hospital
administration machinery completely out of gear. Hence, the need
for better planning, organizing, staffing, coordinating and controlling
hospitals can hardly be overemphasized. Hospital administration can
no longer be left to continue in the hands of a person who is 'Jack-of
all trades' and 'master-of-none'
3. Complexity of Hospital Industry
Though Hospitals have been compared to industry, there is a distinct
difference. The product of a hospital is service to people provided by
its personnel with a variety of skills. The nature of the demand for
Hospital services is also distinctive to the hospital – as admission to
the hospital for services is need driven. The patient leaves his home,
family, friends, his work place, and his way of life for a new
environment i.e. the hospital where he becomes one of the many.
He is housed with strangers and carries out several intimate
functions in their presence. Moreover, he encounters the different
hospital personnel performing different functions.
4. Features of Hospital: Peculiarities associated with hospitals:
 Vast range of services
It includes medical research, improved surgical techniques,
knowledge and application of newer fields.
 Changing Patient Profile:
Consist of different types of diseases requiring wide range of
services.
 High Cost:
Both these factors have resulted in steep increase in expenditure for
starting and running a hospital.
 Increasing Use of sophisticated equipment:
Sophisticated equipment increases the cost of operating.
 Critical role of employees:
Hospitals are labor intensive. Good quality health care requires
expert and experienced medical and paramedical staff.
 Public Perception of Medical Services:
Public continues to look upon hospitals as institutions meant to
provide their services to the society as cheaply as possible.
 Need for Innovative Financing:
5. Classifications of Hospitals
Hospitals have been classified in many ways. The most commonly
accepted criteria for the classification of the modern hospitals are:
(a) length of stay of patients (long-term or short-term), (b) clinical
basis, and (c) ownership control basis. The following is a discussion
on the third aspect.
Classification According to Ownership/Control
On the basis of ownership or control, hospitals can be divided into
four categories, namely, public hospitals, voluntary hospitals, private
nursing homes and corporate hospitals.
Public hospitals: Public hospitals are those run by the Central
Government, state governments or local bodies on non-commercial
lines. These hospitals may be general hospitals or specialized
hospitals or both. General hospitals are those which provide
treatment for common diseases, whereas specialized hospitals
provide treatment for specific diseases like infectious diseases,
cancer, eye diseases, psychiatric ailments, etc. General hospitals can
diagnose patients suffering from infectious diseases, but refer them
to infectious disease hospitals for hospitalization, as general
hospitals are not licensed to treat infectious-disease patients.
Voluntary hospitals: Voluntary hospitals are those which are
established and incorporated under the Societies Registration Act,
1860 or Public Trust Act, 1882 or any other appropriate Act of the
Central or state government. They are run with public or private
funds on a non-commercial basis. No part of the profit of the
voluntary hospital goes to the benefit of any member, trustee or to
any other individual. Similarly, no member, trustee or any other
individual is entitled to a share in the distribution of any of the,
corporate assets on dissolution of the registered society. A board of
trustees, usually comprising prominent members of the community
and retired high officials of the government, manages such hospitals.
The board appoints an administrator and a medical director to run
such voluntary hospitals. These hospitals spend more on patient care
than what they receive from the patients. There is, of late, a trend
among voluntary hospitals to charge reasonably high fees from rich
patients and very little from poor patients. Whatever they earn from
the rich patients of the private wards, spend on the patients of
general wards. However, the main sources of their revenue are
public and private donations, and grants-in-aid from the Central
Government, the state government, and from philanthropic
organizations, both national and international. Thus, voluntary
hospitals run on a 'no profit, no loss' basis.
Private Nursing Homes: Private nursing homes are generally owned
by an individual doctor or a group of doctors. They admit patients
suffering from infirmity, advanced age, illness, injury, chronic
disability, etc., or those who are convalescing, but they do not admit
patients suffering from communicable diseases, alcoholism, drug-
addiction or mental illness. There is, however, no uniform definition
for nursing homes. The phrase may refer to out-of-home care
facilities that offer a range of services similar to many found in a
hospital. These nursing homes are run on a commercial basis.
Naturally, the ordinary citizen cannot usually afford to get medical
treatment there. However, these nursing homes are becoming more
and more popular due to the shortage of government and voluntary
hospitals. Secondly, wealthy patients do not want to get treatment
at public hospitals due to long queues of patients and the shortage of
medical as well as nursing staff leading to lack of medical and nursing
care.
Corporate hospitals: The latest concept is of corporate hospitals
which are public limited companies formed under the Companies
Act. They are normally run on commercial lines. They can be either
general or specialized or both. What is Trust Hospital? (With
Reference to Trust Hospital from Mumbai) Where the Hospital is
registered under The Bombay Public Trusts Act, 1950, it is considered
to be Trust Hospital. The Bombay Public Trusts Act, 1950 provides
machinery of charity commissioners to regulate the administration of
public religious and charitable trusts. It makes registration of all the
public religious and charitable trusts including the religious trusts
created under Hindu Muslim and Christian personal laws mandatory
and prescribes certain norms for the maintenance and audit of
budget, and accounts of such trusts and further empowers the
charity commissioners to inspect and supervise the property
belonging to a public trust and as well the proceedings of the
trustees and books of accounts of such a trust. That apart, the act
also creates certain restrictions on the investment of public trust
money and as well alienation of immovable property of such a trust.
6. Types of Hospitals
(i) General hospital: All establishments permanently staffed by at
least two or more medical officers, which can offer in-patient
accommodation and provide active medical and nursing care for
more than one category of medical discipline (e.g. general medicine,
general surgery, obstetrics).
(ii) Rural hospital: Hospitals located in rural areas (classified by the
Registrar General of India) permanently staffed by at least one or
more physicians, which offer in-patient accommodation and provide
medical and nursing care for more than one category of medical
discipline (e.g. general medicine, general surgery and obstetrics).
iii) Specialized hospital: Hospitals providing medical and nursing care
primarily for only one discipline or specific diseases (e.g.
tuberculosis, ENT, eyes, leprosy, orthopedic, pediatrics,
gynecological, cardiac, mental, cancer, infectious disease, and
venereal diseases). The specialized departments, administratively
attached to a general hospital and sometimes located in an annex or
separate ward, may be excluded and their beds should not be
considered in this category of specialized hospitals.
(iv) Teaching hospital: A hospital to which a college is attached for
medical/dental education.
(v) Isolation hospital: This is a hospital for the care of persons
suffering from infectious diseases requiring isolation of the patients.
(vi) Tertiary hospital: States and Central Governments set up tertiary
hospitals in their capitals where referred patients are treated such as
AIIMS, New Delhi, P.G.I. Chandigarh, Sanjay Gandhi, P.G.I., Lucknow,
etc.
7. Types of Management
(i) Central Government / Government of India: All hospitals
administered by the Government of India, viz. hospitals run by the
railways, military, mining/ESI/ Post & Telegraphs, or public sector
undertakings of the Central Government.
(ii) State government: All hospitals administered by the state union
Territory government authorities and public sector undertakings
operated by states/UTs, including the police, jail, canal departments
and others.
(iii) Local bodies: All hospitals administered by local bodies, viz. the
municipal corporation, municipality, zila parishad, panchayat.
(iv) Private: All private hospitals owned by an individual or by a
private organization.
(v) Autonomous body: All hospitals established under a special Act of
Parliament/ state legislation and funded by the central/state
government Union Territory, e.g. AIIMS (New Delhi).
(vi) Voluntary organization: All hospitals operated by a voluntary
body/a trust/ charitable society registered or recognized by the
appropriate authority under Central/ state government laws. This
includes hospitals run by missionary bodies and co-operatives.
(vii) Corporate body: A hospital runs by a public limited company. Its
shares can be purchased by the public and dividend distributed
among its shareholders.
8. Functions of the Hospital
1. To provide care for the sick and injured: This can be done by
accommodating them according to their physical condition and
financial status. When we talk of physical condition, we mean that
some patients are seriously ill and require admission in Intensive
Care Unit while others are not so seriously ill and can be'
accommodated elsewhere (e.g. in deluxe room, single room with AC
and without AC, semi-private room and general ward) according to
their financial status. There may be some patients who may require
isolation. In that case, they should be kept in isolated rooms, but the
building should be kept always in a good state of repair, pleasing
appearance and providing the patient every mental and physical
comfort. In every hospital, there should be sufficient diagnostic and
treatment facilities available such as medical laboratory, X-ray,
ultrasound, MRI and CT scan for diagnosis, and operation theatre for
surgery, labor room for delivery, nursery for children, physical
therapy for rehabilitation of patients, so that they may be properly
treated.
2. Training of physicians, nurses and other personnel: They receive
their training in both theory and practice in approved schools and
colleges. Therefore, a hospital being a complex and specialized
organization must employ highly trained personnel so that they may
train others. Particularly in the branch of medical and paramedical
education, different associations/councils play very important roles.
They make surveys of hospitals and accord their approval. Only these
approved hospitals can provide training in medicine, nursing,
dietetics, pharmacy, physiotherapy, administration, medical social
work, medical record library, X-ray and medical record technology,
etc. Capable boys and girls should be attracted to such courses as a
career which offers them fair remuneration, opportunities for self-
development and reasonable security.
3. Prevention of disease and promotion of health: It is the duty of
the hospital to cooperate with the government agencies. They can
treat patients of communicable and non-communicable diseases,
notify to the recognized authorities of any communicable disease of
which it has knowledge, assist in vaccination programmes of the
government, etc.
4. Advancement of research in scientific medicine: In light of the
broad social responsibility for maintaining and restoring the health, it
is an important function, but no hospital is permitted to do direct
experiments on patients. It must resort to necessary tests in
laboratories and on animals. They can do so by making observations
of functions of the body in health and in disease but they will have to
main clinical record of patients accurately for which they have to
engage qualified trained medical record technicians who will
preserve the record in such a manner that it can be made available
for study at any time to physicians and surgeons.
9. Complications in Hospital Function
A hospital has many organizational and operational elements in
common with hotels, industrial organizations and educational
institutions. However, a hospital is a unique institution as it includes
all activities present in each of the above-mentioned groups. The
difference between administrative work in hospitals and in other
organizations can be attributed to the existence of the following
conditions peculiar to hospitals:
1. The consumers of the services provided in a hospital (the patients)
are physically or mentally ill and are rendered services within the
four walls of the hospital. As compared with most other institutions
of business, government and education, this is an unusual situation
and presents quite different problems of management.
2. The customers of the hospital (the patients) have individual needs
and require highly personalized and custom-made services, the
diagnostic, therapeutic and preventive services provided by
physicians, nurses and technicians, with the aid of expensive and
specialized equipments and medication are needs of each individual
consumer.
3. In addition to the more common institutional services and
functions such as food preparation, general housekeeping, laundry,
maintenance, purchasing, personnel, credit and collection and public
relations, the hospital also provides a wide range of scientific and
technical services such as nursing, diet therapy, anesthesiology,
pharmacy, radiology, clinical laboratory, physiotherapy and medical
social work. Also, many of its services are provided continuously,
round the clock, every day of the year.
4. All these services involve many individuals-the ill customer
himself, his emotionally tense relatives and friends, physicians,
technologists, clerks and manual laborers. These individuals are
working, suffering, eating and sleeping within a comparatively small
space and in an unusual atmosphere, highly charged with emotion
and tension. Only a very capable administrator can adequately
understand and effectively deal with the human relations problems
arising from these constraints.
5. Nurses and certain other personnel must accept direction from
both the matron and the physicians under whom they work closely
every day. The human relations problems in such situations of dual
authority are much more frequent, delicate, varied and complex than
in organizations where this situation does not exist.
6. Handicapped by low wages, rigid discipline and some
apprehension of exposure to disease, hospital personnel are
expected to maintain a very high level of efficiency, as their
functioning affects the lives of patients.
7. Another way in which the responsibilities and activities of the
hospital administrator differ from his counterpart in other fields is in
the amount and variety of training programmes that the hospital has
to provide. Training is provided for medical interns and residents (6
months to 1 year), nurses (3 to 4 years), X-ray technicians (2 years),
medical laboratory technicians (2 years), physiotherapists (4 years),
pharmacists (2 years), medical social workers (2 years), dieticians (2
years), nurse aides and nursing orderlies (l year).Classroom, clinical
and apprenticeship training methods are used in varying
combinations The administrator is responsible for planning and
operating these various training programmes. Very few other types
of institutions combine such major educational responsibilities with
other operating activities.
8. Just as administration in hospitals differs from that in most other
fields, similarly, public relations aspects and problems of hospitals
are more pervasive, delicate and volatile. The human elements-the
consumers (patients), producers of care and services (doctors, nurses
and other personnel), the variety of community health agencies, the
other competing hospitals, the people in the community (relatives
and friends of the patients)- and the conditions and environment in
which they are brought together (the hospital), present public
relations problems of a sort and variety vastly different from those of
most other institutions.
9. The efficiency and quality of health care services in any hospital is
directly dependent on the use of bio-medical equipments in
diagnosis, surgery and therapeutic process. These equipments
invariably employ sophisticated technology made of complex
systems. Hence, the problem of maintenance and management of
these bio-medical equipments is complex because there is acute
shortage of technical hands who have suitable and adequate training
in the maintenance and repairing of these specialized hi-tech
equipments. At times, spare parts and components are not available
because the models of these equipments undergo frequent change.
Next, the local dealers in India by and large do not provide
worthwhile after sales service or repair. The poor hospital
administrator is in a fix whether to go for hi-tech bio-medical
equipments or use conventional methods of treatment. If he opts for
the first, he either discards these equipments one after another in
view of the above mentioned factors, or enhances the cost of
treatment. If he does not opt for hi-tech biomedical equipments, he
loses his clientele.
10. The introduction of Consumer Protection Act, 1986 and
subsequently, the Supreme Court judgment bringing doctors under
the purview of this act have evoked diverse reactions. While the
public is happy about what they call it a long overdue judgment; but
the doctors and hospital administrators are not happy at all as it will
worsen the patient doctor relationship and surely increase the cost
of treatment. The poor hospital administrator will have to attend
consumer courts for no rhyme or reason in most of the cases as the
patients are not only misled by advocates, but the consumer courts
issue notices to doctors and hospitals without understanding the
nature of complaints filed by patients. In other institutions, such as
hotel or industry chief executives can explain to the advocate, in
their office, the line of defense to be taken in the consumer courts
before the trial begins, but in case of hospitals, their hospital
administrators will have to stand by the side of their advocates to
explain each step taken in the treatment of patients by doctors, as
neither the advocates nor the judges of the consumer courts possess
any medical expertise.
11. Hospital waste management is another peculiar condition to
administrative work in hospital and has become a burning issue
these days for hospital administrators, as increased awareness of
health and its related problems amongst the general public has led
to the demand for comprehensive health care facilities which in turn
require frequent visits to hospitals by the patients to undergo various
tests. This results in the escalating amount of hospital waste
generation in the environment. This hospital waste is not like
domestic waste, but a potentially hazardous waste. Its unscientific
disposal can pose serious problems to the public in general, and the
hospital administrator in particular, as it results in increased
morbidity due to chemical and radioactive toxicity in the
environment and transmission of various diseases. The conventional
waste disposal method does not work at all. Hence the hospital
administrator faces another peculiar problem what is not faced by a
chief executive of a business organization or a hotel in disposing of
the waste of their institutions.
This distinctiveness of hospital administrations, call for a high degree
of professional competence to do justice to the job. It is, therefore,
obvious that hospital administration should be entrusted to those
who have the necessary training and the right kind of attitude to
perform this vital task.
10. Organizational Chart
Most of the hospital is having following organizational Chart.
11. Human Resource: Valuable Assets in Healthcare Industry
Human resources, when pertaining to health care, can be defined as
the different kinds of clinical and nonclinical staff responsible for
public and individual health intervention. As arguably the most
important of the health system inputs, the performance and the
benefits the system can deliver depend largely upon the knowledge,
skills and motivation of those individuals responsible for delivering
health services.
HRM in health has to function in a sector with some unique
characteristics. The workforce is large, diverse, and comprises
separate occupations often represented by powerful professional
associations or trade unions. Some have sector-specific skills; other
can readily move from the health sector to employment in other
sectors. The avowed first loyalty of those with sector-specific skills
and qualifications (physicians, nurses, etc.) tends to be to their
profession and their patients rather than to their employer.
12. Categories of Employees and Functions:
Broadly speaking Employees are divided into four categories
 Doctors/ consultants/Surgeons – These people are highly
qualified & professional.
Their main functions are clinical treatment, Patient care, Medical
Audit, Education & Research.
 Nurses:
They are involved in Nursing care, Relationship, Ward Management,
Education.
 Administrative Staff:
These people are involved in overall Management of the hospital. It
also includes support services like kitchen, Laundry, Engineering,
C.S.S.D, Security, and HR Dept. Finance Dept. etc.
 Paramedical Staff:
It includes all technicians, pharmacist and so on.
13. Hospital Ethics
The code of ethics of hospitals goes hand in hand with the code of
ethics of physicians. Both of them are required to follow their ethics
to render care to the sick and injured. As far as the hospital code of
ethics is concerned, it was developed nearly half century ago, but the
code of ethics of physicians has been in existence since the days of
Hippocrates who lived about B.C. 460-377. Today, the code of
medical ethics has become the fundamental law of the hospitals and
is applicable to all its personnel, including the trustees.
HR Practices in Hospitals
HR practices prevailing in the twelve hospitals in Mumbai as follows:
1 Asian Heart Institute – Bandra, Mumbai
RECRUITMENT: A broad Manpower Planning exercise precedes the
recruitment process. The manpower planning is done keep in view
the present and prospective requirements.
SOURCES OF RECRUITMENT: The hospital depends on the following
sources for their recruitment:
 Placement Consultants
 Walk- in Interviews
 References
 Internal Circulars for vacancies on intranet
 Campus recruitment
 Advertisement in newspapers
For Junior/Residential Doctors the recruitment sources are students
of College of Physicians & Surgeons.
SELECTION:
The hospital has adopted a multi-stage selection process which
proceeds as follows:
a) Scrutiny of applications by HR Department, followed by a
scrutiny by HOD.
b) Short listed candidates are called for interview which is
conducted by Head of Department and HR Manager
c) Followed by written test to judge the aptitude of the candidates.
d) Final interview by Vice Chairman.
The process stands completed when the selected candidates are
given offer letters and advised to appear for medical test. For the
selection of nurses there is a slight deviation. Depending upon
vacancies, the nurses appear for a walk-in interview with Nursing
Director.
INDUCTION:
For induction, the hospital follows a formal and systematic process.
The new entrants are formed into groups of 15. They are put through
the induction process on the 17th and 18th of each month.
The induction process consists of:
 The Head of HR briefs the employees on the various HR issues
 Presentation by various HODs about their respective departments
 General tour of the hospital
 Induction speech by the Vice-Chairman of the hospital.
TRAINING AND DEVELOPMENT:
Determining the Training Needs:
There is no practice of determining training needs. However, HODs
recommend as to who are the employees who need training. On the
basis of this input, the HR Manager makes a training calendar which
includes both in-house and external training.
The in-house training focuses on the following:
 Behavioral skills
 Soft skills
 Communication skills
External training is resorted to when exposure to technical aspects
are vital. During the course of both the systems of training
mentioned above, psycho-metric test are conducted.
Evaluation of Training:
In the case of nurses only, pre-training evaluation and post-training
evaluation is conducted
PERFORMANCE APPRAISAL SYSTEM:

The performance appraisal system is organized and executed

through an HR consultant who is on the panel of experts of the
hospital. As a first step the consultant discusses with the employees
of each department and finalizes the Key Result Areas and sets the
goals. Against these the performance is evaluated for different
categories as under ---
For Executives Quarterly basis
For Nurses Half yearly basis
For other Staff Annual basis
For Probationers Half yearly basis
The appraisal process has the following pattern:
1) The employee rates himself on a form on a 1 to 6 scale
2) The employee and the HOD discuss the rating and record their
joint scores alongside
3) All the forms are sent to the HR department where the data is
converted into software and computed
4) The final report thus compiled is forwarded to the Vice Chairman
5) His appraisal can lead to three possible outcomes
 Promotion decision
 Performance bonus
 Increment grade
PROMOTION POLICY
Promotion is only based on Performance.
MOTIVATIONAL MECHANISM:
 Decent working condition
 Continuous Training and development to Nurses of Accredited work.
 Supportive system to enhance behavioral skills,
 Good food facility
 Good brand name and corporate image
 CONCLUSION:

In the present competitive world, the companies are facing lot of skill
shortage, talent crunch and attrition those reached historically
height ever, that made the companies feel the internal customer also
more important equally with external customers, so every company
try to devise innovative HR practices to attract best talent , giving
them nice environment to work with, that enables the company to
retain talents, the above said practices are conceived and
implemented and found successful by the leading companies in
India. It is found that convergence of practices of different
companies in different HR areas, if any company wants to apply
those practices that will benefit for the company to become more
competitive in the global market.
References
[1]. Stone, R.J. (2009), Managing Human Resources:
[2]. Storey, J. (1995), Human Resource Management:
[3]. Boxall, P. and Purcell, J. (2000), “Strategic human resource
management: where have we come from and where should we
be going?” International Journal of Management Reviews.
[4]. Mondy, R.W. (2010), Human Resource Management,
[5]. Pfeffer, J. (1998), The Human Equation, Harvard Business School
Press, Boston, MA, Ch. 3.