Human resource management (HRM or HR)

Human resource management (HRM or HR) is the strategic approach to the effective management
of people in an organization so that they help the business to gain a competitive advantage. It is
designed to maximize employee performance in service of an employer's strategic objectives.[1][need
quotation to verify] HR is primarily concerned with the management of people within organizations, focusing

on policies and on systems.[2] HR departments are responsible for overseeing employee-

benefits design, employee recruitment, training and development, performance appraisal,
and Reward management (e.g., managing pay and benefit systems).[3] HR also concerns itself
with organizational change and industrial relations, that is, the balancing of organizational practices
with requirements arising from collective bargaining and from governmental laws. [4][need quotation to verify]
Human resources' overall purpose is to ensure that the organization is able to achieve success
through people.[5] HR professionals manage the human capital of an organization and focus on
implementing policies and processes. They can specialize in recruiting, training, employee-relations
or benefits, recruiting specialists, find, and hire top talent. Training and development professionals
ensure that employees are trained and have continuous development. This is done through training
programs, performance evaluations, and reward programs. Employee relations deals with concerns
of employees when policies are broken, such as in cases involving harassment or discrimination.
Employee benefits' role includes developing compensation structures, family-leave programs,
discounts and other benefits that employees can get. On the other side of the field are human
resources generalists or business partners. These human-resources professionals could work in all
areas or be labor-relations representatives working with unionized employees.
HR is a product of the human relations movement of the early 20th century when researchers began
documenting ways of creating business value through the strategic managementof the
workforce.[citation needed] It was initially dominated by transactional work, such
as payroll and benefits administration, but due to globalization, company consolidation, technological
advances, and further research, HR as of 2015 focuses on strategic initiatives like mergers and
acquisitions, talent management, succession planning, industrial and labor relations,
and diversity and inclusion. In the current global work environment, most companies focus on
lowering employee turnover and on retaining the talent and knowledge held by their workforce.[citation
needed] New hiring not only entails a high cost but also increases the risk of a newcomer not being able

to replace the person who worked in a position before. HR departments strive to offer benefits that
will appeal to workers, thus reducing the risk of losing employee commitment and psychological
ownership.
Human resources is used to describe both the people who work for a company or organization and
the department responsible for managing resources related to employees. The term human
resources was first coined in the 1960s when the value of labor relations began to garner attention
and when notions such as motivation, organizational behavior, and selection assessments began to
take shape.
Human resource management is a contemporary, umbrella term used to describe the management
and development of employees in an organization. Also called personnel or talent management
(although these terms are a bit antiquated), human resource management involves overseeing all
things related to managing an organization’s human capital.
Human resource management is therefore focused on a number of major areas, including:

 Recruiting and staffing

 Compensation and benefits
 Training and learning
 Labor and employee relations
  Organization development

Due to the many areas of human resource management, it is typical for professionals in this field to
possess specific expertise in one or more areas. Just a few of the related career titles for HR
professionals include:

 Training development specialist

 HR manager
 Benefits specialist
 Human resource generalist
 Employment services manager
 Compensation and job analysis specialist
 Training and development manager
 Recruiter
 Benefits counselor
 Personnel analyst

A Closer Look at Human Resource Management

Human resource management involves developing and administering programs that are designed to
increase the effectiveness of an organization or business. It includes the entire spectrum of creating,
managing, and cultivating the employer-employee relationship.
For most organizations, agencies, and businesses, the human resources department is responsible
for:

 Managing job recruitment, selection, and promotion

 Developing and overseeing employee benefits and wellness programs
 Developing, promoting, and enforcing personnel policies
 Promoting employee career development and job training
 Providing orientation programs for new hires
 Providing guidance regarding disciplinary actions
 Serving as a primary contact for work-site injuries or accidents

Human resource management is about:

Addressing current employee concerns: Unlike company managers who oversee the day-to-day
work of employees, HR departments deal with employee concerns such as benefits, pay, employee
investments, pension plans, and training. Their work may also include settling conflicts between
employees or between employees and their managers.
Acquiring new employees: The human resource management team recruits potential employees,
oversees the hiring process (background checks, drug testing, etc.), and provides new employee
orientation.
Managing the employee separation process: The HR management team must complete a specific
set of tasks if an employee quits, is fired, or is laid off. Paperwork must be completed to ensure that
the process was completed legally. Severance pay may be offered or negotiated, benefits must be
settled, and access to company resources must be severed via the collection of keys, badges,
computers, or sensitive materials from the employee.
Improving morale: Effective HR teams encourage company employees to do their best, which
contributes to the overall success of the company. Their work often involves rewarding employees for
good performance and creating a positive work environment.
The Changing Shape of Human Resource Management
Human resource management involves both strategic and comprehensive approaches to managing
people, as well as workplace culture and environment.
The role of human resources professionals is to ensure that a company’s most important asset—its
human capital—is being nurtured and supported through the creation and management of programs,
policies, and procedures, and by fostering a positive work environment through effective employee-
employer relations.
The concept behind human resource management is that employees who are subject to effective
human resource management are able to more effectively and productively contribute to a company’s
overall direction, thereby ensuring that company goals and objectives are accomplished.
Today’s human resource management team is responsible for much more than traditional personnel
or administrative tasks. Instead, members of a human resource management team are more focused
on adding value to the strategic utilization of employees and ensuring that employee programs are
impacting the business in positive and measurable ways.
An August 2014 Forbes article explored the shifting goal of today’s human resource management
teams. More specifically, the article found that HR teams focused on things that don’t add true value
to the organization are often deemed reactive, uncreative, and lacking basic business understanding.
On the other hand, HR professionals who want to be recognized as true business partners must see
themselves as business people who specialize in HR, not as HR people who advise a business.
Todays’ human resources managers/business partners must understand the workings of the
business and be able to comfortably speak the language of business leaders in order to have a
measured and proven impact on business objectives.

The Agenda of Today’s Human Resource Management Team

Today’s HR management team must focus their efforts on five, critical areas, according to
the Forbes article:
Define and align organizational purpose: A company’s employees must be able to clearly
articulate why the company exists in order to achieve a purpose-driven, sustainable, high-performing
organization. Employees must also understand how their efforts connect, or align, with the
organization’s purpose.
Recruit the best talent by creating, marketing, and selling an Employee Value Proposition
(EVP): False marketing and misconceptions about an organization are some of the main reasons why
the employer-employee relationship fails. Therefore, companies must create, market, and sell an EVP
that is true and accurate as to not mislead potential employees.
Focus on employee strengths: Companies must make every effort to understand what candidates
and employees do best and put them into roles where they can play to their strengths as much as
possible.
Create organizational alignment: Achievements must align with the organization’s objectives so as
to build a successful and sustainable organization.
Accurately measure the same things: All internal departments and employees must be measuring
the same things as to achieve a definitive organizational result and to ensure that everyone knows
exactly where the organization is at all times.
 Human resources manager
Responsible for the recruitment, training and development of staff; administers salaries, pensions and
benefits; and looks after the health, safety and welfare of all employees.
Job description

Human resource (HR) managers are involved with recruitment, training, career development,
compensation and benefits, employee relations, industrial relations, employment law, compliance,
disciplinary and grievance issues, redundancies etc. The job involves keeping up to date with areas
such as employment law, which change often.

Generalist HR roles are usually found in small and medium sized companies, where the HR manager
will deal with the whole range of HR activities. In large multinationals you will often find specialists, for
example in learning and development, recruitment or employee relations.

Work activities

 Developing HR planning strategies with line managers by considering immediate and long-term
staff requirements
 Recruiting staff by preparing job descriptions and job adverts; deciding on how best to advertise
 Shortlisting applicants for interview using a variety of selection techniques including psychometric
testing Interviewing shortlisted candidates
 Advising on pay and other issues, including promotion and benefits; administer payroll and
maintain staff records
 Interpreting and advising on employment legislation; develop and implement policies on a variety of
workplace issues eg disciplinary procedures, absence management, working conditions,
performance management and equal opportunities
 Listening to grievances and implementing disciplinary procedures
 Analysing training needs in conjunction with line managers; planning and delivering training,
including staff inductions.

Work conditions

 Travel: not a normal part of the working day but attendance at off-site meetings possible.
 Working hours: mainly office hours, with occasional extra hours. Location: opportunities exist
mainly in towns or cities throughout the country.
 Opportunities for self-employment: unlikely (unless a specialist in training).

Typical employers

Any large organisation including banks, insurance companies, hospital, universities, institutes of
technology, etc.

Career development

Progression will very much depend on the size of the organisation. Relocation may be necessary. It is
possible to move from generalist HR roles into specialist areas such as industrial relations,
employment law, organisational development or training and development.
 Salaries

Salary levels for HR officers vary considerably across sector. Salaries in large private companies tend
to be higher than those for workers in local authorities. Republic of Ireland: Graduate entrants can
start at €25,000. This can rise to €40,000 per year with experience. Senior personnel officers,
especially in large organisations, can earn considerably more: some in excess of €100,000. Dublin-
based jobs tend to pay higher. Northern Ireland: Graduate entrants can expect £12,000–£15,000 with
HR Directors earning anything from £50,000–£80,000.

Entry requirements

There are two main entry routes.

Graduate training programmes: while some HR graduate training programmes are available, they are
rare in Ireland.

Entry-level jobs: graduates can gain an entry-level role as a HR administrator, where they will have
responsibility for matters such as updating files, contracts, scheduling interviews, preparing statistics
etc.

Specific degree subjects required

While a HR degree is not necessary it is an advantage, as is the Chartered Institute of Personnel &
Development (CIPD) qualification. A list of CIPD accredited programmes in Ireland is available on
the CIPD website. Some degree courses (usually business studies) and postgraduate courses may
provide exemption from CIPD Professional Qualifications.

Other relevant degree subjects

 Business
 Economics
 Law
 Management
 Psychology
 Public administration
 Social studies.

Postgraduate study

A pre-entry postgraduate qualification is not a requirement but a range of courses at postgraduate

certificate, diploma and masters level are available, some of which combine business studies with
HR.

Specific entry requirements

Although membership of the CIPD is not an absolute requirement for entry into this career, employers
generally look on membership as an asset.

Training

A few graduate training schemes are available.

 Tips for applications

Develop appropriate skills while at college: get involved with student groups and organisations; in
particular take on positions of responsibility, whether in a voluntary or paid capacity.

Talk to staff working in HR, gain experience in a HR department and read relevant journals.

Skills and qualities

 Good communication skills

 Strong interpersonal skills
 Business awareness and commercial focus
 Leadership and strong management skills
 Technically competent
 Strong interpersonal skills
 Ability to analyse, interpret and explain the legal framework regulating employment
 Influencing and negotiating skills
 Personally credible
 Integrity and approachability.

HR managers
Individual within an organization responsible for hiring new employees, supervising employee
evaluations, mediation between employees and bosses as necessary, and general overseeing of the
personnel department.

A Human Resources generalist, manager, or director plays a wide variety of roles in organizations.
Depending on the size of the organization, these HR jobs may have overlapping responsibilities. In
larger organizations, the HR generalist, manager, and director have clearly defined, separated roles
in HR management.

These roles bring progressively more authority and responsibility in the hands of the manager, then
the director, and ultimately, the vice president who may lead several departments including
administration.

HR directors, and occasionally HR managers, may head up several different departments that are
each led by functional or specialized HR staff such as the training manager, the compensation
manager, or the recruiting manager.

Human Resources staff members are advocates for both the company and the people who work in
the company. Consequently, a good HR professional performs a constant balancing act to meet both
needs successfully.
The Changing Human Resources Role

The role of the HR professional is changing to fit the needs of today's modern, fast-changing
organizations. In the past, because the original HR personnel functions were often provided by
accounting, the HR role was focused on administrative tasks such as paying employees,
administering benefits, and keeping track of sick and personal days off.But, a more comprehensive
approach to the management of people in the organization was needed. Programs and processes
that systematically hired employees, retained employees and dealt with all aspects of talent
management evolved in the best organizations .Then, the role evolved again. Still responsible for the
administrative tasks and the programs and processes related to people, the best HR professionals
are now leading the charge .They are developing systems and processes within the organization that
addresses the strategic needs of the business. So, what was once the task of hiring employees is
now the process of team-based hiring of the best possible talented employees who are recruited via
methods that range from employee referrals to social media sourcing.These employees are also
congruent with the company's culture. This is quite a different journey, one that continues to evolve.
Make sure that your HR team is up to it.

New HR Role
The role of the HR manager must parallel the needs of this developing, changing organization.
Successful organizations are becoming more adaptable, resilient, quick to change direction, and
customer-centered. They recognize that organizations will vie for talent in coming years.This
recognition brings about the need for employee oriented workplaces and programs that meet the
needs of employees for meaningful work, growth, challenge, communication, and effective
leadership.Within this environment, the HR professional, who is respected by line managers and
consequently, whose talents are utilized by managers, is responsible for new roles. In Human
Resource Champions, Dave Ulrich, one of the more popular speakers and writers in the HR field, and
a professor at the University of Michigan recommends three additional roles for the HR manager.

 a strategic partner,
 an employee sponsor or advocate, and
 a change mentor.

At the same time, especially the HR generalist still has responsibility for the day-to-day employee
problems and complaints, employee benefits administration, often payroll, and employee paperwork,
especially in the absence of an HR Assistant.

Responsibilities of the HR Professional

Depending on the size of the organization, the HR manager has responsibility for all of the functions
that deal with the needs and activities of the organization's people including these areas of
responsibility.

 Recruiting
 Hiring
 Training
 Organization Development
 Communication
 Performance Management
 Coaching
 Policy Recommendation
 Salary and Benefits
 Team Building
 Employee Relations
  Leadership

When you ask the question, what does the HR manager, generalist or director do, as you can see,
the answer is—a lot. The role bears responsibility for all of the processes and systems related to
people in an organization. They must also consider nonfeasance.

The role must support the work of managers who supervise and lead the work of these people. The
HR staff leads efforts for organization development. They are seriously involved in defining and
developing an organizational culture that enables the organization to succeed in its service to
customers.

The HR professionals must develop the skills of their managers and their organization to do these
activities well. The job of the HR professional is a constant challenge as HR staff balance many roles
and activities in support of their organizations.

Want even more detailed information about the job descriptions and responsibilities of HR
professionals? Take a look at these detailed job descriptions.

Personnel Management
Personnel management can be defined as obtaining, using and maintaining a satisfied workforce. It
is a significant part of management concerned with employees at work and with their relationship
within the organization.

According to Flippo, “Personnel management is the planning, organizing, compensation, integration

and maintainance of people for the purpose of contributing to organizational, individual and societal
goals.”

According to Brech, “Personnel Management is that part which is primarily concerned with human
resource of organization.”

Nature of Personnel Management

1. Personnel management includes the function of employment, development and compensation-

These functions are performed primarily by the personnel management in consultation with
other departments.
2. Personnel management is an extension to general management. It is concerned with
promoting and stimulating competent work force to make their fullest contribution to the
concern.
 3. Personnel management exist to advice and assist the line managers in personnel matters.
Therefore, personnel department is a staff department of an organization.
4. Personnel management lays emphasize on action rather than making lengthy schedules,
plans, work methods. The problems and grievances of people at work can be solved more
effectively through rationale personnel policies.
5. It is based on human orientation. It tries to help the workers to develop their potential fully to
the concern.
6. It also motivates the employees through it’s effective incentive plans so that the employees
provide fullest co-operation.
7. Personnel management deals with human resources of a concern. In context to human
resources, it manages both individual as well as blue- collar workers.

Role of Personnel Manager

Personnel manager is the head of personnel department. He performs both managerial and operative
functions of management. His role can be summarized as :

1. Personnel manager provides assistance to top management- The top management are the
people who decide and frame the primary policies of the concern. All kinds of policies related
to personnel or workforce can be framed out effectively by the personnel manager.
2. He advices the line manager as a staff specialist- Personnel manager acts like a staff advisor
and assists the line managers in dealing with various personnel matters.
3. As a counsellor,- As a counsellor, personnel manager attends problems and grievances of
employees and guides them. He tries to solve them in best of his capacity.
4. Personnel manager acts as a mediator- He is a linking pin between management and
workers.
5. He acts as a spokesman- Since he is in direct contact with the employees, he is required to
act as representative of organization in committees appointed by government. He represents
company in training programmes.

Functions of Personnel Management

Follwoing are the four functions of Personnel Management:

1. Manpower Planning
2. Recruitment
3. Selection
4. Training and Development

Elements of Personnel Management

following are the elements of Personnel Management:

1. Organization- Organization is said to be the framework of many activities taking place in view
of goals available in a concern. An organization can be called as a physical framework of
various interrelated activities. Right from manpower planning to employees’ maintainance, all
activities take place within this framework. The nature of the organization is dependent upon
it’s goal. The business concern goal being profit- making. Clubs, hospitals, schools,etc. their
goal being service. The objective of consultancy being providing sound advice. Therefore, it is
organizational structure on which the achievement of goals of an enterprise depends upon. In
 personnel management, a manager has therefore to understand the importance of
organizational structure.
2. Job- The second element, i.e., jobs tell us the activities to be performed in the organization. It
is said that the goals of an enterprise can be achieved only through the functional department
in it. Therefore, seeing the size of organization today, the nature of activities are changing. In
addition to the three primary departments, personnel and research department are new
additions. Various types of jobs available are :
a. Physical jobs
b. Creative jobs
c. Proficiency jobs
d. Intellectual jobs
e. Consultancy jobs
f. Technical jobs
3. People- The last and foremost element in personnel management is people. In a
organizational structure, where the main aim is to achieve the goals, the presence of
manpower becomes vital. Therefore, in order to achieve departmental goals, different kinds of
people with different skills are appointed. People form the most important element because :
a. The organizational structure is meaningless without it.
b. It helps to achieve the goals of the enterprise.
c. It helps in manning the functional areas.
d. It helps in achieving the functional departmental goals.
e. They make a concern operational.
f. They give life to a physical organization.

The different types of people which are generally required in a concern are :

g. Physically fit people

h. Creative people
i. Intellectuals
j. Technical people
k. Proficient and skilled people

In personnel management, a personnel manager has to understand the relationship of the three
elements and their importance in organization. He has to understand basically three relationships:-

i. Relationship between organization and job

ii. Relationship between job and people
iii. Relationship between people and organization.

Relationship between organization and job helps making a job effective and significant. Relationship
between job and people makes the job itself important. Relationship between people and organization
gives due importance to organizational structure and the role of people in it.
Functions of Personnel Management
1. Managerial Functions
2. Operative Functions

1. Managerial Functions:
The Managerial functions of a personnel manager involve POSDCORB (Luther Gullick) i.e., Planning,
organisation, staffing, directing, coordinating, reporting and budgeting of those who actually perform
the operative functions of the Personnel Department.

The following are the managerial functions (viz. planning, organising, directing and
controlling) performed by a personnel department:
A. Personnel Planning:
Planning lays down a pre-determined course to do something such as what to do, how to do, where
to do, who is to do etc. A personnel manager plans in advance the trend in wages, labour market,
union demands etc. Through planning, most of the future problems can be anticipated.

B. Organising:
According to J.C. Massic, “An organisation is a structure, a framework and a process by which a co-
operative group of human being allocates its task among its members, identifies relationships and
integrates its activities towards common objectives.” The personnel manager has to design the
structure of relationships among jobs, personnel and physical factors so that the objectives of the
enterprise are achieved.

C .Directing:
This function relates to guidance and stimulation of the subordinates at all levels. The personnel
manager directs and motivates the employees of his department so that they work willingly and
effectively for the achievement of organisational goals,

D. Controlling:
A personnel manager has to constantly watch whether there is any deviation from the planned path.
Controlling is concerned with remedial actions. Continuous monitoring of the personnel policies
relating to training, labour turnover, wage payments, interviewing new and separated employees etc.,
is the backbone of controlling.

If deviations are unavoidable, corrective action can be planned in advance. Controlling helps the
personnel manager to evaluate the performance of employees of the personnel department so far as
the operating functions are concerned.

2. Operative Functions:
The operative functions of the Personnel Department are also called service functions. These include.

(a) Procurement function

(b) Development

(c) Promotion, transfer and termination function

(d) Compensation function

(e) Welfare function

(f) Collective bargaining function

(g) Miscellaneous functions.

These functions of the personnel Department are discussed below:

(1) Procurement:
It includes:
(a) Recruitment i.e., tapping the possible sources from where prospective labour supply will come.

(b) Getting information regarding prevailing wage rates and job requirements.

(c) Selecting the best candidate by following a systematic selection procedure.

(d) Maintaining the records of employees.

(e) Introducing the new employee to the officers of the other departments such as Security Officer,
Time Keeper, and Cashier etc.

(2) Training or Development Function:

The training of the new employees and also of those who are being promoted is the crucial function of
Personnel Department. A training programme is devised for this purpose. The training increases the
skills and abilities of the employees.

The various aspects of training are:

(a) Training to new employees, instructors and supervisors.

(b) Training in safety equipments and various policies of companies.

(c) Training through improvement of education such as evening classes, films, Entertainment
programmes etc.

(d) Encouraging employees to give suggestions.

(3) Promotion, Transfer and Termination:

The performance of the employees is evaluated for the purpose of taking decisions concerning the
employment. Merit rating is undertaken for evaluation of the performance of the employees.

The functions of the Personnel Department in this regard are given below:
(a) To lay down a promotion policy.

(b) To formulate policies regarding transfer and termination.

(c) Analysis of voluntary separations and knowing the possible causes of such separations.
(4) Compensation:
The employees should get adequate and equitable remuneration for the work being done by them.

The functions of the Personnel Department concerned with fixation of fair wages are:
(a) To evaluate jobs and determine their worth in terms of money.

(b) To collaborate with those who formulate wage plans.

(c) To assist in formulation of policies regarding pension plans, profit sharing programmes, non-
monetary benefits, etc.

(d) To compare the wages of the enterprise with the industry and remove inconsistencies, if any.

(5) Welfare Activities:

These activities relate to physical and social well-being of the employees and include:
(a) Provision of medical facilities such as first aid, dispensaries, etc.

(b) Suggesting ways and means by which accidents can be eliminated or minimised.

(c) To make provisions for restaurants and other recreational facilities.

(d) To apply the labour laws effectively.

(e) To publish a plant magazine.

(6) Collective Bargaining:

It includes:
(a) To assist in the negotiations which are held with the union leaders?

(b) To know the grievances of employees and following their problems properly.

(7) Miscellaneous:
(a) To advise the line managers regarding administration of personnel policies.

(b) To secure co-ordination of all personnel activities.

(c) To have an effective communication system.

(d) To provide good working conditions.

Top 6 Changing Roles of Personnel Department

Personnel Department: Changing Role # 1.

Employees and Performance:
The role of personnel manager is changing to help companies achieve structural and cultural
changes. Today personnel manager’s role is shifting from protector and screener to strategic partner
and change agent. The metamorphosis of personnel into human resource management reflects a fact
of corporate life today.

In today’s flattened, downsized and high performing organisations, highly trained and committed
employees, not machines, are often the firm’s competitive key.

A recent study found that 70% of companies with above average financial performance considered
employee development a critical factor in corporate success; they therefore emphasize HR
programmes such as leadership training to help build competitive advantage by developing their
human capital.

Personnel Department: Changing Role # 2.

Employee Commitment:
Personnel management/HRM can impact employees’ performance in many ways. High commitment
firms tend to engage in employee development activities which aim to ensure that employees can use
all their skills and gifts at work. HR is crucial for instance, in establishing career oriented performance
appraisal procedures and effective training and development practices.

HR department generally plays the central role in planning and implementing corporate downsizing
and then taking steps to maintain the morale of the existing employees. HR can help employees
adapt to the increased pressures in the downsized departments by helping them learn to prioritise
tasks and reduce job stress.

Personnel Department: Changing Role # 3.

HRM and Service:
Employee behaviour is especially important in the performance of service firms like banks and retail
establishments. If a person is confronted by a sales person who is tactless, unprepared to discuss the
pros and cons of different products/services or downright discourteous, all the firm’s other efforts will
have been wasted.

Service firms have little to sell but their good service. That makes them very dependent on their
employees’ attitudes and motivation-and on HR management. HRM should build employee
commitment and morale, who will then provide excellent customer service which in turn will generate
profits for the organisation.

Personnel Department: Changing Role # 4.

HRM and Responsiveness:
In making companies better and more competitive, HRM can also help make companies’ faster-more
responsive to product and technological innovations and competitors’ moves. For example,
downsizing, flattening the pyramid, empowering employees and organising around teams all HR jobs-
are aimed at improving communications and making it easier for decisions to be made, so the
company can respond more quickly to the customers’ needs and its competitors’ challenges.
Personnel Department: Changing Role # 5.
Research Insight:
That HR practices can improve a firm’s performance is not just intuitively attractive, it is supported by
the research evidence. As two researchers put it, “The most fundamental implication is that the
choice of HR system can have an economically significant effect on firm’s performance.

Research is just beginning to establish the plausible range of these effects, but early work indicates
that reasonable changes in a HR system can affect a firm’s market value by $ 15,000- 45,000 per
employee and can affect the probability of survival for a new firm by as much as 22%.”

Personnel Department: Changing Role # 6.

HRM and Corporate Strategy:
Perhaps the most striking change in the HRM’s role today is its growing involvement in developing
and implementing the company’s strategy. Strategy-the company’s plan for how it will balance its
internal strengths and weaknesses with external opportunities and threats in order to maintain a
competitive advantage was traditionally a job mostly for the firm’s line (operating) managers.

Thus, the chief executive and his staff might decide to enter new markets, drop product lines or
embark on a cost cutting plan. Then he would more or less leave the personnel implications of that
plan (hiring or firing workers, etc.) to be carried out by the HR management.

Today things have changed and they go on changing rapidly. Strategies increasingly depend on
strengthening organisational competitiveness and on building committed work teams and these have
put HR in a central role.

In a fast changing, globally competitive and quality oriented industrial environment, it is often the
firm’s employees-its human resources, who provide the competitive key. It is, thus now increasingly
common to involve HR at the earliest stages of developing and implementing the firm’s strategic plan
rather than to let HR react to it.

Top 10 Roles of a Personnel Manager

the top ten roles of a personnel manager in an organisation.

The roles are: 1. Advisory Role 2. Counseling Role 3. Role of a Change Agent 4. The Conscience
Role 5. Mediator’s Role 6. Liaison Role 7. Legal Role 8. Welfare Role 9. Controller’s Role 10. Human
Relations Role.

Personnel Manager: Role # 1. Advisory Role:

The personnel department has functional relationship with other departments/managers in the total
organisation. As a specialist, the personnel manager advises the heads of different functional
departments on various aspects of human resource management e.g., manpower planning,
recruitment, selection, training, appraisal, compensation etc.

The personnel manager should provide suggestions and assistance very tactfully, in order to win the
confidence and cooperation of all the line managers. Staff assistance is likely to be effective when it is
wanted rather than imposed. He has to persuade the line managers to work with staff specialists and
not against them.
Personnel Manager: Role # 2. Counseling Role:
The personnel manager plays the role of a counseller with the employees also. He discusses the
various problems of the employees relating to work, career, their supervisors, colleagues, health,
family, financial, social etc. and suggests them means to minimise and overcome those problems.

Personnel Manager: Role # 3. Role of a Change Agent:

Personnel manager works as a change agent regarding personnel areas. To be an effective
consultant, he should be familiar with the needs and changing environment of the business. He
should initiate and spearhead necessary improvement in human resource policies.

As a consultant, he can provide necessary infrastructure and support for organisation development.
He helps in introducing and implementing major institutional changes in the organisation.

Personnel Manager: Role # 4. The Conscience Role:

He represents management in many of the relationships that affect the organisation as a whole. He is
also responsible for conveying the problems, grievances or simply opinions of workers to
management.

While playing the conscious role, the personnel manager informs the management about the
humanitarian approach. He should advise the management about the moral and ethical obligations
towards the employees.

Personnel Manager: Role # 5. Mediator’s Role:

The personnel manager often acts as a mediator in the organisation. Whenever there is a friction
between two employees, two groups of employees, superiors and subordinates and employees and
management, the personnel manager has to act as a mediator, so as to maintain industrial harmony.

Personnel Manager: Role # 6. Liaison Role:

The personnel manager acts as a representative of the organisation so as to give an overall picture of
the organisational operations to the employees particularly in case of industrial disputes or grievance
redressal. Similarly, he acts as employees’ representative in representing their problems to the
management particularly in concerns where trade unions are not there.

Personnel Manager: Role # 7. Legal Role:

The personnel manager plays this fire fighting role of grievance handling, settlement of disputes,
handling disciplinary cases, collective bargaining, joint consultation, interpretation and implementation
of various labour laws, contacting lawyers regarding court cases, filing suits in labour courts, industrial
tribunals, civil courts and the like.

Personnel Manager: Role # 8. Welfare Role:

Under Section 49 of the Factories Act, a welfare officer has to be appointed in specific factories.
Personnel manager is expected to be the welfare officer of the company. As a welfare officer, he
provides and maintains (on behalf of the company) canteens, hospitals, creches, educational
institutions, clubs, libraries, conveyance facilities; cooperative credit societies, consumer stores etc.

Personnel Manager: Role # 9. Controller’s Role:

The personnel manager assists the line managers in effective implementation of personnel policies
and programmes. His advice and service is essential for monitoring and controlling the progress. As
an arm of the top management, the personnel manager ensures that the personnel policies and
procedures approved and adopted by the management are being consistently carried out in all the
departments.

Personnel Manager: Role # 10. Human Relations Role:

Personnel manager is supposed to be an expert in human relations. He is expected to improve
productivity by fulfilling the economic, social and psychological needs and aspirations of employees.
Personnel manager also has to meet the challenge of a fast changing postindustrial society.

Role of Personnel Manager

One of the main functions of personnel manager is counselling role. As a counselor As a counsellor,
personnel manager discusses the problems with employees related to career, health, family, finance,
social life and try to solve their problems and offer advice on how to overcome them.

Other functions are a mediator, initiating policies, representative role, decision making role, leadership
and welfare role. In this article, we will explore the role of a personnel manager in an organization.

What are the Responsibilities of Personnel Manager?

Being a manager, he is primarily responsible for the overall management of the department and
performs basic managerial functions like planning, organizing, directing, and controlling.

Additionally, some operational functions like recruitment, training, etc. also form an important part of his
role. A personnel manager plays an integral role in effective personnel management and making human
relations in the organization better.

Like finance assesses costs, marketing focuses on customers, personnel management is all about
people. A good personnel manager brings issues pertaining to the human resources to the attention of
the management. He contributes to solving management issues and helps managers with their human
resource problems.

Functions of Personnel Manager

 Counsellor

 Initiating Policies

 The Advisory Role

 The Link between the Employees and the Management

 Representative Role

 Decision-making Role

 Mediator Role

 Leadership Role

 Welfare Role
 Research Role
Counsellor
Counseling is one of the main functions of personnel manager. As a counsellor, personnel manager
discusses the problems with employees related to career, health, family, finance, social life and try to
solve their problems and offer advice on how to overcome them.

Initiating Policies
Initiating policies is another main function of personnel manager. Initiating policies and formulating them
are two important tasks of a personnel manager. He assists the senior management in creating policies
pertaining to personnel management, salary administration, welfare activities, transfers, working
environment, records, and appraisals.

The Advisory Role

In any organization, on a daily basis, line managers face a wide range of problems pertaining to
personnel management. This is where a personnel manager steps in and offers advice on such matters
since he is familiar with the laws and practices that surround human resources.

The Link between the Employees and the Management

Apart from personnel management, the personnel manager tries to maintain good industrial relation
within the organization. So, he helps the trade unions in understanding the different policies of the
organization. He also communicates the views and concerns of the union leaders to the senior
management.

Representative Role
The personnel manager is also responsible to represent the company and communicate management
policies which affect the people in the organization. This role is best-suited to him because he has a
better overall picture of the company’s operations.

Decision-making Role
He plays an important part in decision-making on human resources-related issues. He also formulates
and designs policies and programs of personnel management.

Mediator Role
In case of a conflict between employees or groups of employees, a superior and a subordinate, or even
the management and employees, the personnel manager plays the role of a mediator. His role is to
ensure peace and harmony in the organization.

Leadership Role
He offers leadership and guidance to employees. Further, a personnel manager ensures effective
communication in the organization and motivates employees to work towards achieving the
organization’s objectives.
Welfare Role
In most organizations, the personnel manager also acts as the welfare officer. Therefore, he ensures
facilities and services like canteen, transport, hospitalization, and other employee welfare services are
available to the workers.

Research Role
He maintains a record of all employees in the organization. He also researches various personnel areas
like absenteeism, alcoholism, labor turnover, etc. Further, post-analysis, he recommends apt measures
to help eradicate them to the senior management.

Job Analysis - Job Description and Job

Specification
Job analysis is primary tool in personnel management. In this method, a personnel manager tries to
gather, synthesize and implement the information available regarding the workforce in the concern. A
personnel manager has to undertake job analysis so as to put right man on right job.

There are two outcomes of job analysis :

1. Job description
2. Job specification

The information collected under job analysis is :

1. Nature of jobs required in a concern.

2. Nature/ size of organizational structure.
3. Type of people required to fit that structure.
4. The relationship of the job with other jobs in the concern.
5. Kind of qualifications and academic background required for jobs.
6. Provision of physical condition to support the activities of the concern. For example- separate
cabins for managers, special cabins for the supervisors, healthy condition for workers,
adequate store room for store keeper.

Advantages of Job Analysis

1. Job analysis helps the personnel manager at the time of recruitment and selection of right man
on right job.
2. It helps him to understand extent and scope of training required in that field.
3. It helps in evaluating the job in which the worth of the job has to be evaluated.
4. In those instances where smooth work force is required in concern.
 5. When he has to avoid overlapping of authority- responsibility relationship so that distortion in
chain of command doesn’t exist.
6. It also helps to chalk out the compensation plans for the employees.
7. It also helps the personnel manager to undertake performance appraisal effectively in a
concern.

A personnel manger carries analysis in two ways :

a. Job description
b. Job specification

1. 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 very important before a
vacancy is advertised. It tells in brief the nature and type of job. This type of document is
descriptive in nature and it constitutes all those facts which are related to a job such as :
1. Title/ Designation of job and location in the concern.
2. The nature of duties and operations to be performed in that job.
3. The nature of authority- responsibility relationships.
4. Necessary qualifications that are required for job.
5. Relationship of that job with other jobs in a concern.
6. The provision of physical and working condition or the work environment required in
performance of that job.

Advantages of Job Description

7. It helps the supervisors in assigning work to the subordinates so that he can guide and
monitor their performances.
8. It helps in recruitment and selection procedures.
9. It assists in manpower planning.
10. It is also helpful in performance appraisal.
11. It is helpful in job evaluation in order to decide about rate of remuneration for a specific
job.
12. It also helps in chalking out training and development programmes.
2. JOB SPECIFICATION is a statement which tells us minimum acceptable human qualities
which helps to perform a job. Job specification translates the job description into human
qualifications so that a job can be performed in a better manner. Job specification helps in
hiring an appropriate person for an appropriate position. The contents are :
1. Job title and designation
2. Educational qualifications for that title
3. Physical and other related attributes
4. Physique and mental health
5. Special attributes and abilities
6. Maturity and dependability
7. Relationship of that job with other jobs in a concern.

Advantages of Job Specification

8. It is helpful in preliminary screening in the selection procedure.

9. It helps in giving due justification to each job.
10. It also helps in designing training and development programmes.
11. It helps the supervisors for counseling and monitoring performance of employees.
12. It helps in job evaluation.
 13. It helps the management to take decisions regarding promotion, transfers and giving
extra benefits to the employees.

From the above advantages, we can justify the importance of job analysis and it’s related products.
Both job description as well as job specification are important for personnel manager in personnel
management function. Therefore, job analysis is considered to be the primary tool of personnel
management.

JOB ANALYSIS AND DESIGN

Job analysis is the term used to describe the process of analyzing a job or occupation into its various
components, that is, organizational structure, work activities, and informational content. The process
results in a relevant, timely and tailored database of job-related information that can be used in a
variety of ways: to develop conventional, individualized, computer-based and/or critical incident
education and training programs and materials; to create and classify job titles; to write job
descriptions; to prepare organization charts; to conduct time and motion studies; to determine quality
assurance standards; and to write both knowledge- and performance-related employee evaluation
measures. Also, job analyses are basic to the preparation of such government publications as
the Occupational Information Network (O*Net), Standard Industrial Classification (SIC), Standard
Occupational Classification (SOC), Occupational Outlook Handbook, and other informational
resources describing the job situation (See Figure 1).

Two terms often used interchangeably with job analysis are occupational analysis and task analysis.
In the literature, job and occupational analysis most often are viewed as the same. The process
focuses on the analysis of a job into its occupational structure, work activities, and informational
content. Later, the data provided by the analysis guides the organization and development of the
occupational training program.

In contrast, task analysis is an integral part of the job analysis process. More specifically, task
analysis addresses the process of analyzing a particular task into its various elements, that is,
performance steps; performance step details; technical information topics; career and occupational
guidance information topics; standards of performance; frequency, importance, and complexity; and
tools, equipment, materials, supplies and technical references. The information resulting from the task
analysis provides a basis for developing the knowledge- and performance-based learning activities of
the training program.

JOB ANALYSIS AND JOB DESIGN

Job analysis refers to a detailed examination of a given job with the purpose of understanding its
features. Through it, the duties and responsibilities of the position it provides can be defined. It has
two components: job description and job specification.

A job description contains information on the breadth of job activities and employee responsibilities
within the organization. It also defines the internal position or level of the job. Through it, the
employee is made aware of the activities that he or she should perform in order to meet the job
requirements. As such, it focuses on the job and the kind of skills that the employee should have in
order to perform the job successfully. Its contents include:

 Job title
 Location of the job
 Summary of the job
 Responsibilities
 Equipment and tools necessary in order to successfully perform activities

A job specification gives the job description in terms of human skills, qualifications, mental or physical
properties. It focuses on the jobholder and attributes that he or she should have in order to perform
the job effectively. For instance, a job may require applicants to have strong quantitative skills or the
ability to communicate effectively with others. It also includes things such as the personal appearance
of an applicant, age, sex or job-related experience.

Job design, on the other hand, refers to the process through which tasks are organized or arranged
so as to achieve common organizational goals. Through it, job requirements are matched with the
appropriate human skills. It focuses on the effects of job activities on employee attitude and morale.
Therefore, it aims to enhance worker job satisfaction and reduce worker problems such as
absenteeism and low morale. Some of the methods that can be used in job design processes include
job rotation, job enlargement, and job enrichment.

JOB DESIGN
Job design (also referred to as work design or task design) is a core function of human resource
management and it is related to the specification of contents, methods and relationship of jobs in
order to satisfy technological and organizational requirements as well as the social and personal
requirements of the job holder or the employee.[1] Its principles are geared towards how the nature of
a person's job affects their attitudes and behavior at work, particularly relating to characteristics such
as skill variety and autonomy.[2] The aim of a job design is to improve job satisfaction, to
improve through-put, to improve quality and to reduce employee problems (e.g., grievances,
absenteeism).

The Job Design means outlining the task, duties, responsibilities, qualifications, methods and
relationships required to perform the given set of a job. In other words, job design
encompasses the components of the task and the interaction pattern among the employees,
with the intent to satisfy both the organizational needs and the social needs of the jobholder.

The objective of a job design is to arrange the work in such a manner so as to reduce the
boredom and dissatisfaction among the employees, arising due to the repetitive nature of the
task.

There are several important methods and techniques that the management uses while
designing the jobs. These are:
1. Job Simplification
2. Job Rotation
3. Job Enrichment
4. Job Enlargement

While designing the job, the following aspects are to be taken into the consideration:

1. The foremost requirement for a job design is to define clearly the task an individual is
supposed to perform. A task is the piece of work assigned to the individual and who has to
perform it within the given time limits.
2. The management must decide on the level of motivation that is required to be enforced on
an individual to get the work completed successfully. Thus, the managers must design the
jobs that motivate his employees.
3. The managers must decide critically on the amount of resourcesthat needs to be allocated to
perform a particular type of a job. Thus, the efforts should be made to make an optimum
utilization of organizational resources while designing the job so that the organization does
not suffer any dilemma due to the shortage of its resources.
4. When the jobs are assigned to the individual, he agrees to do it because of
the rewards attached to it. Thus, the manager must include in the job design the
compensation, bonuses, incentives, benefits and other remuneration method for the
employees.

Thus, the job should be designed with the intent to find a fit between the job and its performer,
such that the job is performed efficiently, and the performer experiences satisfaction while
performing it and give his best efforts towards its completion.

Job Simplification
The Job Simplification means breaking the job into relatively easier sub-parts with the intention to
enhance the individual’s productivity by minimizing the physical and mental efforts required to perform
a complex job.
 Once the complex task is divided into the relatively easier tasks, each task is assigned to the
individuals who perform these over and over again. By doing the same thing again and again, the
employees gain proficiencies in the jobs assigned to them and as a result, the profitability of the
organization increases.

Under the job simplification method, the organization saves its training cost, as a very low level of
skills is required to perform the simplified jobs. Also, the job speed increases, as the individual is
required to perform a small portion of the previously larger and complex job.

But however, by performing the same task again and again, the employees may feel boredom and
may resist the monotony. This may lead to an increase in the employee absenteeism, mistakes and
accidents, etc. Due to these negative consequences, the overall productivity may get adversely
affected, and the organization may suffer losses as a whole.

Thus, an organization cannot resort to the job simplification every time to reap the economic benefits.
It must look at the organizational conditions prevailing at the time of designing the job.

Job Rotation
Definition: Job Rotation is the management technique wherein an employee is shifted from one job
role to the other, with the purpose of familiarizing him with all the verticals of an organization

Generally, the management trainees who are a fresher in the business world are shifted to different
job positions to make them understand the functions of business more precisely. The purpose of a job
rotation is to reduce the monotony of work and letting an employee to acquire multi skills required for
performing different tasks in the organization.

Advantages of Job Rotation

1. Reduces the monotony of work

2. Broadens one’s knowledge and skills
3. Helps the management to explore the hidden talent of an individual
4. Helps an individual to realize his own interest
5. Helps in creating the right employee job fit
6. Developing a wider range of experience

Disadvantages of Job Rotation

1. Reduces uniformity of work

2. Fear of performing another task effectively
3. Frequent interruptions in the work
4. Misunderstanding between the team members or union.
5. Difficulty in coping with other team members
6. Fear of getting more tedious or a hectic work

The job rotation is beneficial for both the employer and the employee. The employer can identify the
vertical where the employee is giving his best and can also place him in the position of a person who
has left because of the retirement, transfer, termination or any other reason.
Likewise, an individual also gets a chance to realize his efficiency and explore his own interest.
Through job rotation, an employee acquires several skill sets which are necessary at different point of
times.

Job Enrichment
Definition: The Job Enrichment is the job design technique used to increase the satisfaction among
the employees by delegating higher authority and responsibility to them and thereby enabling them to
use their abilities to the fullest.

In other words, job enrichment is the opportunity given to the employees to explore their abilities
when some tough task is assigned to them. The job enrichment is the vertical restructuring of moral
excellence in which more authority, autonomy, control is given to the employees to perform a given
set of a job. This concept is in contrast to the job enlargement which considers the horizontal
restructuring, where more and more tasks get added, and the challenge remains the same.

Thus, job enrichment is characterized by the different range of tasks and challenges having varying
levels of difficulties. The organization can realize benefits through this job design technique in any of
the following ways:

 With an increase in the employee morale, the more motivated, he gets to produce top results and
hence, the profitability of the firm increases.
 When the employees bear more responsibility for their work and results, it becomes quite easy for
the organization to operate.
 By giving authority to the employees to perform higher level jobs, the company is preparing its
employees to occupy those high-level positions in the near future.
 Also, with the job enrichment, the number of levels in the management may reduce, thereby
minimizing the complexity of the organization.
The purpose behind the job enrichment is to motivate the employees to use their abilities which
remained unused during their course of action. Also, through job enrichment, the monotony breaks
and the employees get the opportunity to do something new, which ultimately results in the increased
satisfaction levels.

Job Enlargement
The Job Enlargement refers to the horizontal expansion of jobs wherein more and more activities,
and tasks are added to the existing job scope at the same level in the organization.

In other words, job enlargement means increasing the scope of duties and responsibilities of an
individual by adding the related activities to his existing job profile and generally without any change
in his authority and his level in the hierarchy in the organization.

The purpose behind the job enlargement is to increase the employee flexibility and reduce the
monotony that occurs gradually over a period of time. Often, the employees are not required to get
the training for the task-related activities because he is already aware of that and is doing for quite
some time. But however, if the activity added is new for an employee and is not related to his existing
job nature, then a proper training should be given to him in order to acquaint himself with the new job
conditions.

Thus, job enrichment is a job design technique which is used to broaden the scope of the employee’s
activities with the intent to increase his responsibility and duties and minimize the boredom that he
may be facing with his existing job duties. But however, the employee can consider this approach as
a negative step taken by the management; wherein he is required to do more task or activities for the
same amount of pay.

Human Resource Planning (HRP)

Human resource planning (HRP) is the continuous process of systematic planning ahead to achieve
optimum use of an organization's most valuable asset—quality employees. Human
resources planning ensures the best fit between employees and jobs while avoiding manpower
shortages or surpluses.

There are four key steps of the HRP process. They include analyzing present labor
supply, forecasting labor demand, balancing projected labor demand with supply, and supporting
organizational goals.

HRP helps companies is an important investment for any business as it allows companies to remain
both productive and profitable.

Understanding Human Resource Planning (HRP)

Human resources planning allows companies to plan ahead so they can maintain a steady supply of
skilled employees. That's why it is also referred to as workforce planning. The process is also used to
help companies evaluate their needs and to plan ahead to meet those needs.

Human resource planning needs to be flexible enough to meet short-term staffing challenges while
adapting to changing conditions in the business environment over the longer term. HRP starts by
assessing and auditing the current capacity of human resources.

The challenges to HRP include forces that are always changing such as employees getting sick,
getting promoted or going on vacation. HRP ensures there is the best fit between workers and jobs,
avoiding shortages and surpluses in the employee pool.

To satisfy their objectives, HR managers have to make plans to do the following:

 Find and attract skilled employees.

 Select, train, and reward the best candidates.
 Cope with absences and deal with conflicts.
 Promote employees or let some of them go.

Investing in HRP is one of the most important decisions a company can make. After all, a company is
only as good as its employees. If it has the best employees and the best practices in place, it can
mean the difference between sluggishness and productivity and can lead to profitability.
Steps to Human Resources Planning
There are four general, broad steps involved in the human resources planning process. The first step
of human resource planning is to identify the company's current human resources supply. In this step,
the HR department studies the strength of the organization based on the number of employees, their
skills, qualifications, positions, benefits, and performance levels.

The second step requires the company to outline the future of its workforce. Here, the HR department
can consider certain issues like promotions, retirements, layoffs, and transfers—anything that factors
into the future needs of a company.

The third step in the HRP process is forecasting the employment demand. HR creates a gap analysis
that lays out specific needs to narrow the supply of the company's labor versus future demand.
Should employees learn new skills? Does the company need more managers? Do all employees play
to their strengths in their current roles?

The answers to these questions let HR determine how to proceed, which is the final phase of the
HRP process. HR must now take practical steps to integrate its plan with the rest of the company.
The department needs a budget, the ability to implement the plan, and a collaborative effort with all
departments to execute that plan.

The goal of HR planning is to have the optimal number of staff to make the most money for the
company. Because the goals and strategies of the company change over time, HRP is a regular
occurrence.

An HR Planning process simply involves the following four broad steps:

 Current HR Supply: Assessment of the current human resource availability in the

organization is the foremost step in HR Planning. It includes a comprehensive study of the
human resource strength of the organization in terms of numbers, skills, talents, competencies,
qualifications, experience, age, tenures, performance ratings, designations, grades,
compensations, benefits, etc. At this stage, the consultants may conduct extensive interviews
with the managers to understand the critical HR issues they face and workforce capabilities
they consider basic or crucial for various business processes.
 Future HR Demand: Analysis of the future workforce requirements of the business is the
second step in HR Planning. All the known HR variables like attrition, lay-offs, foreseeable
vacancies, retirements, promotions, pre-set transfers, etc. are taken into consideration while
determining future HR demand. Further, certain unknown workforce variables like competitive
factors, resignations, abrupt transfers or dismissals are also included in the scope of analysis.
 Demand Forecast: Next step is to match the current supply with the future demand of HR,
and create a demand forecast. Here, it is also essential to understand the business strategy
and objectives in the long run so that the workforce demand forecast is such that it is aligned
to the organizational goals.
 HR Sourcing Strategy and Implementation: After reviewing the gaps in the HR supply and
demand, the HR Consulting Firm develops plans to meet these gaps as per the demand
forecast created by them. This may include conducting communication programs with
employees, relocation, talent acquisition, recruitment and outsourcing, talent management,
training and coaching, and revision of policies. The plans are, then, implemented taking into
confidence the mangers so as to make the process of execution smooth and efficient. Here, it
is important to note that all the regulatory and legal compliances are being followed by the
consultants to prevent any untoward situation coming from the employees.
Hence, a properly conducted process of HR Planning by an HR Consulting Firm helps the
organization in meeting its goals and objectives in timely manner with the right HR strength in action.

WHAT IS RECRUITMENT
In human resource management, “recruitment” is the process of finding and hiring the best and most
qualified candidate for a job opening, in a timely and cost-effective manner. It can also be defined as the
“process of searching for prospective employees and stimulating and encouraging them to apply for jobs
in an organization”.

It is one whole process, with a full life cycle, that begins with identification of the needs of the company
with respect to the job, and ends with the introduction of the employee to the organization.

When we speak of the recruitment process, we immediately think of activities such as the analysis of the
requirements of a specific job, attracting candidates to apply for that job, screening the applicants and
selecting among them, hiring the chosen candidates to become new employees of the organization, and
integrating them into the structure.

Obviously, the main reason why the recruitment process is implemented is to find the persons who are
best qualified for the positions within the company, and who will help them towards attaining
organizational goals. But there are other reasons why a recruitment process is important.

To ensure proper alignment of skill sets to organizational goals.

Through recruitment, organizations make sure that the skill sets of the staff or manpower of the company
remains aligned to its initiatives and goals.

In the event that they notice some positions do not really contribute to the advancement of the
organization towards its goals, then it can take the proper action to correct this, probably through job
redesign, restructuring of the workforce, or conduct of job enrichment programs.

To ensure effective and efficient recruiting.

Effective recruiting means that the person employed for the job is the best possible candidate for it, with
all the required skills, talents and qualifications of the job. Efficient recruiting, on the other hand, means
that the process has been carried out without incurring a lot of costs on the part of the organization. By
following the process, there is a greater chance that the human resources department can get the best
possible person for the job.

Organizations may carry out their hiring processes their own way, but without a system or set guidelines
in place for its conduct and implementation, there is a risk that the company may incur more expenses
than necessary.

The company will also end up wasting its resources if the wrong or unqualified person was actually hired.
Not only will this create problems for the company in the long run, particularly in the attainment of its
goals, but it would mean that the organization would also have wasted its resources in training an
employee that is not right for the job after all.
To ensure compliance with policies and laws.
There are various rules, laws and regulations that organizations must adhere to when it comes to its
human resources management. Equal opportunity employment and non-discrimination in hiring are two of
them. By following a recruitment process, the chances of the organization violating these policies will be
low.

This is how you can create your employer value proposition and convince talent to join your company.

FACTORS THAT INFLUENCE

RECRUITMENT
Recruitment is affected by several factors. These factors play a big part on whether the recruitment
process will be successful or not.

Size of the organization

A large organization is bound to have a higher demand for new employees. It is bound to look for more
people, since the structure will require more manpower. On the other end of the spectrum, a small
enterprise, like a new company just starting its operations, will require only a lean staff.

Comparing the two, it is clear that the smaller enterprise will have a simpler, more straightforward and
shorter recruitment process, conducted by only one or two people. The larger organization, however, will
have a lengthier and more complex recruitment process, one where several members of the organization
will take part in.

Current employment conditions in the economy

Try comparing employment opportunities in a country with a developed economy with that of an
underdeveloped one. An organization operating in an underdeveloped economy may have difficulty
finding the candidates with the talents and skills it requires.

The availability of prospective talents is one huge issue with respect to the economy that an enterprise
belongs to. The company will have to design and implement its recruitment process in a way that will
address this issue.

Salary structure of the organization

Say one company is known to provide higher salaries and wages to its employees. Once it advertises its
open position, candidates are likely to line up submitting their resumes. However, a company known to be
quite stingy with its wages will have more difficulty recruiting top talents.

In addition, it may even have problems keeping or retaining its employees, since no employee would want
to stay for a long time in a company that will not pay him enough for his services.
Working conditions within the organization
Maintaining employees’ job satisfaction is one way for organizations to keep its employees, and attract
new ones.

Prospective candidates will first look for work in companies or organizations that are known to provide
good working conditions and looks out for the health and well-being of their employees.

Growth rate of the organization

There are organizations that grow at a fast rate, which means that they will require new employees from
time to time. However, there are also organizations that do not grow as much, or even at all. The only time
that these organizations with low growth rates are likely to recruit new employees would be when the old
ones retire or resign.

Before we fully launch into the recruitment process, let us address one question first: who conducts the
recruitment process?

The answer is largely dependent on the size of the organization, as well as its culture and practices. Large
companies have their own human resource departments, where they have in-house hiring managers.
They may also acquire the services of third-party and independent human resource professionals and
recruitment agencies.

Recruitment & Selection Hiring Process

In order to increase efficiency in hiring and retention and to ensure consistency and compliance in the
recruitment and selection process, it is recommended the following steps be followed (also refer
to Staff Recruitment and Selection Hiring Checklist). Details for each step include the minimum
recommended best practice to attract a talented and diverse applicant pool:
Step 1: Identify Vacancy and Evaluate Need
Step 2: Develop Position Description
Step 3: Develop Recruitment Plan
Step 4: Select Search Committee
Step 5: Post Position and Implement Recruitment Plan
Step 6: Review Applicants and Develop Short List
Step 7: Conduct Interviews
Step 8: Select Hire
Step 9: Finalize Recruitment
Affirmative Action, Equal Employment Opportunity and Diversity are not separate actions in the
recruitment and selection process. They are key variables which are woven into each step of the
process to support UCR’s achievement of excellence.
Recruitment
Recruitment refers to the overall process of attracting, shortlisting, selecting and appointing suitable candidates
for jobs (either permanent or temporary) within an organization.[1]Recruitment can also refer to processes involved in
choosing individuals for unpaid roles. Managers, human resource generalists and recruitment specialists may be
tasked with carrying out recruitment, but in some cases public-sector employment agencies, commercial recruitment
agencies, or specialist search consultancies are used to undertake parts of the process. Internet-based technologies
which support all aspects of recruitment have become widespread

Types of Recruitment
Recruitment is of 2 types

1. Internal Recruitment - is a recruitment which takes place within the concern or organization. Internal sources of
recruitment are readily available to an organization. Internal sources are primarily three - Transfers, promotions
and Re-employment of ex-employees.

Internal recruitment may lead to increase in employee’s productivity as their motivation level increases. It also
saves time, money and efforts. But a drawback of internal recruitment is that it refrains the organization from new
blood. Also, not all the manpower requirements can be met through internal recruitment. Hiring from outside has
to be done.

Internal sources are primarily 3

a. Transfers
b. Promotions (through Internal Job Postings) and
c. Re-employment of ex-employees - Re-employment of ex-employees is one of the internal sources of
recruitment in which employees can be invited and appointed to fill vacancies in the concern. There are
situations when ex-employees provide unsolicited applications also.
2. External Recruitment - External sources of recruitment have to be solicited from outside the organization.
External sources are external to a concern. But it involves lot of time and money. The external sources of
recruitment include - Employment at factory gate, advertisements, employment exchanges, employment
agencies, educational institutes, labour contractors, recommendations etc.
a. Employment at Factory Level - This a source of external recruitment in which the applications for
vacancies are presented on bulletin boards outside the Factory or at the Gate. This kind of recruitment is
applicable generally where factory workers are to be appointed. There are people who keep on soliciting
jobs from one place to another. These applicants are called as unsolicited applicants. These types of
workers apply on their own for their job. For this kind of recruitment workers have a tendency to shift from
one factory to another and therefore they are called as “badli” workers.
b. Advertisement - It is an external source which has got an important place in recruitment procedure. The
biggest advantage of advertisement is that it covers a wide area of market and scattered applicants can
get information from advertisements. Medium used is Newspapers and Television.
c. Employment Exchanges - There are certain Employment exchanges which are run by government.
Most of the government undertakings and concerns employ people through such exchanges. Now-a-days
recruitment in government agencies has become compulsory through employment exchange.
d. Employment Agencies - There are certain professional organizations which look towards recruitment
and employment of people, i.e. these private agencies run by private individuals supply required
manpower to needy concerns.
e. Educational Institutions - There are certain professional Institutions which serves as an external source
for recruiting fresh graduates from these institutes. This kind of recruitment done through such
educational institutions, is called as Campus Recruitment. They have special recruitment cells which
helps in providing jobs to fresh candidates.
f. Recommendations - There are certain people who have experience in a particular area. They enjoy
goodwill and a stand in the company. There are certain vacancies which are filled by recommendations of
 such people. The biggest drawback of this source is that the company has to rely totally on such people
which can later on prove to be inefficient.
g. Labour Contractors - These are the specialist people who supply manpower to the Factory or
Manufacturing plants. Through these contractors, workers are appointed on contract basis, i.e. for a
particular time period. Under conditions when these contractors leave the organization, such people who
are appointed have to also leave the concern.

What is Selection?
Selection is the process of picking or choosing the right candidate, who is most suitable for a vacant
job position in an organization. In others words, selection can also be explained as the process of
interviewing the candidates and evaluating their qualities, which are required for a specific job and
then choosing the suitable candidate for the position.

The selection of a right applicant for a vacant position will be an asset to the organization, which will
be helping the organization in reaching its objectives.

Different authors define Selection in different ways. Here is a list of some of the definitions −

 Employee selection is a process of putting a right applicant on a right job.

 Selection of an employee is a process of choosing the applicants, who have the qualifications to fill the
vacant job in an organization.

 Selection is a process of identifying and hiring the applicants for filling the vacancies in an organization.

 Employee selection is a process of matching organization’s requirements with the skills and the
qualifications of individuals.

A good selection process will ensure that the organization gets the right set of employees with the
right attitude.

Difference between Recruitment and Selection

The major differences between Recruitment and Selection are as follows −

Recruitment Selection

Recruitment is defined as the process of Selection is defined as the process of choosing

identifying and making the potential the right candidates for the vacant positions.
candidates to apply for the jobs.

Recruitment is called as a positive process Selection is called as a negative process with its
with its approach of attracting as many elimination or rejection of as many candidates as
candidates as possible for the vacant jobs possible for identifying the right candidate for the
position.
Both recruitment and selection work hand in hand and both play a vital role in the overall growth of
an organization.

Importance of Selection
Selection is an important process because hiring good resources can help increase the overall
performance of the organization. In contrast, if there is bad hire with a bad selection process, then
the work will be affected and the cost incurred for replacing that bad resource will be high.

The purpose of selection is to choose the most suitable candidate, who can meet the requirements
of the jobs in an organization, who will be a successful applicant. For meeting the goals of the
organization, it is important to evaluate various attributes of each candidate such as their
qualifications, skills, experiences, overall attitude, etc. In this process, the most suitable candidate is
picked after the elimination of the candidates, who are not suitable for the vacant job.

The organization has to follow a proper selection process or procedure, as a huge amount of money
is spent for hiring a right candidate for a position. If a selection is wrong, then the cost incurred in
induction and training the wrong candidate will be a huge loss to the employer in terms of money,
effort, and also time. Hence, selection is very important and the process should be perfect for the
betterment of the organization.

Advantages of Selection
A good selection process offers the following advantages−

 It is cost-effective and reduces a lot of time and effort.

 It helps avoid any biasing while recruiting the right candidate.

 It helps eliminate the candidates who are lacking in knowledge, ability, and proficiency.

 It provides a guideline to evaluate the candidates further through strict verification and reference-checking.

 It helps in comparing the different candidates in terms of their capabilities, knowledge, skills, experience,
work attitude, etc.

A good selection process helps in selecting the best candidate for the requirement of a vacant
position in an organization.

Selection Process and Steps

As we have discussed that Selection is very important for any organization for minimizing the losses
and maximizing the profits. Hence the selection procedure should be perfect. A good selection
process should comprise the following steps −
  Employment Interview − Employment interview is a process in which one-on-one session in conducted
with the applicant to know a candidate better. It helps the interviewer to discover the inner qualities of the
applicant and helps in taking a right decision.

 Checking References − Reference checking is a process of verifying the applicant’s qualifications and
experiences with the references provided by him. These reference checks help the interviewer understand
the conduct, the attitude, and the behavior of the candidate as an individual and also as a professional.

 Medical Examination − Medical examination is a process, in which the physical and the mental fitness of
the applicants are checked to ensure that the candidates are capable of performing a job or not. This
examination helps the organization in choosing the right candidates who are physically and mentally fit.

 Final Selection − The final selection is the final process which proves that the applicant has qualified in all
the rounds of the selection process and will be issued an appointment letter.

A selection process with the above steps will help any organization in choosing and selecting the
right candidates for the right job.

Difference between Recruitment and

Selection
Basis Recruitment Selection

Meaning It is an activity of establishing contact between It is a process of picking up more competent

employers and applicants. and suitable employees.

Objective It encourages large number of Candidates for a It attempts at rejecting unsuitable candidates.
job.

Process It is a simple process. It is a complicated process.

Hurdles The candidates have not to cross over many Many hurdles have to be crossed.
hurdles.

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 Less time is required. More time is required.

Consuming

Orientation and Placement

Once the candidates are selected for the required job, they have to be fitted as per the qualifications. Placement is said to
be the process of fitting the selected person at the right job or place, i.e. fitting square pegs in square holes and round
pegs in round holes. Once he is fitted into the job, he is given the activities he has to perform and also told about his
duties. The freshly appointed candidates are then given orientation in order to familiarize and introduce the company to
him. Generally the information given during the orientation programme includes-

 Employee’s layout
 Type of organizational structure
 Departmental goals
 Organizational layout
 General rules and regulations
 Standing Orders
 Grievance system or procedure

In short, during Orientation employees are made aware about the mission and vision of the organization, the nature of
operation of the organization, policies and programmes of the organization.

The main aim of conducting Orientation is to build up confidence, morale and trust of the employee in the new
organization, so that he becomes a productive and an efficient employee of the organization and contributes to the
organizational success.

The nature of Orientation program varies with the organizational size, i.e., smaller the organization the more informal is
the Orientation and larger the organization more formalized is the Orientation programme.

Proper Placement of employees will lower the chances of employee’s absenteeism. The employees will be more satisfied
and contended with their work.

Difference Between Recruitment and Selection

Recruitment is a process of searching out the potential applicants and inspiring them to apply for the
actual or anticipated vacancy. On the other hand, Selection is a process of hiring employees among
the shortlisted candidates and providing them a job in the organization.
Due to increase in population, getting a good job is not an easy task. Employers want the right
candidate for the concerned position. The large supply of workforce has given them the opportunity to
select the best talent.

Nowadays, there is a very lengthy procedure for appointment of an employee to a post. There are two
major stages which may be heard by you hundreds and hundreds of times; they are recruitment and
selection. Most of us view them as the same thing. But, they are quite different in meaning and
behaviour. Read the article provided below that explains the difference between recruitment and
selection in human resource management (HRM) in tabular form.

Content: Recruitment Vs Selection

1. Comparison Chart
2. Definition
3. Key Differences
4. Conclusion

Comparison Chart
BASIS FOR
RECRUITMENT SELECTION
COMPARISON

Meaning Recruitment is an activity of Selection refers to the process

searching candidates and of selecting the best candidates
encouraging them apply for it. and offering them job.

Approach Positive Negative

Objective Inviting more and more Picking up the most suitable

candidates to apply for the vacant candidate and rejecting the
post. rest.

Key Factor Advertising the job Appointment of the candidate

Sequence First Second

Process Vacancies are notified by the firm
through various sources and
application form is made
available to the candidate.
The firm makes applicant pass
through various levels like
submitting form, written test,
interview, medical test and so
on.

Contractual As recruitment only implies the Selection involves the creation

 BASIS FOR
RECRUITMENT SELECTION
COMPARISON

Relation communication of vacancies, no of contractual relation between

contractual relation is the employer and employee.
established.

Method Economical Expensive

Definition of Recruitment

Recruitment is a process of finding out the prospective applicants and stimulating them to apply for
the vacancy. It is a long process which involves a series of activities that starts with analysing the job
requirements and ends on the appointment of the employee. The activities involved in the recruitment
of employees are as under:

 Analysing job requirement

 Advertising the vacancy
 Attracting candidates to apply for the job
 Managing response
 Scrutiny of applications
 Shortlisting candidates

The recruitment is done by the Human Resource managers either internally or externally. The
sources of internal recruitment are promotion, transfers, retrenched employees, contact or
references, ex-employees, retired employees, etc. On the other hand, sources of external recruitment
are recruitment through advertisement, campus recruitment, recruitment by employment exchanges,
recruitment by third parties (recruitment agencies), internet recruiting, unsolicited applicants, etc.

Definition of Selection

Selection is an activity in which the organisation selects a fixed number of candidates from a large
number of applicants. It involves the actual appointment of the employee for filling up the vacancies of
the enterprise. The term selection means the placement of the right man at the right job. We all know
that a lot of people apply for a single job at the time of recruitment, in which the recruiters have to
decide which candidate fits the best for the job.

The selection also involves a set of activities which are given as under:

 Screening
 Eliminating unsuitable candidates
 Conducting the examination like aptitude test, intelligence test, performance test, personality
test, etc.
 Interview
 Checking References
 Medical Test
The process of selection is a time-consuming one because the HR managers have to identify the
eligibility of every candidate for the post. Besides this, the educational qualification, background, age,
etc. are also some of the most important factors in which they have to pay more attention. After this,
the written examination and interview is also a very tough task.

Key Differences Between Recruitment and Selection

The following points are substantial so far as the difference between recruitment and selection is
concerned:

1. Recruitment is the process of finding candidates for the vacant position and stimulating them
to apply for it. The selection means picking up the best candidate from the list of applicants
and offering them the job.
2. Recruitment is a positive process as it attracts more and more job seekers to apply for the
post. Conversely, Selection is a negative process as it rejects all the unfit candidates.
3. Recruitment aims at inviting more and more candidates to apply for the vacant position. On
the contrary, selection aims at rejecting unsuitable candidates and appointing the right
candidates at the job.
4. The activity of recruitment is quite simple because in this the recruiter does not have to pay
more attention to scrutinising the candidate, whereas selection is a complex activity because
in this the employer wants to know every minute detail about each candidate so that he can
choose the perfect match for the job which requires thorough investigation.
5. Recruitment consumes less time as it only involves identifying the needs of the job and
stimulating candidates to apply for the same. Conversely, selection involves a wide range of
activities, right from shortlisting the candidates to appointing them.
6. In recruitment, the firm notifies the candidates regarding vacancy through different sources
such as the internet, newspaper, magazines, etc. and distributes the form to the candidates
so that they can easily apply. As against this, in the process of selection, the firm makes sure
that candidate passes through various stages such as form submission, written exam,
interview, medical exam, etc.
7. In recruitment, no contractual relation is created between the employer and employee. Unlike
selection, where both employer and employee are bound by the contract of employment.
8. Recruitment is an economical process while the selection is an expensive process.

Induction, Orientation and Placement

Induction, Orientation and Placement: Induction means introducing a new worker to his job, his co-workers and basic
objectives and policies of the organization. This kind of initiation is helpful for an employee in settling himself to his new
job. This can be achieved by supplying the new employee all relevant information about his job and the organization
through printed / written document (staff manual) and verbal explanation by his immediate superior / supervisor.

The induction and orientation programmes are meant for any person at any level while appointed because the
newly appointed persons are not expected to perform the jobs with much efficiency. They must get acclimatized to new
work environment of the library.

a) Purpose of Induction and Orientation Programme: The purpose of induction and orientation programme is-
i) To be acquainted with the objective, function, general policies and services of the library.
ii) To create a sense of belonging to the institution.
iii) To gain confidence in the particular department in which he /she shall have to work.
iv) To gain acclimatized or confidence in the new work environment.
v) To understand his/her own responsibilities.
vi) To motivate them to give their best.

An induction programme is the process used within many businesses to welcome new employees to the company
and prepare them for their new role. It helps in the effective integration of the employee into the organisation.[1]
Induction training should, according to TPI-theory, include development of theoretical and practical skills, but also
meet interaction needs that exist among the new employees.[2]
An Induction Programme can also include the safety training delivered to contractors before they are permitted to
enter a site or begin their work. It is usually focused on the particular safety issues of an organisation but will often
include much of the general company information delivered to employees.
An induction programme is an important process for bringing staff into an organisation. It provides an introduction to
the working environment and the set-up of the employee within the organisation. The process will cover the
employer and employee rights and the terms and conditions of employment. As a priority the induction programme
must cover any legaland compliance requirements for working at the company and pay attention to the health and
safety of the new employee.
An induction programme is part of an organisations knowledge management process and is intended to enable the
new starter to become a useful, integrated member of the team, rather than being "thrown in at the deep end"
without understanding how to do their job, or how their role fits in with the rest of the company.
Good induction programmes can increase productivity and reduce short-term turnover of staff. These programs can
also play a critical role under the socialization to the organization in terms of performance, attitudes and
organizational commitment.[3] In addition well designed induction programmes can significantly increase the speed to
competency of new employees thus meaning they are more productive in a shorter period of time.
A typical induction programme will include at least some of the following:

 any legal requirements (for example in the, some Health and Safety training is obligatory)
 any regulatory requirements (for example in the banking sector certain forms need to be completed)
 introduction to terms and conditions (for example, holiday entitlement, how to make expense claims, etc.)
 a basic introduction to the company, and how the particular department fits in
 a guided tour of the building
 completion of government requirements (for example in submission of a P45 or P60)
 set-up of payroll details
 introductions to key members of staff
 specific job-role train
 In order to fully benefit the company and employee, the induction programme should be planned in advance.
The timetable should be prepared, detailing the induction activities for a set period of time (ideally at least a
week) for the new employee, including a named member of staff who will be responsible for each activity.
This plan should be circulated to everyone involved in the induction process, including the new starter. If
possible it should be sent to the new starter in advance, if not co-created with the new starter[4]
 It is also considered best practice to assign a buddy to every new starter. If possible this should be a person
who the new starter will not be working with directly, but who can undertake some of the tasks on the
induction program, as well as generally make the new employee feel welcome. (For example, by ensuring
they are included in any lunchtime social activities.)
Induction is the process for welcoming newly recruited employees and supporting them to adjust to their new roles
and working environments. Starting a new job can be a stressful experience and new employees need help to settle
in. The University’s induction program will provide new employees with all of the necessary information, including
local welcome events and activities.

The induction you will receive in your local department/institution will enable you to:
 Meet your key colleagues;
 Find your way around your workplace;
 Understand your terms and conditions of employment;
 Understand your role, key responsibilities and how you fit into your department/institution;
 Know what is expected of you and the way in which your work will be monitored;
 Know how you will be managed and supported to carry out your duties;
 Access University and local policies and procedures; and
 Identify any training and development needs that have to be met to enable you to undertake your role effectively.

At the beginning of your induction, you will be provided with an Employee Induction Checklist (HR24). You can work
through this with your line manager (or the person responsible for your induction) and use it as a prompt for ensuring
that key aspects of your induction are covered. The Employee Induction Checklist should be completed within your
first month and then provided to your department/institution administrator or other appropriate support staff for
retention on your local personal file.

The Employee Induction Checklist does not only cover local induction activity—

Induction
Definition: Induction
Induction is the process of introducing a new employee to his/her job and organization and giving him all the
necessary information required by him/her to start his work. The purpose of induction is to welcome a new employee
and inform them about the organizational culture, introduce them to their team and co-workers, give them an
understanding of their job, help them understand how their work will be connected to his co workers and informing
him about the policies of the organization.

Induction helps to reduce the anxiety of a new entrant in the organization and helps him to feel a sense of
belongingness in the organization. If the induction process is neglected it may lead to confusion for the employee,
wasted time, wasted resources, absenteeism and turnover.

Therefore the objectives of induction are as follows:

1) To reduce the anxiety, shyness and nervousness a new employee feels when he joins new organization and is
surrounded by new people and a new environment.
2) To introduce the employees their job, company culture, policies, workplace, work environment and the people of
the organization.
3) To ensure that the new employee does not form a negative perception about the organization.
4) To reduce confusion and waste of time and resources.
5) To foster good relations among employees
6) To reduce the possibility of a new employee being exploited by an evil co worker
Induction may be formal or informal.
Informal induction is an unplanned induction and is carried out by small business units. In some cases of informal
induction the immediate supervisor may introduce the employee to his job, organization and co workers while in
some other cases the supervisor may appoint an existing employee as a buddy to the new employee. The buddy
explains all the processes of the organization and introduces the new employee to his surroundings in this case.
Formal induction is a pre planned induction process. It is carried out in large organizations. In formal induction a
programme is carefully designed to introduce the new employee to his job, colleague and organization. A formal
induction may take more time but it results in new employees learning better about their jobs and hence making
lesser errors and working with better coordination with coworkers.

A good induction programme should include the following:

1) Brief history of the organization, the organizations products, industry and competitors
2) The mission, vision and purpose of the organization
3) Policies and rules of the organization
4) The organizational structure and the various departments in the organization
5) Information about the employees job, its significance and the risks and hazards associated with the job
6) About the employee’s department
7) Terms and conditions of the employee’s service and the various benefits that the organization will provide the
employee
8) The career development and career progression opportunities available to the employee
Hence, this concludes the definition of Induction along with its overview.
Induction Programmes: Concept, Objectives and Phases of Induction Programme
1. Concept of Induction:
Introduction of a new entrant into any existing group of people has been a common feature we come across in
our everyday life. Recall, the bride on joining to (your) family was introduced to (your) family members and
manners. Remember your own joining to your present Department of Business Administration.
On joining the Department, you may have been told about the Department’s rules and regulations, the
procedure for academic activities such as sessional tests, assignments, seminar presentations, summer
training, semester examination, papers to be taught with the names of the teachers, etc.
You were probably introduced to your seniors by organising ‘fresher’s welcome’. Similarly, when a person
joins a new job, he/she also needs the same type of introduction to his/her job and the organisation. This
introduction is called ‘induction’. Induction is also known as ‘orientation’ and ‘indoctrination’.
A new entrant joins an organisation as a stranger to his co-workers, job and organisation. This causes the
initial anxiety for the new entrant. It culminates at times to surprise resignation by the new employee. Hence,
arrangements need to be made to make the integration of the new employee into the organisation as smooth
and as free of anxiety as possible. Induction helps do so.
Induction is welcoming a new employee to the organisation. In other words, it is a well orchestrated event to
socialise the new entrant with the people and the work environment in a particular organization.
According to Michael Armstrong “Induction is the process of receiving and welcoming an employee when he
first joins a company and giving him basic information he needs to settle down quickly and happily and start
work”.

2. Objectives of Induction:
When a new entrant joins an organisation, he/she is an utter stranger to the co-workers, workplace and work
environment. As such, he/she may feel insecure, shy and nervous. The first few days may be all anxious and
disturbing ones for the new entrant.
Particularly when a new entrant comes from rural area, he/she finds himself/herself completely at sea in an
industrial town and city. Then, induction helps reduce such anxities and dispels doubts and nervousness from
the mind of the new entrant.
Therefore, an induction programme is designed to achieve the following objectives:
1. To reduce the initial anxiety all new entrants feel when they join a new job in a new organisation.
2. To familiarize the new employees with the job, people, work-place, work environment and the organisation.
3. To facilitate outsider – insider transition in an integrated manner.
4. To reduce exploitation by the unscrupulous co-workers.
5. To reduce the cultural shock faced in the new organisation.
3. Benefits of induction programme:
A formal induction programme may provide the following benefits to the new comer and the organisation:
1. A well-designed induction programme reduces anxiety, nervousness, and absenteeism and employee
turnover.
2. Induction helps minimize the reality or cultural shock new employees undergo on joining a new
organisation.
3. Effective induction also helps integrate the new employees into the organisation and fosters the feeling of
belongingness to the new organisation.
4. Induction also binds the newcomer and the present employees in a team.
B.P. Billimoria has appreciated the benefits of induction in these words:
“Induction has a greater significance in a developing country like India, where the percentage of illiteracy is
very high. The worker finds himself completely at sea when by force of circumstances he has to shift from
rural surroundings into an industrial environment. It is no use trying to push a handbook of certified rules and
regulations into his hands and expecting him to turn out into a loyal and efficient employee. He needs a short
and simple induction conducted by someone who speaks his own language. This will go a long way in reducing
turnover and, above all, in preventing a worker from the likelihood of falling a prey to subversive elements
which thrive on creating labour unrest by misrepresenting employees to illiterate employees”.
4. Contents of induction programme:
The induction programme may be informal or formal. These are discussed one by one.
Informal Induction:
This is an unplanned induction programme. This may be simply an introduction to the new entrant about the
job and organisation. Such type of induction programme is generally carried out by the medium and small-
scale units. Usually, informal induction programme needs to be brief- lasting for one hour or so.
Informal induction programme itself may be in the following two versions:
(i) Supervisory System:
In this system, the immediate job supervisor conducts the induction programme for the new entrant. The
supervisor briefs the new comer about the job, the department, introduces to the colleagues, and takes him
round the sections/divisions which are related to his job.
(ii) Buddy or sponsor system:
In the ‘Buddy System’, the immediate supervisor assigns the responsibility of induction of the new entrant to
an old employee. The old employee acts as friend, philosopher and guide to the new comer. In order to
introduce the new comer to the job and the organisation, the guide, i.e., the old employee arranges meetings
with other persons and departments and also supplies him with relevant documents/literature regarding
rules, regulations and other details of the organisation.

Formal Induction:
Formal induction is a planned programme carried out to integrate the new entrant into the organisation. This
is usually carried out by the large size organisation. A comprehensive induction programme is carefully
designed to introduce the new entrant to all about his job, colleagues and organisation.
Accordingly, the contents of the formal induction programme cover the aspects ranging from the mission,
vision, rules and regulations of the organisation to job related particulars like salary, benefits, service
conditions, safety and welfare measures, etc.
A formal induction programme, thus, includes the following contents:
1. Brief history of the organisation.
2. Organisational mission, vision, objectives and philosophies.
3. Policies and procedures of the organisation.
4. Rules and regulation of the organisation.
5. Organisational structure and authority relationship.
6. Terms and conditions of job including remuneration, working hours, holidays, promotional avenues, etc.
7. Welfare measures like subsidised canteen, transport, health and recreation facilities, etc.
8. Safety measures.
All the contents of the induction programme are arranged into the three phases which are discussed
subsequently. Formal induction programme is carried out by the HR specialists through leaflets, lectures, semi-
nars and conduct tours for a couple of days/weeks. The induction may spread over periods of time ranging
from a few days to a few weeks even months.
Go through the following example of the induction programme carried out at TISCO. It will help you better
understand the contents of a Formal Induction Programme.
Induction at TISCO:
The formal induction in the TISCO was carried out since late 1960s. The objective of induction was to acquaint
the new employee with his surroundings, explain to him the rules and safety measures, etc., and give him an
induction of the education, training and welfare activities sponsored by the company.
The induction programme consists generally of the following:
1. Introduction to the Company:
As a first step in the programme, new entrants in batches of not more than 15 are told about the Founder and
the history of the Company’s development, its organisations and functions, its various products and its
personnel policies. The Safety Officer of the Safety & Accident Prevention Services gives a talk on safety and
demonstrates the correct use of various safety appliances.
2. Briefing on conditions of service:
The salient features of the Works Standing Orders, Gratuity and Provident Fund rules, medical, housing, and
educational and welfare facilities, etc., are explained. A brief talk is also given in respect of wages, overtime,
bonus and other remunerations. The rules regarding seniority, leave, acting and promoting procedures, etc.,
too, are covered by the talk.
3. Introduction to the Officers of the Department and Visit to the Works Location and Environment:
After the new entrants are educated on the subjects indicated above at the Employment Bureau, they are sent
to the department concerned where they are introduced to the supervisors in charge of the various sections
and the Personnel Officer. They are then taken to the place of work and shown various important places such
as the Check Houses, Watch Houses, Rest Rooms, Toilet, etc.
4. Introduction on the Job:
The new entrants are given a brief description of the jobs they are supposed to perform, of the location of
their work and the way to approach the jobs. Breakdown signals, fire alarm and other safety precautions are
explained. In addition, the method of recording attendance is also indicated to them.
5. Phases of induction programme:
A carefully designed induction programme consists of the following three phases:
1. General Induction
2. Specific Induction
3. Follow-up Induction
A brief description of these follows:
General Induction:
This first phase of induction is conducted by the HR department. The focus of the induction is to expose the
new entrant to the organisation by explaining him the mission, objectives, history and philosophy of the
organisation. The new employees is also briefed about his service conditions, pay and perks, promotion
procedure, personnel policies and grievance handling mechanism practised in the organisation. This phase of
induction inculcates pride for the employee to work in the organisation. The period of induction, depending
on the organisation, may vary from a few days to few weeks.
Specific Induction:
This induction is given by the new employee’s supervisor. The focus is on the overall exposition of the new
employee to his job. Accordingly, the employee is introduced to the job, shown place of work and around the
premises, introduced to his co-workers and briefed about the procedures and methods, custom and routines,
rules and regulations regarding his job. This training/ induction help the new employee adjust with his work
environment. The induction may last for few weeks or even months.
Follow-up induction:
The main objective of the follow-up induction is to verify whether the new employee is getting himself
adjusted with the work and organisation or not. This induction is given by the employee’s supervisor or a
qualified specialist on industrial psychology.
While giving induction training, the employee’s suggestions on adequacy or otherwise of the already
conducted induction programmes and on any other related aspects, if any, are duly taken into consideration
to make the induction more and more effective. Such feedback can also be used to assess the requirements of
guidance and counseling for the new entrants. The duration of follow-up induction may vary from some weeks
to few months.

Placement:
Placement: is the process of assigning specific jobs and work places to the selected candidates. It
involves putting square pegs in to square holes i.e. matching the individual and the job. Correct
placement is in no way less important than accurate selection. Even a competent employee maybe
inefficient and dissatisfied if put on a wrong job. Correct placement helps to improve efficiency and
satisfaction of employees. While placing employees on the job the requirements of both the
organization and the employee should be considered requirements of the organization include nature
of job, number of vacancies in a particular branch or unit degree of difficulty in the job etc. Age,
marital status, language patterns, qualifications and experience of a particular candidate should also
be considered while placing the right man on the right job.
In selecting the successful candidate, the panel must make a decision based on the merit and
eligibility of the candidates as judged by:
 Content of application
 Qualifications
 Performance at Interview 
 Outcome of any selection tests 
 Right to work 
The panel must seek to ensure that candidates appointed will actively promote the core values.
Which are as follows
 Assess the need for the job and ensure there is adequate funding for it.
 Review the job description to ensure that it meets the present and future requirements
 Review the person specification to ensure it meets the requirements of the job description
 Design the selection process
 Draft the advertisement and select the advertising media
 Short list using the person specification only
 Interview and test short-listed candidates
 Validate references, qualifications and security clearances
  Make appointment
Managers hold the responsibility for ensuring this framework is followed. HR is available for advice
and will assist in general administration of the recruitment process

Essay on the Meaning of Placement:

The selection procedure ends with the placement of a worker to the job. Placement is the process of
assigning a specific job to each one of the selected candidates.

In very simple words placement means sending the newly employed person to some department for work.
It also implies assigning a specific rank and responsibility to an individual. Matching the requirements of
the job with the qualifications of a candidate is the essence of placement.

According to Pigors and Myers “Placement is the determination of the job to which an accepted
candidate is to be assigned and his assignment to that job. It is a matching of what the supervisor
has reason to think he can do with the job demands. It is a matching of what he imposes (in strain,
working conditions etc.) and what he offers (in the form of payroll, companionship with others,
promotional possibilities etc.).”
Essay on the Principles of Placement:
A few basic principles should be followed at the time of placement of a worker on the job.

These may be enumerated as below:

1. Man should be placed on the job according to the requirements of the job. The job should not be
adjusted according to the qualifications or requirements of the man. Job first; man Next should be the
principle of placement.

2. The job should be offered to the man according to his qualifications. The placement should neither be
higher nor lower than the qualifications.

3. The employee should be made conversant with the working conditions prevailing in the industry and all
things relating to the job. He should also be made aware of the penalties if he commits a wrong.

4. While introducing the job to the new employee, an effort should be made to develop a sense of loyalty
and cooperation in him so that he may realise his responsibilities better towards the job and the
organisation.

5. The placement should be ready before the joining date of the newly selected person.
6. The placement in the initial period may be temporary as changes are likely after the completion of
training. The employee may be later transferred to the job where he can do justice.

Proper placement helps to improve employee morale. The capacity of the employee can be utilised fully if
he is placed on the job for which he is most suitable. Right placement also helps to reduce labour
turnover, absenteeism and accident rates. If a candidate adjusts himself to the job and continues to
perform as per expectations, it might mean that the candidate is properly placed.

Essay on the Problems in Placement:

The main problem with placement arises when the recruiters look at the individual but not at the job.
Often, the individual does not work independent of the others.

Jobs in his context are classified into three categories:

1. Independent Jobs:
In independent jobs, non-overlapping routes or territories are allotted to each employee e.g. in field sales.
In such situations, the activities of one employee have little bearing on the activities of other workers.
Independent jobs do-not pose great problems in placement. Each employee has to be evaluated between
his capabilities and interests and those required on the job.

The objectives of placement will be:

(a) To fill the job with people who have at least the minimum required qualifications.

(b) People should be placed on the job that will make the best possible use of their talents, given available
job and HR constraints.

2. Dependent Jobs:
Dependent jobs may be sequential or pooled. In sequential jobs, the activities of one employee are
dependent on the activities of a fellow employee. Assembly lines are the best example of such jobs.

In pooled jobs, there is high interdependence among jobs. The final output is the result of the contribution
of all the workers.

In dependent jobs, an employee is placed in a specific sub group. While placing, care must be taken to
match characteristics of the employee with that of the sub group. Because in such jobs, team work
matters a lot.HR specialists must use assessment classification model for placing newly hired employees.
In order to match individual with jobs, this, model suggests the following steps:

Training and Development

Training and Development is one of the main functions of the human resource management department.
Training refers to a systematic setup where employees are instructed and taught matters of technical
knowledge related to their jobs. It focuses on teaching employees how to use particular machines or how to do
specific tasks to increase efficiency.

Whereas, Development refers to the overall holistic and educational growth and maturity of people in
managerial positions. The process of development is in relation to insights, attitudes, adaptability, leadership
and human relations.

Training and Development Programmes

Training and development programmes are designed according to the requirements of the organisation, the type
and skills of employees being trained, the end goals of the training and the job profile of the employees. These
programmes are generally classified into two types:

(1) on the job programmes, and

(2) off the job programmes.
Different training is given to employees at different levels. The following training methods are used For the training
of skilled workers and operators- Specific job training programmes, Technical training at a training with live
demos, Internship training, Training via the process of rotation of job.

Training given to people in a supervisory or managerial capacity is – Lectures, Group Discussions, Case studies,
Role-playing, Conferences etc.

People in managerial programmes are given this type of training- Management Games to develop decision
making, Programmes to identify potential executives, Sensitivity training to understand and influence employee
behaviour, Simulation and role-playing, Programmes for improving communication, human relations and
managerial skills.

Other Training Programmes

Technical Training – Technical training is that type of training that is aimed at teaching employees how a
particular technology or a machine.

Quality Training – Quality training is usually performed in companies who physically produce a product. Quality
training teaches employees to identify faulty products and only allow perfect products to go out to the markets.

Skills Training – Skills training refers to training given to employees so as to perform their particular jobs. For e.g.
A receptionist would be specifically taught to answer calls and handle the answering machine.

Soft Skills – Soft skills training includes personality development, being welcoming and friendly to clients,
building rapport, training on sexual harassment etc.

Professional Training – Professional Training is done for jobs that have constantly changing and evolving work
like the field of medicine and research. People working in these sectors have to be regularly updated on matters of
the industry.

Team Training – Team training establishes a level of trust and synchronicity between team members for
increased efficiency.

Benefits of Training

Training improves the quantity and quality of the workforce. It increases the skills and knowledge base of the
employees.

It improves upon the time and money required to reach the company’s goals. For e.g. Trained salesmen
achieve and exceed their targets faster than inexperienced and untrained salesmen.

Training helps to identify the highly skilled and talented employees and the company can give them jobs of
higher responsibilities.

Trained employees are highly efficient in comparison to untrained ones.

Reduces the need to constantly supervise and overlook the employees.

Improves job satisfaction and thus boosts morale.

Benefits of Development

Exposes executives to the latest techniques and trends in their professional fields.

Ensures that the company has an adequate number of managers with knowledge and skill at any given point.
 Helps in the long-term growth and survival of the company.

Creates an effective team of managers who can handle the company issues without fail.

Ensures that the employees utilise their managerial and leadership skills in particular to the fullest.

Training
Training – It is referred to as teaching specific skills and behaviour to employees for effective
performance of their task.It is the process by which the employees are taught skills and given the
necessary knowledge to carry out their responsibilities according to the desired standards.

A Systematic Approach to Training

1. Assessment – Determine training needs, Identify training objectives

2. Implementation – Select training methods, Conduct Training
3. Evaluation – Measure outcomes
Objectives/Purpose of Training –

 To train new recruits

 To enhance the skills, knowledge and abilities of existing employees
 To keep the organization updated with the changing working standards
 To tackle the strategy of competitors
 To motivate employees and keep them satisfied
 Preparing the employees for future jobs, special events, new projects, technical advancements etc.

Training V/s Development

Training Development

It is meant for operatives It is meant for managers

It aims to improve to overall ability and personality of

It aims to improve a specific skill relating to a job
an individual

It is a one-time process It is an on-going and continuous process

It meets the needs of current requirements of a job It meets the future needs of the job and the individual
 Reactive process Proactive process

It focuses on an entire workgroup or managementof

It focuses is on individual employees
an organization

It is a result of outside motivation It is a result of internal motivation

Training Methods –

They can be classified on the basis of the location where the instruction/training is provided into –

1. On the Job Methods – Training is provided at the actual workplace of the employee/trainee
2. Off the Job Methods – Training is provided at a place other than the actual workplace of the
employee. The trainee is separated from his current job location and complete focus is on learning
skills related to his future job performance.

On the Job Training Methods –

(1) Job instruction Training (JIT) – It is a four step instructional process involving preparation,
presentation, performance and follow-up. It is used to teach workers how to do their current job. The
four steps of JIT are as follows –

 Demonstration – The trainer demonstrates the right way to do the job

 Overview – Educate trainee about the purpose and outcomes of the job
 Performance – The trainee is asked to copy the trainer and perform the task independently with
little guidance
 Follow-up- The trainer checks the trainee`s performance to determine whether he/she is ready for
the job

(2) Coaching – It refers to an informal, unplanned training provided by superiors or peers to an

employee. It involves daily feedback and training of employees by their immediate supervisors.
Supervisors or peers carry out the following activities in order to train the employee.

 Explain him the right way of doing things

 Explaining the do`s and don’ts of the job
 Stating observations accurately about employee performance
 Offering alternative/suggestions
 Follow up
 (3) Mentoring – It is a relationship in which a senior manager assumes the responsibility for
grooming a junior manager. Technical, interpersonal and political skills are conveyed by an
experienced person to help the trainee attain psychological maturity and get integrated with the
organization. The main focus of a mentor is on career advancement and psychological maturity of the
trainee. Therefore the mentor carries out the following functions –

 Career functions – Those aspects of the relationship that enhance career advancement. Eg:
Sponsorship, Exposure and visibility, Coaching, Protection, Challenging assignments
 Psychological functions – Those aspects that enhance trainee`s sense of competence. Eg: Role
modelling, Acceptance and Assurance, Counselling, Friendship
(4) Job Rotation – It involves movement of employees from one job to another within an
organization. The purpose of job rotation is to provide employees with a larger organization
perspective and better understanding of different functional areas. It relives employees of boredom
and provides flexibility in the organization.

(5) Apprenticeship Training – Apprentices are trainees who spend a prescribed amount of time
working with an experienced guide, coach or trainer. It demands high level of participation from the
trainee. Such form of training is called Apprenticeship training. Internships and summer training are
similar to Apprenticeship.

(6) Committee Assignments – In this method the trainees are asked to solve an actual
organizational problem. The trainees have to work together and offer a solution to the problem. It
gives a broadening experience and helps to understand the personalities, issues and processes
governing the organization.

Off the Job Training Methods –

(1) Vestibule training – Under this method the actual work conditions are stipulated in a classroom
and the actual material, files and equipment used in the actual job are used in teaching the employee.
It is commonly used for semi-skilled and clerical jobs.

(2) Role Playing – It involves action, doing and practice of human interactions with realistic behaviour
in imaginary situations.

(3) Lecture method – It is a traditional and direct method of providing training. The instructor
organizes all the material and provides instructions to a group of trainees in form of oral lectures.

(4) Conference/Discussion method – In this method the trainer delivers a lecture and involves the
trainee in a discussion in order to clear his/her doubts about the job. Trainers may use audio-visual
aids like presentations, mock-ups and videos to train the employees. It is a group centred approach
involving clarification of doubts, communication of ideas, standards and procedures between the
trainer and trainee.

(5) Programmed Instructions – In this method the subject matter to be taught is presented in a
series of carefully planned sequential instructions and tasks. These instruction and tasks are
arranged from simple to more complex level of instructions which are to be performed by the trainees
step by step.

(6) Virtual Classroom and E-Learning – A virtual classroom makes use of special enterprise
collaboration software and online learning management systems to enable multiple remote learners
to participate in a live audio-visual discussion and lectures. Trainee`s communicate via text or voice
online and learn via content provided online in form of videos, e-books, presentations etc.

E-learning methods include instructions delivered through Optical disks, pen drives, internet, satellite
broadcasts or digital collaborations between partners willing to learn from each other.

(7) Behaviourally experienced training – These programs focus on emotional and behavioural
learning. It includes activities like business games, case studies, role playing, group discussions,
sensitivity and laboratory training.

Training and development

Training and development involves improving the effectiveness of organizations and the individuals and teams within
them.[1] Training may be viewed as related to immediate changes in organizational effectiveness via organized instruction, while
development is related to the progress of longer-term organizational and employee goals. While training and development
technically have differing definitions, the two are oftentimes used interchangeably and/or together. Training and development
has historically been a topic within applied psychology but has within the last two decades become closely associated
with human resources management, talent management, human resources development, instructional design, human factors,
and knowledge management
Training has been used in organizations for the past several decades. Although training and development requires investments
of many types, there are cited benefits to integrating training and development into organizations:

 Increased productivity and job performance [1]

 Skills development [1]
 Team development [1][16]
 Decreasing safety-related accidents [17]
However, if the training and development is not strategic and pointed at specific goals, it can lead to more harm than
good.[18] Needs assessments, especially when the training is being conducted on a large-scale, are frequently conducted in order
to gauge what needs to be trained, how it should be trained, and how extensively.[19] Needs assessments in the training and
development context often reveal employee and management-specific skills to develop (e.g. for new employees), organizational-
wide problems to address (e.g. performance issues), adaptations needed to suit changing environments (e.g. new technology),
or employee development needs (e.g. career planning). The degree of effectiveness of training and development programs can
be predicted by the needs assessment and how closely the needs were met, the execution of the training (i.e. how effective the
trainer was), and trainee characteristics (e.g. motivation, cognitive abilities).[20] Effectiveness of training is typically done on an
individual or team-level, with few studies investigating the impacts on organization.

Definition: Training and Development

Training and Development is a subsystem of an organization which emphasize on the improvement of the performance of individuals
and groups. Training is an educational process which involves the sharpening of skills, concepts, changing of attitude and gaining
more knowledge to enhance the performance of the employees. Good & efficient training of employees helps in their skills &
knowledge development, which eventually helps a company improve.
Training is about knowing where you are in the present and after some time where will you reach with your abilities. By training,
people can learn new information, new methodology and refresh their existing knowledge and skills. Due to this there is much
improvement and adds up the effectiveness at work. The motive behind giving the training is to create an impact that lasts beyond the
end time of the training itself and employee gets updated with the new phenomenon. Training can be offered as skill development for
individuals and groups.

Organizational Development is a process that “strives to build the capacity to achieve and sustain a new desired state that benefits the
organization or community and the world around them.” (From the Organizational Development Network website).

Relation between Training and Development

There is a relation between training and development, and there is clear difference between the two based on goals to be achieved.
Development is made to answer the training problems:

TRAINING DEVELOPMENT

Training is meant for operatives Development is meant for executives

It is reactive process It is pro- active process

AIM: To develop additional skills AIM: To develop the total personality

It is short term process It is continuous process

OBJECTIVE: To meet the present need of an employee OBJECTIVE: To meet the future need of an employee

Initiative is taken by the management Initiative is taken by an individual.

Importance of Training and Development
For companies to keep improving, it is important for organizations to have continuous training and development programs for their
employees. Competition and the business environment keeps changing, and hence it is critical to keep learning and pick up new skills.
The importance of training and development is as follows:
• Optimum utilization of Human resources
• Development of skills like time management, leadership, team management etc
• To increase the productivity and enhance employee motivation
• To provide the zeal of team spirit
• For improvement of organization culture
• To improve quality, safety
• To increase profitability
• Improve the morale and corporate image

Need for Training and Development

Training and development of employees is a costly activity as it requires a lot quality inputs from trainers as well as employees. But it
is essential that the company revises its goals and efficiencies with the changing environment. Here are a few critical reasons why the
company endorses training and development sessions.
• When management thinks that there is a need to improve the performances of employees
• To set up the benchmark of improvement so far in the performance improvement effort
• To train about the specific job responsibility and skills like communication management, team management etc
• To test the new methodology for increasing the productivity

Advantages of training and development

Training and development has a cost attached to it. However, since it is beneficial for companies in the long run, they ensure
employees are trained regularly. Some advantages are:
1. Helps employees develop new skills and increases their knowledge.
2. Improves efficiency and productivity of the individuals as well as the teams.
3. Proper training and development can remove bottle-necks in operations.
4. New & improved job positions can be created to make the organization leaner.
5. Keeps employees motivated and refreshes their goals, ambitions and contribution levels.

Disadvantages of training and development

Even though there are several advantages, some drawbacks of training and development are mentioned below:
1. It is an expensive process which includes arranging the correct trainers and engaging employees for non-revenue activities.
2. There is a risk that after the training and development session, the employee can quit the job.

Training and Development Process

Training and development is a continuous process as the skills, knowledge and quality of work needs constant improvement. Since
businesses are changing rapidly, it is critical that companies focus on training their employees after constantly monitoring them &
developing their overall personality.
Steps for training and development processes are:
1. Determine the need of training and development for individuals or teams
2. Establish specific objectives & goals which need to be achieved
3. Select the methods of training
4. Conduct and implement the programs for employees
5. Evaluate the output and performance post the training and development sessions.
6. Keep monitoring and evaluating the performances and again see if more training is required.
Hence, this concludes the definition of Training and Development along with its overview.

Employee Development
Employee development is defined as a process where the employee with the support of his/her employer undergoes various training
programs to enhance his/her skills and acquire new knowledge and skills.

Benefits of Employee Development

In today’s work environment, employee development is the number #1 factor for employee retention, especially among Millennials.
Top employee development methods used by organizations most frequently include training programs and leadership development
programs. Investments in employee learning and development directly impact employee engagement and productivity, improving
overall business success metrics.

What is Employee Development ?

Employee development is a joint initiative of the employee as well as the employer to upgrade the existing skills and
knowledge of an individual. It is of utmost importance for employees to keep themselves abreast with the latest
developments in the industry to survive the fierce competition. Believe me, if you are not aware of what is happening
around you, even before you realize you would be out of the game. As they say there is really no age limit for
education. Upgrading knowledge is essential to live with the changes of time. Employee development goes a long way
in training, sharpening the skills of an employee and upgrading his/her existing knowledge and abilities. In a layman’s
language, employee development helps in developing and nurturing employees for them to become reliable resources
and eventually benefit the organization. Employees also develop a sense of attachment towards the organization as a
result of employee development activities.

Organizations must encourage their employees to participate in employee development activities. Employees also
must take skill enhancement or employee development activities seriously. Do not attend trainings or other employee
development activities just because your Boss has asked you to do so. Don’t just attend trainings to mark your
attendance. You just cannot use same ideas or concepts everywhere.

It is excellent if you know Microsoft Excel or for that matter Microsoft Word. Remember simply knowing few basic
functions of MS excel would not help you in the long run. It might help you in the short run. Excel is not just to store
your required data. There are many other formulae and advanced applications which one should be aware of.

Enhance your skills with time. Employee development can also be defined as a process where the employee with the
support of his/her employer undergoes various training programs to enhance his/her skills and acquire new
knowledge and learnings. Every organization follows certain processes which not only help in the professional but also
personal growth of an employee. Employee development activities help an employee to work hard and produce quality
work.

Examples of Employee Development Activities

Professional Growth

Employee development activities must be defined keeping in mind an employee’s current stage and desired stage.
Knowing an employee’s current and desired stage helps you find the gaps and in which all genres he/she needs to be
trained on. Human resource professionals must encourage employees to participate in internal or external trainings,
get enrolled in online courses to increase their professional knowledge and contribute effectively.
 Personal Growth

Employees start taking their work as a burden only when an organization does not provide any added benefits or
advantages which would help in their personal growth.

Soft skills classes, fitness sessions, loans with lower interest rates are certain initiatives which not only motivate an
employee to do quality work but also help in employee development.

Employee development not only helps in enhancing knowledge of employees but also increases the productivity of
organizations. Employees, as a result of employee development activities are better trained and equipped and work
harder to yield higher profits.

Transfer
Transfer – It can simply be defined as “a change in job assignment of an employee.”

It involves movement of employee from one job to another within an organization while being in the
same level of hierarchy, requiring similar skills, involving same level of authority and responsibility
and similar pay.

Types of Transfer –

 Production Transfer – Movement of employees within an organization due to changes in

production requirements.
 Replacement Transfer – Movement of an employee within an organization to replace an existing
employee.
 Rotation Transfer – Movement of employees within an organization to increase their versatility.
 Shift Transfer – Movement of employees within an organization from one job shift to another. It
involves change in job timings.
 Remedial Transfer – It involves movement of an employee within an organization to correct a
wrong placement.
 Penal Transfer – Movement of an employee within an organization in order to punish him for a
misconduct.

Essential Principles of a Transfer policy –

1. It must be in writing and must be communicated to all employees in an organization.

2. It must clearly state the type of transfer and the selection criteria.
3. It must clearly state the basis of transfer.
4. It must indicate the authority responsible for executing the transfers.
5. It must specify the rate of pay and dimensions of transfers.
6. It must indicate whether any training is required for the new job.
7. It must ensure that transfers are only made when necessary.
Employee Separations – It occurs when employees cease to be members of the organization, the
service agreement ends and the employee leaves the organization.

Causes of Employee Separations –

 Resignation – It occurs when an employee quits the organization on voluntary, personal or
professional grounds.
 Retirement – It occurs when an employee has completed his full tenure in an organization. It may
be voluntary retirement, compulsory retirement or retirement due to the death of the employee.
 Lay-offs – It is temporary removal of employees from the pay-roll of an organization due to
adverse business conditions.
 Retrenchment – It is the permanent termination of an employee due to economic reasons such as
surplus staff, economic losses, poor demand and general economic slowdown.
 Out-placement – In this case employers help the employee to find a job in another organization. It
happens in cases where services required from employee are temporary or one time jobs.
 Suspension – Under a suspension an employee is prohibited from attending and performing work
due to disciplinary reasons.
 Discharge – It is a permanent termination of employee due to reasons such as – Alcoholism or
Drug abuse, Dishonesty, Carelessness, Inefficiency or Physical disability
 Dismissal – An employee is dismissed from his services. It is a punitive measure for some
misconduct.

Job Transfers: Definition, Need, Policy and Types!

Definition:
A transfer refers to lateral movement of employees within the same grade, from one job to another. According to Flippo
“a transfer is a change in the job (accompanied by a change in the place of the job) of an employee without a change in
responsibilities or remuneration”.
Transfer differs from promotion in the sense that the latter involves a change of job involving increase in salary,
authority, status and responsibility, while all these remain unchanged /stagnant in the case of former. Also, transfers are
frequent and regular whereas promotions are infrequent, if not irregular.
Transfer may be initiated either by the company or the employee. In practice, the company may transfer the employee
to the place where he/she can prove more useful and effective. Similarly, employee may initiate transfer to a location
where he/she is likely to enjoy greater satisfaction.
Transfer could be permanent, temporary or ad hoc to meet emergencies. Usually, permanent transfers are made due to
changes in work load or death, retirement, resignation, etc. of some employee. As regards temporary transfer, it arises
mainly due to ill health, absenteeism, etc. of some employee.
Transfer decisions may be perceived as negative or positive depending upon an individual’s personal preferences, needs
and aspirations. For example, an organisation may consider transfer from Guwahati regional office to Delhi-head office
as positive and reward because it will enable the employee to broaden his/her knowledge and work experience. On the
contrary, the employee may look down upon it as it breaks ties with his people and community in Guwahati.
Sometimes, transfers are used as an instrument for victimizing the employees by management. Realizing it, provisions
are made by constituting labour courts to set aside transfer orders proved as management strategy to victimize
employees. In order to make transfers useful for employee and the company, some organisations have clear agreements
with trade unions for the transfer of unionized staff especially on promotions.
There are some public sector organisations like Minerals and Metals Trading Corporation (MMTC) who have entered
into agreements, with employees for creating two cadres of officers, namely. Local Officers and All India Officers
wherein promotions to and within the former are less accelerated than in the latter, but do not entail transfer.
Need:
The need for making transfer is left for various reasons as listed below:
1. To Meet Organisational Needs:
Changes in technology, volume of production, production schedule, product line, quality of products, organisational
structure, etc. necessitate an organisation to reassign jobs among employees so that right employee is placed on the
right job.
2. To Satisfy Employee Needs:
Employees may request for transfer in order to satisfy their desire to work in a particular department, place and under
some superior. Personal problems of employee like health, family circumstances, and interpersonal conflicts may also
necessitate transfer.
3. To Better Utilize Employee:
When an employee is not performing satisfactorily on one job and management thinks that his/her capabilities would be
utilized better elsewhere, he/she may be transferred to other job.
4. To Make the Employee More Versatile:
In some organisations like banks, employees after working on a job for a specified period are transferred to other job
with a view to widen their knowledge and skill and also reduce monotony. This is also called ‘job rotation.
5. To Adjust the Workforce:
Work force can be transferred from the departments / plants where there is less work to the departments/plants where
more work is.
6. To Provide Relief:
Transfers may be made to give relief to the employees who are overburdened or doing hazardous work for long period.
7. To Punish Employee:
Management may use transfer as an instrument to penalize employees who are indulged in undesirable activities. As a
disciplinary action, employees are transferred to remote and far-flung areas.
Policy:
Transfer involves costs as well. Therefore, every organisation should have a just and impartial transfer policy for its
employees. Transfers should then be affected according to such policy only. In fact, a good and fair transfer policy serves
as a guide-post to the manager in affecting transfers as and when required in the overall interest of the organisation.
A good transfer policy should satisfy the following requirements:
1. Specify the circumstances under which transfers will be made. These should be in writing and should be
communicated to the employees. For example, defence personnel and government employees are subjected to transfer
once in three years. The employees in these organisations know when they are due for a transfer and are prepared for
it.
2. Specify the basis for transfer i.e., whether transfer will be made on the basis of seniority or skill and competency or on
any other basis.
3. Decide the authority which would handle transfers.
4. Intimate the fact of transfer to the person concerned well in advance.
5. Specify the jobs to which transfers will be made and duties and salary on assumption of new jobs should also be
clarified.
6. Clarify whether transfer is permanent or temporary.
7. Indicate whether transfers can be made within a department or between departments or between units.
8. Not to be made frequent and not for the sake of transfer only.
However, one should not expect for a uniform transfer policy in all the organisations. Depending on the type, kind and
size of the organisation, transfer policy is subject to vary from organisation to organisation. In any case, a good transfer
policy should be consistent with the overall objectives of the organisation.
Types:
Employee transfers may be classified into following types:
1. Production Transfer:
Such transfers are made when labour requirements in one division or branch is declining. The surplus employees from
such division are transferred to those divisions or branches where there is shortage of employees. Such transfers help
avoid lay off and stabilize employment.
2. Remedial Transfer:
Such transfers are affected to correct the wrong selection and placement of employees. A wrongly placed employee is
transferred to more suitable job. Such transfers protect the interest of the employee.
3. Replacement Transfer:
Replacement transfers are similar to production transfers in their inherent, i.e. to avoid layoffs. Replacement transfers
are affected when labour requirements are declining and are designed to replace a new employee by an employee who
has been in the organisation for a sufficiently long time. The purpose of these transfers is to retain long service
employees in the organisation and also give them some relief from the heavy pressure of work.
4. Versatility Transfer:
These transfers are also known as ‘job rotation? In such transfers, employees are made move from one job to another to
gain varied and broader experience of work. It benefits both the employee and organisation. It reduces boredom and
monotony and gives job enrichment to the employee. Also, employees’ versatility can be utilized by the organisation as
and when needed.
5. Shift Transfers:
These transfers are affected in the organisations where work progresses for 24 hours or in shifts. Employees are
transferred from one shift to another usually on the basis of mutual understanding and convenience.
6. Penalty Transfer:
Management may use transfer as an instrument to penalize employees’ involved in undesirable activities in the
organisation. Employee transfer from one’s place of convenience to a far-flung and remote area is considered as a
penalty to the employee.
Job Promotions: Definition, Types and Other Details
Definition:
Promotion is vertical movement of an employee within the organisation. In other words, promotion
refers to the upward movement of an employee from one job to another higher one, with increase in
salary, status and responsibilities. Promotion may be temporary or permanent, depending upon the
needs of the organisation.

There can be ‘dry promotion’ also where an employee is assigned to a higher level job without
increase in pay. An example of ‘dry promotion’ is a University Professor made Head of the
Department with no increase in salary.

Promotion has an in-built motivational value as it elevates the authority, power and status of an
employee within an organisation. It is considered good personnel policy to fill vacancies in a higher
job through promotions from within because such promotions provide an inducement and motivation
to the employees and also remove feelings of stagnation-and frustration.

Types of Promotion:
Promotion given to employees in an organisation can be classified into three types:
1. Horizontal promotion:
When an employee is shifted in the same category, it is called ‘horizontal promotion’. A junior clerk
promoted to senior clerk is such an example. It is important to note that such promotion may take
place when an employee shifts within the same department, from one department to other or from
one plant to another plant.

2. Vertical Promotion:
This is the kind of promotion when an employee is promoted from a lower category to lower category
involving increase in salary, status, authority and responsibility. Generally, promotion means ‘vertical
promotion’.

3. Dry Promotion:
When promotion is made without increase in salary, it is called ‘dry promotion’. For example, a lower
level manager is promoted to senior level manager without increase in salary or pay. Such promotion
is made either there is resource/fund crunch in the organisation or some employees hanker more for
status or authority than money.

Purposes:
The following are the purposes or objectives of promotion:
1. To recognize an employee’s skill and knowledge and utilize it to improve the organisational
effectiveness.
2. To reward and motivate employees to higher productivity.

3. To develop competitive spirit and inculcate the zeal in the employees to acquire skill, knowledge
etc.

4. To promote employees satisfaction and boost their morale.

5. To build loyalty among the employees toward organisation.

6. To promote good human relations.

7. To increase sense of belongingness.

8. To retain skilled and talented people.

9. To attract trained, competent and hard working people.

10. To impress the other employees that opportunities are available to them too if they also perform
well.

According to Dale Yoder, “Promotion provides incentive to initiative, enterprise and ambition;
minimizes discontent and unrest; attracts capable individuals; necessitates logical training for
advancement; and forms an effective reward for loyalty and cooperation, long service, etc.”

Promotion benefits both employees and the employer. However, it needs to be made with a great
caution because wrong promotion may invite implications of one type or other for the organisation. So
to say, promotion is like a double-edged weapon. Hence, every organisation needs to evolve and
implement a suitable promotion policy for its employees. The following section deals with the same.

Policy:
The following characteristics make a promotion policy as sound and good policy:
1. It must provide equal opportunities for promotion across the jobs, departments, and regions.

2. It must be applied uniformly to all employees irrespective of their background.

3. It must be fair and impartial.

4. The basis of promotion must be clearly specified and made known to the employees.

5. It must be correlated with career planning. Both quick (bunching) and delayed promotions must be
avoided as these ultimately adversely affect the organisational effectiveness.

6. Appropriate authority must be entrusted with the task of making final decision.

7. Promotion must be made on trial basis. The progress of the employee must be monitored. In case,
the promoted employee does not make the required progress, provision must be there in the
promotion policy to revert him/her to the former post.

8. The policy must be good blending of promotions made from both inside and outside the
organisation.
Promotion can be made on various bases. Following are the major ones:
1. Seniority i.e., length of service

2. Merit, i .e., performance

3. Educational and technical qualification

4. Potential for better performance

5. Career and succession plan

6. Vacancies based on organisational chart

7. Motivational strategies like job enlargement.

8. Training

As a matter of fact, no single basis of promotion is acceptable and applicable to all organisations.
Every basis has its strengths and weaknesses. For example, while promotion on the basis of seniority
gives satisfaction to the senior employees, it causes frustration to the talented ones.

Similarly, promotion based on merit motivates competent employees to work hard while trade unions
oppose it on the justification of its subjectivity. In India, promotion in the government departments is
made on the basis of seniority of the employees. In case of private organisations, merit is generally
used as a basis for promoting employees. Here, the promotion policy is to promote the best one
available.

promotion
When there are vacancies in an organization, they can be filled up by the internal or external candidates. Though the organization prefers to fill up the
vacancies by the external candidates through the selection procedure, the internal candidates may also apply for post and may be tested and selected
for higher level job in the organizational hierarchy at par with external candidates. Is such upward movement of an employee a promotion? Or it is purely
selection? It is purely a selection. If the organization prefers to fill a vacancy only by the internal candidates, it assigns that higher level job to the
selected employee from within through promotion tests. Such upward movement can be said as promotion.
► Definition:-
“Promotion is advancement of an employee to a better job- better in terms of grater responsibility, more prestige or status, greater skills and
especially increased rate of pay or salary.”
“The upward reassignment of an individual in an organizational hierarchy, accompanied by increased responsibilities, enhanced status and usually with
increased income though not always so.”
Promotion is the reassignment of a higher level job to an internal employee with delegation of responsibilities and authority required to perform that
higher job and normally with higher pay. Thus, the main conditions of promotion are:-
1) Reassignment of higher level job to an employee than what he is presently performing.

2) The employee will naturally be delegated with greater responsibility and authority than what he has had earlier.
3) Promotion normally accompanies higher pay.
Promotion may be temporary or permanent depending upon the organizational needs and employee performance.

► Purpose of promotion:-
Organizations promote the employee with a view to achieve the following purposes:-
1) To utilize the employee’s skills, knowledge at the appropriate level in the organizational hierarchy resulting in organizational effectiveness and
employee satisfaction.
2) To develop competent spirit and inculcate the zeal in the employees to acquired the skills, knowledge etc. required by higher level jobs.
3) To develop competent internal source of employees ready to take up jobs at higher level in the changing environment.

4) To promote employee’s self development and make them await their turn of promotions. It reduces labour turnover.
5) To promote a feeling of content with the existing conditions of the company and a sense of belongingness.
6) To promote interest in training, development programmers and in team development areas.

7) To build loyalty and to boost morale.

8) To reward committed and loyal employees.
9) To get rid of the problems created by the leader of workers’ unions by promoting them to the officer’ levels where they are less effective in creating
problems.

Merit as a basis of promotion:-

Merit is taken to denote an individual employee’s skills, knowledge, ability, efficiency and aptitude as measured from educational, training and past
employment record. The merits of merit system of promotion are:
1) The resources of higher order of an employee can be better utilized at a higher level. It result in maximum utilization of human resources in an
organization
2) Competent employees are motivated to exert all their resources and contribute them to the organizational efficiency and effectiveness
3) It works as golden hand-cuffs regarding employee turnover,

4) Further it continuously encourages the employees to acquire new skill, knowledge etc. for all-round development.
Despite these advantages the merit systems suffer from some demerit. They are:
1) Measurement or judging of merit is highly difficult.
2) Many people, particularly trade union leaders, distrust the management’s integrity in judging merit.
3) The techniques of merit measurement are subjective.
4) Merit denotes mostly the past achievement, efficiency but not the future success. Hence, the purpose of promotion may not be served if merit is
taken as sole criteria for promotion.

Senior as a basis of promotion

Seniority refers to relative length of service in the same job and in the same organization. The logic behind considering the seniority as a basis of
promotion is that there is a positive correlation between the length of service in the same job and the amount of knowledge and the level of skill acquired
by an employee in an organization. This system is also based on the custom that the first in should be given first chance in all benefit and privileges.
► Advantages of seniority as a basis of promotion are:

1) It is relatively easy to measure the length of service and judge the seniority.
2) There would be full support of the trade unions to this system.
3) Every party trust the management’s action as there is no scope for favoritism and discrimination and judgment.
4) It gives a sense of certainty of getting promotion to every employee and of their turn of promotion.
5) Senior employees will have a sense of satisfaction to this system as the older employees are respected and their inefficiency cannot be pointed
out.
6) It minimizes the scope for grievances and conflicts regarding promotion.
7) This system seems to reserve the purpose in the sense that employees may learn more with increase in the length of service.

► In spite of these merits, this system also suffers from certain limitations. They are:
1) The assumption that the employees learn more relatively with length of service is not valid as this assumption has reverse effect. In other words
employees learn up to a certain age and beyond that stage the learning ability of the cognitive process diminishes.
2) It denominates the young and more competent employees and results in employee turnover particularly among the dynamic force.
3) It kills the zeal and interest to develop as everybody will be promoted with or without improvement.
4) Organizational effectiveness may be diminishes through the deceleration of the human resource effectiveness as the human resource consists of
mostly undynamic and old blood.
5) Judging the seniority though it seems to be in the theoretical sense. it is highly difficult in practice as the problems like job seniority, company
seniority, zonal/regional seniority, service in different organizations, experience as apprentice trainee, trainee, researcher, length of service not only by
days but hours and minutes will crop up.
Thus the two main basic of promotion enjoy certain advantages and at the same time suffer from certain limitations. Hence, a combination of both of
them may be regarded as an effective basis of promotion.

Seniority-cum-merit
Management mostly prefers merit as the basis of promotion as they are interested in enriching its human resources. But trade union favour seniority as
the sole basis for promotion with a view to satisfy the interests of majority of their members.
Hence a combination of both seniority and merit can be considered as the basis for promotion satisfying the management for organizational
effectiveness and employees and trade union for respecting the length of service. A balance between seniority and merit should be struck and a new
basis is to be developed. There are several ways in striking the balance between these two basis.viz:-
1) Minimum length of service and merit:-
Under this method all those employees who complete the minimum service, say five years, are made eligible for promotion and then merit is taken as
the sole criteria for selecting the employee for promotion from the eligible candidates. Most of the commercial bank in India has been following this
method for promoting the employees from clerk’s position to officer’s position.
2) Measurements of seniority and merit through a common factor.
3) Minimum merit and seniority:-
In contrast to the earlier methods, minimum score of merit which is necessary for the acceptable performance on the future job is determined and all the
candidates who secure minimum score are declared as eligible candidates. Candidates are selected for promotion based on their seniority only from the
eligible candidates.

► Benefit of promotion:-
1) Promotion places the employees in a position where an employee’s skills and knowledge can be better utilized.

2) It creates and increases the interest of the other employees in the company as they believe that they will also get their turn.
3) It creates among employees a feeling of content with the existing conditions of work and employment.
4) It increases interest in acquiring higher qualifications, in training and in self development with a view to meet the requirement of promotion

5) Promotion improves employee morale and job satisfaction.

6) Ultimately it improves organizational health.

► Problems with promotion:-

Though promotions benefit the employee and the organization, it creates certain problems. They are disappointment of the candidates, refusal of
promotions etc.
Promotion disappointment some employees:-
Some employees who are not promoted will be disappointed when their colleagues with similar qualifications and experience are promoted either due to
favoritisms or due to lack of systematic promotion policy. Employee may develop negative attitude and reduce their contributions to the organization and
prevent organizational and individual advancement.
Some employee refuse promotion:-
There is a general tendency that employee accept promotion. But their are several incidents where employees refuse promotions. These include
promotion together with transfer to an upward place, promotion that level where the employee feels that he will be quite incompetent to carry out the job,
delegation of unwanted responsibilities, and when trade union leader feel that promotion causes damage to their position in trade union.
The other problems associated with the promotion are: some superiors will not relieve their subordinates who are promoted because of their
indispensability in the present job and inequality in promotional in different departments, regions and categories of jobs.
Promotion problems can be minimized though a career counseling by the superiors and by formulating a systematic promotion policy.

► Promotion policy

Every organizational has to specify clearly its policy regarding promotion based on its corporate policy. The characteristics of a systematic promotion
policy are:
1) It should be considered the sense that policy should be applied uniformly to all employees irrespective of the background of the persons,
2) It should be fair and impartial. In other words it should not give room for nepotism, favoritism etc.,

3) Systematic line of promotion channel should be incorporated

4) It should provide equal opportunities fro promotion in all categories of jobs, departments, and regions of an organization
5) It should insure open policy in the sense that every eligible employee should be considered for promotion rather than a closed system which
consider only a class of employees
6) It should contain clear cut norms and criteria for judging merit, length or service, potentiality etc.

7) Appropriate authority should be entrusted with the task of making final decision
8) Favoritism should not be taken as a basis for promotion
9) It should contain promotional counseling, encouragement, guidance and follow-up regarding promotional opportunity, job requirement and
acquiring the required skills, knowledge etc. it should also contain reinforcing the future chances in the mind of rejected candidates and a provision for
challenging the managements decision and action by employee or union within the limits of promotion policy.
► Types of Promotion
As already noted, a promotion involves an increase in status, responsibilities and pay. But, in certain cases, only the pay increases, and the other
elements remain stagnant. In other cases, the status only increases without a corresponding increase in pay or responsibilities. Depending on which
elements increase and which remain stagnant, promotions may be classified into the following types:
1) Horizontal Promotion:-
This type of promotion involves an increase in responsibilities and pay, and a change in designation. But the employee concerned does not transgress
the job classification. For example, a lower division clerk is promoted as an upper division clerk. This type of promotion is referred to as upgrading’ the
position of an employee.
2) Vertical Promotion:-
This type of promotion results in greater responsibility, prestige and pay, together with a change in the nature of the job. A promotion is vertical when a
canteen employee is promoted to an unskilled job. The concerned employee naturally transgresses the job classification.
3) Dry Promotions:-
Dry promotions are sometimes given in lieu of increases in remuneration. Designations are different but no change in responsibilities. The promotee may
be given one or two annual increments.

performing.
2) The employee will naturally be delegated with greater responsibility and authority than what he has had earlier.

3) Promotion normally accompanies higher pay.

Promotion may be temporary or permanent depending upon the organization

The Role of Human Resource Development as a Change Agent

For businesses to maintain their position in the market place or gain competitive advantage they need to change constantly.
Change helps improve and increase productivity which ultimately increases sales of an enterpr ise. The growing global competition
and the rate of technological advancement foresee a continuing need for change. An organization will require the services of a
change agent to assist in in its effort to change successfully. This study examines the role of Human Resource Development
(HRD) as a change agent in several areas such as organizational change management, different roles played by the change
management, skills and competencies for HRD change agents, the models of change used by the change agents to facilitate
change and conclusion. The study ends with recommendations for further research.

Introduction
Currently, organizations have to keep on changing in order to remain competitive and have competitive advantage as they are
operating in an environment that is fast paced and changing continuously (Biedebacha & Spimlderholma, 2008). Improvement in
employee performance can help boost the production and increase sales of an organization. Dowling and Welch (2004) postulates
that growth in mergers, acquisition and alliances, organizational restructuring, global competition and rapidly changing technology
are the accepted forces of change. Organizations that want to go global are likely to seek Human Resource Development (HRD)
professionals for support and advice (Short and Callahan 2005). Employees are the implementers/drivers of any desired change in
an organization and should therefore be involved in the planning for change. According to Ulrich and Brockband (2005) it is t he
responsibility of Human Resource (HR) professionals to protect the employees against the side effects of inevitable changes and
to ease the effect of changes in the organizations change agents. Vital role of maximizing organization’s human resource is p layed
by the HR practitioners as it is critical for accomplishing key organizational process through the support of employee behaviour
and accordingly proceed to have a successful organization.(Nel,Werner, Poisat, Sono, Du Plessis, & Nqalo, 2011; Stone 2008;
Rennie 2003; Wright & Boswell, 2002). When the employees are involved they will own the change. HR Practitioners have been
assigned many roles such as specialists in service provision, provision of guidance and advice, business partner, a strategis t as
well as change agent (Armstrong 2006). The change agent comes in handy because he/she facilitates this change through the
personnel. He/she is able to gain commitment from the employees. He/she is able to facilitate change by having a potential im pact
on employees in all major projects (Caldwell 2003). Lunenburg (2010) in his paper Managing Change: The Role of the Change
Agent only discussed general role of change agent but did not discuss the role of HRD as a change agent. This paper therefore
aims at discussing the role of Human Resource Development officers as change agents.

2.Literature Review

2.1.Organizational Change Management

Hayes (2002) defines organizational change management as the transformation and modification of whole organizations, or parts ,
in an effort to maintain or improve upon the effectiveness in productivity, revenue, market competitiveness and internal alignment.
Kotter J., (2011) indicates that change management is an approach to transitioning individuals, teams and organizations to a
desired future state. He continues and posits that change management is the utilization of basic structures and tools to control any
organizational change effort. It is an organizational process aimed at helping employees to accept and embrace changes in the ir
current business environment as they are the lifeblood of a company according to (Du Plessis., 2009 & Rennie, 2003)
According to Nel, P. S., Werner, A., Poisat, P., Sono, T., Du Plessis, A. J. & Nqalo, O. (2011), the environment of the 21 st century
is turbulent and uncertain and organizations which manage change effectively by continuously adapting their systems, strategies,
cultures, products and bureaucracies are branded as masters of renewal. Guy, Beaman and Weinstein (2005) affirms that the
century is moving forward at a rapid pace; people are becoming more technologically advanced, have higher expectations, open to
globalization and growing more innovative with each passing day. Carnall (2003) portrays organizations that change as value
adding companies due to their consistently emerging needs to keep up with customers’ needs. He continues to say business
should continuously reframe their strategies, corporate culture, technologies, training and deployment and their leadership o r
leadership styles to remain relevant. Purcell (2001) submitted that HR can play a most important part in change as Human
Resource Management strategies are concerned with the future, the unknown, thinking of and learning how to do things differen tly,
performing things differently and handling its implementation. Organizations that have integrated their human resource
management policies with the strategies and the strategic change process, training, and employee relations manage their chang e
successfully (Armstrong, 2006)
According to Jamrog and Overhold, (2004) HR Practitioners in past have been tagged as administrators but firms wants HR
function to go beyond the delivery of cost effective administrative and provide expertise on how to leverage human capital.
According to Rennie, 2003; Walker and Stopper, (2000) considerable attention to HR practitioners’ roles as business partners and
leader of change has also been received. Hobeche, (2006) posits that over the years the function of HR has become more
multifaceted as the pace of change quickens, requiring a transition toward more value-added roles such as the role of change
agent. Nel et al., (2011) says that HRD practitioners have critical role to play to ensure that the change process runs smoot hly as
change in itself causes a high level of turmoil on organizations.

2.2.Models of Change
The change agents can institute change by following Kurt Lawin’s three steps change model and Kotters eight steps model.
Normandin (2012) in his article "Three Types of Change Management Models" explain Kurt Lewis’ s Model of change as follows:
Kurt Lewin created this change models in 1950s where he observed that people desired to operate in comfort zone. According to
George and Jones, (2002), a three-step process for successful organizational change was proposed whi ch are unfreezing, moving,
and freezing.

2.3.Unfreeze
To avoid resistance to change the first stage of change involves preparing the organization to accept that change is necessar y,
which involves breaking down the existing status quo before you can build up a new way of operating. Schein, (1992 indicates that
employees are motivated to unfreeze when they understand the crisis the firm is going through or have a good vision to motiva te
them. Breaking down of the status quo is the unfreezing Burns, (2004) in dicates. The preferred environment should be created for
change to occur so the new ideas and visions can be formed in people’s mind.
The unfreezing process passes through three phases. Firstly there must be indicators that current conditions are not ideal .
Secondly, this vital information must be communicated to organizational members and finally a solution has to be found to red uce
members of anxiety. This first phase of change is the most difficult and stressful. A period of thawing or unfreezing must be
initiated through motivation.

2.4.Transition/Change
In this stage, people have resolved their uncertainty and are looking forward to new ways of doing things and support the new
direction. Morrison, (2010) points out that since change is dynamic it will d oubtless involve a transition period if it will be effective.
He continues to say that change can start when members open their minds. The second phase enables members to move from a
less acceptable situation to the desired future as it is more interactive Barnstable (2012). For the process to be successful,
reassurance from leadership is required. Also communication is vital for the success of change and people need to be given ti me
to understand the change and feel highly connected to the organization thr oughout the transition period.

2.5.Refreeze
At the point when the progressions are coming to fruition and individuals have grasped the better approaches for working, the
association is prepared to refreeze. Ramos (2011) indicates that changes in the associ ation are completely acknowledged by all
parts and the principle reason at this stage is strength. The outward indications of the refreeze are a stable association ou tline,
reliable sets of responsibilities, etc. The refreeze arrange likewise needs to help individuals and the association disguise or
organize the progressions. This implies verifying that the progressions are utilized constantly; and that they are fused into regular
business. With another feeling of steadiness, workers feel sure and agreeable with the better approaches for working.

2.6.Kotter’s 8 Step Change Model

According to Kotter and Cohen (2002) there are eight critical steps an organization needs to go through for successful change .
Leaders who successfully transform businesses do eight things right and they do them in the right order! (John Kotter)

2.6.1.Create a Sense of Urgency

People will act immediately if they are convinced and see the need for change. The first step in successful change effort is to make
sure sufficient people act with sufficient urgency. For change agents to have power and credibility to initiate the required change
program the need for change must be understood(Kotter, 1997) The use of consultants as a tactic for creating sense of urgent and
to challenge the status quo is recommended by Kotter (1996). This is also applied to examining the realities, identifying and
discussion crisis, potential crises or major opportunities.

2.6.2.Creating the Guiding Coalition

Appelbaum.S.H., Habashy S. Jean-Luc Malo S.J, Hisham S. (2012) in their Journal "Back to the future: revisiting Kotter’s 1996
change model", cites Kotter (1996) and posits that no one person is capable of single -handedly leading and managing the change
process in an organization and putting together the right "guiding coalition" of people to lead a change initiative is critical to its
success. Therefore, it is critical for the change operators to assemble a gathering with enough power to lead the change and get
the gathering to cooperate like a group. A compelling controlling gathering has two qualities. It's comprised of the right individuals,
and it exhibits cooperation. The "right individuals" are those people with suitable abilities, administration limit, authorit ative validity,
and the associations with handle hierarchical change like the change specialists. According to Kotter (1996), the introductory
undertaking of the controlling coalition is to define a dream for the change exertion and to guarantee that it is conveyed al l
throughout the association.

2.6.3.Developing a Vision and Strategy

According to Kotter, (1996) employees are able to understand and to act on a vision if it clearly defined. A good change agen t
should help the organization to ask themselves these questions; What change is necessary? Wha t is our vision for the new
organization? What should not be altered? What is the best way to make the vision a reality? What change strategies and
unacceptably dangerous? If they are able to answer these questions they can transit change very well. Manage rs who understand
the change effort are more likely to be excited about the change and less likely to think that change effort would fail (Wash ington &
Hacker 2005).

2.6.4.Communicating the Change Vision

Communication is very vital for any organization in all aspects. According to Bordia et al, (2004) communication is a critical
element of the organizational change process as it can reduce uncertainty, decrease ambiguity and even affect the type of pos itive
or negative response to the change. (Nelissen and Van Selm, 2008). The vision should be understood and accepted by as many
people as possible. Change messages communicated should be simple not complex for easy comprehension.

2.6.5.Empowering Broad-Based Action

According to Kotter (2002) Barriers should be eradicated when people begin to understand and act on a change vision. Structures
and obstacles that undermine the vision should be removed and systems changed.

2.6.6.Generating Short-Term Wins

Appelbaum. et al (2012) cites Pietersen, 2002) in which The former President of Lever Brothers’ Foods Division in the USA, Willie
Pietersen, says that large-scale change can be a long, formidable undertaking, so it is important to create short -term wins.
Achievements that can easily be visible should be planned. Short term wins should be recognized and those employees involved
should be rewarded.

2.6.7.Consolidating Gains and Producing More Change/Don’t Let Up

Determination and persistence should be nurtured and encouraged by use of increased credibility to change structures, systems
and policies. According to Pfeifer et al. (2005) the main goal for gathering first successes is verifying the credibility of vision and
strategy through the use of measurable results. He continues and says that these first successes will be required to plan for further
change.

2.6.8.Anchoring New Approaches in the Culture

Change agents require a support structure for sustainability of change. The structure should offer training and mentori ng.
Communication and recognition of change initiatives should be used like newsletters, informal meetings seminars, web sites
among others (Massey & Williams, 2006). Articulate the connections between the new behaviors and organizational success, and
develop the means to ensure leadership development and succession.

2.7.Change Agent Role

Lunenburg (2010) posits that there are three distinct roles of any change agent; consulting role where the agent assists employees
to generate data from within the firm or from external sources, and through analysis of valid data helps the workers to solve
problems. Training role in which the agent trains organizational members to learn new methods by providing them with new skil ls.
Research role where he/she may not only train employees but design an evaluation component that can be used in solving not
only the current problem but also solve future problems (Carnall, 2008; Dawson, 2010; Stephen, 2010; Tidd, 2010).
2.8.The Human Resource Development Change Agent’s Role
Change agents are the persons who initiate change and manage change in the organizations. They are specialized in theory and
practice of managing changes (Varghese et al 2012). According to Lawler and Boudreau, (2009) the HRD can support the
introduction of new technology through staff training of the operations of the new technology. A person responsible for organizing
and coordinating the overall change effort can be a change agent according to Carter McNamara (2005). He/she can either be an
internal change agent who is frequently a sub set for organizational leaders or an external change agent, who are most likely to be
consultants or managers brought in to invoke change. (Blewett 2000). The role of HRD as change agent might fail if it does no t
strongly define the process and priorities of change effort as the role of HR in driving changes varies among different
organizations. (Kesler, 2000)
Holbeche, (2008) argues that during recruitment of staff when an organization needs to employ new employees, the HR shoul d be
able to help this task to proceed smoothly without a hitch. This is because they are able to hold the tasks related to change .
Customer needs and expectations are also evaluated. This is used to evaluate the business satisfaction to the customers.
The role played by the HRD professional has equally changed with the change in the organizational environment. Gilley, Quatro,
Lynham, (2003) articulates that in the past the prime responsibility of HRD professionals was to identify, select and evaluat e
training programmes which could be external or internal and deal with the performance of the employees through designing or
customizing training intercessions (Gilley el al., 2003). Therefore, training intervention was the main focus of HRD (Gilley, el al.,
2003). However, at present the HRD Professionals acts as Strategic adviser to help the decision makers on issues related with
HRD. (Du Plessis., 2009; Rennie, 2003; Walker & Stopper,2000). They also play the role of an HR systems designer and
developer by assisting the HR management in designing and developing HR systems in an organization to increase its
performance (Rennie., 2003; Walker & Stopper., 2000) They also act as organizational change agents by helping the management
in designing and implementing change strategies to transform the organization (KJ Singh 2013). Ulrich and Brockbank (2005)
advances that HR practitioners comprises both strategic partner and change agent roles and therefore according to Caldwell,
(2003) HRD Professionals may performance a proactive role in change management as they are in a good position. According to
Green (2001) HRD professionals are uniquely positioned to take responsibility for this role in the organization as it deals w ith the
culture of a firm. According to (CIPD, 2005, Ulrich, 2005; Kenton & Yarnall, 2005; McLagan, 1996; Nijhof, 2004; Tjepkema et al.,
2000) HRD roles have been transformed to strategic business partner, internal consultant and change agent which is the main
focus for this study.

3.The Human Resource Development Specialist as Change Agent

Armstrong, (2006) cites Caldwell (2001) who categories Human Resource Development change agents in four dimensions which
are transformational, incremental, Human Resource vision and Human Resource expertise. Transformational change is a major
change that has a dramatic effect on HR policy and practice across the whole organization. Incremental change is gradual
adjustments of Human Resource policy and practices that affect single activities or multi ple functions. HR vision is a set of values
and beliefs that affirm the legitimacy of the Human Resource function as strategic business partner. Human Resource
Development expertise is the knowledge and skills that define the unique contribution the Human Resource professional can make
to effective people management (Caldwell, 2001).Caldwell goes on to suggest that the change agent roles that can be carried o ut
by Human Resource Development professional are change champions, change adapters, change consulta nts and change
synergists. Caldwell (2003) describes these roles as follows

3.1.Change Champions
Align Human Resource with the business strategy and provide "sponsorship for strategic change" Proactive and persuasive. Have
credibility (which is directly linked to business experience), Possess analytical skills (e.g. gap analysis) and political skills (to make
change happen) Take risks, inspire people and make them aware of the need for change (Caldwell, 2003).

3.2.Change Adapters
HR generalists who implement the change in business units and functional areas "Translate the vision into practical actions" and
are involved in the implementation process. Need to encourage, persuade, empower & challenge the line. (Armstrong, 2006).

3.3.Change Consultants
According to Carnall, 2008; Dawson, 2010; Stephen, 2010; Tidd, (2010), as Consultant the change agent assists the workers to
generate data from within and outside the organization. Caldwell (2003) on the other hand posits that work on a project or sp ecific
stages of an HR project need specialized knowledge or technical expertise, administrative skills, consulting skills, project
management experience & skills as well as the "ability to meet demanding timescales".

3.4.Change Synergists
The activities concerned in co-operating the effort that mutually support the success and involvement of diverse resources
energies and people is referred to as synergy (Barnstable, 2012). Caldwell (2003) indicated that Human Resource Development
change agents are capable of strategically coordinating, integrating and delivering complex, large scale and multiple change
projects across the whole organization. Need coordination, integration, project management and leadership competencies operat e
strategically and act as catalysts for change.
3.5.Importance/Reasons of Organizational Changes
Change is important for any organization because, without change, businesses would likely lose their competitive edge and fai l to
meet the needs of what most hope to be a growing base of loyal customers (Richard L.2011). It is important because business is
an ongoing process of change like everything else. Organizational changes can occur as a response to current crisis situation or
as a reaction to an ever changing environment. A progressive and proactive manager can also trigger change. Transfer of
executive power in organization can also trigger organizational change (Haveman, Russo & Meyer, 2001).
According to Swaim R. (2011) different reasons which can be proactive or reactive can make organizations to change which
include and not limited to:

3.6.New Technology
Technology is changing rapidly and it is prudent for organization to identify new technology and more efficient and economica l
methods to perform work to have competitive advantage. Technological innovation has created the need for change in
organizations (D’Agustino, 2011). According to Francis (2010) organizations have to adopt new technology to be cost effective and
have competitive advantage. Though there is disruption at first due to adoption of new technology, the change ultimately leads to
increased productivity and service (Swaim, 2011).

3.7.Mergers & Acquisitions

Mergers and acquisitions create change in a number of areas often negatively impacting employees when two organizations are
merged and employees in dual functions are made redundant. Some expenses are cut while some resources are reallocated to the
production of new products or services (Swaim, 2011).

3.8.Reaction to Internal & External Pressure

Internal pressure comes from management and employees, particularly those in organized unions often exert pressure for change.
On the other hand external pressures come from many areas, including customers, competition, changing government regulations,
shareholders, financial markets, and other factors in the organization's external environment Lunenburg (2010). Globalization is
another aspect that makes organization change.

3.9.Economic Changes
Brimley and Garfield, (2009) posits that the attitudes and morale of employees suffer during perio d of inflation and recession as
affected by economic changes which can ultimately affect organizational performance.

3.10.Government Laws and Regulations

Change can occur due to change in government laws and regulations. For instance the equal employment o pportunity and the
3rd rule (Constitution of Kenya 2010) must be enforced (Robinson, 2010).

3.11.Customer Needs
Customers’ needs and preferences keep on changing For example customers who were satisfied with conventional ovens many
years ago are sometimes impatient with the microwave today. As the world evolves, customer needs change and grow, creating
new demand for new types of products and services and opening up new areas of opportunity for companies to meet those needs
(Swaim R. 2011).

3.12.Skills and Competencies Required For Human Resource Development Change Agents
The ability to add value to business is referred to as Competency; to achieve sustainable competitive advantage competence mu st
focus on the process leading to changing business conditions. Ulrich et.al (2008) Competence indicates sufficiency of knowledge
and skills that enable someone to act in a wide variety of situations (Business dictionary) Choi Sang Long (2013) lists the following
as the competencies for HR professional as change agents:-Effective relationship skill, Human resource development (HRD) skill,
Performance management, Value chain knowledge, and Conflict management.

3.13.Effective Relationship Skill

The ability to add value to business is referred to as competency according to Ulrich et.al (2008). To achieve sustainable
competitive advantage, the agents must focus on changing business conditions and help lead the process of change using their
competencies.

3.14.Professional Competency
Long and Ismail, (2008) asserts that professional competencies are allied to employee champion and administrative expert roles
which entail credibility of the agent. As HR professionals or line managers, their credibility should be gained by their work ing
partners as employee champions. One the other hand they should be able to deliver traditional operation HR activities in their
business (Long & Ismail, 2008) restructuring, talent and performance management, providing advice and support on career and
organizational development, evaluating the HR practices and programs’ impact could be included in these activities.

4.Human Resource Development (HRD) Skill

According to Ketter (2006) Human Resource Development professional need to create an enabling environment for learning and
comprehend the process of learning as change agents. Employees are helped by Human Resource Development skills to improve
organizational and personal knowledge, skills and abilities.

4.1.Performance Management
HR Practitioners as change agents need to forewarn employees to improve work performance and productivity. Glendinning
(2002) defines performance management as a process that unites goal setting, development and performance appraisal not a
single, common system whose purpose is to ensure that the firm’s strategic objec tives are supported by employees. Dessler
(2008) affirms that this competency is paramount to HR agents to guarantee employees’ performance is measured with proper
instruments and tools.

4.2.The Right Attitude

Change is a complex and labour-intensive process that arouses feelings and emotions and therefore change cannot succeed with
great persistence (Tan & Kaufmann 2010). Without the right attitude managers cannot lead the team through difficulties and
challenges of frustrated teammates, angry people unforeseen problems among others with stamina and great determination.

4.3.The Necessary Skills

Varieties of skills are compulsory for change agent to succeed. For example conflict management and managing challenges of
transition. They should also possess the ability to remain highly effective under extreme pressure. Analytical skills are also needed
which Balogun and Hailey, (2005) indicates that they assist the change agent in analyzing complicated situation in the firm a nd
also helps them to be flexible enough to work around roadblocks and handle upcoming issues. People skills are a must as the
change involves staff and this will be able to forte strong interpersonal relationship and communicate with different groups to
create readiness for change (Balogun & Hailey 2005). The change agent needs to raise understanding for the need to change by
creating dissatisfaction with the status quo (Gerlick’s, 1991; Armenakis et al., 1993; Raineri, 2008). Good listening skills are a
necessity to help them to empathize and also have good listening skills. According to Becker et al., (2001) increased perception of
effectiveness of Human Resource Development change agents is contributed by their credibility. On the other hand Long & Ismai l
(2008) stresses the foundation for Human Resource Development professional is his/her personal credibility skills which assist in
dealing with employees during change process. Last but not least communication skills are a must as communication is the glue
that keeps the organization together and helps to move to the desired future. They need to communicate effectively and efficiently
at all levels of the entire organization (Tan & Kaufmann, 2010).

4.4.Types of HRD Change Agents

Nameer (2008) describes change agents as external change agents, internal change agents and external -internal change agents.
External agents are outside consultants temporally employed to oversee the change process. The external agents are usually
needed when the changes are of complex nature with limited capacity or capability within and when there is need for an external
intervention by people with no conflicts of interest, prejudice or loyalty (Green 2012). Internal change agents are persons
employed by the firm who knows its problems and has the capability of improving or fixing the problem.(Nemeer,2008) The internal
agents are deployed when there is an internal driver to use or rely upon internal capacity or capability or when there is bel ief that
owners should clearly be internal(Green, 2012). According to Nameer(2008) on the other hand external -internal change agents are
persons or small group within the firm designated to work with the external change agents so that intervention could be
implemented effectively with their help.

5.Conclusion
Large or small firms need change agents when they want to change either their structure, introduce new products/services or n ew
technology. A change agent helps an organization to transits to the new way of doing things and we can therefore say that a
change agent is any person with power and skills to facilitate and guide change effort. Change agents can either be external or
internal who plays different roles such as change champions, change adopters, consultant and synergists. They are able to propel
change through different change models which are adopted by the organizations. When HRD plays the role of change agent, they
are able to successfully manage the change because the HR knows how to deal with the human resource who are organizational
valuable assets and who are the movers of change.

6.Recommendations for Further Research

The current seminar paper focused on the Role of Human Resource Development as a change agent. Future research should
focus on the role of advanced human resource development as a change agent and every trends affecting HRD as change agents.
The author recommends that future studies should look into how human resource development can be tailored for a diverse
workforce. There exists scanty literature on human resource development in Kenya; more studies should therefore be carried out.

UNIT:2

Performance Appraisal

What is a Performance Appraisal?

A performance appraisal is a regular review of an employee's job performance and overall contribution to
a company. Also known as an "annual review," "performance review or evaluation," or "employee
appraisal," a performance appraisal evaluates an employee’s skills, achievements and growth, or lack
thereof. Companies use performance appraisals to give employees big-picture feedback on their work and
to justify pay increases and bonuses, as well as termination decisions. They can be conducted at any
given time but tend to be annual, semi-annual or quarterly

Why Companies give Performance Appraisals

Because companies have a limited pool of funds from which to award raises and bonuses, performance
appraisals help determine how to allocate those funds. They provide a way for companies to determine
which employees have contributed the most to the company’s growth so companies can reward their top-
performing employees accordingly.

Performance appraisals also help employees and their managers create a plan for employee development
through additional training and increased responsibilities, as well as to identify shortcomings the employee
could work to resolve.

Ideally, the performance appraisal is not the only time during the year that managers and employees
communicate about the employee’s contributions. More frequent conversations help keep everyone on the
same page, develop stronger relationships between employees and managers, and make annual reviews
less stressful.

Performance Appraisal Types

Most performance appraisals are top-down, meaning supervisors evaluate their staff with no input from
the subject. But there are other types:
  Self assessment: Individuals rate their job performance and behavior.
 Peer assessment: An individual's work group rates his performance.
 360-degree feedback assessment: Includes input from an individual, her supervisor and her peers.
 Negotiated appraisal: A newer trend, utilizes a mediator and attempts to moderate the adversarial
nature of performance evaluations by allowing the subject to present first. Also focuses on what the
individual is doing right before any criticism is given. This structure tends to be useful during
conflicts between subordinates and supervisors.

Performance Appraisal Criticism

An issue with performance appraisals is that differentiating individual and organizational performance can
be difficult. And if the evaluation's construction doesn't reflect the culture of a company or organization,
it can be detrimental. Employees report general dissatisfaction with their performance appraisal
processes. Other potential issues include:

 Distrust of the appraisal can lead to issues between subordinates and supervisors or a situation in
which employees merely tailor their input to please their employer.
 Performance appraisals can lead to the adoption of unreasonable goals that demoralize workers or
incentivize them to engage in unethical practices.
 Some labor experts believe that use of performance appraisals has led to lower use of merit-
and performance-based compensation.
 Performance appraisals may lead to unfair evaluations in which employees are judged not by their
accomplishments but by their likeability. They can also lead to managers giving underperforming
staff a good evaluation to avoid souring their relationship.
 Unreliable raters can introduce a number of biases that skew appraisal results toward preferred
characteristics or ones that reflect the rater's preferences.
 Performance appraisals that work well in one culture or job function may not be useful in another.

Performance Appraisa
Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of
a person for further growth and development. Performance appraisal is generally done in systematic ways which are
as follows:

1. The supervisors measure the pay of employees and compare it with targets and plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance.

Objectives of Performance Appraisal

Performance Appraisal can be done with following objectives in mind:

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 provide a feedback to employees regarding their performance and related status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programmes.
Advantages of Performance Appraisal
It is said that performance appraisal is an investment for the company which can be justified by following advantages:

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 includes 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 analyse 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.

Performance Appraisal Methods: Traditional and Modern Methods

Each method of performance appraisal has its strengths and weaknesses may be suitable for one
organisation and non-suitable for another one. As such, there is no single appraisal method accepted
and used by all organisations to measure their employees’ performance.

All the methods of appraisal devised so far have been classified differently by different authors. While
DeCenzo and Robbins’^ have classified appraisal methods into three categories: absolute methods,
relative methods and objective methods; Aswathappa has classified these into two categories past-
oriented and future-oriented.

Michael R Carrell et. al. have classified all appraisal methods into as many as six categories: rating
scales, comparative methods, critical incidents, 6ssay, MBO and combination methods. Rock and
Levis” have classified the methods into two broad categories: narrow interpretation and broad
interpretation. Beatty and Schneier have categorised various methods of appraisal into four groups:
comparative methods, absolute methods, goal setting, and direct indices.
A more widely used classification of appraisal methods into two categories, viz., traditional methods
and modem methods, is given by Strauss and Sayles”. While traditional methods lay emphasis on the
rating of the individual’s personality traits, such as initiative, dependability, drive creativity, integrity,
intelligence, leadership potential, etc.; the modem methods, on the other hand, place more emphasis
on the evaluation of work results, i.e., job achievements than the personal traits! Modem methods
tend to be more objective and worthwhile. The various methods included in each of the two
categories are listed in Table 28.4.

In the discussion that follows, each method under both categories will be described briefly.

Traditional Methods:
Ranking Method:
It is the oldest and simplest formal systematic method of performance appraisal in which employee is
compared with all others for the purpose of placing order of worth. The employees are ranked from
the highest to the lowest or from the best to the worst.

In doing this the employee who is the highest on the characteristic being measured and also the one
who is L lowest, are indicated. Then, the next highest and the next lowest between next highest and
lowest until all the employees to be rated have been ranked. Thus, if there are ten employees to be
appraised, there will be ten ranks from 1 to 10.

However, the greatest limitations of this appraisal method are that:

(i) It does not tell that how much better or worse one is than another,

(ii) The task of ranking individuals is difficult when a large number of employees are rated, and
(iii) It is very difficult to compare one individual with others having varying behavioural traits. To
remedy these defects, the paired comparison method of performance appraisal has been evolved.

Paired Comparison:
In this method, each employee is compared with other employees on one- on one basis, usually
based on one trait only. The rater is provided with a bunch of slips each coining pair of names, the
rater puts a tick mark against the employee whom he insiders the better of the two. The number of
times this employee is compared as better with others determines his or her final ranking.

Grading Method:
In this method, certain categories of worth are established in advance and carefully defined. There
can be three categories established for employees: outstanding, satisfactory and unsatisfactory.
There can be more than three grades. Employee performance is compared with grade definitions.
The employee is, then, allocated to the grade that best describes his or her performance.

Such type of grading is done is Semester pattern of examinations and in the selection of a candidate
in the public service sector. One of the major drawbacks of this method is that the rater may rate most
of the employees on the higher side of their performance.

Forced Distribution Method:

This method was evolved by Tiffen to eliminate the central tendency of rating most of the employees
at a higher end of the scale. The method assumes that employees’ performance level confirms to a
normal statistical distribution i.e., 10,20,40,20 and 10 per cent. This is useful for rating a large number
of employees’ job performance and promo ability. It tends to eliminate or reduce bias.

It is also highly simple to understand and easy to apply in appraising the performance of employees
in organisations. It suffer from the drawback that improve similarly, no single grade would rise in a
ratings.

Forced-Choice Method:
The forced-choice method is developed by J. P. Guilford. It contains a series of groups of statements,
and rater rates how effectively a statement describes each individual being evaluated. Common
method of forced-choice method contains two statements, both positive and negative.

Examples of positive statements are:

1. Gives good and clear instructions to the subordinates.
2. Can be depended upon to complete any job assigned.
A pair of negative statements may be as follows:
1. Makes promises beyond his limit to keep these.
2. Inclines to favour some employees.

Each statement carries a score or weight, which is not made known to the rater. The human resource
section does rating for all sets of statements— both positive and negative. The final rating is done on
the basis of all sets of statements. Thus, employee rating in this manner makes the method more
objective. The only problem associated with this method is that the actual constructing of several
evaluative statements also called ‘forced-choice scales’, takes a lot of time and effort.

Check-List Method:
The basic purpose of utilizing check-list method is to ease the evaluation burden upon the rater. In
this method, a series of statements, i.e., questions with their answers in ‘yes’ or ‘no’ are prepared by
the HR department (see Figure 28-2). The check-list is, then, presented to the rater to tick appropriate
answers relevant to the appraisee. Each question carries a weight-age in relationship to their
importance.

When the check-list is completed, it is sent to the HR department to prepare the final scores for all
appraises based on all questions. While preparing questions an attempt is made to determine the
degree of consistency of the rater by asking the same question twice but in a different manner (see,
numbers 3 and 6 in Figure 28-2).

However, one of the disadvantages of the check-list method is that it is difficult to assemble, analyse
and weigh a number of statements about employee characteristics and contributions From a cost
stand point also, this method may be inefficient particularly if there are a number of job categories in
the organisation, because a check-list of questions must be prepared for each category of job. It will
involve a lot of money, time and efforts.
Critical Incidents Method:
In this method, the rater focuses his or her attention on those key or critical behaviours that make the
difference between performing a job in a noteworthy manner (effectively or ineffectively). There are
three steps involved in appraising employees using this method.

First, a list of noteworthy (good or bad) on-the-job behaviour of specific incidents is prepared.
Second, a group of experts then assigns weightage or score to these incidents, depending upon their
degree of desirability to perform a job. Third, finally a check-list indicating incidents that describe
workers as “good” or “bad” is constructed. Then, the check-list is given to the rater for evaluating the
workers.

The basic idea behind this rating is to apprise the workers who can perform their jobs effectively in
critical situations. This is so because most people work alike in normal situation. The strength of
critical incident method is that it focuses on behaviours and, thus, judge’s performance rather than
personalities.

Its drawbacks are to regularly write down the critical incidents which become time-consuming and
burdensome for evaluators, i.e., managers. Generally, negative incidents are positive ones. It is
rater’s inference that determines which incidents are critical to job performance. Hence, the method is
subject to all the limitations relating to subjective judgments.

Graphic Rating Scale Method:

The graphic rating scale is one of the most popular and simplest techniques for appraising
performance. It is also known as linear rating scale. In this method, the printed appraisal form is used
to appraise each employee.

The form lists traits (such as quality and reliability) and a range of job performance characteristics
(from unsatisfactory to outstanding) for each trait. The rating is done on the basis of points on the
continuum. The common practice is to follow five points scale.

The rater rates each appraisee by checking the score that best describes his or her performance for
each trait all assigned values for the traits are then totaled. Figure 28-3 shows a typical graphic rating
scale.
This method is good for measuring various job behaviours of an employee. However, it is also
subjected to rater’s bias while rating employee’s behaviour at job. Occurrence of ambiguity in design-
mg the graphic scale results in bias in appraising employee’s performance.

Essay Method:
Essay method is the simplest one among various appraisal methods available. In this method, the
rater writes a narrative description on an employee’s strengths, weaknesses, past performance,
potential and suggestions for improvement. Its positive point is that it is simple in use. It does not
require complex formats and extensive/specific training to complete it.

However, essay method, like other methods, is not free from drawbacks. In the absence of any
prescribed structure, the essays are likely to vary widely in terms of length and content. And, of
course, the quality of appraisal depends more upon rater’s writing skill than the appraiser’s actual
level of performance.

Moreover, because the essays are descriptive, the method provides only qualitative information about
the employee. In the absence of quantitative data, the evaluation suffers from subjectivity problem.
Nonetheless, the essay method is a good start and is beneficial also if used in conjunction with other
appraisal methods.

Field Review Method:

When there is a reason to suspect rater’s biasedness or his or her rating appears to be quite higher
than others, these are neutralised with the help of a review process. The review process is usually
conducted by the personnel officer in the HR department.

The review process involves the following activities:

(a) Identify areas of inter-rater disagreement.

(b) Help the group arrive at a consensus.

(c) Ensure that each rater conceives of the standard similarity.

However, the process is a time-consuming one. The supervisors generally resent what they consider
the staff interference. Hence, the method is not widely used.

Confidential Report:
It is the traditional way of appraising employees mainly in the Government Departments. Evaluation is
made by the immediate boss or supervisor for giving effect to promotion and transfer. Usually a
structured format is devised to collect information on employee’s strength weakness, intelligence,
attitude, character, attendance, discipline, etc. report.

Modern Methods:
Management by Objectives (MBO):
Most of the traditional methods of performance appraisal are subject to the antagonistic judgments of
the raters. It was to overcome this problem; Peter F. Drucker propounded a new concept, namely,
management by objectives (MBO) way back in 1954 in his book.
The Practice of management. The concept of MBO as was conceived by Drucker, can be described
as a “process whereby the superior and subordinate managers of an organization jointly identify its
common goals, define each individual’s major areas of responsibility in terms of results expected of
him and use these measures as guides for operating the unit and assessing the contribution of each
its members”.

In other words, stripped to its essentials, MBO requires the manager to goals with each employee
and then periodically discuss his or her progress toward these goals.

In fact, MBO is not only a method of performance evaluation. It is viewed by the Practicing managers
and pedagogues as a philosophy of managerial practice because .t .s a method by wh.ch managers
and subordinates plan, organise, communicate, control and debate.

An MBO programme consists of four main steps: goal setting, performance standard, comparison,
and periodic review. In goal-setting, goals are set which each individual, s to attain. The superior and
subordinate jointly establish these goals. The goals refer to the desired outcome to be achieved by
each individual employee.

In performance standards, the standards are set for the employees as per the previously arranged
time period. When the employees start performing their jobs, they come to know what is to be done,
what has been done, and what remains to be done.

In the third step the actual level of goals attained are compared with the goals agreed upon. This
enables the evaluator to find out the reasons variation between the actual and standard performance
of the employees. Such a comparison helps devise training needs for increasing employees’
performance it can also explore the conditions having their bearings on employees’ performance but
over which the employees have no control.

Finally, in the periodic review step, corrective measure is initiated when actual performance deviates
from the slandered established in the first step-goal-setting stage. Consistent with the MBO
philosophy periodic progress reviews are conducted in a constructive rather than punitive manner.

The purpose of conducting reviews is not to degrade the performer but to aid in his/her future
performance. From a motivational point of view, this would be representative of McGregor’s theories.
Figure 28.4 present the MBO method of performance appraisal presently used by an engineering
giant i.e., Larsen and Turbro Limited.
Limitation of MBO:
MBO is not a panacea, cure for all organisational problems.

As with other methods, it also suffers from some limitations as catalogued

below:
(i) Setting Un-measurable Objectives:
One of the problems MBO suffers from is unclear and un-measurable objectives set for
attainment. An objective such as “will do a better job of training” is useless as it is un-
measurable. Instead, “well have four subordinates promoted during the year” is a clear
and measurable objective.

(ii) Time-consuming:
The activities involved in an MBO programme such as setting goals, measuring progress,
and providing feedback can take a great deal of time.

(iii) Tug of War:

Setting objectives with the subordinates sometimes turns into a tug of war in the sense
that the manager pushes for higher quotas and the subordinates push for lower ones. As
such, goals so set are likely to be unrealistic.

(iv) Lack of Trust:

MBO is likely to be ineffective in an environment where management has little trust in its
employees. Or say, management makes decisions autocratically and relies heavily on
external controls.

Behaviourally Anchored Rating Scales (BARS):

The problem of judgmental performance evaluation inherent in the traditional methods of
performance evaluation led to some organisations to go for objective evaluation by
developing a technique known as “Behaviourally Anchored Rating Scales (BARS)” around
1960s. BARS are descriptions of various degrees of behaviour with regard to a specific
performance dimension.

It combines the benefits of narratives, critical incidents, and quantified ratings by

anchoring a quantified scale with specific behavioural examples of good or poor
performance. The proponents of BARS claim that it offers better and more equitable
appraisals than do the other techniques of performance appraisal we discussed so far.

Developing BARS typically involves five steps:

1. Generating Critical Incidents:
Critical incidents (or say, behaviours) are those which are essential for the performance of
the job effectively Persons who are knowledgeable of the job in question (jobholders
and/or supervisors) are asked to describe specific critical incidents of effective and
ineffective performance. These critical incidents may be described in a few short sentences
or phrases using the terminology.

2. Developing Performance Dimensions:

The critical incidents are then clustered into a smaller set of performance dimensions,
usually five to ten. Each cluster, or say, dimension is then defined.

3. Reallocating Incidents:
Various critical incidents are reallocated dimensions by another group of people who also
know the job in question. Various critical incidents so reallocated to original dimensions
are clustered into various categories, with each cluster showing similar critical incidents.
Those critical incidents are retained which meet 50 to 80% of agreement with the cluster
as classified in step 2.

4. Scaling Incidents:
The same second group as in step 3 rates the behaviour described in each incident in terms
of effectiveness or ineffectiveness on the appropriate dimension by using seven to nine
points scale. Then, average effectiveness ratings for each incident are determined to decide
which incidents will be included in the final anchored scales.

5. Developing Final BARS Instrument:

A subset of the incidents (usually six or seven per cluster) is used as a behavioural anchor
for the final performance dimensions. Finally, a BARS instrument with vertical scales is
drawn to be used for performance appraisal, as in Figure 27-5.

How BARS is developed can be exemplified with an example of grocery checkout clerks
working in a large grocery chain.

A number of critical incidents involved in checking out of grocery can be

clustered into seven performance dimensions:
1. Knowledge and Judgment
2. Conscientiousness

3. Skill in Human Relations

4. Skill in Operation of Register

5. Skill in Bagging

6. Organisational Ability of Check stand Work

7. Skill in Monetary Transactions

8. Observational Ability

Now, a BARS for one of these performance dimensions, namely, “knowledge and
judgment” can be developed, as in Figure 28-5. Notice how the typical BARS is
behaviourally anchored with specific critical incidents.
BARS method of performance appraisal is considered better than the traditional ones
because it provides advantages like a more accurate gauge, clearer standards, better
feedback, and consistency in evaluation. However, BARS is not free from limitations.

The research on BARS indicates that it too suffers from distortions inherent in most rating
scales. The research study concluded that “it is clear that research on BARS to date does
not support the high promise regarding scale independence In short, while BARS may
outperform conventional rating techniques, it is clear that they are not a panacea for
obtaining high interrater reliability”

Assessment Centres:
The introduction of the concept of assessment centres as a method of performance method
is traced back in 1930s in the Germany used to appraise its army officers. The concept
gradually spread to the US and the UK in 1940s and to the Britain in 1960s.

The concept, then, traversed from the army to business arena during 1960s. The concept
of assessment centre is, of course, of a recent origin in India. In India, Crompton Greaves,
Eicher, Hindustan Lever and Modi Xerox have adopted this technique of performance
evaluation.

In business field, assessment centres are mainly used for evaluating executive or
supervisory potential. By definition, an assessment centre is a central location where
managers come together to participate in well-designed simulated exercises. They are
assessed by senior managers supplemented by the psychologists and the HR specialists for
2-3 days.

Assessee is asked to participate in in-basket exercises, work groups, simulations, and role
playing which are essential for successful performance of actual job. Having recorded the
assessee’s behaviour the raters meet to discuss their pooled information and observations
and, based on it, they give their assessment about the assesee. At the end of the process,
feedback in terms of strengths and weaknesses is also provided to the assesees.

The distinct advantages the assessment centres provide include more accurate evaluation,
minimum biasedness, right selection and promotion of executives, and so on. Nonetheless,
the technique of assessment centres is also plagued by certain limitations and problems.
The technique is relatively costly and time consuming, causes suffocation to the solid
performers, discourages to the poor performers (rejected), breeds unhealthy competition
among the assessees, and bears adverse effects on those not selected for assessment.

360 – Degree Appraisal:

Yet another method used to appraise the employee’s performance is 360 – degree
appraisal. This method was first developed and formally used by General Electric
Company of USA in 1992. Then, it travelled to other countries including India. In India,
companies like Reliance Industries, Wipro Corporation, Infosys Technologies, Thermax,
Thomas Cook etc., have been using this method for appraising the performance of their
employees. This feedback based method is generally used for ascertaining training and
development requirements, rather than for pay increases.

Under 360 – degree appraisal, performance information such as employee’s skills, abilities
and behaviours, is collected “all around” an employee, i.e., from his/her supervisors,
subordinates, peers and even customers and clients.

In other worlds, in 360-degree feedback appraisal system, an employee is appraised by his

supervisor, subordinates, peers, and customers with whom he interacts in the course of his
job performance. All these appraisers provide information or feedback on an employee by
completing survey questionnaires designed for this purpose.

All information so gathered is then compiled through the computerized system to prepare
individualized reports. These reports are presented to me employees being rated. They
then meet me appraiser—be it one’s superior, subordinates or peers—and share the
information they feel as pertinent and useful for developing a self-improvement plan.

In 360 – degree feedback, performance appraisal being based on feedback “all around”, an
employee is likely to be more correct and realistic. Nonetheless, like other traditional
methods, this method is also subject to suffer from the subjectivity on the part of the
appraiser. For example, while supervisor may penalise the employee by providing negative
feedback, a peer, being influenced by ‘give and take feeling’ may give a rave review on
his/her colleague.
Cost Accounting Method:
This method evaluates an employee’s performance from the monetary benefits the
employee yields to his/her organisation. This is ascertained by establishing a relationship
between the costs involved in retaining the employee, and the benefits an organisation
derives from Him/her.

While evaluating an employee’s performance under this method, the

following factors are also taken into consideration:
1. Unit wise average value of production or service.

2. Quality of product produced or service rendered.

3. Overhead cost incurred.

4. Accidents, damages, errors, spoilage, wastage caused through unusual wear and tear.

5. Human relationship with others.

6. Cost of the time supervisor spent in appraising the employee.

Steps Involved in Process of Performance Appraisal

The six steps involved in process of performance appraisal are as follows: 1. Establish
Performance Standards 2. Communicate Performance Expectation to Employee 3.
Measure Actual Performance 4. Compare Actual Performance with Standards 5. Discuss
the Appraisal with the Employee 6. Initiate Corrective Actions.

1. Establish Performance Standards:

The appraisal process begins with the establishment of performance standards. The
managers must determine what outputs, accomplishments and skills will be evaluated.
These standards should have evolved out of job analysis and job descriptions.

These performance standards should also be clear and objective to be understood and
measured. Standards should not be expressed in an articulated or vague manner such as “a
good job” or “a full day’s work” as these vague phrases tells nothing.
2. Communicate Performance Expectations to Employees:
Once the performance standards are established, this need to be communicated to the
respective employees so that they come to know what is expected of them. Past experience
indicates that not communicating standards to the employees compounds the appraisal
problem.

Here, it must be noted that mere transference of information (relating to performance

standards, for example) from the manager to the employees is not communication It
becomes communication only when the transference of information has taken place and
has been received and understood by the employees’.

The feedback from the employees on the standards communicated to them must be
obtained. If required, the standards may be modified or revised in the light of feedback
obtained from the employees. It is important to note that communication is a two-way
street.

3. Measure Actual Performance:

This is the third step involved in the appraisal process. In this stage, the actual
performance of the employee is measured on the basis of information available from
various sources such as personal observation, statistical reports, oral reports, and written
reports.

Needless to mention, the evaluator’s feelings should not influence the performance
measurement of the employee. Measurement must be objective based on facts and
findings. This is because what we measure is more critical and important to the evaluation
process than how we measure.

4. Compare Actual Performance with Standards:

In this stage, the actual performance is compared with the predetermined standards. Such
a comparison may reveal the deviation between standard performance and actual
performance and will enable the evaluator to proceed to the fifth step in the process, i.e.,
the discussion of the appraisal with the concerned employees.
5. Discuss the Appraisal with the Employee:
The fifth step in the appraisal process is to communicate to and discuss with the
employees the results of the appraisal. This is, in fact, one of the most challenging tasks
the manager’s face to present an accurate appraisal to the employees and then make them
accept the appraisal in a constructive manner.

A discussion on appraisal enables employees to know their strengths and weaknesses. This
has, in turn, impact on their future performance. Yes, the impact may be positive or
negative depending upon how the appraisal is presented and discussed with the
employees.

6. Initiate Corrective Action:

The final step in the appraisal process is the initiation of corrective action when it is
necessary. The areas needing improvement are identified and then, the measures to
correct or improve the performance are identified and initiated.

The corrective action can be of two types. One is immediate and deals predominantly with
symptoms. This action is often called as “putting out fires.” The other is basic and delves
into causes of deviations and seeks to adjust the difference permanently.

This type of action involves time to analyse deviations. Hence, managers often opt for the
immediate action, or say, “put out fires”. Training, coaching, counselling, etc. is the
common examples of corrective actions that managers initiate to improve the employee
performance.
Performance Appraisal System
HR Competencies
 Leadership and Navigation
 Communication
 HR Expertise

Objective
Is your performance appraisal system aligned with your business strategy and engaging your
employees to achieve stronger results? If you are frustrated with your current system and desire to
create a meaningful process that maximizes talent management, this seminar is for you. This
seminar focuses on designing an effective performance appraisal system that is more than just
developing the form. The design must align and bring life to the organization’s mission, vision,
values, and goals. This class will provide the specific tools needed to help you define, develop, and
implement a performance appraisal program for your organization. You will learn how to develop
an integrated system that focuses both individual and organizational efforts towards achieving high
performance and competitive advantage. Participants will receive a toolkit with step-by-step
guidelines for designing the system, including the form.

Outline
 Gauging the current system in relation to key factors for success
 Aligning performance with business goals
 Integrating performance appraisal with other HR systems
 Minimizing legal risks
 Gaining commitment
 Determining critical performance measures
 Designing a customized evaluation tool
 Implementing and managing the system

Designed For
Human resources professionals, business owners, managers, and others seeking a strategic
approach in designing and implementing a meaningful and relevant performance management
system
Wage and Salary Administration
Wage and salary administration is a collection of practices and procedures used for planning and distributing
company-wide compensation programs for employees. These practices include employees at all levels and are
usually handled by the accounting department of a company. Wage and salary administration procedures
usually involve activities such as calculating the number of hours worked in order to determine compensation,
administering employment benefits, and answering payroll questions from employees. At the majority of
companies and organizations, wages are usually dispersed to all employees on a specific date. The workers in
charge of salary administration may also be charged with ensuring that the company adheres to federal and
local compensation laws.

Objectives and Principles of Wage and Salary Administration

The main objective of wage and salary administration is to establish and maintain an equitable wage
and salary system. This is so because only a properly developed compensation system enables an
employer to attract, obtain, retain and motivate people of required calibre and qualification in his/her
organisation. These objectives can be seen in more orderly manner from the point of view of the
organisation, its individual employees and collectively. There are outlined and discussed
subsequently:

Organisational Objectives:
The compensation system should be duly aligned with the organisational need and should also be
flexible enough to modification in response to change.

Accordingly, the objectives of system should be to:

1. Enable an organisation to have the quantity and quality of staff it requires.
2. Retain the employees in the organisation.
3. Motivate employees for good performance for further improvement in performance.
4. Maintain equity and fairness in compensation for similar jobs.
5. Achieve flexibility in the system to accommodate organisational changes as and when these take place.
6. Make the system cost-effective.
Individual Objectives:
From individual employee’s point of view, the compensation system should have the following
objectives:
1. Ensures a fair compensation.
2. Provides compensation according to employee’s worth.
3. Avoids the chances of favouritism from creeping in when wage rates are assigned.
4. Enhances employee morale and motivation.
Collective Objectives:
These objectives include:
1. Compensation in ahead of inflation.
2. Matching with market rates.
3. Increase in compensation reflecting increase in the prosperity of the company.
4. Compensation system free from management discretion.
Beach has listed the five objectives of wage and salary administration:
1. To recruit persons for a firm
2. To control pay-rolls
3. To satisfy people, reduce the incidence of turnover, grievances, and frictions.
4. To motivate people to perform better
5. To maintain a good public image.
Principles of wage and salary administration:
The main principles that govern wage and salary fixation are three:
1. External Equity
2. Internal Equity
3. Individual Worth.
1. External Equity:
This principle acknowledges that factors/variables external to organisation influence levels of
compensation in an organisation. These variables are such as demand and supply of labour, the
market rate, etc. If these variables are not kept into consideration while fixing wage and salary levels,
these may be insufficient to attract and retain employees in the organisation. The principles of
external equity ensure that jobs are fairly compensated in comparison to similar jobs in the labour
market.

2. Internal Equity:
Organisations have various jobs which are relative in value term. In other words, the values of various
jobs in an organisation are comparative. Within your own Department, pay levels of the teachers
(Professor, Reader, and Lecturer) are different as per the perceived or real differences between the
values of jobs they perform.

This relative worth of jobs is ascertained by job evaluation. Thus, an ideal compensation system
should establish and maintain appropriate differentials based on relative values of jobs. In other
words, the compensation system should ensure that more difficult jobs should be paid more.

3. Individual Worth:
According to this principle, an individual should be paid as per his/her performance. Thus, the
compensation system, as far as possible, enables the individual to be rewarded according to his
contribution to organisation.

Alternatively speaking, this principle ensures that each individual’s pay is fair in comparison to others
doing the same/similar jobs, i.e., ‘equal pay for equal work’. In sum and substance, a sound
compensation system should encompass factors like adequacy of wages, social balance, supply and
demand, fair comparison, equal pay for equal work and work measurement.

Wage & salaries have two different purposes from point of employers & employees.

(i) Employers perceive as a cost of business effort and attempt to reduce it. But they also realise that it is not possible
because of these reasons:

(a) Wage & salary are essential to attract and retain an effective work force.

(b) Wage and salary are required to motivate, employees for positive attitudes and better performance.

(c) Employees have to be provided compensation for service rendered by them to the organisation.

(ii) Employees consider wage as a means for satisfying their need to maintain their standard. They also want it equitable
with similar skills for doing similar work.

Principles of Wage & Salary administration:

14. Wage & salary plans and policies should be sufficiently flexible.
15. Job evaluation must be done scientifically.
16. Wage & salary administration plans. Must always be consistent with overall organisation plans &
programmes.
17. Wage & salary administration plans and programmes should be in conformity with the social &
economic objectives of the country like attainment of equality of income distribution and controlling
inflationary trends. Wages & salary administration plans and programmes should be responsive to the
changing local and national conditions. The plans should simply & expedite other administration
processes3 .

Objectives of wage & salary administration:

1. To acquire qualified and competent personnel:
Candidates decide upon their career in a particular organisation mostly on the basis of the
amount of remuneration the organisation offers. Qualified and competent people join the best-
paid organisation. As such, the organisation should aim at payment of salaries at that level,
where they can attract competent and qualified people.
2. To retain the present employees: If the salary level does not compare favourable with that of other
similar organisation, employees quit the present one and join other organisation. The organisation must
keep the wage & salary structure at the competitive level, with those of similar organisation .
3. To secure internal and external equity: Internal equity does mean payment of similar wages for similar
jobs within the organisation. External equity implies that payment of similar wages to similar jobs in
comparable organisations.
4. To ensure desired behaviour: Good rewards reinforce desired behaviour like performance, loyalty,
accepting new responsibilities and changes etc.
5. To keep labour and administrative costs in line with the ability of the organisation to pay.
6. To project in public as progressive employers and to comply with the wage legislations.
7 To pay according to the content and difficulty of the job and in tune with the effort and merit of the
employee.
8. To facilitate pay roll administration of budgeting and wage and salary control.
9. To simplify collective bargaining procedures and negotiations.
10. To promote organisation feasibility.

Systems to Achieve the Objectives:

The above mentioned objectives are achieved by the use of the following systems:
1. Job evaluation:
All jobs will be analysed and graded to establish the pattern of internal relationships. It is the process of
determining relative worth of jobs, It includes selecting suitable job evaluation techniques, classifying
jobs into various categories and determining relative value of jobs in various categories.

2. Wage and salary ranges:

Overall salary range for all the jobs in an organisation is arranged. Each job grade will be assigned a
salary range. These individual salary ranges will be fitted into an overall range.
3. Wage and salary adjustments:
Overall salary grades of the organisation may be adjusted based on the data and information collected
'about the salary levels of similar organisations. Individual salary Ievel may also be adjusted based on the
performance of the individual employees.
 The Elements of Wage and Salary System:
Wage and .salary system should have relationship with the performance, satisfaction and attainment of
goals of an individual.
Following are the elements of wage and salary system.
1. Identifying the available salary opportunities, their costs, estimating the worth of its members of
these salary opportunities and communicating them to employees.
2. Relating salary to needs and goals.
3. Developing quality quantity and time standards relating to work and goals.
4. Determining the effort necessary to achieve standards.
5. Measuring the actual performance.
6. Comparing the performance with the salary received.
7. Measuring the job satisfaction gained by the employees.
8. Evaluating the unsatisfied wants and unreached goals of the employees.
9. Finding out the dissatisfaction arising from unfulfilled needs and unattained goals.
10. Adjusting the salary levels accordingly with a view to enable the employees to reach unreached goals
and fulfil the unfulfilled needs5 . Process of Determinations of wages: Determination of equitable wage
and salary structure in one of the most important phase of employer-employee relations.

The primary objective of wage and salary administration programme is that each employee should be
equitably compensated for the service rendered on the basis of:
(i) The nature of job.
(ii) The present worth of that type of job in other organisation, and
(iii) The effectiveness with which the individual performs the job.

Theories of Wages
The following points highlight the top six theories of wages. The theories are:

1. The Subsistence Theory of Wages

2. Standard of Living Theory
3. Wage Fund Theory
4. Residual Claimant Theory
5. Marginal Productivity Theory
6. Discounted Marginal Productivity Theory.

Theory # 1. The Subsistence Theory of Wages:

The theory was formulated by physiocrats. According to them wages would be equal to the amount
just sufficient for subsistence. Lassale, a German economist developed this theory. According to this
theory, wages are determined by the cost of production of labour or subsistence level. The wages so
determined will remain fixed.
It actual wages are higher than the subsistence level, then population will increase leading to an
increase in labour supply and lower wages. If on the other hand, the actual wages fall below the
subsistence level, population will decrease resulting in a decline in labour supply and rise in wages.
Since there is a tendency for the wages to remain fixed at the subsistence level, it is called as Iron
Law of Wages or Brazen Law of Wages.

This theory is based on two assumptions:

1. Food production is subject to the law of diminishing returns, i.e., there is a limit to expansion of
food production.

2. Population increases at an increasing rate.

Criticisms:

1 The subsistence theory of wages explains wages from the supply side and ignores the demand
side.

2. If all labourers must get the bare necessaries of life, all must get equal wages. But there are many
differences in wages. Thus this theory ignores wage differences.

3. This theory asserts that wages are fixed at the subsistence level. Therefore, it assumes that the
trade unions are powerless in increasing the wages. This is a wrong notion.

4. This theory is based on the Malthusian theory of population according to which a rise in wages
above the subsistence level will lead to rapid increase in population. But experience shows that a rise
in wages leads to higher standard of living and not increase in population.

5. This theory is pessimistic because it excludes all possibility of improvement in the conditions of
labour either through increased efficiency or due to general economic progress.

Theory # 2. Standard of Living Theory:

This theory is an improved and refined version of subsistence theory. According to this theory, wage
is determined by the standard of living of the workers. Standard of living refers to the bare
necessaries of life and also education, and recreation to which the worker is habituated.

Merits:
This theory has two merits:
1. This theory gives importance to the efficiency and productivity of the worker.

2. When workers are paid a high wage rate for a considerable period of time, they become
accustomed to a high standard of living and they will try to maintain the same high standard of living.
Criticisms:
In spite of its merits, the theory has been subjected to many criticisms:
1. Individuals do not have any fixed standard of living. Critics point out that there is no such thing as a
standard of living to which a worker is accustomed.

2. When wages depend on standard of living, the latter should not change. But workers’ standard of
living remains fixed for sometimes but wages change frequently.

3. No doubt, wages are determined by standard of living. It is also true that standard of living is
determined by wages.

Theory # 3. Wage Fund Theory:

This theory was developed by J.S.Mill. According to him, the employers set apart a certain amount of
capital to pay wages for labourers. This is fixed and constant. This is called as wages fund. Wage is
determined by the amount of wages fund and the total number of labourers.

According to J.S.Mill, “wages depend upon the demand and supply of labour or as it is often

expressed as proportion between population and capital. By population is here meant the number
only of the laboring classes or rather of those who work for hire and by capital, only circulating
capital……….. “.

Wage rate=Wage fund / Number of labourers

An increase in wage rate is possible only by an increase in wage fund or by a reduction in the number
of labourers. Thus there exists a direct relation between wage rate and wages fund and inverse
relation between wage rate and number of labourers. This theory also states that trade unions are
powerless in rising the general wage rate.

Criticisms:
1. Wage fund theory states that the wage rate is found by dividing the wage fund by the number of
workers. But it does not tell us about the sources of wages fund and the method of estimating it.

2. Wage fund theory is unscientific and illogical because it first decides the wages fund and then
determines wages. But in reality, wages should be found first and from that wage fund should be
calculated. This theory neglects the quality and efficiency of the workers in determining the wage rate.
This is considered to be a basic weakness of the theory.

3. This theory neglects the quality and efficiency of the workers in determining the wage rate. This is
considered to be a basic weakness of the theory.
4. This theory assumes that wages can increase only at the expense of profit. This is not correct. The
operation of the law of increasing returns will lead to a great increase in total output which may be
sufficient to raise both wages and profits.

5. The wages fund theory has been criticised by the trade unions for its assumption that wages
cannot be increased through bargaining.

6. Wages fund theory has failed to explain the differences in wage rate.

7. This theory believes that wages are paid out of circulating capital. But when the process of
production is short, wages are paid out of current production. When the process of production is long,
wages are paid out of capital.

Theory # 4. Residual Claimant Theory:

This theory was propounded by Walker. According to this theory, rent and interest are contractual
payments. After deducting rent and interest from total product, the employer will deduct his profits.
What remains after deducting rent, interest and profits is wages. It is possible to increase wages by
increasing the total product by improving the efficiency of the workers.

This theory has several defects:

1. This theory assumes that the share of landlords, capitalists and entrepreneurs are fixed and it is
absolutely wrong.

2. It is not the worker who is the residual claimant but the entrepreneur.

3. It does not explain the influence of trade union in wage determination.

4. The supply side of labour has been totally ignored by the theory.

Theory # 5. Marginal Productivity Theory:

Marginal productivity theory of wages is an extension of marginal productivity theory of distribution.
According to this theory, wage for labour should be equal to the value of the marginal product under
conditions of perfect competition. Marginal product is the addition made to total product by the
employment of one unit of labour. The value of the marginal product of labour is equal to the price at
which the marginal product can be sold.

Under conditions of perfect competition, an employer will continue to employ more and more of
labourers till the value of the marginal product is equal to marginal factor cost(MFC). Marginal factor
cost is the cost of employing an additional worker. In order to find out the marginal productivity of
labour we have to keep the quantity of other factors constant while employing one more unit of
labour.
The difference in total production is the marginal productivity. The employment of an additional unit of
labour will result in increase in output and cost. As long as MPP is greater than MFC, the employer
will employ additional units of labour. But he will stop employing additional units of labour when
MPP=MC.

Assumptions:
This theory is based upon the following assumptions:
1. There is perfect competition in factor market and in product market.

2. Labour is homogeneous.

3. The law of diminishing returns operates in production.

4. There is free entry and exit of the firms.

5. There is perfect knowledge about the market conditions.

6. All factors of production can be substituted for each other.

7. There is free mobility of factors of production.

8. Factors of production are divisible.

Criticism:
The theory is found to be unsatisfactory and various criticisms have been leveled against this theory.

1. The theory deals with the demand side only. The supply side is totally ignored.

2. This theory is unjust because wages are determined by the marginal productivity. But justice
demand that workers should be paid on the basis of average productivity.

3. Further, marginal productivity of the worker cannot be calculated as factors are not divisible into
small units.

4. Factors of production are neither mobile nor perfect substitutes. Their Knowledge is also imperfect.

5. This theory assumes perfect competition in the product market. But the market for goods is
characterised by imperfect competition.

6. Marginal product of labour depends not only on its support but also on the supply of other factors. If
other factors are plentiful and labour is scarce, marginal product of labour will be high and vice versa.

7. This theory fails to explain the differences in wages.

Rejecting the marginal productivity theory Marshall states, “This doctrine has been put forward as a
theory of wages. But there is no valid ground for any such pretension… Demand and supply exert
equally important influences on wages; neither has a claim to predominance; any more than has
either blade of scissors, or either pier of an arch… The doctrine throws into clear light, one of the
causes that governs wages”.

Theory # 6. Discounted Marginal Productivity Theory:

Taussig has given a modified version of the Marginal Productivity theory of wages. According to this
theory, the wage for labour is determined not by its marginal product but by the discounted marginal
product. Labourers cannot get the entire amount of the marginal product because production is a long
drawn out process.

In the same way, sales also take time. As the labourers are poor and cannot wait till the product is
sold, they have to be supported by the employers. The employer does not pay the full amount of the
marginal product of labour. In order to compensate the risk involved in giving advance to the workers,
the employer deducts a certain percentage from the final output. This deduction is made at the
current rate of interest. It is the discounted marginal product that determines the wage of the
labourers.

Criticisms:
1. This theory is abstract. It is “a dim and abstract one remote from the problem of real life”.

2. It is very difficult to determine the discounted marginal product of labour.

3. This theory fails to take into account other factors which determine the wage rate.

4. This theory has failed to explain differences in wage rate.

Taussing’s theory is another version of the Residual Claimant Theory of wages. Therefore, it is
subject to all criticisms put forward against the Residual Claimant Theory.

(IMP)Top 7 Theories of Wages –

Explained!
Some of the most important theories of wages are as follows:

1. Wages Fund Theory

2. Subsistence Theory
3. The Surplus Value Theory of Wages
4. Residual Claimant Theory
5. Marginal Productivity Theory
6. The Bargaining Theory of Wages
7. Behavioural Theories of Wages.
How much and on which basis wages should be paid to the workers for services rendered by them has been a subject
matter of great concern and debate among economic thinkers for a long time This has given birth to several wage
theories, i.e. how wages are determined. Out of them, some important theories of wages are discussed here.

1. Wages Fund Theory:

This theory was developed by Adam Smith (1723-1790). His theory was based on the basic assumption that workers are
paid wages out of a pre-determined fund of wealth. This fund, he called, wages fund created as a result of savings.
According to Adam Smith, the demand for labour and rate of wages depend on the size of the wages fund. Accordingly,
if the wages fund is large, wages would be high and vice versa.

2. Subsistence Theory:

This theory was propounded by David Recardo (1772-1823). According to this theory, “The labourers are paid to enable
them to subsist and perpetuate the race without increase or diminution”. This payment is also called as ‘subsistence
wages’. The basic assumption of this theory is that if workers are paid wages more than subsistence level, workers’
number will increase and, as a result wages will come down to the subsistence level.

On the contrary, if workers are paid less than subsistence wages, the number of workers will decrease as a result of
starvation death; malnutrition, disease etc. and many would not marry. Then, wage rates would again go up to
subsistence level. Since wage rate tends to be at, subsistence level at all cases, that is why this theory is also known as
‘Iron Law of Wages’. The subsistence wages refers to minimum wages.

3. The Surplus Value Theory of Wages:

This theory was developed by Karl Marx (1849-1883). This theory is based on the basic assumption that like other article,
labour is also an article which could be purchased on payment of its price i e wages. This payment, according to Karl
Marx, is at subsistence level which is less than in proportion to time labour takes to produce items. The surplus,
according to him, goes to the owner. Karl Marx is well known for his advocation in the favour of labour.

4. Residual Claimant Theory:

This theory owes its development to Francis A. Walker (1840-1897). According to Walker, there are four factors of
production or business activity, viz., land, labour, capital, and entrepreneurship. He views that once all other three
factors are rewarded what remains left is paid as wages to workers. Thus, according to this theory, worker is the residual
claimant.

5. Marginal Productivity Theory:

This theory was propounded by Phillips Henry Wick-steed (England) and John Bates Clark of U.S.A. According to this
theory, wages is determined based on the production contributed by the last worker, i.e. marginal worker. His/her
production is called ‘marginal production’.

6. The Bargaining Theory of Wages:

John Davidson was the propounder of this theory. According to this theory, the fixation of wages depends on the
bargaining power of workers/trade unions and of employers. If workers are stronger in bargaining process, then wages
tends to be high. In case, employer plays a stronger role, then wages tends to be low.
7. Behavioural Theories of Wages:

Based on research studies and action programmes conducted, some behavioural scientists have also developed theories
of wages. Their theories are based on elements like employee’s acceptance to a wage level, the prevalent internal wage
structure, employee’s consideration on money or’ wages and salaries as motivators.

Job evaluation
A job evaluation is a systematic way of determining the value/worth of a job in relation to other jobs in an organization. It tries to
make a systematic comparison between jobs to assess their relative worth for the purpose of establishing a rational pay
structure. Job evaluation needs to be differentiated from job analysis. Job analysis is a systematic way of gathering information
about a job. Every job evaluation method requires at least some basic job analysis in order to provide factual information about
the jobs concerned. Thus, job evaluation begins with job analysis and ends at that point where the worth of a job is ascertained
for achieving pay equity between jobs and different roles.

The process of job evaluation involves the following steps:

 Gaining acceptance: Before undertaking job evaluation, top management must explain the aims and uses of the
programme to managers, emphasizing the benefits. Employeesand unions may be consulted, depending on the legal and
employee relations environment and company culture. To elaborate the program further, presentations could be made to
explain the inputs, process and outputs/benefits of job evaluation.
 Creating job evaluation committee: It is not possible for a single person to evaluate all the key jobs in an organization.
Often a job evaluation committee consisting of experienced employees, union representatives and HR experts is created to
set the ball rolling.
 Finding the jobs to be evaluated: Every job need not be evaluated. This may be too taxing and costly. Certain key jobs in
each department may be identified. While picking up the jobs, care must be taken to ensure that they represent the type of
work performed in that department, at various levels.
 Analysing and preparing job description: This requires the preparation of a job description and also an analysis of job
specifications for successful performance. See job analysis.
 Selecting the method of evaluation: The method of evaluating jobs must be identified, keeping the job factors as well as
organisational demands in mind. Selecting a method also involves consideration of company culture, and the capacity of the
compensation and benefits function or job evaluation committee.
 Evaluating jobs: The relative worth of various jobs in an organisation may be determined by applying the job evaluation
method. The method may consider the "whole job" by ranking a set of jobs, or by comparing each job to a general level
description. Factor-based methods require consideration of the level of various compensable factors (criteria) such as level
and breadth of responsibility, knowledge and skill required, complexity, impact, accountability, working conditions, etc.
These factor comparisons can be one with or without numerical scoring. If there is numerical scoring, weights can be
assigned to each such factor and scores are associated with different levels of each factor, so that a total score is
determined for the job. All methods result in an assigned grade level.

Methods[edit]
There are primarily three methods of job evaluation:
(1) ranking,
(2) classification,
(3) Factor comparison method or Point method.
While many variations of these methods exist in practice, the three basic approaches are described here.
Ranking method[edit]
Perhaps the simplest method of job evaluation is the ranking method. According to this method, jobs are arranged from highest
to lowest, in order of their value or merit to the organization. Jobs can also be arranged according to the relative difficulty in
performing them. The jobs are examined as a whole rather than on the basis of important factors in the job; the job at the top of
the list has the highest value and obviously the job at the bottom of the list will have the lowest value. Jobs are usually ranked in
each department and then the department rankings are combined to develop an organizational ranking. The variation in
payment of salaries depends on the variation of the nature of the job performed by the employees. The ranking method is simple
to understand and practice and it is best suited for a small organization. Its simplicity however works to its disadvantage in big
organizations because rankings are difficult to develop in a large, complex organization. Moreover, this kind of ranking is highly
subjective in nature and may offend many employees. Therefore, a more scientific and fruitful way of job evaluation is called for.

Classification method (Grading method)[edit]

According to this method, a predetermined number of job groups or job classes are established and jobs are assigned to these
classifications. This method places groups of jobs into job classes or job grades. Separate classes may include office, clerical,
managerial, personnel, etc. Following is a brief description of such a classification in an office.

 Class I - Executives: Further classification under this category may be Office Manager, Deputy office manager, Office
superintendent, Departmental supervisor, etc.
 Class II - Skilled workers: Under this category may come the Purchasing assistant, Cashier, Receipts clerk, etc.
 Class III - Semiskilled workers: Under this category may come Stenotypists, Machine-operators, Switchboard operator etc.
 Class IV - Unskilled workers: This category may comprise peons, messengers, housekeeping staff, Daftaris [clarification needed], File
clerks, Office boys, etc.
The job grading method is less subjective when compared to the earlier ranking method. The system is very easy to understand
and acceptable to almost all employees without hesitation. One strong point in favour of the method is that it takes into account
all the factors that a job comprises. This system can be effectively used for a variety of jobs. The weaknesses of the Grading
method are:

 Even when the requirements of different jobs differ, they may be combined into a single category, depending on the status a
job carries.
 It is difficult to write all-inclusive descriptions of a grade.
 The method oversimplifies sharp differences between different jobs and different grades.
 When individual job descriptions and grade descriptions do not match well, the evaluators have the tendency to classify the
job using their subjective judgements.
Factor comparison method or Point method[edit]
This method is widely used and is considered to be one of the reliable and systematic approach for job evaluation in mid and
large size organisations. Most consulting firms adopt this method, which was pioneered by Edward Hay in 1943. Here, jobs are
expressed in terms of key factors. Points are assigned to each factor after prioritizing each factor in order of importance. The
points are summed up to determine the wage rate for the job. Jobs with similar point totals are placed in similar pay grades. The
procedure involved may be explained thus:
1. Select key jobs. Identify the factors common to all the identified jobs such as skill, effort, responsibility, etc.
2. Divide each major factor into a number of sub factors. Each sub factor is defined and expressed clearly in the order of
importance, preferably along a scale.
The most frequent factors employed in point systems are:
(i) Skill (key factor); Education and training required, Breadth/depth of experience required, Social skills required, Problem-
solving skills, Degree of discretion/use of judgment, Creative thinking
(ii) Responsibility/Accountability: Breadth of responsibility, Specialized responsibility, Complexity of the work, Degree of freedom
to act, Number and nature of subordinate staff, Extent of accountability for equipment/plant, Extent of accountability for
product/materials;
(iii) Effort: Mental demands of a job, Physical demands of a job, Degree of potential stress
The educational requirements (sub factor) under the skill (key factor) may be expressed thus in the order of importance.
3. Find the maximum number of points assigned to each job (after adding up the point values of all sub-factors of such a job).
This would help in finding the relative worth of a job. For instance, the maximum points assigned to an officer's job in a bank
come to 540. The manager's job, after adding up key factors + sub factors points, may be getting a point value of say 650 from
the job evaluation committee. This job is now priced at a higher level.
4. Once the worth of a job in terms of total points is expressed, the points are converted into money values keeping in view the
hourly/daily wage rates. A wage survey is usually undertaken to collect wage rates of certain key jobs in the organization.

What is Job Evaluation?

Job Evaluation definition

A systematic, formal process that allows organisations to compare jobs to others across the company and the
industry. Job evaluation is often seen as the foundation for a fair and efficient pay framework.

Job evaluations may be carried out in order to help businesses:

 Produce a fair pay framework

 Reduce inefficiencies in remuneration e.g. two people on the same ‘level’ with different salaries
 Compare remuneration with other companies
 Design new jobs, departments and functions
 Rework their pay framework after a company re-organisation

Job evaluation differs from job analysis – the latter is the process of gathering information about a job, whereas job
evaluation goes a stage further by placing a relative value on a job so that a fair and suitable pay framework can be
produced.

Job evaluation can be quite an invasive process, particularly if the analysis runs deeply, which means HR must
consider and mitigate the effect on employees. A good relationship with unions and employees is important.

Employees are welcome to appeal against plans put into place as a result of a job evaluation. Companies should have
established procedures – separate from the standard grievance procedures – for dealing with these appeals.

One of the biggest criticisms of job evaluation is that it is conducted from the employer’s point of view. Other
stakeholders, such as employees and unions, may ascribe greater importance to certain factors than employers.

Merit Rating: Meaning, Concept and

Process | HRM
Meaning of Merit Rating:
Merit Rating is also known as performance appraisal or performance evaluation. It is a systematic
process for measuring the performance of the employees in terms of job requirements. It utilizes
various rating techniques for comparing individual employees in a work group, in terms of personal
qualities or deficiencies and the requirements of their respective jobs.
It is an established fact that people differ in their abilities and aptitudes. These differences are natural
to a great extent and cannot be eliminated even by providing same training and education facilities to
them.

There will be some differences in the quality and quantity of work done by different workers even on
the same job. Therefore it is essential for the management to know these differentials so that
employees having better abilities may be rewarded and the wrong selection and placement may be
restricted or avoided.

Concepts and Definitions of Merit Rating:

According to Scot and Spriegal: “Merit rating of an employee is the process of evaluating the
employee’s performance on the job in terms of the requirements of the job.” It is a technique of
assessing the worth of an employee with reference to job requirements.
According to Dale Yodder:
“Refers to all formal procedures used in working organizations to evaluate personalities and
contribution and potential of group members.” In the words of Yodder all types of methods used
in evaluating the worth of employees for the organization are termed as performance appraisal. In
Views of Alford and Beaty: “Employees rating is the evaluation or appraisal of the relative worth
to the company of a man’s services on his job.”
According to his definition, the contribution of employees on jobs and their usefulness to the company
is assessed under performance appraisal.

Thus according to the above mentioned definitions merit rating or performance appraisal is a
systematic evaluation of employees contribution to the organization in performance of their jobs.

This evaluation is normally done by the immediate superior in the organization which is reviewed in
turn by his superior. Not only the qualities, but deficiencies are also taken into consideration to
improve the performance of employees.

Objects of Merit Rating:

People differ in abilities and aptitudes. Management should know these differences so that
employees are assigned jobs according to their capability.

Main objectives of merit rating are as follows:

1. To assess the work of employees in relation to their job requirements.
2. To consider employees/workers for promotions, transfer, layoffs etc.

3. To assess the good and bad points in working of employees and then making suggestions for
improvement.

4. To help in wage and salary administrations and taking decisions about incentives and increments
to be given to the workers.

5. To evaluate skill and training capabilities of employees and helping in planning suitable training
and development programmes for workers.

6. To know the problems faced by workers while doing various jobs.

7. To provide a basis for comparison to segregate efficient and inefficient workers.

8. To help management in placement/transfer of workers according to their capacity, interest, aptitude

and qualifications.

9. To help supervisors to know their subordinates more closely for increasing their efficiency and
improving productivity of the system.

Process of Merit Rating:

Merit rating should be done on the basis of certain standards fixed in advance. The workers should
also be in the know of the yardsticks to be used for evaluating them. Unless a proper process is used
for evaluation, it will not give good results.

Following process is used for merit rating:

(i) Establishing Standards:
The employees/workers will have to be rated against the standards set for their performance. There
should be some base on which one may categorize that the performance of a person is good,
average, bad etc.

The standards may be in terms of quantity and quality of production in case of workers; personality
traits like leadership, initiative, imagination in case of executives, files cleared in case of office staff,
etc. These standards will help in setting yardsticks for evaluating performance of the people
concerned.
(ii) Communicating Standards to Workers:
The standards set for performance should be communicated to the employees. They should know
what is expected from them. When the standards are made known to employees, they will try to
achieve their performance equal or above them.

Even later on they will not resent adverse reports if they fail to achieve certain standards. It is
essential to get feedback from employees whether they have followed the standards as is desired by
the management.

(iii) Measuring Actual Performance:

The next step in evaluation process is to measure actual performance of employees. The
performance may be measured through personal observation, statistical reports, oral reports, written
reports, received from the executives concerned.

(iv) Comparing Actual with Standards:

The actual performance is compared to the standards set earlier for finding out the standing of
workers. The employee is evaluated and judged by his potential for growth and advancement.
Deviations in performance are also recorded at this stage.

(v) Discussing Reports with Workers:

The assessment reports are periodically discussed with concerned employees/workers. The weak
points, good points and difficulties are indicated for helping employees to improve their performance.

The information received by employees influences their performance. It also effects their attitude and
work in future. It may be easy to convey good reports but it requires tact to discuss adverse reports
with the concerned employees.

(vi) Taking Corrective Action:

Evaluation process will be useful only when corrective action is taken on the basis of reports. One
corrective action may be in the form of advice, counselling, warning etc. Other action may be in the
form of additional training, refresher courses, delegation of more authority, special assignments,
coaching etc. These actions will be useful in helping employees to improve their future performance.
Importance of Merit Rating:
It is an established fact that people differ in their abilities and attitudes. The evaluation of their
performance is the most important tool of an organization. This helps in assigning of work according
to ability and capacity, spotting people for higher responsibility jobs, and recognising training and
development requirements.

Following points brings out the importance of merit rating:

1. It is a managerial technique to find out the worth/capacity of various workers.

2. It helps in correct placement of workers.

3. Evaluation reports help employees to know their good points and weaknesses. The superiors also
counsel their subordinates in improving their performance.

4. It provides a scientific basis for employee’s selection, training, promotion, demotion and any other
action required.

5. It provides a basis for fixing wages and salaries and also helps in deciding about pay increases
and incentive schemes for work force.

6. Merit rating can be used as basis of sound personnel policy in relation to transfer, promotion of
workers.

7. It helps in eliminating personal prejudices and human bias against workers for any reasons.

8. It helps in removing grievances and develops a sense of confidence amongst workers because
they will be sure of impartial evaluation process.

9. The workers will be more concerned in improving their performance and it will create more
discipline among the employees.
10. It aims at providing data to superiors with which they may judge future job assignments and
compensation required.

11. It helps in improving employer-employee relations through mutual confidence which is a result of
frank discussions between a supervisor and his workmen.

Advantages of Merit Rating:

The following are the advantages of Merit Rating:
(1) It provides a scientific basis for judging the capability of employees who will try to improve their
performance if it is not up to their satisfaction. Hence it helps in making comparisons.

(2) It provides a sound basis for the purpose of promotion, demotion, transfer or termination of
employees. Better persons are selected for promotion. The systematic evaluation remains as a part
of permanent record.

(3) It helps in distinguishing efficient and inefficient workers. In this way it reveals the defects in the
selection procedure if any. Those employees who are misfit may be spotted and appropriate action
initiated against them.

(4) Workers may be given increase in pay or incentives if their performance is good. It helps the
management in avoiding spot judgements and replacing it by advance decisions.

(5) It develops confidence among the workers since the methods of evaluation are systematic and
impartial. Among the workers, a sense of competition develops resulting into increased output hence
improved productivity.

(6) It creates a congenial atmosphere in which employer-employee relations are improved.

Subordinates are motivated to work harder for getting favourable rating.

(7) Merit rating is helpful in stimulating and guiding the development of an employee as it points out
the weakness of the employees. In this way training requirements can be known and training
programme can be accordingly decided.

(8) It is a systematic evaluation technique which produces better supervisors and executives. On the
basis of merit-rating report, the top management can judge the ability of executives writing such
reports.
However, formal merit rating may not take place in case of a small unit where the informal rating can
provide all the desired information. In case of a large scale concern, or big industries both employer
and employee will be benefited from a systematic performance appraisal.

Limitations of Merit Rating:

The various methods of merit rating are subject to the following limitations:
1. There is a tendency to rate employee on the basis of one factor only. It is also known as ‘blending
tendency’. If the rater finds that the man is good in one field he will rate him good in all other
concerned fields.

2. Each rater may apply his own standards with the result the final ratings simply cannot be
compared. For example, a rater may think that ‘satisfactory’ rating is better than ‘excellent’. So clarity
in standards is missing.

3. Lenient raters give; high ratings where as strict raters always give low ratings. Hence there is a big
difference of ratings between two raters. It is another limitation of merit rating.

4. Generally the raters evaluate employee by keeping them in the average category though some
may be falling in the extreme ends of the scale i.e. excellent or worst. So this central tendency is
another drawback of this technique.

5. Usually there is a tendency to give high rating to a person who is doing the higher paid job. Merit
rating has nothing to do with the job so it is its limitation.

6. Even if a person tries to be fairest rater in performance evaluation, he cannot eliminate bias
because of differing perceptions.

Certain unconscious factors such as race, caste, creed, etc. may affect merit rating. If a manager who
is less qualified, rates his subordinate who is more qualified, evaluation in such cases may not be fair.
The limitations of merit rating explained above can be minimized to some extent by educating and
training the raters.
Methods of Merit Rating: Traditional and Modern Methods
The two methods of techniques of merit rating are as follows:
1. Traditional Methods
2. Modern Methods!

A. Traditional Methods:
The various traditional methods used are mentioned below:
1. Ranking Methods:

It is the simplest, oldest and most conventional method of merit rating. Every employee is judged as a
whole without distinguishing the rates from his performance. In this method a list is then prepared for
ranking the workers in order of their performance on the job so that an excellent employee is at the
top and the worst at the bottom. It permits comparison of all employees in any single rating group
regardless of the type of work.
The difficulty of this method is that it is very difficult to compare persons on the whole when they differ
in qualities, attitudes, etc. This method only gives the idea about the standing of various people and
not the actual difference among them. This method however does not indicate specific strengths and
weaknesses between two or more workers. This technique is used in those enterprises where there
are few workers
2. Paired Comparison Method:

In this method every person is compared trait wise, with other persons one at a time, the number of
times one person is compared with others is recorded on a piece of paper. These numbers help in
yielding rank of employees. For example, if there are five persons to be compared.
As performance is first compared with that B to determine who has better performance, then A’s
compared with C,D and E in turn and performance is recorded. Later B is compared to C,D and E
since he has already been compared with A. Afterwards C is compared with D and E and so on. The
results of these comparisons are tabled and a rank is assigned to each employee. The number of
comparisons can be worked out with the formula.
Number of Comparisons = N(N- 1) / 2
Where N is total number of employees to be evaluated. This method gives more reliable rating than
straight raking. But it will be suitable only when the number of persons is small.

3. Grading system:

Under this system certain features like analytical ability, cooperativeness, dependability, job
knowledge, etc. are selected for evaluation. The employees are given grades according to the
judgment of the rater.
The grades may be such as:
A-outstanding, B-very good: C-satisfactory, D- average, etc. The actual performance of every
employee is rated with various grades in the mind of the rater.

4. Forced distribution method:

Some evaluators suffer from a constant error i.e. either they rate all workers as good, average or
poor. They do not evaluate the employees properly. This system minimizes rater’s bias so that all
employees are not equally rated. This system is based on the presumption that all employees can be
divided into five categories.
Outstanding, above average, average below average and poor. The main aim in this system is to
spread ratings in a number of grades. This method will be useful only when the group of employees is
large, it is also easy to understand and simple to apply.

5. Check list method:

In this technique the supervisors are provided with printed forms containing descriptive questions
about the performance of workers. The supervisor has to answer in yes or no. After putting answers
to these questions the forms are sent to Personnel Department where final rating is done. Various
questions in the form may be weighted equally or certain questions may be given more weight age
than others.
The check list may contain such questions:
1. Is the employee hard working? (Yes/No)
2. Is he regular on the work? (Yes/No)
3. Does he co-operate with his superiors? (Yes/No)
4. Does he maintain his equipment/machines well? (Yes/No)
5. Does he obey instructions well? (Yes/No)
The supervisor’s bias is the main characteristic of this method because he can distinguish between
positive and negative question. It is also difficult to put all possible questions in the check list because
it will make the check list lengthily.

6. Critical incident method:

This method measures worker’s performance in terms of certain events or incidents that occur in the
course of work. The assumption in this method is that the performance of an employee/ worker on the
happening of critical incidents determines his failure or success. The supervisor keeps a record of
critical incidents occurring at different times and then rates him on this basis.
Examples of critical incidents are:
(i) Refused to follow instructions without a detailed discussion with superiors.
(ii) Refused to follow instructions even when these were made clear.
(iii) Increased his efficiency despite resentment from other worker/ employees.
(iv) Showed presence of mind in saving a worker when sudden fire broke out.
(v) Performed a difficult task even though it was outside has regular duties.
(vi) Displayed a courteous behaviour to a supplier.
(vii) He helped fellow employees in solving their problems.
The only difficulty in this method is that outstanding incidents may not regularly occur. Moreover
negative incidents may be more noticeable than the positive ones. The supervisor may not record an
incident immediately and forget it later on. It may be difficult for the supervisors to decide whether an
incident is critical or not.

7. Free essay method:

In the free essay method the supervisor writes a report about the worker which is based on his
assessment about performance of workers. The supervisor continuously watches the workers or
subordinates and writes his assessment in the report. The covered factors are the behaviour with
employees, job knowledge, employee traits, development requirements for future, etc.
In this method the supervisor will be able to provide a detailed account of the employee’s
performance. The system may suffer from human bias because of likings or disliking of the supervisor
for specific workers. The other limitation of this technique is that an appraiser may not be able to
express his judgement in appropriate words and it will limit the utility of appraisal reports.
B. Modern Methods:
The modern methods used in merit rating are as follows:

1. Management by objectives:

The management by objective or management by results was developed by Peter Drucker who
emphasized that performance of each job should be directed towards the achievement of whole
business objectives. According to Georg S. Ordisure, “The system of management by objectives can
be described as a process whereby the superior and subordinate managers of an organization jointly
identify its common goals, define each individual’s major areas of responsibility in terms of results
expected of him and use these measures as guides for members”. Petrer Drucker pointed out that
objectives are required in every area where performance and results directly and vitally affect the
survival and chances of success of the business.
In the MBO system of merit rating the superior and subordinate sit together and set the goals to be
achieved by the later in a particular period of time. The work to be performed becomes a goal for
performance evaluation. The employees periodically meet their supervisor to evaluate the progress of
important features of this system.
MBO, as a technique of evaluation, may not provide good results if the goal setting is hasty and over
ambitious. Lack of proper feedback between the superior and subordinate may also adversely affect
the application of this technique.

2. Assessment centre method:

The assessment centre method was first used in German army and later in British Army. The purpose
was to assess people in particular situations. The evaluators record their assessment regarding
various people when they perform in an actual situation. This method is utilized, generally, to
determine the suitability of persons for first supervisory levels. It also helps in determining training and
development requirements or employees.
The distinguishing characteristics training and development requirements of employees. The
distinguishing characteristics normally assessed are organizing and planning ability, getting along
with other, quality thinking, resistance to stress, orientation to work etc. The assessment centre
ratings are said to be influenced by the participant’s interpersonal skills.
The employees who generally perform well in a normal situation may become conscious under
stimulated situations. The supervisors who nominate employees to assessment centres normally do
not favour people who are aggressive, intelligent, and independent even though these qualities are
essential for higher level positions.
Occupational safety and health
Occupational safety and health (OSH), also commonly referred to as occupational health and
safety (OHS), occupational health,[1] or workplace health and safety (WHS), is a multidisciplinary field concerned with
the safety, health, and welfare of people at work. These terms also refer to the goals of this field,[2] so their use in
the sense of this article was originally an abbreviation of occupational safety and health program/department etc.

The goals of occupational safety and health programs include to foster a safe and healthy work environment.[3] OSH may
also protect co-workers, family members, employers, customers, and many others who might be affected by the
workplace environment. In the United States, the term occupational health and safety is referred to as occupational
health and occupational and non-occupational safety and includes safety for activities outside of work.[4]

In common-law jurisdictions, employers have a common law duty to take reasonable care of the safety of their
employees.[5] Statute law may in addition impose other general duties, introduce specific duties, and create government
bodies with powers to regulate workplace safety issues: details of this vary from jurisdiction to jurisdiction.

As defined by the World Health Organization (WHO) "occupational health deals with all aspects of health and safety
in the workplace and has a strong focus on primary prevention of hazards."[6] Health has been defined as "a state of
complete physical, mental and social well-being and not merely the absence of disease or infirmity."[7] Occupational
health is a multidisciplinary field of healthcare concerned with enabling an individual to undertake their occupation,
in the way that causes least harm to their health. Health has been defined as It contrasts, for example, with the
promotion of health and safety at work, which is concerned with preventing harm from any incidental hazards, arising
in the workplace.

Since 1950, the International Labour Organization (ILO) and the World Health Organization (WHO) have
shared a common definition of occupational health. It was adopted by the Joint ILO/WHO Committee on Occupational
Health at its first session in 1950 and revised at its twelfth session in 1995. The definition reads:

The main focus in occupational health is on three different objectives:

(i) the maintenance and promotion of workers’ health and working capacity;
(ii) the improvement of working environment and work to become conducive to safety and health and
(iii) development of work organizations and working cultures in a direction which supports health and
safety at work and in doing so also promotes a positive social climate and smooth operation and
may enhance productivity of the undertakings. The concept of working culture is intended in this
context to mean a reflection of the essential value systems adopted by the undertaking concerned.
Such a culture is reflected in practice in the managerial systems, personnel policy, principles for
participation, training policies and quality management of the undertaking.

Those in the field of occupational health come from a wide range of disciplines and professions
including medicine, psychology, epidemiology, physiotherapy and rehabilitation, occupational therapy, occupational
medicine, human factors and ergonomics, and many others. Professionals advise on a broad range of occupational health
matters. These include how to avoid particular pre-existing conditions causing a problem in the occupation, correct
posture for the work, frequency of rest breaks, preventative action that can be undertaken, and so forth.

"Occupational health should aim at: the promotion and maintenance of the highest degree of physical, mental and social
well-being of workers in all occupations; the prevention amongst workers of departures from health caused by their
 working conditions; the protection of workers in their employment from risks resulting from factors adverse to health;
the placing and maintenance of the worker in an occupational environment adapted to his physiological and
psychological capabilities; and, to summarize, the adaptation of work to man and of each man to his job.

Employee Grievances and Redressal

Grievance means any type of dissatisfaction or discontentment arising out of factors related to an
employee’s job which he thinks are unfair. A grievance arises when an employee feels that something
has happened or is happening to him which he thinks is unfair, unjust or inequitable. In an
organization, a grievance may arise due to several factors such as:
 Violation of management’s responsibility such as poor working conditions
 Violation of company’s rules and regulations
 Violation of labor laws
 Violation of natural rules of justice such as unfair treatment in promotion, etc.
Various sources of grievance may be categorized under three heads: (i) management policies,
(ii) working conditions, and (iii) personal factors

1. Grievance resulting from management policies include:

 Wage rates
 Leave policy
 Overtime
 Lack of career planning
 Role conflicts
 Lack of regard for collective agreement
 Disparity between skill of worker and job responsibility
2. Grievance resulting from working conditions include:
 Poor safety and bad physical conditions
 Unavailability of tools and proper machinery
 Negative approach to discipline
 Unrealistic targets
 Grievance resulting from inter-personal factors include
 Poor relationships with team members
 Autocratic leadership style of superiors
 Poor relations with seniors
 Conflicts with peers and colleagues
It is necessary to distinguish a complaint from grievance. A complaint is an indication of employee
dissatisfaction that has not been submitted in written. On the other hand, a grievance is a complaint
that has been put in writing and made formal.
 Grievances are symptoms of conflicts in industry. Therefore, management should be concerned with
both complaints and grievances, because both may be important indicators of potential problems
within the workforce. Without a grievance procedure, management may be unable to respond to
employee concerns since managers are unaware of them. Therefore, a formal grievance procedure is
a valuable communication tool for the organization.

Employee Grievance Redressal

Employee Grievances can be handled by adopting various measures. These measures are discussed
separately in this section.
 Open Door Policy
 Step Ladder Procedure
Model Grievance Handling Procedure in Public Enterprises of India
1. An aggrieved employee can take up his grievances orally with his immediate superior, who will
hear it and try to resolve the same at his level.
2. The hearing officer can refer the grievance to the Head of Department, or the Personnel Manager
or the aggrieved employee himself give in writing to the Head of Department/Personnel Manager,
who will take up the matter and give a hearing. The HOD will try to resolve the grievance.
3. Management may constitute a Grievance Redressal Committee at organizational level. This
committee may hear the issues and make suggestions to management for resolve of the problem.

Grievance Handling: Definition, Features Causes, and Effects !

Introduction and Definition of Grievance:

A grievance is any dissatisfaction or feeling of injustice having connection with one’s employment
situation which is brought to the attention of management. Speaking broadly, a grievance is any
dissatisfaction that adversely affects organizational relations and productivity. To understand what a
grievance is, it is necessary to distinguish between dissatisfaction, complaint, and grievance.

1. Dissatisfaction is anything that disturbs an employee, whether or not the unrest is expressed in
words.

2. Complaint is a spoken or written dissatisfaction brought to the attention of the supervisor or the
shop steward.

3. Grievance is a complaint that has been formally presented to a management representative or to a

union official.
According to Michael Jucious, ‘grievance is any discontent or dissatisfaction whether expressed or
not, whether valid or not, arising out of anything connected with the company which an employee
thinks, believes or even feels to be unfair, unjust or inequitable’.

In short, grievance is a state of dissatisfaction, expressed or unexpressed, written or unwritten,

justified or unjustified, having connection with employment situation.

Features of Grievance:
1. A grievance refers to any form of discontent or dissatisfaction with any aspect of the organization.

2. The dissatisfaction must arise out of employment and not due to personal or family problems.

3. The discontent can arise out of real or imaginary reasons. When employees feel that injustice has
been done to them, they have a grievance. The reason for such a feeling may be valid or invalid,
legitimate or irrational, justifiable or ridiculous.

4. The discontent may be voiced or unvoiced, but it must find expression in some form. However,
discontent per se is not a grievance. Initially, the employee may complain orally or in writing. If this is
not looked into promptly, the employee feels a sense of lack of justice. Now, the discontent grows and
takes the shape of a grievance.

5. Broadly speaking, thus, a grievance is traceable to be perceived as non-fulfillment of one’s expec-

tations from the organization.

Causes of Grievances:
Grievances may occur due to a number of reasons:
1. Economic:
Employees may demand for individual wage adjustments. They may feel that they are paid less when
compared to others. For example, late bonus, payments, adjustments to overtime pay, perceived
inequalities in treatment, claims for equal pay, and appeals against performance- related pay awards.

2. Work environment:
It may be undesirable or unsatisfactory conditions of work. For example, light, space, heat, or poor
physical conditions of workplace, defective tools and equipment, poor quality of material, unfair rules,
and lack of recognition.
3. Supervision:
It may be objections to the general methods of supervision related to the attitudes of the supervisor
towards the employee such as perceived notions of bias, favouritism, nepotism, caste affiliations and
regional feelings.

4. Organizational change:
Any change in the organizational policies can result in grievances. For example, the implementation
of revised company policies or new working practices.

5. Employee relations:
Employees are unable to adjust with their colleagues, suffer from feelings of neglect and victimization
and become an object of ridicule and humiliation, or other inter- employee disputes.

6. Miscellaneous:
These may be issues relating to certain violations in respect of promotions, safety methods, transfer,
disciplinary rules, fines, granting leaves, medical facilities, etc.

Effects of Grievance:
Grievances, if not identified and redressed, may adversely affect workers, managers, and the organiza-
tion.

The effects are the following:

1. On the production:
a. Low quality of production

b. Low productivity

c. Increase in the wastage of material, spoilage/leakage of machinery

d. Increase in the cost of production per unit

2. On the employees:
a. Increase in the rate of absenteeism and turnover

b. Reduction in the level of commitment, sincerity and punctuality

c. Increase in the incidence of accidents

d. Reduction in the level of employee morale.

3. On the managers:
a. Strained superior-subordinate relations.

b. Increase in the degree of supervision and control.

c. Increase in indiscipline cases

d. Increase in unrest and thereby machinery to maintain industrial peace

Need for a Formal Procedure to Handle Grievances:

A grievance handling system serves as an outlet for employee frustrations, discontents, and gripes like
a pressure release value on a steam boiler. Employees do not have to keep their frustrations bottled up
until eventually discontent causes explosion.

The existence of an effective grievance procedure reduces the need of arbitrary action by supervisors
because supervisors know that the employees are able to protect such behavior and make protests to
be heard by higher management. The very fact that employees have a right to be heard and are
actually heard helps to improve morale. In view of all these, every organization should have a clear-
cut procedure for grievance handling.

Employee Grievance - Effective Ways of Handling Grievance

Grievance may be any genuine or imaginary feeling of dissatisfaction or injustice which an employee experiences
about his job and it’s nature, about the management policies and procedures. It must be expressed by the employee
and brought to the notice of the management and the organization.

Grievances take the form of collective disputes when they are not resolved. Also they will then lower the morale and
efficiency of the employees. Unattended grievances result in frustration, dissatisfaction, low productivity, lack of
interest in work, absenteeism, etc. In short, grievance arises when employees’ expectations are not fulfilled from the
organization as a result of which a feeling of discontentment and dissatisfaction arises. This dissatisfaction must crop
up from employment issues and not from personal issues.

Grievance may result from the following factors-

a. Improper working conditions such as strict production standards, unsafe workplace, bad relation with
managers, etc.
b. Irrational management policies such as overtime, transfers, demotions, inappropriate salary structure, etc.
c. Violation of organizational rules and practices
The manager should immediately identify all grievances and must take appropriate steps to eliminate the causes of
such grievances so that the employees remain loyal and committed to their work. Effective grievance management is
an essential part of personnel management. The managers should adopt the following approach to manage grievance
effectively-

1. Quick action- As soon as the grievance arises, it should be identified and resolved. Training must be given to
the managers to effectively and timely manage a grievance. This will lower the detrimental effects of
grievance on the employees and their performance.
2. Acknowledging grievance- The manager must acknowledge the grievance put forward by the employee as
manifestation of true and real feelings of the employees. Acknowledgement by the manager implies that the
manager is eager to look into the complaint impartially and without any bias. This will create a conducive work
environment with instances of grievance reduced.
3. Gathering facts- The managers should gather appropriate and sufficient facts explaining the grievance’s
nature. A record of such facts must be maintained so that these can be used in later stage of grievance
redressal.
4. Examining the causes of grievance- The actual cause of grievance should be identified. Accordingly remedial
actions should be taken to prevent repetition of the grievance.
5. Decisioning- After identifying the causes of grievance, alternative course of actions should be thought of to
manage the grievance. The effect of each course of action on the existing and future management policies and
procedure should be analyzed and accordingly decision should be taken by the manager.
6. Execution and review- The manager should execute the decision quickly, ignoring the fact, that it may or may
not hurt the employees concerned. After implementing the decision, a follow-up must be there to ensure that
the grievance has been resolved completely and adequately.

An effective grievance procedure ensures an amiable work environment because it redresses the grievance to mutual
satisfaction of both the employees and the managers. It also helps the management to frame policies and procedures
acceptable to the employees. It becomes an effective medium for the employees to express t feelings, discontent and
dissatisfaction openly and formally.

Participative decision-making
Participative decision-making (PDM) is the extent to which employers allow or encourage employees to share or
participate in organizational decision-making (Probst, 2005). According to Cotton et al. (1988), the format of PDM could be
formal or informal. In addition, the degree of participation could range from zero to 100% in different participative
management (PM) stages (Cotton et al. 1988; Black & Gregersen 1997; Brenda, 2001).
PDM is one of many ways in which an organization can make decisions. The leader must think of the best possible style
that will allow the organization to achieve the best results. According to psychologist Abraham Maslow, workers need to feel
a sense of belonging to an organization (see Maslow's hierarchy of needs).
"Participative management (PM) is known by many names including shared leadership, employee empowerment, employee
involvement, participative decision-making, dispersed leadership, open-book management, or industrial democracy"
(Steinheider, B., Bayerl, P.S. & Wuestewald, T.,2006).
"The basic concept involves any power-sharing arrangement in which workplace influence is shared among individuals who
are otherwise hierarchical unequals. Such power-sharing arrangements may entail various employee involvement schemes
resulting in co-determination of working conditions, problem solving, and decision-making" (Locke & Schweiger, 1979).
The primary aim of PDM is for the organization to benefit from the "perceived motivational effects of increased employee
involvement" (Latham, as cited in Brenda, 2001, p. 28).

Advantages

PM is important where a large number of stakeholders are involved from different walks of life, coming together to make a
decision which may benefit everyone. Some examples are decisions for the environment, health care, anti-animal cruelty
and other similar situations. In this case, everyone can be involved, from experts, NGOs, government agencies, to
volunteers and members of public.
However organizations may benefit from the perceived motivational influences of employees. When employees participate
in the decision-making process, they may improve understanding and perceptions among colleagues and superiors, and
enhance personnel value in the organization..
Participatory decision-making by the top management team can ensure the completeness of decision-making and may
increase team member commitment to final decisions. In a participative decision-making process each team member has
an opportunity to share their perspectives, voice their ideas and tap their skills to improve team effectiveness and efficiency.
Participatory decision-making can have a wide array of organizational benefits. Researchers have found that PDM may
positively impact the following:

 Job satisfaction
 Organizational commitment
 Perceived organizational support
 Organizational citizenship behavior
 Labor-management relations
 Job performance and organizational performance
 Organizational profits
By sharing decision-making with other employees, participants may eventually achieve organization objectives that
influence them (Brenda, 2001). In this process, PDM can be used as a tool that may enhance relationships in the
organization, increase employee work incentives, and increase the rate of information circulation across the organization
(Anderson & McDaniel, as cited in Brenda, 2001).

Outcomes[edit]

The outcomes are various in PDM. In the aspect of employees, PDM refers to job satisfaction and performance, which are
usually recognized as commitment and productivity (Allen & Meyer, as cited in Brenda, 2001). In the aspect of employers,
PDM is evolved into decision quality and efficiency that influenced by multiple and differential mixed layers in terms of
information access, level of participation, processes and dimensions in PDM.
Research primarily focuses on the work satisfaction and performance of employees in PDM (Cotton et al. 1988; Black &
Gregersen 1997; Lowin, 1968; Brenda, 2001). Different measurement systems were applied to identify the two items and
the relevant properties. If they are measured with different processes in PDM, the relationship is as described below (Black
& Gregersen 1997):

 Identifying problems: Do not have strong relationship with performance. Because even with full participation,
participants may not explore their skills and knowledge in identifying problems, which is likely to weaken the desires
and motivation then influence performance.
 Providing solutions: Positive and "potentially strong" relations with performance (Black & Gregersen 1997, p. 865). It is
not only attributed to the skills and knowledge could be explored but also the innovative ways employees can provide
and generate.
 Selecting solutions: Positive to performance but not likely to enhance satisfaction. If the solutions generated are not
acknowledged by the employees who are absent at the previous stage, the satisfaction could lessen.
 Planning implementation: Positive and strong relationship with both performance and satisfaction. Participants are
given the possibility to affect the achievement of a designed plan. As the "value attainment" is attached, the extent of
performance and work satisfaction increase (Black & Gregersen 1997, p. 863).
 Evaluating results: Weaker relationship with performance, but positive relationship with satisfaction due to the future
benefit.

Disadvantages
One of the primary risks in any participative decision-making or power-sharing process is that the desire on the part of the
management for more inclusive participation is not genuine . In the words of Arnstein (1969. p. 216), "There is a critical
difference between going through the empty ritual of participation and having the real power needed to affect the outcome of
the process. This difference is brilliantly capsulized in a poster [available for viewing in her article]... [which] highlights the
fundamental point that participation without redistribution of power is an empty and frustrating process for the powerless. It
allows the powerholders to claim that all sides were considered, but makes it possible for only some of those sides to
benefit."
When participative decision-making takes place in a team setting, it can cause many disadvantages. These can be anything
from social pressures to conform to group domination, where one person takes control of the group and urges everyone to
follow their standpoints. With ideas coming from many people, time can be an issue. The meeting might end and good ideas
go unheard. Possible negative outcomes of PDM are high costs, inefficiency, indecisiveness and incompetence (Debruin,
2007).
With participation comes dilemmas. van der Helm (2007), an independent futurist based at the Hague, The Netherlands,
outlines ten major disadvantages in form of dilemma. According to him there are ten such dilemmas and the only way to
deal with them is to use foresight.
Ten dilemmas:

1. Participation as the answer and as the problem

2. The involvement of the actors
3. The level of ambition of the initiators, the context and the participants.
4. Representation and legitimization – participation works best in a situation where it is not needed, i.e. in an
environment in which all interests are taken into consideration
5. Knowledge, power and strategic behavior
6. Formalism or freedom
7. Entering the debate: between timing and perseverance
8. Going beyond information: communication and mediation
9. Results and non-results
10. Appreciating and apprehending success and failure

Methods/Ways of Participation of Employees in Decision-Making

Participation of workers in decision-making process has resulted in successful value creation in many organizations.
Though the extent to which employees should participate in organizational decision making is still a matter of debate. Some
say that workers’ union should participate with management as equal partners while some believe in restricted or bounded
participation, that is, participation of employees or workers to a limited extent. However, there are a number of ways through
which employees can participate in decision-making process of any organization.

 Participation at the Board Level: Representation of employees at the board level is known as industrial
democracy. This can play an important role in protecting the interests of employees. The representative can put all
the problems and issues of the employees in front of management and guide the board members to invest in
employee benefit schemes.
 Participation through Ownership: The other way of ensuring workers’ participation in organizational decision
making is making them shareholders of the company. Inducing them to buy equity shares, advancing loans, giving
financial assistance to enable them to buy equity shares are some of the ways to keep them involved in decision-
making.
 Participation through Collective Bargaining: This refers to the participation of workers through collective
agreements and by deciding and following certain rules and regulations. This is considered as an ideal way to
 ensure employee participation in managerial processes. It should be well controlled otherwise each party tries to
take an advantage of the other.
 Participation through Suggestion Schemes: Encouraging your employees to come up with unique ideas can
work wonders especially on matters such as cost cutting, waste management, safety measures, reward system,
etc. Developing a full-fledged procedure can add value to the organizational functions and create a healthy
environment and work culture. For instance, Satyam is known to have introduced an amazing country-wide
suggestion scheme, the Idea Junction. It receives over 5,000 ideas per year from its employees and company
accepts almost one-fifth of them.
 Participation through Complete Control: This is called the system of self management where workers union acts
as management. Through elected boards, they acquire full control of the management. In this style, workers directly
deal with all aspects of management or industrial issues through their representatives.
 Participation through Job Enrichment: Expanding the job content and adding additional motivators and rewards
to the existing job profile is a fine way to keep workers involved in managerial decision-making. Job enrichment
offers freedom to employees to exploit their wisdom and use their judgment while handling day-to-day business
problems.
 Participation through Quality Circles: A quality circle is a group of five to ten people who are experts in a
particular work area. They meet regularly to identify, analyze and solve the problems arising in their area of
operation. Anyone, from the organization, who is an expert of that particular field, can become its member. It is an
ideal way to identify the problem areas and work upon them to improve working conditions of the organization.

Employees can participate in organizational decision making through various processes mentioned above. However, there
are other ways such as financial participation, Total Quality Management, participation through empowered teams and joint
committees and councils through which they can contribute their share in making the organizations a better place to work .

Employee Empowerment - Good or Bad

What motivates people to work? Money may be the primary reason, but beyond a certain limit it fails to. Organizations have
been trying out different things to increase the level of motivation of its employees. Employee empowerment is one of them.

Employee empowerment means that an employee is given a chance to be enterprising, take risks without compromising
with the organizational goals, mission and vision. His say in the process of decision making in increased. This can be for
one particular individual or for the entire organization. In the latter case it is called participative management.

There are pros and cons to this employee empowerment. Whereas it is said and has been observed that participative
management may lead to increased productivity, motivation, job satisfaction and quality enhancement; it may also slow
down the process of decision making and act a potential security threat in terms of ease of access of information it offers to
the employees.

From an organizational perspective the following pros and cons may be associated with employee empowerment.

Pros of Employee Empowerment

 It leads to greater job satisfaction, motivation, increased productivity and reduces the costs.
 It also leads to creativity and innovation since the employees have the authority to act on their own.
 There is increased efficiency in employees because of increased ownership in their work.
 Lesser need of supervision and delegation.
 Focus on quality from the level of manufacturing till actual delivery and service of goods.
 Employees when empowered become more entrepreneurial and start taking more risks. Greater the risk, greater
are the chances to succeed.
Cons of Employee Empowerment

At the individual level employee empowerment means you are an integral component of the organization. This may sprout
egotism or arrogance in the workers.

Apart from disadvantages at the organizational level, there are certain challenges that emerge at the individual level.
Supervisors often complain disgust from the empowered workers. The following points go against employee empowerment:

 Egotism / arrogance: Worker arrogance can create a big trouble for the supervisors and the managers. There can
be problems in delegating. Employees avoid reporting about their work and feedback can be taken negatively.
 Security: Since information comes and is shared by all, there are apprehensions about leakage of critical data.
 Risk: Creativity and innovation demands a greater risk bearing capacity and there are equal chances of success
and failure. Workers often lack the expertise to execute are enterprise, which can cost big.
 Industrial Democracy: Labor unions and workers are empowered and they may misuse the same. Strikes and lock
outs become more frequent. Also, labor unions gain insights into management and their functioning and they leak
the same.

Participative management or employee empowerment does not mean relentless transfer of authority. It has to be in a
controlled and regulated manner. Each aspect has to be carefully studied and levels of participation decided. For example,
the level of participation of knowledge workers is different from that of a floor worker.

Quality circle
A quality circle or quality control circle is a group of workers who do the same or similar work, who meet regularly to
identify, analyze and solve work-related problems.[1] Normally small in size, the group is usually led by a supervisor or
manager and presents its solutions to management; where possible, workers implement the solutions themselves in order
to improve the performance of the organization and motivate employees. Quality circles were at their most popular during
the 1980s, but continue to exist in the form of Kaizen groups and similar worker participation schemes.[2]
Typical topics for the attention of quality circles are improving occupational safety and health, improving product design, and
improvement in the workplace and manufacturing processes. The term quality circles was most accessibly defined by
Professor Kaoru Ishikawa in his 1988 handbook, "What is Total Quality Control? The Japanese Way" [3] and circulated
throughout Japanese industry by the Japanese Union of Scientists and Engineers in 1960. The first company in Japan to
introduce Quality Circles was the Nippon Wireless and Telegraph Company in 1962. By the end of that year there were 36
companies registered with JUSE by 1978 the movement had grown to an estimated 1 million Circles involving some 10
million Japanese workers. Contrary to some people's opinion this movement had nothing whatever to do with Dr. W.
Edwards Deming or indeed Dr Juran and both were skeptical as to whether it could be made to work in the USA or the West
generally.
Quality circles are typically more formal groups. They meet regularly on company time and are trained by competent
persons (usually designated as facilitators) who may be personnel and industrial relations specialists trained in human
factors and the basic skills of problem identification, information gathering and analysis, basic statistics, and solution
generation.[4] Quality circles are generally free to select any topic they wish (other than those related to salary and terms
and conditions of work, as there are other channels through which these issues are usually considered).[5][6]

Empirical studies[edit]

In a structures-fabrication and assembly plant in the south-eastern US, some quality circles (QCs) were established by the
management (management-initiated); whereas others were formed based on requests of employees (self-initiated). Based
on 47 QCs over a three-year period, research showed that management-initiated QCs have fewer members, solve more
work-related QC problems, and solve their problems much faster than self-initiated QCS. However, the effect of QC
initiation (management- vs. self-initiated) on problem-solving performance disappears after controlling QC size. A high
attendance of QC meetings is related to lower number of projects completed and slow speed of performance in
management-initiated QCS[10] QCs with high upper-management support (high attendance of QC meetings) solve
significantly more problems than those without.[11][12] Active QCs had lower rate of problem-solving failure, higher
attendance rate at QC meetings, and higher net savings of QC projects than inactive QCs. [13] QC membership tends to
decrease over the three-year period. Larger QCs have a better chance of survival than smaller QCs. A significant drop in
QC membership is a precursor of QC failure. The sudden decline in QC membership represents the final and irreversible
stage of the QC's demise.[14] Attributions of quality circles' problem-solving failure vary across participants of QCs:
Management, supporting staff, and QC members.[15]
There are seven basic quality improvement tools that circles use:

 Cause-and-effect diagrams (sometimes called Ishikawa or "fishbone" diagrams)

 Pareto charts
 Process mapping, data gathering tools such as check sheets
 Graphical tools such as histograms, frequency diagrams, spot charts and pie charts
 Run charts and control charts
 Scatter plots and correlation analysis
 Flowcharts

Student quality circles[edit]

Student quality circles work on the original philosophy of total quality management.[16] The idea of SQCs was presented
by City Montessori School (CMS) Lucknow India at a conference in Hong Kong in October 1994. It was developed and
mentored by two engineers of Indian Railways PC, Bihari and Swami Das, in association with Principal Dr. Kamran of CMS
Lucknow India. They were inspired and facilitated by Jagdish Gandhi, who founded CMS after his visit to Japan, where he
learned about Kaizen. The world's first SQC was made in CMS Lucknow with then-13-year-old student Sucheta Bihari as its
leader kshitiz Kumar deputy leader sudeep bihari,meru das namit kaura. CMS has continued to conduct international
conventions on student quality circles every two years. After seeing its utility, educators from many countries started such
circles. The World Council for Total Quality & Excellence in Education was established in 1999 with its Corporate Office in
Lucknow and head office in Singapore. It monitors and facilitates student quality circle activities in its member countries,
which number more than a dozen. SQC's are considered to be a co-curricular activity. They have been established in India,
Bangladesh, Pakistan, Nepal, Sri Lanka, Turkey, Mauritius, Iran, UK (Kingston University and started in University of
Leicester), and USA. In Nepal, Prof. Dinesh P. Chapagain has been promoting the approach through QUEST-Nepal since
1999. He has written a book entitled A Guide Book on Students' Quality Circle: An Approach to prepare Total Quality
People, which is considered a standard guide to promote SQC's in academia for students' personality development.[citation
needed]

Quality Circles (QCs): Definition, Objectives and

Other Details
Definition:
Perhaps the most widely discussed and undertaken intervention of employee involvement is the quality circle (QC). The
concept of QC originally began in the United States and was exported to Japan in the 1950s. It is mentioned that it is the
concept of QC that enabled Japanese firms to make high quality products at low costs.

What is quality circle? It is a work group of employees who meet regularly to discuss their quality problems, investigate
causes, recommend solutions, and take corrective actions. Generally, QC is a small group of employees belonging to the
same similar work area.
This is so because the employees doing the similar type of work are well familiar to problems faced by them. The size of the
QC should not be too big so as to prevent some members from participating meaningfully in its meetings. Generally, six to
eight members are considered the ideal size of the QC.

QC is formed to achieve the following objectives:

1. Improvement in quality of product manufactured by the organisation.
2. Improvement in methods of production.
3. Development of employees participating in QC.
4. Promoting morale of employees.
5. Respect humanity and create a happy work place worthwhile to work.

The main features of QC can be listed as follows:

1. Voluntary Groups:
QC is a voluntary group of employees generally coming from the same work area. There is no pressure from anywhere on
employees to join QC.

2. Small Size:
The size of the QC is generally small consisting of six to eight members.

3. Regular Meeting:
QC meetings are held once a week for about an hour on regular basis. The members meet during working hours usually at
the end of the working day in consultation with the manager. The time of the meetings is usually fixed in advance in
consultation with the manager and members.

4. Independent Agenda:
Each QC has its own agenda with its own terms of reference. Accordingly, each QC discusses its own problems and takes
corrective actions.

5. Quality Focused:
As per the very nature and intent of QC, it focuses exclusively on quality issues. This is because the ultimate purpose of QC
is improvement in quality of product and working life.

Developing Quality Circles in Organisations:

Like any other organizational change, QC being a new concept may be opposed by the employees.

Therefore, QC should be developed and introduced with great concern and precaution as discussed below:
1. Publicising the Idea:
Introduction of QC is just like an organisational change programme Hence, like an organisational change programme, the
workers need to be convinced about the need for and significance of QC from the points of view of the workers and the
organisation. Moreover, participation in QC being voluntary, its publicity among the workers is necessary. To begin with,
management can also arrange for initial training to those workers who want to form a quality circle.

2. Constitution of QC:
Workers doing the same or similar type of work are drawn voluntarily to form quality circle. The membership of a QC is
generally restricted to eight to ten. Once a QC is formed, they remain as permanent members of the circle unless they leave
that work area.

3. Initial Problem Solving:

The members of QC should discuss the problem at threadbare and, then, prepare a list of alternative solutions. Thereafter,
each alternative solution should be evaluated and the final solution should be arrived at on the basis of consensus.
4. Presentation and Approval of Suggestions:
The final solution arrived at should be presented to the management either in oral or in written form. The management may
evaluate the solution by constituting a committee for this purpose. The committee may also meet the members of the quality
circle for clarifications, if required. Presentation of solutions to the management helps improve the communication between
management and workers and reflects management’s interest to the members of QC.

5. Implementation:
Once the suggestion or solution is approved by the management, the same is being put into practice in a particular
workplace. Quality circles may be organized gradually for other workplaces or departments also. In this way, following
above outlined process, the entire organisation can have quality circles.

Characteristics of Effective Quality Circles:

1. The atmosphere should be informal, comfortable and relaxed. The members should feel involved and interested.
2. Everyone should participate.
3. The objectives should be clear to the members.
4. The members should listen to each other.
5. The group should feel comfortable even when there are disagreements.
6. The decisions should generally be taken by a kind of consensus and voting should be minimum.
7. When an action is required to be taken, clear assignments should be made and accepted by all the members.
8. The leader should not dominate the group. The main idea should not be as to who controls but how to get the job done.
9. Until a final solution is found and results are attained feedback is necessary.
Objectives of Quality Circles:
Some of the broad objectives of the Quality Circle are:
(i) To improve quality, productivity, safety and cost reduction.
(ii) To give chance to the employees to use their wisdom and creativity.
(iii) To encourage team spirit, cohesive culture among different levels and sections of the employees.
(iv) To promote self and mutual development including leadership quality,
(v) To fulfill the self-esteem and motivational needs of employees.
(vi) To improve the quality of work-life of employees.
Implementation of Quality Circles in an Organisation:
For the success of Quality Circle programme, following actions are necessary in the Organisation:
(a) Few managers representing production, quality control, design, process planning form the Quality Circle (Q.C.) steering
committee. This acts as a policy making body and will monitor the Q.C. in the Organisation.

(b) Top management must attend the orientation courses designed for them.

(c) A committed top and middle management is necessary.

(d) A facilitator must be appointed, who serves as a link between top management, Q.C., steering committee, middle
management circle leaders and circle members. Facilitator will coordinate training courses; get the support from all
concerned including top management Q.C., steering committee, circle leader and circle members to help the circle leader in
conducting the meetings, and to provide necessary resources.

Organisation and Working of Quality Circles:

Q.C. was conceived in Japan in 1962 as a forum for training its work force for improving the quality of products. Q.C. is a
voluntary one. Employees are free to join or not to join. In it, 8 to 10 employees including the Supervisor from same
workshop doing similar work join together as a group. The Supervisor can become leader of the group, if the members of
Q.C. so desire.

It is a part time activity; members of Q.C. are allowed to meet for an hour every week. During the various meetings, these
groups progressively identify, select, analyse and solve the problems. Later they offer their proposed solutions to
management for consideration, approval and implementation.

Additionally a senior officer from same workshop is nominated as facilitator who guides the activities of the group.

A Management Committee at senior level is also formed, which overview the progress of Quality Circles.

Training of members, leaders and facilitators is very important for the success of programme.

Rules for Quality Circles:

(a) Each member can contribute an idea on his turn in rotation.
(b) Each member offers only one idea per turn regardless of how many he or she has in mind.
(c) Not everyone has an idea during each rotation, when this occurs just say “Pass”.
(d) No criticism or comments should be passed on the ideas being contributed by the member whatever old it may look to
be, welcome their ideas.
(e) During brain-storming, no evaluation of suggested idea should occur. This applies equally to leader, phrases such as
“We have tried it before”, “Impractical”, “Well” “May be it would work”. “Doubtful”, “Very good” etc. should not be uttered.
(f) Members can vote by raising their hands.
(g) Only supporting votes are taken. Votes against the ideas are not allowed.
(h) The time allotted for brain-storming session should be variable. The length of time that can be spent profitably will vary
widely with nature of problem and the group itself. As a general practice, one hour is probably the minimum.
(i) While members give their ideas, they are recorded by the Recorder on a large sheet.
(j) It is often helpful to set a goal originally, i.e. Let us start for 30 ideas.
(k) When all members say “pass” then the first phase of brain-storming session is over. This means all ideas have been
exhausted.
(l) Now all the ideas recorded on the sheet are displayed.
(m) These massive number of ideas are then narrowed down by the process of voting. The voting technique works because
the members are experts in their areas. Members vote on each idea. The leader records each vote next to the idea.
(n) Members can vote for as many ideas as they feel have value. Only supporting votes are taken.
(o) Leader draws a circle around those ideas that receive the most votes. The members thus find that many of the top ideas
will be so identified.
(p) Now the members can focus on a few important ideas instead of being somewhat confused by a large number of them.
These few important ideas are voted on to give ranking to the circle ideas. Leader writes the ranking number beside each
idea that has been circled.
(q) A member can ask for voting on any idea and argue for or against it. Others can join, if they wish. Only when the
discussion has finished then the voting take place.
Idea ranked in the session can then be taken up for analysis or solution later on.

Duties of Circle Leader:

For the success of Quality Circles, circle leader must have following duties:
(i) He must assume the responsibility of guiding the members.
(ii) He must make his members sure about what is going on.
(iii) He must channelise the discussions.
(iv) Every member is allowed equal opportunity.
(v) Specific task be assigned to each member.
(vi) He must work in coordination with facilitator.
Steps for Setting up Quality Circles:
For starting Quality Circles in an organisation, following steps should be taken:
(i) First of all Managers, Supervisors and Foremen must be made to understand the concepts and activities of Q.C.
(ii) Management’s total support and commitment should be made known to everyone in the organisation.
(iii) Steering committee is formed with the top management personnel to give direction to Quality Circle activities.
(iv) A facilitator (or sometimes known as promoter) is selected from the senior management level, who will serve as
coordinator and advisor to the circle.
(v) Supervisor and foreman are then trained to act as Q.C. leaders.
(vi) Members of each circle must be selected from the persons who are doing similar type of work or belong to the same
department or section.
(vii) Membership to the circle is voluntary.
(viii) First few meetings of the circle are held with a view to train them.
(ix) To start with, only one to two circles should be formed in an organisation, and then increase the number gradually as
more and more experience is gained.
(x) Meetings must be held regularly, may be once in a week initially and once in a month on completion of basic training of
members.
(xi) Everyone’s suggestion or problem matching with the circle’s objectives is discussed.
(xii) Total participation of team members must be encouraged.
(xiii) Recommendations of the circle must be considered and decisions should be taken without delay.
Benefits of Quality Circles (Q.C.):
1. Through the forum of Q.C. the chronic problems-of organisations which really create hurdles in work get resolved by the
grass root employees of organisation, whose knowledge and experience otherwise is not fully utilized.
2. With such a capable work force, any organisation can easily undertake more difficult and challenging assignments for its
growth and profit.
3. As the employees gain experience they take more challenging projects, in due course they undertake projects on cost
reduction, material handling, quality improvement, preventing wastage, improving delivery schedule, improving customer
service, improving inspection and test methods, preventing accidents improving design and process etc.
4. Cost reduction.
5. Increased productivity.
6. Improved quality.
7. Better communication.
8. Better house-keeping.
9. Increased team work.
10. Smooth working.
11. Better mutual trust.
12. Greater sense of belongingness.
13. Increased safety.
14. Better human relations.
Launching of Quality Circle Programme:
The typical steps for launching programme are as under:
(i) Orientation Programme for Senior Management Personnel.
(ii) Orientation Programme for Managers and Executives.
(iii) Orientation Programme for Selected Supervisors.
(iv) Orientation Programme for Workers (selected area).
(v) Formation of Circles (Minimum 2 and Maximum 4).
(vi) Training of Facilitators.
(vii) Training of Leaders.
(viii) Q.C. meetings for projects.

Total Quality Management (TQM)

Total quality management (TQM) is the continual process of detecting and reducing or eliminating errors in manufacturing,
streamlining supply chain management, improving the customer experience, and ensuring that employees are up to speed
with training. Total quality management aims to hold all parties involved in the production process accountable for the
overall quality of the final product or service.

TQM was developed by William Deming, a management consultant whose work had a great impact on Japanese
manufacturing. While TQM shares much in common with the Six Sigma improvement process, it is not the same as Six
Sigma. TQM focuses on ensuring that internal guidelines and process standards reduce errors, while Six Sigma looks to
reduce defects.

Understanding Total Quality Management

Total quality management (TQM) is a structured approach to overall organizational management. The focus of the process
is to improve the quality of an organization's outputs, including goods and services, through continual improvement of
internal practices. The standards set as part of the TQM approach can reflect both internal priorities and any industry
standards currently in place.
 Industry standards can be defined at multiple levels and may include adherence to various laws and regulations governing
the operation of the particular business. Industry standards can also include the production of items to an understood norm,
even if the norm is not backed by official regulations.

Primary Principles of Total Quality Management

TQM is considered a customer-focused process and aims for continual improvement of business operations. It strives to
ensure all associated employees work toward the common goals of improving product or service quality, as well as
improving the procedures that are in place for production.

Industries Using Total Quality Management

While TQM originated in the manufacturing sector, its principles can be applied to a variety of industries. With a focus on
long-term change over short-term goals, it is designed to provide a cohesive vision for systemic change. With this in mind,
TQM is used in many industries, including, but not limited to, manufacturing, banking and finance, and medicine.

These techniques can be applied to all departments within an individual organization as well. This helps ensure all
employees are working toward the goals set forth for the company, improving function in each area. Involved departments
can include administration, marketing, production, and employee training.

KEY TAKEAWAYS

 Total quality management (TQM) is the continual process of detecting and reducing or eliminating errors in
manufacturing, streamlining supply chain management, improving the customer experience, and ensuring that
employees are up to speed with training.
 The focus of the process is to improve the quality of an organization's outputs, including goods and services,
through continual improvement of internal practices.
 Total quality management aims to hold all parties involved in the production process accountable for the overall
quality of the final product or service.

TOTAL QUALITY MANAGEMENT (TQM)

TQM stands for total quality management. A core definition of total quality management (TQM) describes a management
approach to long-term success through customer satisfaction. In a TQM effort, all members of an organization participate in
improving processes, products, services, and the culture in which they work.

TOTAL QUALITY MANAGEMENT (TQM) PRIMARY ELEMENTS

Total quality management, or TQM, can be summarized as a management system for a customer-focused organization that
involves all employees in continual improvement. It uses strategy, data, and effective communications to integrate the
quality discipline into the culture and activities of the organization. Many of these concepts are present in modern quality
management systems, the successor to TQM. Here are the 8 principles of total quality management:

1. Customer-focused

The customer ultimately determines the level of quality. No matter what an organization does to foster quality
improvement - training employees, integrating quality into the design process, or upgrading computers or software -the
customer determines whether the efforts were worthwhile.
2. Total employee involvement

All employees participate in working toward common goals. Total employee commitment can only be obtained after fear
has been driven from the workplace, when empowerment has occurred, and when management has provided the proper
environment. High-performance work systems integrate continuous improvement efforts with normal business operations.
Self-managed work teams are one form of empowerment.

3. Process-centered
A fundamental part of TQM is a focus on process thinking. A process is a series of steps that take inputs from suppliers
(internal or external) and transforms them into outputs that are delivered to customers (internal or external). The steps
required to carry out the process are defined, and performance measures are continuously monitored in order to detect
unexpected variation.

4. Integrated system

Although an organization may consist of many different functional specialties often organized into vertically structured
departments, it is the horizontal processes interconnecting these functions that are the focus of TQM.
o Micro-processes add up to larger processes, and all processes aggregate into the business processes required for
defining and implementing strategy. Everyone must understand the vision, mission, and guiding principles as well as the
quality policies, objectives, and critical processes of the organization. Business performance must be monitored and
communicated continuously.
o An integrated business system may be modeled after the Baldrige National Quality Program criteria and/or incorporate
the ISO 9000 standards. Every organization has a unique work culture, and it is virtually impossible to achieve excellence
in its products and services unless a good quality culture has been fostered. Thus, an integrated system connects
business improvement elements in an attempt to
continually improve and exceed the expectations of customers, employees, and other stakeholders.

5. Strategic and systematic approach

A critical part of the management of quality is the strategic and systematic approach to achieving an organization’s vision,
mission, and goals. This process, called strategic planning or strategic management, includes the formulation of a
strategic plan that integrates quality as a core component.
6. Continual improvement

A large aspect of TQM is continual process improvement. Continual improvement drives an organization to be both
analytical and creative in finding ways to become more competitive and more effective at meeting stakeholder
expectations.
7. Fact-based decision making

In order to know how well an organization is performing, data on performance measures are necessary. TQM requires
that an organization continually collect and analyze data in order to improve decision making accuracy, achieve
consensus, and allow prediction based on past history.

8. Communications

During times of organizational change, as well as part of day-to-day operation, effective communications plays a large
part in maintaining morale and in motivating employees at all levels. Communications involve strategies, method, and
timeliness.
Total quality management
Total Quality Management (TQM) consists of organization-wide efforts to "install and make permanent climate where
employees continuously improve their ability to provide on demand products and services that customers will find of
particular value."[1] "Total" emphasizes that departments in addition to production (for example sales and marketing,
accounting and finance, engineering and design) are obligated to improve their operations; "management" emphasizes that
executives are obligated to actively manage quality through funding, training, staffing, and goal setting. While there is no
widely agreed-upon approach, TQM efforts typically draw heavily on the previously developed tools and techniques
of quality control. TQM enjoyed widespread attention during the late 1980s and early 1990s before being overshadowed
by ISO 9000, Lean manufacturing, and Six Sigma.

Features[edit]

There is no widespread agreement as to what TQM is and what actions it requires of organizations,[10][11][12] however a
review of the original United States Navy effort gives a rough understanding of what is involved in TQM.
The key concepts in the TQM effort undertaken by the Navy in the 1980s include:[13]

 "Quality is defined by customers' requirements."

 "Top management has direct responsibility for quality improvement."
 "Increased quality comes from systematic analysis and improvement of work processes."
 "Quality improvement is a continuous effort and conducted throughout the organization."
The Navy used the following tools and techniques:

 The PDCA cycle to drive issues to resolution

 Ad hoc cross-functional teams (similar to quality circles) responsible for addressing immediate process issues
 Standing cross-functional teams responsible for the improvement of processes over the long term
 Active management participation through steering committees
 Use of the Seven Basic Tools of Quality to analyze quality-related issues

1. Introduction to Quality

Every manufacturing organisation is concerned with the quality of its product. While it is important that quantity requirements
be satisfied and production schedules met, it is equally important that the finished product meet established specifications.
Because, customer's satisfaction is derived from quality products and services. Stiff competition at national and international
level and consumer's awareness require production of quality goods and services for survival and growth of the company.
Quality and productivity are more likely to bring prosperity into the country and improve quality of work life.

Quality Control

However, the management looks to achieve customer satisfaction by running its business at the desired economic level.
Both these can be attained by properly integrating quality development, quality maintenance and quality improvement of die
product. The integration of these three aspects of a product can be achieved through a sound quality control system.

2. The Meaning of Quality

Quality is a relative term and it is generally used with reference to die end use of the product. For example, a gear used in
sugarcane juice extracting machine may not possess good surface finish, tolerance and accuracy as compared with the
gear used in the head stock of a lathe, still it may be considered of good quality if it works satisfactorily in die juice extracting
machine. The quality is thus defined as die fitness for use/purpose at die most economical level.

The quality depends on die perception of a person in a given situation. The situation can be user-oriented, cost-oriented or
supplier-oriented. Since, die item is manufactured for me use of die customer, die requirements of die customer dictates die
quality of die product. Quality is to be planned, achieved, controlled and improved continuously.

The word "Quality" has variety of meanings :-

Fitness for purpose : The component is said to possess good quality, if it works well in the equipment for which it is meant.
Quality is tiius defined as fitness for purpose.
Conformance to requirements : Quality is die ability of the material/component to perform satisfactorily in an application for
which it is intended by die user. Quality of a product, thus, means conformance to requirements. Customer needs have to
be assessed and translated into specifications depending upon die characteristics required for specific application. Just as
every human has his own characteristics every application has its own characteristics.
Grade : Quality is a distinguishing feature or grade of the product in appearance, performance, life, reliability, taste, odor,
maintainability etc. This is generally called as quality characteristics.
Degree of preference : Quality is the degree to which a specified product is preferred over competing products of equivalent
grade, based on comparative test by customers, normally called as customer's preference.
Degree of excellence : Quality is a measure of degree of general excellence of the product.
Measure of fulfillment of promises : The quality of a product is a measure of fulfillment of the promises made to the
customers.
Suitability : For specific application.
Reliability : It should give efficient and consistent performance.
Durability : It should have desired life.
Safety : Safe and foolproof workability.
Affordability : It should be economical.
Maintainability : It should be easy to maintain.
Aesthetic look : It should look attractive.
Satisfaction to customers : It should satisfy the customers' requirements.
Economical : It should have reasonable price.
Versatility : It should serve number of purposes.

A product can be said to possess good quality if all the above requirements are properly balanced while designing and
manufacturing it.

3. Quality Control

Control can be defined as "a process by means of which we observe the actual performance and compare it with some
standard".

If there is a deviation between the observed performance and the standard performance then it is necessary to take
corrective action.

The term "Quality Control" has variety of meanings :

Quality control is the process through which we measure the actual quality performance, compare it with the standards and
take corrective action if there is a deviation.
It is a systematic control of various factors that affect the quality of the product. It depends on : Material, Tools, Machines,
type of labour, working conditions, measuring instruments, etc.
Quality control can be defined as the entire collection of activities which ensures that the operation will produce the optimum
quality products at minimum cost.
It can also be defined as the tools, devices or skills through which quality activities are carried out.
It is the name of the department which devotes itself full time to quality functions.
The procedure for meeting the quality goals is termed as quality control.
It is a system, plan or method of approach to the solution of quality problems.
As per A.Y. Feigorbaum

Total Quality control is "An effective system for integrating the quality development, quality maintenance and quality
improvement efforts of the various groups in anorganization, so as to enable production and services at the most
economical levels which allow full customer satisfaction."

square red 4. Steps In Quality Control Programme

Formulate quality policy.

Work out details of product requirements, set the standards (specifications) on the basis of customers preference, cost and
profit.
Select inspection plan and set up procedure for checking.
Detect deviations from set standards or specifications.
Take corrective action through proper authority and make necessary changes to achieve standards.
Decide on salvage method i.e. to decide how the defective parts are disposed of, entire scrap or rework.
Co-ordination of quality problems.
Developing quality consciousness in the organization. Quality control is not a function of any single department or a person.
It is the primary responsibility of any supervisor to turn out work of acceptable quality.

Quality control is one aspect of production planning and control. It is basically concerned with the quality production through
regular inspection technique. Quality is a combination of characteristics pertaining to the manufacture of the product and
control is the correction in the quality of the product, when the deviations in the product are more than expected. A good
quality item is one which conforms to some standard specifications. These specifications are determined by the
expectations of consumers and also by the availability and costs of processes and materials.

To most people, quality is variable. It is subjectively judged because it deals with the relative goodness of a product. When a
buyer boasts that his house or car is the best, it implies high quality. Quality is thus subjective and vaguely measurable.

In the words of Broom,

"subjective quality refers to degree of goodness of a product and objectively it consists of a set of measurable
characteristics for which standard dimensions together with small, allowable departures, up and down, may be prescribed."

All manufacturing processes face a basic difficulty. It is physically impossible to make all items or units exactly alike. There
is always variability in the product. With precision manufacturing, the variability may be difficult to see but nevertheless it is
there. When variability becomes obvious it results in scraps, re-work and losses, thus adding to the costs.

5. Objectives of Quality Control

Establishment of quality standard : The main objective of quality control is the economical production of a high quality
product at the quality level the customer wants. It is basically for eliminating variations in production and in order to have
uniformity in production.
Locating quality deviations : It is necessary to analyze the trend and extent of quality deviations in a manufacturing process.
Such deviations should be explained by statistical techniques when they cannot be attributed to the element of chance.
Evaluating methods and processes of production : By evaluating methods and processes of production, quality control helps
to take corrective measures to maintain the quality of the product during the process of manufacture.
Quick sale of quality goods : Quality control accelerates the sale of the goods by supplying only the quality goods in the
market. Consumers also support quality goods.
Production of standard quality goods : Quality control aims at manufacturing standard quality products and avoids the
production of inferior quality goods. Such standard quality goods give satisfaction to consumers and also create goodwill in
the market.
Improvement in quality : One objective of quality control is to find out high quality standards and to make constant efforts to
reach those standards. Quality control aims at creating quality consciousness at all levels in the Organisation.

6. Steps In Quality Control Process

Devising control over raw materials : The quality of the finished product is determined mostly by the quality of raw materials.
It calls for close connection between the raw material purchase department of the company and the vendors. As and when
necessary, a resident inspector may be deputed by the Quality Control Department in the vendor's place to see that only
goods in accordance with specifications are supplied. It is advisable to reinspect the raw materials before putting them to
actual use.
Fixing standards and specifications : In order to make any scheme of quality control successful, it is essential to
predetermine standards and specifications. The practice should be to provide quality instructions in the form of drawings,
showing shapes, dimensions and specifications describing color, strength, thickness, chemical composition, etc.
Exercising control over production operations : In order to execute efficient practices, the technical expert of the Quality
Control Department must investigate, from time to time, the operating methods. Such investigation helps to eliminate all
possible variables.
Locating inspection points : When the points at which defects occur are wrongly located or located with delay, it hinders
quality control. Therefore there should first inspection of the raw materials at the vendor's places, then at the company's
plant, then at the various points during the process of production and finally at the time of packing. The defects are likely to
occur at these points. The finished goods can be cleared after obtaining 'O.K.' or 'All Correct' from the Quality Control
Department.
Maintaining quality of equipments : The final quality of the products is conditioned by the quality of the equipments and other
devices used. The Quality Control Department is responsible for testing the equipment used in inspection such as gauges,
which measure dimensions, electronic devices, magnetic devices and industrial radio graphical instruments.
Maintaining records : The Quality Control Department is responsible for maintaining all records relating to quality inspection
and control and the number rejected.

7. Advantages of Quality Control

Quality control is important as it offers certain advantages to the manufacturer. Such advantages are: stability to sale,
goodwill in the market, ability to face market competition effectively, reduction in production costs, and elimination of
wastage due to rejections and uniformity in production. These benefits are important for sales promotion and profit
maximization. Manufacturers now give special attention to quality control techniques for long term benefits. Attention is
given to research and development activities for this purpose. Even foreign collaborations are made for raising the quality
standards of products manufactured. In brief, quality control is a matter of great importance in production management.

The benefits of quality control to consumes are: Availability of standard quality and reliable goods, proper reward for the
price paid, safety to life and health, better standard of living and protection against substitution or adulteration and quick
shopping of goods. Consumers always purchase standard quality goods even by paying a little higher price as they get full
satisfaction over a long period from quality goods. Consumers, particularly educated consumers, support quality products as
they know the benefits available from such standard quality products. This suggests the importance of quality control from
the point of view of consumers.

The importance of quality control is, now, accepted even at the global level. Consumers now insist for superior quality
goods. Expenditure on quality control is an investment for more sale and satisfaction to consumers. Quality control is a must
for export promotion. Companies can capture foreign markets only by manufacturing superior quality goods at reasonable
cost of production. Japan is a leading world exporter. This is mainly due to superior quality of goods manufactured in Japan.
Governments in many countries support quality control measures. They provide all possible help for maintaining superior
quality of goods. Restrictions are also imposed on the manufacturing of cheap goods. Even associations of manufacturers
and traders support quality control measures. This suggests the importance of quality control in business.

In addition, the following advantages of quality control also suggest its importance:

Improvement in the quality of production and reduction in the production cost.

Uniformity in the production and supply of standard quality goods to consumers.
Offering full return of the price paid by consumers and giving convenience and satisfaction to consumers. This also
develops cordial relations with consumers.
Reduction in spoiled production and rejection from consumers and dealers.
Promotion of exports due to superior and standard quality production.
Sales promotion in the internal market and facing market completion with confidence.
Reduction in the inspection cost.
Improvement in the productivity and motivation of employees.
Making the products popular in the market and thereby to develop market goodwill.

8. Cost of Quality

The costs of carrying out company quality program are known as "Cost of Quality". It includes :-

Market research cost of discovering quality needs of customer.

Product research and development cost of creating a product concept, which will meet quality needs.
The design cost of transmitting product concept into information which represents planning for manufacturer.
Cost of inspection and test.
Cost of defect prevention.
Cost of quality assurance.
Cost of scrap and quality failure.
The quality cost can be defined in four categories :-
Cost of prevention.
Cost of appraisal.
Cost of internal failures.
Cost of external failures.

8.1 (a) Cost of Prevention

It consists of costs associated with person engaged in designing, implementing, maintaining the quality system. Cost of
prevention includes:-

Cost of Quality planning : It includes the cost associated with creating a overall quality plan, the cost of market research and
product development, inspection plan, reliability plan etc.
Cost of Documenting : It includes cost of preparation of manuals and procedures to communicate these costs.
Process control cost : Used with quality plans procedure to achieve fitness for use.
Cost of training : Cost associated in preparing any programs for attaining, improving, maintaining quality programs.
Cost associated with preventing recurring defects : Engineering, technical, supervisory, cost of preventing recurring defects.
Cost of investigation, analysis of correction of causes of defects by quality central department.
Cost of investigation, analysis of correction of causes of defects by engineering control department.
Cost of consciousness programs.

8.2 (b) Cost of Appraisal

Costs associated with measuring, evaluating or auditing the products, component and purchase materials to assure
conformance with quality standard and performance requirement are called as "Cost of appraisal".

In other words, the cost of evaluating, quality and of identifying and segregating non-conforming part and assemblies.

This consist costs of :-

Receiving or incoming tests and inspection.

Laboratory and acceptance test.
Inspection and test.
Checking labor.
Set up for inspection and test.
Inspection of test material.
Quality Audits.
Review of test and inspection data.
Evaluation of field stocks, spare parts.

8.3 (c) Cost of internal failures

The costs associated with defective products, components, materials that fail to meet quality requirements and results in
manufacturing losses are called as "Cost of internal failures".

Costs associated with scrap i.e. Cost of material, labor. Cost of rework, repair i.e. Cost of making defective parts and
assembly rules.

Cost of re-inspection and re-test after defective parts are repaired. Costs associated with material review activity.

Cost of processes yield lower that might be attainable by improved controls. Trouble shooting.

8.4 (d) Cost of External Failures

Cost because of defective products being shifted to the customer.

Cost of processing complaints from the customer.

Cost of service to customer to receive defective items.
Cost of inspecting, preparing defective items.
Cost of replacing defective products.

9. The Concept of Total Quality Management (TQM)

Total quality management is a comprehensive concept and not related only to the quality of goods and services. It suggests
that high quality standards (e.g., ISO 9000) should be maintained in other aspects of management such as production cost,
marketing, sales promotion, etc. For such quality/efficiency in all aspects of business management,
consciousness/awareness needs to be developed at all levels and among employees working in all departments of the
enterprise. Employees must be motivated for maintaining high quality standards. In addition, their cooperation/involvement
is necessary for maintaining efficiency in all aspects of business management. In brief, quality management is not the
responsibility of management alone. Participation/involvement of both parties (management and employees) is essential for
achievement of quality and other benefits.
Total Quality Management TQM

The concept of TQM is closely related to the concept of quality circles which is very popular and also successful in Japan.
Quality circles are work groups that meet frequently to study the ways and means to improve quality, reduce cost, eliminate
wastages and solve other production problems. Here, employees are associated with quality, cost, efficiency, productivity,
consumer service and satisfaction. This creates background for the concept of TQM.

TQM aims at improving the total performance at the work place. It covers all functions, activities and people who are
responsible for competitiveness of an Organisation. The employees are expected to participate not only in maintaining
quality but also in improving their total performance so that the wastages will be avoided, production cost will go down and
the enterprise can earn more profit.

TQM means strategic commitment to improving quality by combining statistical quality control methods with a cultural
commitment to seeking incremental improvements that increase productivity and lower costs.

Total quality management reflects the culture of an Organisation. It indicates consumer oriented, quality-oriented
management philosophy. It is a commitment to quality by all managers and workers. TQM is a philosophy for achieving
customer satisfaction which involves all - managers, employees and users. It is management by commitment and not
management by control. This technique is to be introduced through quality circles. The route to TQM is through application
of simple tools followed by Organisation change and culture change.
Total quality management is based on the following four powerful elements:

Focus on customer expectations,

Employees' involvement,
Mastery of processes,
Team work.

9.1 Definition of TQM

According to John Gilbert,

Total Quality Management is "A process designed to focus on customer expectations, preventing problems, building
commitment to quality in the workforce and promoting open decision-making."

square red 9.2 Origin of TQM

Stress on quality management : In TQM, collective efforts are being made for improving quality of goods and services so as
to give more satisfaction to consumers. Quality improvement is also useful for facing market competition and for creating
market reputation. In brief, TQM involves steps for improving quality and productivity. There is total commitment to quality
on the part of entire Organisation. TQM covers all functions, activities and people who are instrumental for raising the
competitiveness.
Continuous process : TQM is a continuous process/activity as there is ample scope for using new methods and techniques
for improvement in the quality standards and performance. "Steal ideas constantly and shamelessly" is the rule in TQM.
Implementation of innovative ideas or taking benefit of new opportunities is an integral aspect of TQM. In fact, TQM is a
never ending quest for achieving new levels of performance.
Stress on quality assurance system : The aim of TQM is to give maximum satisfaction to consumers by providing goods
which are best in quality (zero defects). The present ISO9000 series is a set of well recognised standards for quality
assurance system. The Japanese have been using quality assurance concepts and principles as a part of their TQM
implementation programme even when specific name or number was not used. Thus, quality assurance system is an
integral part of TQM.
Linkage of quality and productivity : The TQM technique is useful for improving quality as well as productivity. In a TQM
programme, the focus is on quality improvement. However, such programme also raises productivity. The methods used in
TQM programmes. E.g. stress on quality improvement, zero defects production, making all employees responsible for
quality maintenance and improvement) are likely to bring quality improvement as well as yield improvement. Similarly, the
TQM programme creates a feeling of participation among the employees. There is also positive improvement in the morale
of employees.
TQM is a gradual process : Introduction of TQM is a gradual process. It is self improvement and group improvement
programme through team building for raising quality and productivity. TQM is about the gradual change of people's behavior
towards the tasks they perform and their attitude towards other people. A mental revolution among the employees is
required for the execution of TQM. However, such change in the mental make-up of managers and employees requires long
period. This suggests that TQM is a gradual process. There are, in fact, four broad phases in the introduction of TQM.

These are:

Awareness Phase,
Planning Phase,
Implementation Phase, and
Institutional Phase.

Focus on customers : Customers are the source of all the revenue that flows through the corporation. Their satisfaction
keeps the money flowing especially in an open market where competitors are wooing them too. The focus of TQM is on
customer satisfaction on quality, cost and delivery through improved orgarnisational quality of processes. According to
British Quality Association (BQA), TQM is a corporate business management philosophy which recognised that customers'
needs and business goals are inseparable.
Employee involvement : Employees involvement is the most important recognised feature of TQM. In fact, quality's a team
work of all employees. Their participation and co-operation are required to be taken at all levels. TQM is possible only
through participative management. Under TQM, employees will be motivated to participate actively in the process of quality
improvement through incentives and recognition of contribution for achieving quality standards.
Formation of quality improvement teams : A cornerstone of TQM is the team building that leads to commitment to
improvement. Such teams include quality steering teams, corrective actions teams and so on. Such teams motivate
employees and facilitate quality improvement.
Management's involvement : TQM is a systems approach in managing business and improving overall performance. It
needs total commitment from the top management to provide viable leadership to the whole approach. Top level
management has to take number of initiatives in order to start the process of TQM. In fact, TQM cannot have a good take
off without total commitment of CEO and other senior executives.

9.3 Advantages of TQM

Customer satisfaction : TQM is basically for the satisfaction and welfare of customers. Needs and expectations of
customers are given special attention in TQM. The attention is on customers and zero defect goods will be supplied to them.
As a result, there will be reduction in the complaints of consumers/customers. TQM is not for profit-making at the cost of
customers but it is for giving satisfaction and welfare to them.
Quality improvement : One major advantage of a TQM is quality improvement at all levels and in all activities. There is a
systematic attempt to eliminate deficiencies such as production scrap or rework, customer complaints and material
shortages. The cornerstone of any successful TQM system is the organised elimination of waste. The rejection rate in the
production process will be low and this minimizes waste of materials and human efforts. Due to quality improvement, the
sales and profits will also increase. The company will also develop goodwill and market recognition as supplier of quality
goods.
Absence of additional investment : One advantage of TQM is that TQM does not require any additional investment. It
improves operational quality as well as reduces cost. This technique is quite convenient to developing countries which are
facing financial difficulties due to various reasons. TQM gives many benefits but without additional financial burden.
Raises competitiveness : TQM technique is useful for raising quality and reducing costs. This naturally raises
competitiveness in the domestic as well as global markets. TQM technique is useful for exports by raising global
competitiveness.
Facilitates expansion and diversification : TQM leads to large turnover and high profits along with market reputation and
consumer support. The company can use this profit for the execution of its expansion and diversification programmes. In
brief, TQM facilitates expansion and diversification of business.
Provides trained and motivated employees : TQM philosophy has its positive impact on employees. They are given proper
training, monetary and non-monetary incentives, attractive working conditions and proper treatment. Workers take pride in
manufacturing defect-free products.
Miscellaneous Advantages : TQM technique offers other advantages as noted below:-

Long-term consumer support,

Prestigious position in international marketing,
High standard of living to employees, and
Cost control.

10. Quality Circle (QC)

Dewar, President of the International Association of QCs, defines QCs as "a way of capturing the creative and innovative
power that lies within the work force".

A quality circle is a small group of volunteers (usually 3 to 12 employees) doing similar work. They meet regularly under the
leadership of their immediate supervisor, or some one chosen among the circle to identify problems, set priorities, discover
causes and propose solutions. These may concern quality, productivity, safety, job structure, process flow, control
mechanism, aesthetics of the work area etc.

According to Maurice Alston,

"Quality Circles are small groups of people doing similar work who, together with their supervisors volunteer to meet for an
hour a week to study and solve work related problems which affect them. Circle leaders and members are trained in simple
problem solving techniques which identify causes and develop solutions. At an appropriate time, presentations are made by
the quality circles to the management who decide whether to accept, modify or decline the proposals".

Quality Circle is a participative management system in which workers make suggestions and improvements for the
betterment of organisation.

10.1 Concept of Quality Circle

The Quality Circle concept has three major attributes; these are :

QC is a form of participative management.

QC is a human resource development technique.
QC is a problem solving technique.

10.2 Objectives of Quality Circles

Objectives which contribute to the improvement and development of the enterprise and indirectly the interest of the
employees are :

To improve the quality and productivity and thus contribute to the improvements and development of the enterprise.
To reduce the cost of products or services by waste reduction, safety, effective utilisation of resources, avoiding
unnecessary errors and defects.
To identify and solve work related problems that interfere with production.
To tap the creative intelligence of the persons working in the organisation and to make full use of its human resources.
To permit employees to develop and use greater amount of knowledge and skill and motivate them to apply to a wide range
of challenging tasks.
To improve communication within the organisation.
To increase employees' loyalty and commitment to the organisation and its goals.
To respect humanity and build a happy bright work place environment which is meaningful to work in.
To enrich human capability, confidence, moral, attitude and relationship.
To satisfy the human needs of recognition, achievement and self-development.

10.3 Advantages of Quality Circles

The organization can accomplish one or more of the following advantages by establishing quality circles:

Promote high level of productivity and quality-mindedness.

Self and mutual development of employees.
Creating team spirit and unity of action.
Increased motivation, job satisfaction and pride in their work.
Reduced absenteeism and labour turnover.
Developing sense of belongingness towards a particular organization.
Waste Reduction.
Cost reduction.
Improved communication.
Safety improvement.
Increased utilization of human resource potential.
Enhancement in consciousness and moral of employees through recognition of their activities.
Leadership development.
Trained staff.

Personnel Management
Personnel management can be defined as obtaining, using and maintaining a satisfied workforce. It is a significant
part of management concerned with employees at work and with their relationship within the organization.

According to Flippo, “Personnel management is the planning, organizing, compensation, integration and maintainance
of people for the purpose of contributing to organizational, individual and societal goals.”

According to Brech, “Personnel Management is that part which is primarily concerned with human resource of
organization.”

Nature of Personnel Management

1. Personnel management includes the function of employment, development and compensation- These
functions are performed primarily by the personnel management in consultation with other departments.
2. Personnel management is an extension to general management. It is concerned with promoting and
stimulating competent work force to make their fullest contribution to the concern.
3. Personnel management exist to advice and assist the line managers in personnel matters. Therefore,
personnel department is a staff department of an organization.
4. Personnel management lays emphasize on action rather than making lengthy schedules, plans, work methods.
The problems and grievances of people at work can be solved more effectively through rationale personnel
policies.
5. It is based on human orientation. It tries to help the workers to develop their potential fully to the concern.
6. It also motivates the employees through it’s effective incentive plans so that the employees provide fullest co-
operation.
7. Personnel management deals with human resources of a concern. In context to human resources, it manages
both individual as well as blue- collar workers.
Role of Personnel Manager
Personnel manager is the head of personnel department. He performs both managerial and operative functions of
management. His role can be summarized as :

1. Personnel manager provides assistance to top management- The top management are the people who decide
and frame the primary policies of the concern. All kinds of policies related to personnel or workforce can be
framed out effectively by the personnel manager.
2. He advices the line manager as a staff specialist- Personnel manager acts like a staff advisor and assists the
line managers in dealing with various personnel matters.
3. As a counsellor,- As a counsellor, personnel manager attends problems and grievances of employees and
guides them. He tries to solve them in best of his capacity.
4. Personnel manager acts as a mediator- He is a linking pin between management and workers.
5. He acts as a spokesman- Since he is in direct contact with the employees, he is required to act as
representative of organization in committees appointed by government. He represents company in training
programmes.

How Does Technology Impact HR Practices?

Technology changes the way HR departments contact employees, store files and analyze employee performance. Used well,
technology makes HR practices more efficient. When used poorly, it can get in the way of managing the company's human
resources. Good HR practices maximize the benefits and minimize the problems.

Technology changes the way HR departments contact employees, store files and analyze employee performance. Technology makes it easier

to gather and break down data on employees to get an overall picture.

Recruiting Transformed by the Internet

Before the internet and email, connecting with job seekers meant phone, face time or a letter. In the 21st century, it's routine for

companies to post openings online, and require job seekers to apply through an online applicant tracking system. That frees up

a great deal of time that HR would have spent dealing with paper resumes or personal calls.

However, HR practices don't always take into account how well the system works for the candidates. Online forms have a

standardized format that often makes it hard to tell a star performer from a slacker. A badly designed system with confusing

instructions and slow response times can actually turn job seekers off to applying with a firm.

Ease of Communication

With email, text and messaging apps it's easier than ever for HR staff to stay in touch with the rest of the company. If a manager

wants to share a new schedule with a project team, one email with an attachment or a conversation on Slack can share the word

with a dozen people at once. There's a risk of relying too much on tech as a time-saver though. Information in a two-page email

may be better off delivered to the group face to face. That way everyone can ask questions and hear the answers.

Data Analysis of Employee Performance

Analyzing employee performance used to depend on personal assessments and obvious standards: Did the employee finish the

task on time? Does their boss trust them?

Technology makes it easier to gather and break down data on employees to get an overall picture. Which tasks do they perform

best? Do they meet all the goals from last year's performance appraisal? If they fell short, was it by 12 percent, 50 percent or 75

percent? Software programs can even take over much of the work in evaluating employees.

Too Much Data

As HR makes more use of data collection and analysis, employees might feel their privacy shrinking. If, say, a company has

security cameras that monitor employees every second, it can be easier to find the facts behind a harassment charge or

someone drinking on the job. However, being constantly monitored can alienate employees as well. Good HR practices involve

not only knowing how much data can be gathered but also how much should be gathered.

Another risk is that the HR department can end up getting more data than it can manage. After a certain point, wading through

data to pick out the relevant material becomes an impossible task. It's also possible that HR will misread data or make

assumptions that a face-to-face conversation could clear up.

Security Practices

Securing employee records used to mean locking a file cabinet. In the 21st century, best HR practices have to include security

for the digital data. Some security is more an IT matter, such as a good firewall. HR needs to have good policies in place,

though, governing who can access confidential data, both hard copy and in electronic form.

5 Ways Technology is Changing the Face of HR

With potentially groundbreaking HR technology solutions emerging, we’re seeing a tech boom that is fundamentally
reshaping the way we work — and how we think about HR.
According to the 2019 HCM Trends report from The HR Federation, a network of leading HR market analysts, global HR
technology venture capital has topped $3.1 billion this year, more than triple the amount invested in 2017. While there’s a
range of technologies, some of the most interesting — and disruptive — examples are powered by artificial intelligence and
automation.
“AI and machine learning are opening the door to a whole new world of possibility for the human capital
space,” CareerBuilder CEO Irina Novoselsky says. “Our research shows that more than half of HR managers feel AI will
become a regular part of HR within five years.”
Novoselsky says her company has developed AI technology that can build a job description or resume in less than a
minute, and also tell companies which candidates match jobs and are likely to respond. “What is exciting is that we’re just at
the cusp of what this technology can do,” she says.
Here are five other ways technology is changing the face of HR.

1. AI Is Making Recruitment Smarter

Recruiting new hires is a time-consuming and costly process, but thanks to automation and AI it’s getting easier to find
skilled people who are a great fit for your company. From automated resume screeners to robot interviewers, a wave of
these tech solutions for recruiting has hit the market.
“AI is starting to outperform humans at making hiring decisions in certain areas, such as evaluating hard skills,” says Harj
Taggar, co-founder and CEO of Triplebyte, which offers a credentials-blind process for evaluating engineers. “AI then frees
up recruiters to focus more on conducting soft-skill and culture-fit evaluation in a more structured way.”
Mikaila Turman, director of people at background check company GoodHire, says machine learning and AI are changing
the way the company recruits, hires and onboards new employees. For example, she says, the company recently used a
tech tool called Entelo to find qualified engineers in a more targeted way during a high-volume hiring period.
“We were able to reach out directly via email versus posting on LinkedIn, and subsequently increased our candidate pool,”
she says. “Leveraging technology helps us to be proactive in our efforts to get responses instead of spinning our wheels
and getting nowhere.”

2. Compliance Is More Efficient and Sophisticated

Staying compliant has often been a major challenge for HR teams. Laws and regulations are constantly changing and often
require vast amounts of paperwork and information.
Compliance once required organization and dedicated IT storage capacity, but cloud-based solutions have streamlined the
process.
Derek Jones, vice president of enterprise solutions at employee scheduling firm Deputy, says that as technologies continue
to improve and labor laws evolve, companies will increasingly turn to technology to navigate complex and sometimes
politically charged compliance issues.
For example, he says, the Fair Workweek movement has emerged as a major working-class issue, with cities like New York
and San Francisco passing laws that limit unpredictable work hours that can demoralize workers and make it hard for
businesses to retain talent. He says companies that have employed tech solutions for this issue have been able to more
effectively navigate these changing rules.
“Businesses that embrace technology for compliance will come out on top, with more attractive recruiting and retention
efforts, as well as better working conditions that improve employee engagement and increase sales,” he says.

3. Analytics Drive Better Performance Management

Performance management has long been an important HR function. HR pros have driven the process, monitoring
performance, collecting supervisory feedback and facilitating regular employee reviews. Technology has streamlined the
process and eliminated a lot of unnecessary steps, but the next data-driven phase of performance management is upon us.
Betterworks CEO Doug Dennerline says HR will see a new level of data competency in 2019 with the rapid and widespread
adoption of people analytics that help managers and executives make decisions about their workforce. “The raw data pulled
from analytics can be used to create actionable insights and ultimately support data-driven decisions around promotions or
compensation, development and success planning, and agile cross-functional team staffing,” Dennerline says.
He says HR teams can apply analytics to sentiment data generated from hundreds of interactions between employees and
managers as part of the performance management process. Analyzing sentiment data helps HR to identify opportunities for
coaching, Dennerline says, and allows managers and employees to benchmark their performance.
“Though people analytics won’t replace the human elements of HR, 2019 will see them complement humans more than
ever before and become an extension of the team,” he says.

4. Better Analytics Boosts Diversity and Inclusion

McKinsey & Co.’s 2017 Diversity Matters II report says there’s a positive correlation between a more ethnically and gender-
diverse leadership team and an increase in profits. Consumers are also more frequently looking for companies that value
diversity, and that will have an impact on recruiting strategies.
Parijat Sarkar, senior director of product management for Zenefits, says that as awareness of the value of diverse teams
grows, organizations will increasingly leverage workforce analytics to tackle diversity and inclusion issues.
“This is important as more companies — especially with today’s political climate — are pressured to take a stance on D&I
workplace issues,” Sarkar says. “For example, companies can use people analytics to get a clearer view of pay gaps and
discrepancies so they can do a better job to promote fair salary compensation.”
As the spotlight on workplace D&I continues to grow, Sarkar says, it will put pressure on HR software vendors to offer more
of these types of offerings.

5. A More Strategic Role for HR

Technology has given HR professionals tools that reduce the time they have to spend on administrative tasks, allowing
them to focus on issues that require more hands-on attention.
Before mobile apps and cloud computing, HR was defined by piles of paperwork and a constant struggle to keep up with
compliance, hiring and unending stacks of employee information. By simplifying responsibilities like recruitment, record
keeping and payroll, technology has significantly improved efficiency, accuracy and even employee morale.
“HR’s role as an administrative function will continue to shift to HR being a strategic advantage for the organization as the
department continues to be supported by technology that simplifies administrative tasks and frees up our time and
resources to make a more strategic impact on the organization,” GoodHire’s Turman says.

Impact Of Technology On Human Resource Management And What Lies

Ahead
Human Resource is no longer just a supporting function of an organization – with the growing importance of human capital
and its management in the corporate setup, HR is now a collection of highly specialized and essential capabilities, each with
distinct goals, needs, and tasks.

The advent of technology has changed all the aspects of our lives – HR being no exception to the fact. Earlier HR was a
department that was defined by piles of paper and files along with a consistent struggle to multitask between the hiring of
candidates, compliance, storage and management of employees’ data, reference checks, on boarding and exit procedures,
payroll, managing control and reward systems and so on. By simplifying these responsibilities, technology has drastically
improved the efficiency and effectiveness of the department thereby facilitating the time to focus on the major issues that
require their attention. In my opinion, apart from the umpteenth number, the major noticeable contributions of technology to
the HR department as a whole are as follows:

Recruitment: Earlier the process of sourcing the potential employees for any organization was dependent on the posts on
newspapers, word of mouth, internal referrals or face to face networking. Today through postings on job portals like
Naukri.com, Sheroes.com, Monster.com, etc. and professional social networks like LinkedIn, recruiters can now reach out to
a wide number of candidates and need not settle for any less. They can now select the right for both the role and the
organization as a whole. On the other hand, evaluating an applicant’s skill set and personality is also a lot easier now
through in-house or outsourced online test platforms thereby saving cost and time in the long run and giving the best-
desired results.

Data Management: Managing the data of employees, potential candidates, legal compliance related data, etc. required a
lot of space and were not very easy to locate when needed. Cloud storage has now allowed to store data on cloud using
electronic files (e-files). This made data storage easy to organize and was available within a few clicks. This streamlining
has saved paper, space and a lot of time thereby improving the level of security and confidentiality too.

Performance Management: Various software using HRIS (Human Resource Information System) like ClearCompany,
Halogen Performance, PerformancePro, High Ground, Lattice, and Big Data Analytics have made performance
management of employees more accurate and helped in giving suitable rewards to the personnel. This has resulted in
increased employee satisfaction and loyalty towards the work and organization.

Flow of information: Can we imagine a day without our office inbox not functioning? No right? Technology has made
communication between people within an organization easier by giving and receiving prompt replies and important
information over emails or in-house messengers. Cloud-based mobile platforms allow employees to access relevant
information easily and initiatives like work from home and while on holidays have been made possible for the welfare of the
employees.

Despite the huge list of advantages, many organizations today have still not adopted the technology based HR systems.
The benefits of cost saving, time saving, accuracy and environment protection far outweigh the initial challenges of setting
the system and welcoming the change. Hence, I believe this is just a matter of time and soon all the organizations would
embrace this new change with both arms open also because using technology in Human Resource just like in any other
function will be the only way out to sustain and survive the competition of the dynamic corporate world .

5 Crucial Technological Changes in Human Resource Management

Over the years, human resources has grown from a single department that worked to hire and fire people and handle
payroll to an instrumental part of growing companies, building an organization’s reputation, helping to create
organizational change, and ensuring compliance. Emerging technology has changed the landscape of HR. Here are some
of the changes in human resource management that have been due to technology.

Remote Working
Technology has changed the way people work. One way is by enabling greater connectivity also offering mobility. New
security technologies such as identify and access management software can offer businesses the safety and security of
knowing their data is only being accessed by approved employees while also giving employees the resources and data
they need to success in their positions, even away from the office.

Recruitment
Finding and retaining the best talent is no longer a matter of placing an ad in a newspaper or even on an internet job
boards. The technology used in human resource management in now benefitting the recruitment and hiring process. In
addition to digital message boards and social media assisting in publishing and sharing job postings, technology has made
searching through resumes simpler by accessing key words that match the job posting or requirements. Additionally,
machine learning technology has improved the ability to target people with personalized job postings and ads. By
analyzing data from multiple places, machine learning can more effectively match people’s interest with a potential job
fit. This change in human resource management due to technology is one that can benefit both employers and potential
employees.

Employee Engagement
Another impact of technology in human resource management is helping organizations and HR departments to understand
how their employees are experiencing the company. Technology has allowed for employee feedback to be collected and
that data to be analyzed to create better experiences for employees. More engaged and satisfied employees prove to be
more productive employees.

Benefits and Payroll

Companies used to manually run checks to distribute and pay their employees. Then came advancements in banking and
direct deposit. Many employees can now log in to a web-based payroll system and check their tax exemptions, download
their past pay stubs, update their banking information, check on benefits information, and even digitally request and log
time off.
One up and coming change that technology is bringing to HR is when it comes benefits and wellness. Companies are
investing in wellness programs where if their employees participate, it can help to offset some of their insurance cost.
Companies are utilizing web-based programs where employees log their wellness activities and earn points or are using
the technology of wearable to help track employee fitness and activity to calculate their wellness benefits.
Automation
Finally, the technology that allows for more and more tasks to be automated – like running payroll and time clocks –
allows for HRM staff to focus on tasks and challenges that require more creativity, such as writing compelling job
postings or creating employee appreciation events.
What is the role of technology in human resource management at your company? Have human resource technology trends
changed anything about your business, from hiring to engagement to improving the employee experience?

How Technology is Changing Human Resource

Management
Technology is changing every sector of the economy at a rapid pace. One of the biggest changes is in the way
that information is shared. When human resources managers are seeking to recruit staff members, post jobs or
keep track of applicants, technology is interwoven throughout every process. Consider these three ways in
which technology is changing the way that your organization finds, evaluates and trains new people to work in
your organization.

Recruiting Through Social Media

More than 92 percent of human resources officers report that they use social media as a recruitment tool [1].
Most adults actively participate in at least one social media network. Human resources teams can post job
openings through a variety of methods on social media. They can use a person’s university affiliation,
experience, likes and interests on social media as recruitment techniques. Social media also allows for the
implementation of viral recruiting techniques. For example, if your company has dozens or hundreds of
seasonal jobs to fill, shares and retweets on social media are fast ways to recruit the staff you need.

Digital Job Postings and Applications

Long gone are the days when you had to fax a job advertisement to the newspaper, wait for them to print it and
then wait for applications to come in through snail mail. You can now use technology to almost instantaneously
deliver job postings to dozens of recruitment websites, university posting services, professional networks and
social media outlets. Applicants do not have to carefully print their applications. They can deliver them to you
through your platform or send them electronically through email, allowing you to get responses within minutes
of posting an opening.

Information Storage and Retrieval

When your recruitment strategies on social media are successful, you could end up with hundreds of
applications. Technology facilitates the storage and retrieval of all of this information. When you have another,
similar job opening, you can refer to your database and see which qualified applicants might fit the bill. Cloud
computing makes it easy and cost-effective to store a great deal of digital information for recruiting.
Management of Change (MOC)
Management of Change (MOC) is a best practice used to ensure that safety, health, and environmental risks and
hazards are properly controlled when an organization makes changes to their facilities, operations, or personnel. Having a
properly implemented MOC policy in place when implementing changes can help ensure that new hazards aren’t
introduced and the risk levels of existing hazards aren't being increased. Inadequate MOC on the other hand has the
potential to increase risks to the health and safety of employees and the environment.

Effective MOC involves review of all significant changes to ensure that an acceptable level of safety will be maintained
after the change has been implemented. From this evaluation, the proposed change can either be set for implementation,
amended to make it more safe, or rejected entirely. Should the change be implemented, personnel should be informed
about the change and how to maintain a safe workspace in this new environment.

Under the Occupational Safety and Health Administration’s (OSHA's) Process Safety Management (PSM) standard,
performing MOC is required when making changes that could affect the safety of a facility. This can include changes in
process chemicals, technology, equipment, procedures, and the number of employees involved in a process.

While MOC is generally used to examine the effects of a proposed permanent change to a facility, temporary changes
should not be overlooked. A number of catastrophic events have occurred over the years due to temporary changes in
operating conditions, staffing, etc. For this reason, an effective MOC program should address all changes that could affect
the safety of a facility or personnel, regardless of whether or not it is permanent.

Management of change (MOC) is a systematic approach to organizational changes with the aim of
ensuring the continued safety of the workforce throughout the process. These systematic processes
ensures that the change is dealt with in a proactive fashion.

Major organizational changes can come as the result of internal decisions, such as a corporate shakeup or
downsizing, the replacement of retiring senior executives, or a merger with or acquisition from another
company. They can also come as a result of external factors, such as new government regulations or updated
industry standards.
Regardless of the reasons behind them, organizational changes can be very disruptive to the organization's
normal operations. Since these operations include processes, procedures, and policies aimed at protecting
workers from injury, dealing with the change haphazardly or without forethought can leave workers unsafe and
unprotected.
Management of change involves keeping workers safe by implementing a kind of temporary safety program
and ensuring that no worker is put at undue risk while the changes are underway.
.
Management of Change
. What is Management of Change (MOC)?
Management of Change, or MOC, is a best practice used to ensure that safety, health and environmental risks are
controlled when a company makes changes in their facilities, documentation, personnel, or operations.
When decisions and changes are made rapidly, safety and health risks can increase resulting in disasters such as
explosions at the oil refinery and detergent plant described in the U.S. Chemical Safety and Hazard Investigation Board’s
2001 “Management of Change” safety bulletin. There are many other notable examples of how even simple changes at a
worksite have led to tragedy. At worksites where highly hazardous chemicals are used, the Process Safety Management
(PSM) rules apply and proper application of Management of Change is not just a best practice, but is actually a
requirement. In these cases, a MOC program is used to ensure all changes to a process are properly reviewed and any
hazards introduced by the change are identified, analyzed, and controlled before resuming operation. MOC often seems
deceptively simple in concept, but can be very effective in the prevention of accidents and can be used as a best practice
at worksites where the Process Safety Management rule doesn’t apply. When is MOC used? Generally, a business need
or opportunity becomes a project or business solution and requires changes in the workplace that can affect processes,
systems, people, or organizational structure. Think about whether implementing this change improves your safety
program and makes good business sense. One obvious benefit Management of Change gives is avoiding the
consequences of unforeseen safety and health hazards through planning and coordinating the implementation of
change in your facility. This is why Management of Change is required in the PSM rules when highly hazardous chemicals
are used.
What are the benefits of MOC? ƒ
 It minimizes unplanned adverse impacts on system integrity, security, stability, and reliability for the business
process being altered or added. ƒ
 It maximizes the productivity and efficiency of staff planning, coordinating, and implementing the changes. ƒ It
provides a stable production environment. ƒ
 It ensures the proper level of technical completeness, accuracy of modifications, and testing of systems before
implementation. ƒ
 It provides an appropriate level of management approval and involvement.
How do you effectively design and implement MOC? Managing change begins with a discussion of the types of changes
being considered that could affect workplace safety and health, including effects that may not be obvious. Procedures
for managing these changes should be written and regularly reviewed to reduce the risk associated with any changes.
Changes being considered must be thoroughly evaluated for how they affect employee safety and health. Sometimes
there is a domino effect, where one change leads to more changes, and you will need to determine if the changes being
considered prompt additional changes to operating procedures. Your MOC program must specify what types of changes
are to be managed, for example, physical alterations to equipment or new operating procedures. A proper MOC system
also requires that any change be evaluated before implementation. The level of evaluation can depend on the degree of
change and how critical it is to the safety of your operations.
Employees, as well as maintenance and contract workers whose work will be affected by the change, must be informed
and trained on the new equipment, process or whatever the change includes. This must be done before startup of the
process or startup of the affected part of the process. 3 Managing change also means updating any safety information,
operating procedures or practices related to the new procedures.

Elements of an effective MOC Program: ƒ

Procedures that consider: ƒ
 The technical basis for the proposed change. ƒ
 Impact of the change on employee safety and health. ƒ
 Modifications to operating procedures. ƒ
 Time needed for the change. ƒ
 Authorization required for the proposed change. ƒ
 Steps to identify hazards before the changes are made.
 ƒ Methods to screen and classify changes. ƒ
 Keys to identifying hazards in changes. ƒ
 Methods for documenting MOC reviews. ƒ
 Procedures to make approvals and authorizations workable.

 ƒ Plans to inform and train personnel about the changes.

 Methods for updating Process Safety Information, procedures and other Process Safety Management
information.
 ƒ Steps for effective implementation.
 ƒ Procedures for reviewing and revising any existing MOC Program.

Best Practices in MOC

1. Compile safety information on the products, equipment, materials or processes that are changing and write policies
and procedures to incorporate the new information. Be sure to include information on how to investigate accidents,
audit compliance with safety procedures and plan for emergency responses.
2. Establish a way to gather employee input on the changes, such as interviews, group discussions or surveys.
Incorporate employee comments and suggestions into your draft policy and procedures.

3. Write instructions for all employees on every process in which changes are involved. The procedures must be clear,
include steps for performing every operation, cover safety information, state what to do in the case of an emergency
and be readily available to the employees performing the procedures.

4. Train employees on the changes. Emphasize any safety and health hazards and what to do in the case of an
emergency. The training must take place before an employee is allowed to operate the equipment or perform the job
that the changes were related to.

5. Establish written procedures for what you will do the next time you have a change in safety management.

Changing Roles of Personnel Department

Personnel Department: Changing Role # 1.
Employees and Performance:
The role of personnel manager is changing to help companies achieve structural and cultural changes. Today personnel
manager’s role is shifting from protector and screener to strategic partner and change agent. The metamorphosis of
personnel into human resource management reflects a fact of corporate life today.

In today’s flattened, downsized and high performing organisations, highly trained and committed employees, not machines,
are often the firm’s competitive key.

A recent study found that 70% of companies with above average financial performance considered employee development
a critical factor in corporate success; they therefore emphasize HR programmes such as leadership training to help build
competitive advantage by developing their human capital.

Personnel Department: Changing Role # 2.

Employee Commitment:
Personnel management/HRM can impact employees’ performance in many ways. High commitment firms tend to engage in
employee development activities which aim to ensure that employees can use all their skills and gifts at work. HR is crucial
for instance, in establishing career oriented performance appraisal procedures and effective training and development
practices.

HR department generally plays the central role in planning and implementing corporate downsizing and then taking steps to
maintain the morale of the existing employees. HR can help employees adapt to the increased pressures in the downsized
departments by helping them learn to prioritise tasks and reduce job stress.
Personnel Department: Changing Role # 3.
HRM and Service:
Employee behaviour is especially important in the performance of service firms like banks and retail establishments. If a
person is confronted by a sales person who is tactless, unprepared to discuss the pros and cons of different
products/services or downright discourteous, all the firm’s other efforts will have been wasted.

Service firms have little to sell but their good service. That makes them very dependent on their employees’ attitudes and
motivation-and on HR management. HRM should build employee commitment and morale, who will then provide excellent
customer service which in turn will generate profits for the organisation.

HRM and Responsiveness:

In making companies better and more competitive, HRM can also help make companies’ faster-more responsive to product
and technological innovations and competitors’ moves. For example, downsizing, flattening the pyramid, empowering
employees and organising around teams all HR jobs-are aimed at improving communications and making it easier for
decisions to be made, so the company can respond more quickly to the customers’ needs and its competitors’ challenges.

Personnel Department: Changing Role # 5.

Research Insight:
That HR practices can improve a firm’s performance is not just intuitively attractive, it is supported by the research evidence.
As two researchers put it, “The most fundamental implication is that the choice of HR system can have an economically
significant effect on firm’s performance.

Research is just beginning to establish the plausible range of these effects, but early work indicates that reasonable
changes in a HR system can affect a firm’s market value by $ 15,000- 45,000 per employee and can affect the probability of
survival for a new firm by as much as 22%.”

Personnel Department: Changing Role # 6.

HRM and Corporate Strategy:
Perhaps the most striking change in the HRM’s role today is its growing involvement in developing and implementing the
company’s strategy. Strategy-the company’s plan for how it will balance its internal strengths and weaknesses with external
opportunities and threats in order to maintain a competitive advantage was traditionally a job mostly for the firm’s line
(operating) managers.
Thus, the chief executive and his staff might decide to enter new markets, drop product lines or embark on a cost cutting
plan. Then he would more or less leave the personnel implications of that plan (hiring or firing workers, etc.) to be carried
out by the HR management.

Role of Personnel Manager or HR Manager

Human resources Managers, nowadays wear many hats. They perform mainly three different types of
roles while meeting the requirements of employees and customers, namely administrative, operational
and strategic.

Administrative Roles:

The administrative roles of human resources management include policy formulation and implementation,
housekeeping, records maintenance, welfare, administrative, legal compliance etc.

Policy maker: The human resource manager helps management in the formation of policies governing
talent acquisition and retention, wage and salary administrative welfare activities, personnel records,
working conditions etc. He also helps in interpreting personnel policies in an appropriate manner.

Administrative expert: The administrative role of an HR Manager is heavily oriented to processing and
record keeping. Maintaining employees file and HR related databases processing employee benefit claims,
answering queries regarding leave, transport and medical facilities, submitting required reports to
regulatory agencies are examples of the administrative nature of HR management. These activities must
be performed efficiently and effectively to meet changing requirements of employees, customers and the
government.

Advisor: It is said that personnel management is not a line responsibility but a staff function. The
personnel manager performs 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 . Personnel advice includes preparation of reports, communication of guidelines for
the interpretation and implementation of policies, providing information regarding labor laws etc.
Housekeeper: The administrative roles of a personnel manager in managing the show include recruiting
pre-employment testing, reference checking, employee surveys, time keeping, wage and salary
administration, benefits and pension administration wellness programs, maintenance of records etc.

Counselor: The personal manager discusses 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 if any.

Welfare officer: Personnel manager is expected to be the Welfare Officer of the company. As a Welfare
officer he provides and maintains (On behalf of the company) canteens, hospitals, crèches, educational
institutes, clubs, libraries, conveyance facilities, co-operative credit societies and consumer stores. Under
the Factories Act, Welfare officers are expected to take care of safety, health and welfare of employees.
The HR managers are often asked to oversee if everything is in line with the company legislation and
stipulation.

Legal consultant: Personnel manager plays a role of grievance handling, settling of disputes, handling
disciplinary cases, doing collective bargaining, enabling the process of joint consultation interpretation and
implementation of various labor laws, contacting lawyers regarding court cases, filing suits in labor courts,
industrial tribunals, civil courts and the like.

In some organizations the above administrative functions are being outsourced to external providers in
recent times, with a view to increasing efficiency as also cutting operational costs. Technology is being
put to good use to automate many of the administrative tasks.

Operational 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 organizations and resolving
differences between employees.

Recruiter: Winning the war for talent has become an important job of HR managers in recent times in
view of the growing competition for people possessing requisite knowledge, skills and experience. HR
managers have to use their experience to good effect while laying down lucrative career paths to new
recruits without, increasing the financial burden to the company.

Trainer developer motivator: Apart from talent acquisition talent retention is also important. To this end,
HR managers have to find skill deficiencies from time to time, offer meaningful training opportunities, and
bring out the latent potential of people through intrinsic and extrinsic rewards which are valued by
employers.

Coordinator /linking pin: The HR manager is often deputed to act as a linking pin between various
divisions / 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.

Mediator: The personnel manager acts as a mediator in case of friction between two employees, groups
of employees, superiors, and subordinates and employees and management with the sole objective of
maintaining industrial harmony.
Top 10 Roles of a Personnel Manager
This article throws light upon the top ten roles of a personnel manager in an organisation.
The roles are: 1. Advisory Role 2. Counselling Role 3. Role of a Change Agent 4. The
Conscience Role 5. Mediator’s Role 6. Liaison Role 7. Legal Role 8. Welfare Role 9.
Controller’s Role 10. Human Relations Role.

Personnel Manager: Role # 1. Advisory Role:

The personnel department has functional relationship with other departments/managers
in the total organisation. As a specialist, the personnel manager advises the heads of
different functional departments on various aspects of human resource management e.g.,
manpower planning, recruitment, selection, training, appraisal, compensation etc.

He represents management in many of the relationships that affect the organisation as a

whole. He is also responsible for conveying the problems, grievances or simply opinions of
workers to management.

The personnel manager should provide suggestions and assistance very tactfully, in order
to win the confidence and cooperation of all the line managers. Staff assistance is likely to
be effective when it is wanted rather than imposed. He has to persuade the line managers
to work with staff specialists and not against them.

Personnel Manager: Role # 2. Counselling Role:

The personnel manager plays the role of a counseller with the employees also. He
discusses the various problems of the employees relating to work, career, their
supervisors, colleagues, health, family, financial, social etc. and suggests them means to
minimise and overcome those problems.

Personnel Manager: Role # 3. Role of a Change Agent:

Personnel manager works as a change agent regarding personnel areas. To be an effective
consultant, he should be familiar with the needs and changing environment of the
business. He should initiate and spearhead necessary improvement in human resource
policies.
As a consultant, he can provide necessary infrastructure and support for organisation
development. He helps in introducing and implementing major institutional changes in
the organisation.

Personnel Manager: Role # 4. The Conscience Role:

While playing the conscious role, the personnel manager informs the management about
the humanitarian approach. He should advise the management about the moral and
ethical obligations towards the employees.

Personnel Manager: Role # 5. Mediator’s Role:

The personnel manager often acts as a mediator in the organisation. Whenever there is a
friction between two employees, two groups of employees, superiors and subordinates and
employees and management, the personnel manager has to act as a mediator, so as to
maintain industrial harmony.

Personnel Manager: Role # 6. Liaison Role:

The personnel manager acts as a representative of the organisation so as to give an overall
picture of the organisational operations to the employees particularly in case of industrial
disputes or grievance redressal. Similarly, he acts as employees’ representative in
representing their problems to the management particularly in concerns where trade
unions are not there.

Personnel Manager: Role # 7. Legal Role:

The personnel manager plays this fire fighting role of grievance handling, settlement of
disputes, handling disciplinary cases, collective bargaining, joint consultation,
interpretation and implementation of various labour laws, contacting lawyers regarding
court cases, filing suits in labour courts, industrial tribunals, civil courts and the like.

Personnel Manager: Role # 8. Welfare Role:

Under Section 49 of the Factories Act, a welfare officer has to be appointed in specific
factories. Personnel manager is expected to be the welfare officer of the company. As a
welfare officer, he provides and maintains (on behalf of the company) canteens, hospitals,
creches, educational institutions, clubs, libraries, conveyance facilities; cooperative credit
societies, consumer stores etc.
Personnel Manager: Role # 9. Controller’s Role:
The personnel manager assists the line managers in effective implementation of personnel
policies and programmes. His advice and service is essential for monitoring and
controlling the progress. As an arm of the top management, the personnel manager
ensures that the personnel policies and procedures approved and adopted by the
management are being consistently carried out in all the departments.

Personnel Manager: Role # 10. Human Relations Role:

Personnel manager is supposed to be an expert in human relations. He is expected to
improve productivity by fulfilling the economic, social and psychological needs and
aspirations of employees. Personnel manager also has to meet the challenge of a fast
changing postindustrial society.

Changing role of HR in Today's Scenario

In 50's and 90's the role of Human Resource Management was more of "Personnel Management", but in the last decade, the
Human Resource rolehas changed from Personnel Management to HR Business Partner. HR Business partner is a major link
between HR and different business units. Also to succeed in the competitive environment of today and the future, it will take
more than market information and trends; which are available. What is most required is work force.

Supporting the business

The Human Resource function must also adapt to the modern business needs – a highly dynamic employee management and
planning team that can respond and adapt to the rapidly varying requirements of an organization or market needs. Human
Resource should be considered as a strategic, incorporated position that directly influences the business’ success because
Human Resource works so closely with its Human resources – the organization’s true competitive advantage. By managing
present, incoming and leaving employees, Human resource ensures the company always has the right people for the right jobs.

Employee engagement

Human Resource must no longer to be seen as an employee’s final option in the case of negative encounters – in truth, modern
Human Resource must be defined by active engagement with employee issues, back the staff members in the workplace,
listening to their concerns, and building a professional and stable relation between Human Resource, employees and managers.

Managing expectations, being flexible, communicating and adequate trainingis one of the most significant factors in keeping
employees contented. Human Resource managers can go further, too – conducting performance appraisals, career
development and up Skilling, developing effective reward systems and designing jobs to fit both the needs of the business and
employees. Taking an active and engaged role in employee happiness promotes better overall performance because it helps to
retain and motivate staff.

Change Management

During changes in the organization Human Resource Managers makes sure that employees are having the necessary skills and
information when an aspect of their work environment changes – example can be, everyone one is trained to operate new
software package that is being used throughout the company or any acquisition or merger has taken place between two
companies. A good change management process makes sure that all the changes go smoothly, with minimal interruption and
maximum involvement from the staff.
Human Resource plays a major role in ensuring that change is carried out according to plan because of its unique position as
the core of all the employee relations. This added dimension hands over the Human Resource Manager a direct role and power
while developing the business, according to the available capabilities, meaning the drastic changes are better through and
presented in a manageable way to the employees who need to work through it.

CURRENT TRENDS IN HUMAN RESOURCE

MANAGEMENT
The Human resource industry is undergoing a major innovative change from last five years. The way of
working and the technical data have collaborated to shape the human resources of an organization.

The emerging role of Chief People Officer and People Scientists works for the employees of the company. This
is done to get an insight about the staff and to retain best people on the job.

LIST OF RECENT HR TRENDS IN 2018

 Chat bots
 Machine Learning
 Artificial Intelligence
 Intelligent learning platforms
 Emergence of new vendors in the recruitment market
 Outsourced Recruitment

Human Resource industry will undergo a drastic transformation in another 5 to 10 years as reported by Gartner
firm.

Virtual Reality, Conversational platforms, and Augmented Reality is supposed to provide immersive and
natural interactions with the digital world.

Here is an expert view of the tech trends that will take place in another 12 months henceforth in the HR
scenario.

FINDING THE RIGHT TECHNOLOGY FOR THE

ORGANIZATION
This is the foremost query needs to sort out before opting for the right technology in the organization.

As an employer, one does not want to keep a toolkit of no use to staff. To run a great company and fit in that
culture, find the perfect people for the right technology and place them there.

The renowned founders states about the areas in which one needs to invest:

 Selection
 Brand of the employer
 Development and Involvement of people through the digital platforms
 The time, money, and environmental saving technologies are priorities.
For instance, the HR needs the technology and digital app tool that connect the people to each other seriously
and emotionally. It does not isolate people for the specific six hours timing in the office. The technology demos
in a week will help them to keep abreast with changing HR technologies.

1. SHIFT TO EMPLOYEES EXPERIENCE

The digitalization age has skillfully shifted the concentration from the employee’s engagement to the
employee’s experiences at the workplace. The world leaders are shifting their emphasis on the core ecosystem
and dimensions like company culture, engagement, and managing of the performance. The focus will be on
the following:

 Seek the employee’s journey map in order to optimize their performances.

 The Company’s HR will have hands on the technological tools like employee wellness apps, pulse feedback
tools, productivity tools and modern communication tools.
 Apps helping in understanding and support in the development of the employee’s organizational experience.

According to Forbes, presently almost 69% of the companies are taking an active interest in their staff’s data as
compared to some 10% to 15% of the organizations before. If the managers are able to analyze the company’s
data carefully, then they can predict about the

 Needs of the staff

 Helps in improving employee’s career
 Productive office atmosphere
 Easy Implementation of the HR process

2. GOOD RISE IN PEOPLE OR HR ANALYTICS

The rises in the people analytics is growing as companies are moving from the back office data of the
warehouses to the advanced people analytics. The organizations have also moved from the reporting through
the dashboards to the predictive models. The companies are buying analytic solutions from the vendors. These
solutions come in the form of

 SAP Success Factors

 ADP
 Oracle
 Workday
 Visier
 Cornerstone
 Ultimate Software

These all have the employee retention predictors and other features that come embedded in their
corresponding software.

The products from the SAP Success Factors and Oracle employ respective employees according to their
activities and the role. The Workday helps in knowing about which job moves are not to be made in order to
get higher performance.

The Cornerstone software forecasts about which employees will lapse in their respective training and
certification program. Bersin states about three major elements involved in the People Analytics as

 AI
 Embedded Analytics
 Organizational Network Analysis
Likewise, Starling Trust provides a system that analyzes the pattern of communication sand e-mails in order to
build the trust network. It helps in predicting the fraud and the security leak in an organization.

3. APPOINTMENT OF THE CONTINGENT WORKFORCE

To find the specialized skills and people for the contractual work the HR uses varied channels to post jobs and
hire the pool of talent. There are mainly two markets involved in hiring the contingent workforce:

1. Contingent Workforce Management system

2. Gig-Work Networks

The first market includes management systems from the Kronos, Fieldglass from the SAP, PeopleFluent,
Beeline, Workday, etc. Few leaders in the market provide software for the vendor management. They make
schedules and time tracking system.

The second market matches the workers with respective projects. They find the workforce from the platforms
like Freelancer, Workpop, Upwork, Fiverr and many others. Instead of working as job platforms, these sites are
now witnessed as skills-management sites and recruiters.

According to an estimate by SHRM, almost 40% of workers are working as a contingent workforce. U.S.
Employee Workforce indicates that this trend is going up in the year 2018 as one can witness an enormous rise
of nearly 115% since the year 2005. Taking the data of U.S.A, almost Nine million employees were remote
workforce from past year and are set to rise in 2018 too. This option actually increases the employees’ job
satisfaction that works as a boost for uplifting their morale.

For example, the sites like Pixelapse work as a collaborated platform for the designers. The GitHub serves as
a platform for recruiting the software engineers.

4. WAVE OF AUGMENTED REALITY AND VIRTUAL REALITY

According to Bersin by Deloitte founder, Josh Bersin the VR and AR are emerging as the hottest trends in the
HR tech market. It supports performance and learning market for the organizational staff.

These technologies provide the simulation process to the learners and teach them on how to react in the real
situations.

The giants like BlackBerry, Google Glass, Lenovo and other popular hardware manufacturers are plunging into
Augmented Reality. They can now easily complement the process of manufacturing and replace kinds of
training in their organizations.

The Virtual Reality helps the organization in the recruitment process as it immerses the candidate in
the real-life work situation. This provides the person the virtual tour of the office and helps them to
experience the organizational culture personally. This makes the recruitment easier as candidates will
be able to analyze what it will be like working for a particular company.

Even the recruiters will come to know how the candidates will react to situations in real-time.

For an example, the VR technology can help the HR in the improvement of the underestimated onboard
experience. AR can help to train the staff in the virtual environment that will prove cost-effective. The
employees can engage themselves in various office activities and learn in a better way.
5. WIDER SHIFT FROM AUTOMATION TO PRODUCTIVITY OF HR
PROCESS
Previously, the focus of the HR department was on automation and integration of Human Resource practices.
For example, they included the record keeping, resume capture, performance appraisal, compensation,
interview and hiring, assessment of employees, etc.

Nowadays, companies are getting very little credit for the automation process (though they are important too)
but the payroll vendors and the HRMS that are cloud-based carry it out. Moreover, the research by the High-
Impact HR shows that nearly 45% of the companies still focus on a basic automation process.

The HIHR now discusses the bigger topic that is productivity. The productivity can be increased in a better way
through

 Quality people
 Optimal usage of the potential of the hired employees
 Considering HR or People Analytics
 Focus on team-centric companies
 Agile workforce

The only challenge in front of the HR is to sort out the issues related to employee’s engagement, focus, and
burnouts. Even HR needs to engage the varied communication tools in order to deal with messages and the E-
mails. For example, to increase the productivity of employees, one can use digital platforms like mobile apps,
social media, AI, etc.

CONCLUSION
The HR world is undergoing a drastic change during the year 2018 seen as the plethora to increase the
involvement of skilled workforce. The idea is to focus on the needs of the employees, their empowerment, well-
being, etc. by employing newer technologies.

The HR must use intelligent tools and the emerging technologies that are based on the conversational and
cognitive systems. For the greater work experience of the employees, the pulse survey and feedback will play
an important role.

What are the recent trends in human resource management?

The world of work is rapidly changing. As a part of organization, Human Resource Management (HRM) must be prepared
to deal with effects of changing world of work. For the HR people it means understanding the implications of
globalization, work-force diversity, changing skill requirements, corporate downsizing, continuous improvement
initiatives, re-engineering, the contingent work force, decentralized work sites and employee involvement for which all
and more have the financial implication to organization. Let alone on the employees side where engagement, satisfaction,
motivation, retention, absenteeism, turnover have to be checked. As a rule human resource management has to venture
into new trends in order to remain relevant corporate development partner. Look at the new trends bellow:

1. Globalization and its implications

Business today doesn’t have national boundaries – it reaches around the world. The rise of multinational corporations
places new requirements on human resource managers. The HR department needs to ensure that the appropriate mix of
employees in terms of knowledge, skills and cultural adaptability is available to handle global assignments. In order to
meet this goal, the organizations must train individuals to meet the challenges of globalization. The employees must have
working knowledge of the language and culture (in terms of values, morals, customs and laws) of the host country.
Human Resource Management (HRM) must also develop mechanisms that will help multicultural individuals work
together. As background, language, custom or age differences become more prevalent, there are indications that employee
conflict will increase. HRM would be required to train management to be more flexible in its practices. Because
tomorrow’s workers will come in different colors, `nationalities and so on, managers will be required to change their ways.
This will necessitate managers being trained to recognize differences in workers and to appreciate and even celebrate
these differences.

2. Work-force Diversity

In the past HRM was considerably simpler because our work force was strikingly homogeneous. Today’s work force
comprises of people of different gender, age, social class sexual orientation, values, personality characteristics, ethnicity,
religion, education, language, physical appearance, marital status, lifestyle, beliefs, ideologies and background
characteristics such as geographic origin, tenure with the organization, and economic status and the list could go on.
Diversity is critically linked to the organization’s strategic direction. Where diversity flourishes, the potential benefits from
better creativity and decision making and greater innovation can be accrued to help increase organization’s
competitiveness. One means of achieving that is through the organization’s benefits package. This includes HRM offerings
that fall under the heading of the family friendly organization. A family friendly organization is one that has flexible work
schedules and provides such employee benefits such as child care. In addition to the diversity brought by gender and
nationality, HRM must be aware of the age differences that exist in today’s work force. HRM must train people of different
age groups to effectively manage and to deal with each other and to respect the diversity of views that each offers. In
situations like these a participative approach seems to work better.

3. Changing skill requirements

Recruiting and developing skilled labor is important for any company concerned about competitiveness, productivity,
quality and managing a diverse work force effectively. Skill deficiencies translate into significant losses for the
organization in terms of poor-quality work and lower productivity, increase in employee accidents and customer
complaints. Since a growing number of jobs will require more education and higher levels of language than current ones,
HRM practitioners and specialists will have to communicate this to educators and community leaders etc. Strategic
human resource planning will have to carefully weigh the skill deficiencies and shortages. HRM department will have to
devise suitable training and short term programs to bridge the skill gaps & deficiencies.

4. Corporate downsizing.

Whenever an organization attempts to delayer, it is attempting to create greater efficiency. The premise of downsizing is to
reduce the number of workers employed by the organization. HRM department has a very important role to play in
downsizing. HRM people must ensure that proper communication must take place during this time. They must minimize
the negative effects of rumors and ensure that individuals are kept informed with factual data. HRM must also deal with
actual layoff. HRM dept is key to the downsizing discussions that have to take place.

5. Continuous improvement programs

Continuous improvement programs focus on the long term well-being of the organization. It is a process whereby an
organization focuses on quality and builds a better foundation to serve its customers. This often involves a companywide
initiative to improve quality and productivity. The company changes its operations to focus on the customer and to involve
workers in matters affecting them. Companies strive to improve everything that they do, from hiring quality people, to
administrative paper processing, to meeting customer needs.

Unfortunately, such initiatives are not something that can be easily implemented, nor dictated down through the many
levels in an organization. Rather, they are like an organization wide development process and the process must be
accepted and supported by top management and driven by collaborative efforts, throughout each segment in the
organization. HRM plays an important role in the implementation of continuous improvement programs. Whenever an
organization embarks on any improvement effort, it is introducing change into the organization. At this point organization
development initiatives dominate. Specifically, HRM must prepare individuals for the change. This requires clear and
extensive communications of why the change will occur, what is to be expected and what effect it will have on employees.

6. Re-engineering work processes for improved productivity

Although continuous improvement initiatives are positive starts in many of our organizations, they typically focus on
ongoing incremental change. Such action is intuitively appealing – the constant and permanent search to make things
better. Yet many companies function in an environment that is dynamic- facing rapid and constant change. As a result
continuous improvement programs may not be in the best interest of the organization. The problem with them is that they
may provide a false sense of security. Ongoing incremental change avoids facing up to the possibility that what the
organization may really need is radical or quantum change. Such drastic change results in the re-engineering of the
organization.

Re-engineering occurs when more than 70% of the work processes in an organization are evaluated and altered. It requires
organizational members to rethink what work should be done, how it is to be done and how to best implement these
decisions. Re-engineering changes how organizations do their business and directly affects the employees. Re-engineering
may leave certain employees frustrated and angry and unsure of what to expect. Accordingly HRM must have mechanisms
in place for employees to get appropriate direction of what to do and what to expect as well as assistance in dealing with
the conflict that may permeate the organization. For re-engineering to generate its benefits HRM needs to offer skill
training to its employees. Whether it’s a new process, a technology enhancement, working in teams, having more decision
making authority, or the like, employees would need new skills as a result of the re-engineering process.

7. Contingent workforce

A very substantial part of the modern day workforce are the contingent workers. Contingent workers are individuals who
are typically hired for shorter periods of time. They perform specific tasks that often require special job skills and are
employed when an organization is experiencing significant deviations in its workflow. When an organization makes its
strategic decision to employ a sizable portion of its workforce from the contingency ranks, several HRM issues come to the
forefront. These include being able to have these virtual employees available when needed, providing scheduling options
that meet their needs and making decisions about whether or not benefits will be offered to the contingent work force.

No organization can make the transition to a contingent workforce without sufficient planning. As such, when these
strategic decisions are being made, HRM must be an active partner in these discussions. After its entire HRM
department’s responsibility to locate and bring into the organization these temporary workers. As temporary workers are
brought in, HRM will also have the responsibility of quickly adapting them to the organization. HRM will also have to give
some thought to how it will attract quality temporaries. This is sometimes done on consultancy basis. Consultancy work is
often a short time basis and to re-invent the organization’s operation such a workforce of consultancy is vital.

8. Mass Customization

There is a lot going on already within HR concerning mass customization, the optimal combination of mass production
with customization. We’ve seen companies basing employment arrangements on learning styles and personalities,
allowing employees to choose between lower base pay and higher bonuses vs. higher base pay and lower bonuses, and
changing from career ladders with a straight shot to the top to career lattices where a sideways move is considered a good
career move. Here, HR has done a great job of applying HR principles to its own traditional functional processes.

HR will need to take the tools of marketing around customization for consumers and clients and applying them to the task
of talent segmentation. The key is to optimize. At one extreme, a personal employment deal for every individual would be
chaotic. At the other extreme, defining fairness as “same for everyone” risks missing important benefits of customization,
and in fact may be unproductive and unfair.

Thus, HR should develop principles for understanding the optimal level of customization in the employment relationship.
Moreover, because customization will often mean that different groups of employees receive different employment
arrangements based on their needs or the way they contribute, HR must develop principles that equip leaders to explain
these differences to employees. Our work suggests that while many HR managers understand the need for customization
and differentiation in principle, they resist it because they simply don’t feel well-equipped to explain them. It is far easier
to say, “We do the same thing for everyone, so it’s out of my hands.” The concept of fairness is sometimes confused with
treating everyone the same.

9. Decentralized work sites

Work sites are getting more and more decentralized. Telecommuting capabilities that exist today have made it possible for
the employees to be located anywhere on the globe. With this potential, the employers no longer have to consider locating
a business near its work force. Telecommuting also offers an opportunity for a business tin a high cost area to have its
work done in an area where lower wages prevail.
Decentralized work sites also offer opportunities that may meet the needs of the diversified workforce. Those who have
family responsibilities like child care, or those who have disabilities may prefer to work in their homes rather than travel
to the organization’s facility. For HRM, decentralized work sites present a challenge. Much of that challenge revolves
around training managers in how to establish and ensure appropriate work quality and on-time completion. Work at
home may also require HRM to rethink its compensation policy. Will it pay by the hour, on a salary basis, or by the job
performed? Also, because employees in decentralized work sites are full time employees of the organization as opposed to
contingent workers, it will be organization’s responsibility to ensure health and safety of the decentralized work force.

10. Employee involvement

For today’s organization’s to be successful there are a number of employee involvement concepts that appear to be
accepted. These are delegation, participative management, work teams, goal setting, employee training and empowering
of employees. HRM has a significant role to play in employee involvement. What is needed is demonstrated leadership as
well as supportive management. Employees need to be trained and that’s where human resource management has a
significant role to play. Employees expected to delegate, to have decisions anticipatively handled, to work in teams, or to
set goals cannot do so unless they know and understand what it is that they are to do. Empowering employees requires
extensive training in all aspects of the job. Workers may need to understand how new job design processes. They may need
training in interpersonal skills to make participative and work teams function properly.

11. Technology

With the current technological advancement and its projection in the future, it has brought in new eyes in the face of
HRM. A number of computerized systems have been invented to help in the HRM of which they are seen as simplifier of
HR functions in companies. Large or multinational organizations using some of the human resources information systems
are reaping big. You do not have to stay in a particular location to do your duties but you can do on a mobile basis. For
instance the paper work files are being replaced by HRMIS which may be tailor made or Off the Shelf. These systems help
in handling a lot of data on a chip other than having a room full of file shelves.

What HRM is concerned with here is the safety (confidentiality) of the data/information of staff, and therefore it is at the
forefront of having to train personnel in operating such systems and developing the integrity of such personnel to handle
the sensitivity of the matter.

Industrial relations
Industrial relations or employment relations is the multidisciplinary academic field that studies the
employment relationship;[1] that is, the complex interrelations
between employers and employees, labor/trade unions, employer organizations and the state.
The newer name, "employment relations" is increasingly taking precedence because "industrial relations"
is often seen to have relatively narrow connotations.[2] Nevertheless, industrial relations has frequently
been concerned with employment relationships in the broadest sense, including "non-industrial"
employment relationships. This is sometimes seen as paralleling a trend in the separate but related
discipline of human resource management.[3]
While some scholars regard or treat industrial/employment relations as synonymous with employee
relations and labour relations, this is controversial, because of the narrower focus of employee/labour
relations, i.e. on employees or labour, from the perspective of employers, managers and/or officials. In
addition, employee relations is often perceived as dealing only with non-unionized workers, whereas
labour relations is seen as dealing with organized labour, i.e unionized workers.[4][better source needed] Some
academics, universities and other institutions regard human resource management as synonymous with
one or more of the above disciplines,[5]although this too is controversial.
Industrial relations examines various employment situations, not just ones with a unionized workforce.
However, according to Bruce E. Kaufman, "To a large degree, most scholars regard trade
unionism, collective bargaining and labour–management relations, and the national labour policy
and labour law within which they are embedded, as the core subjects of the field."[6]
Initiated in the United States at end of the 19th century, it took off as a field in conjunction with the New
Deal. However, it is generally regarded as a separate field of study only in English-speaking countries,
having no direct equivalent in continental Europe.[7] In recent times, industrial relations has been in decline
as a field, in correlation with the decline in importance of trade unions[6] and also with the increasing
preference of business schools for the human resource management paradigm.[8]
Industrial relations has three faces: science building, problem solving, and ethical.[9] In the science building
phase, industrial relations is part of the social sciences, and it seeks to understand
the employment relationship and its institutions through high-quality, rigorous research. In this vein,
industrial relations scholarship intersects with scholarship in labour economics, industrial
sociology, labour and social history, human resource management, political science, law, and other areas.
Industrial relations scholarship assumes that labour markets are not perfectly competitive and thus, in
contrast to mainstream economic theory, employers typically have greater bargaining power than
employees. Industrial relations scholarship also assumes that there are at least some inherent conflicts of
interest between employers and employees (for example, higher wages versus higher profits) and thus, in
contrast to scholarship in human resource management and organizational behaviour, conflict is seen as
a natural part of the employment relationship. Industrial relations scholars therefore frequently study the
diverse institutional arrangements that characterize and shape the employment relationship—from norms
and power structures on the shop floor, to employee voice mechanisms in the workplace, to collective
bargaining arrangements at company, regional, or national level, to various levels of public policy
and labour law regimes,[citation needed] to varieties of capitalism[10] (such as corporatism, social democracy,
and neoliberalism).
When labour markets are seen as imperfect, and when the employment relationship includes conflicts of
interest, then one cannot rely on markets or managers to always serve workers' interests, and in extreme
cases to prevent worker exploitation. Industrial relations scholars and practitioners, therefore, support
institutional interventions to improve the workings of the employment relationship and to protect workers'
rights. The nature of these institutional interventions, however, differ between two camps within industrial
relations.[11]The pluralist camp sees the employment relationship as a mixture of shared interests and
conflicts of interests[12] that are largely limited to the employment relationship. In the workplace, pluralists,
therefore, champion grievance procedures, employee voice mechanisms such as works
councils and trade unions, collective bargaining, and labour–management partnerships. In the policy
arena, pluralists advocate for minimum wage laws, occupational health and safety standards, international
labour standards, and other employment and labour laws and public policies.[13] These institutional
interventions are all seen as methods for balancing the employment relationship to generate not only
economic efficiency but also employee equity and voice.[14] In contrast, the Marxist-inspired critical camp
sees employer–employee conflicts of interest as sharply antagonistic and deeply embedded in the socio-
political-economic system. From this perspective, the pursuit of a balanced employment relationship gives
too much weight to employers' interests, and instead deep-seated structural reforms are needed to
change the sharply antagonistic employment relationship that is inherent within capitalism. Militant trade
unions are thus frequently supported.
Industrial Relations
“Industrial relationship is about the relationship between an employee and management. This page carries
information about Industrial relations and its concept through definition and description of industrial
relation.”
Industrial relations has become one of the most delicate and complex problems of modern industrial
society. Industrial progress is impossible without cooperation of labors and harmonious relationships.
Therefore, it is in the interest of all to create and maintain good relations between employees (labor) and
employers (management).
Industrial relation is defined as relation of Individual or group of employee and employer for engaging
themselves in a way to maximize the productive activities.
In the words of Lester, “Industrial relations involve attempts at arriving at solutions between the conflicting
objectives and values; between the profit motive and social gain; between discipline and freedom,
between authority and industrial democracy; between bargaining and co-operation; and between
conflicting interests of the individual, the group and the community.

Concept of Industrial Relations

The term ‘Industrial Relations’ comprises of two terms: ‘Industry’ and ‘Relations’. “Industry” refers to “any
productive activity in which an individual (or a group of individuals) is (are) engaged”. By “relations” we
mean “the relationships that exist within the industry between the employer and his workmen.” The term
industrial relations explains the relationship between employees and management which stems directly or
indirectly from union-employer relationship.
Industrial relations are the relationships between employees and employers within the organizational
settings. The field of industrial relations looks at the relationship between management and workers,
particularly groups of workers represented by a union. Industrial relations are basically the interactions
between employers, employees and the government, and the institutions and associations through which
such interactions are mediated.
The term industrial relations has a broad as well as narrow outlook. Originally, industrial relations was
broadly defined to include the relationships and interactions between employers and employees. From this
perspective, industrial relations covers all aspects of the employment relationship, including human
resource management, employee relations, and union-management (or labor) relations. Now its meaning
has become more specific and restricted. Accordingly, industrial relations pertains to the study and
practice of collective bargaining, trade unionism, and labor-management relations, while human resource
management is a separate, largely distinct field that deals with nonunion employment relationships and
the personnel practices and policies of employers.
The relationships which arise at and out of the workplace generally include the relationships between
individual workers, the relationships between workers and their employer and the relationships between
employees. The relationships employers and workers have with the organizations are formed to promote
their respective interests, and the relations between those organizations, at all levels. Industrial relations
also includes the processes through which these relationships are expressed (such as, collective
bargaining, workers’ participation in decision-making, and grievance and dispute settlement), and the
management of conflict between employers, workers and trade unions, when it arise

.
Topics On Trade Union Collective Bargaining And Industrial Disputes

Trade Unions Collective Bargaining

Objectives of Trade Unions Functions of Industrial Relations

Reason for Joining Trade Unions Causes of Industrial Disputes

Trade Unionism

Importance of Trade Unions Strikes

Facts and Figures of Trade Unions Analysis of Strikes

Code of Ethics Lockouts

Causes of Industrial Disputes

Labour Market Prohibition of Strikes and Lockouts

Importance of Collective Bargaining Grievances

Collective Bargaining Process Grievance Procedure

Levels of Collective Bargaining Women Employment and Welfare

Characteristics of Collective Bargaining Employment in India

Forms of Collective Bargaining Organized and Unorganized Labour

Employee Welfare Labour Welfare Fund

Employee Welfare Schemes Employee Health

Factories Act and Labour Welfare Issues of Employee Health

Need for Industrial Relation

Need of Industrial Relation has arisen to defend the interest of workers for adjusting the reasonable salary
or wages. It also helps the workers to seek perfect working condition for producing maximum output.
Workers/employees are concerned with social security measures through this. Industrial Relations is also
needed for achieving the democracy by allowing worker to take part in management, which helps to
protect human rights of individual.Salaries in India are much more attractive in Indian subcontinent. As
India is having flourishing economy, the job opportunities are emerging and there is huge scope of
expansion. The salary pattern of India is also growing. Even, the seventh pay commission is also
spreading the way to coming soon. The Salaries of private sector is also in the upswing mode with the
increase of 11% annually. Although, Inflation is one of the major factor which nullify the increase in the
salary. But still, the inflation is lower than the increase in the salary. So, this can be seen as increase in
the salary.
The National Commission on Labor (NCL) also emphasize on the same concept. According to NCL,
industrial relations affect not merely the interests of the two participants- labor and management, but also
the economic and social goals to which the State addresses itself. To regulate these relations in socially
desirable channels is a function, which the State is in the best position to perform In fact, industrial relation
encompasses all such factors that influence behaviour of people at work. A few such important factors are
below:
In fact, industrial relation encompasses all such factors that influence behaviour of people at work. A few
such important factors are below:
Characters
It aims to study the role of workers unions and employers€™ federations officials, shop stewards,
industrial relations officers/ manager, mediator/conciliators / arbitrator, judges of labor court, tribunal etc.
Institution
It includes government, employers, trade unions, union federations or associations, government bodies,
labor courts, tribunals and other organizations which have direct or indirect impact on the industrial
relations systems.
Methods
Methods focus on collective bargaining, workers participation in the industrial relations schemes, discipline
procedure, grievance redressal machinery, dispute settlements machinery working of closed shops, union
reorganization, organizations of protests through methods like revisions of existing rules, regulations,
policies, procedures, hearing of labor courts, tribunals etc.
Contents
It includes matter pertaining to employment conditions like pay, hours of works, leave with wages, health,
and safety disciplinary actions, lay-off, dismissals retirements etc., laws relating to such activities,
regulations governing labor welfare, social security, industrial relations, issues concerning with workers
participation in management, collective bargaining, etc.

Industrial Relations
Definition: The Industrial Relations or IR encompasses the relationship between the management and
workmen and the role of a regulatory body to resolve any industrial dispute.

As the name implies, Industry Relations comprises of two words, Industry, and
Relations. Where industry covers the production activity in which the group of workmen is
 engaged in, while the relations show the relationship between the management and the
workers within the industry. IR plays a significant role in today’s working scenario where
the harmonious relationship between the employers and employees is needed to have an
uninterrupted production. The Industrial Relations mainly cover the following:

 Regulatory body to resolve industrial disputes.

 Collective Bargaining.
 The role of management, unions and government.
 Labor Legislation
 Worker’s Grievance Redressal system.
 Disciplinary policy and practice.
 Industrial Relations Training.

Importance of Industrial Relations

1. Increased Productivity: With amicable industrial relations both the workers and
managers continue to work on their respective position and contribute towards the overall
productivity of the firm. Thus, IR ensures the continuity of production.
2. Reduced Industrial Disputes: An effective IR helps in the reduction of industrial disputes
as both the management and the workers maintain harmonious relations with each other
and work in unison towards the accomplishment of production objective.
3. Increased Morale: The peaceful industrial relations boost the morale level of the
employees as they feel that their interest coincides with that of the employer’s, and their
efforts will result in the overall profitability of the firm.
4. Minimization of Wastage: A good IR ensures reduced wastage as the resources – Man,
Machinery, Material are fully utilized and are effectively contributing towards the overall
productivity of the firm.

Thus, an effective IR is required to ensure higher production at less cost and increased
profits. It covers the system, rules, and procedures to protect the interest of the workmen
and the employers and to regulate the behavior of the employer i.e. the way he treats his
workmen.

Industrial Relations in India: An Overview

IR is dynamic in nature. The nature of IR can be seen as an outcome of complex set of transactions among the major

players such as the employers, the employees, the trade union, and the state in a given socio-economic context. In a sense,

change in the nature of IR has become sine quo non with change in the socio-economic context of a country.
Keeping this fact in view, IR in India is presented under the following two sections:

1. IR during Pre- Independence

2. IR during Post-Independence

1. IR During Pre-Independence:

The structure of the colonial economy, the labour policies of colonial government, the ideological composition of the political

leadership, the dynamics of political struggle for independence, all these shaped the colonial model of industrial relations in

pre-independent India”. Then even union movement was an important part of the independence movement.

However, the colonial dynamics of the union movement along with the aggressiveness of alien capital, the ambivalence of

the native capital and the experience of the outside political leadership frustrated the process of building up of industrial

relations institutions. Other factors like the ideology of Gandhian class harmony, late entry of leftists and the bourgeois

character of congress also weakened the class approach to the Indian society and industrial conflict”.

Till the Second World War, the attitude of the colonial government toward industrial relations was a passive regulator only

Because, it could provide, that too only after due pressure, the —um of protective and regulative legal framework for

industrial relations Trade Union Act 1926 (TL A) Trade Disputes Act 1929 (TDA). It was the economic emergence of the

Second World War that altered the colonial government’s attitude on industrial relations.

The state intervention began in the form of introduction of several war time measures, viz. the Defense of India Rules (Rule

81- A), National Service (Technical Personnel) Ordinance, and the Essential Service (Maintenance) Ordinance As such in a

marked contrast to its earlier stance, the colonial government imposed extensive and pervasive controls on industrial

relations by the closing years of its era-. Statutory regulation of industrial relations was on plank of its labour policy. The joint

consultative institutions were established primarily to arrive at uniform and agreeable labour policy.

The salient features of the colonial model of IR can be summarized as close association between political and trade union

movement, dominance of ‘outsiders’ in the union movement, state intervention and federal and tripartite consultations.

The eve of Independence witnessed several instances that served as threshold plank for IR during post Independence era.

The prominent instances to mention are passing of Indian Trade Unions (Amendment) Act, 1947, Industrial Employment
(Standing Orders) Act 1946, Bombay Industrial Relations Act, 1946, and Industrial Disputes Act, 1947 and split in AITUC

and formation of INTUC.

2. IR During Post-Independence:

Though Independent India got an opportunity to restructure the industrial relations system the colonial model of IR remained

in practice for sometimes due to various reasons like the social, political and economic implications of partition, social

tension, continuing industrial unrest, communist insurgency, conflict, and competition in the trade union movement. In the

process of consultation and confrontation, gradually the structure of the industrial relations system (IRS) evolved.

State intervention in the IRS was a part of the interventionist approach to the management of industrial economy. Several

considerations like unequal distribution of power in the labour market, neutrality of the state, incompatibility of free collective

bargaining institution with economic planning etc. provided moral justification for retaining state intervention in the IRS. State

intervention in the IRS is logical also when the state holds large stakes in the industrial sector of the economy.

However state intervention does not mean suppression of trade unions and collective bargaining institution. In fact, state

intervention and collective bargaining were considered as complementary to each other. Gradually, various tripartite and

bipartite institutions were introduced to supplement the state intervention in the IRS.

The tripartite process was considered as an important instrument of involving participation of pressure groups in the state

managed system. Non formal ways were evolved to do what the formal system did not legistate, for one reason or other.

The political and economic forces in the mid 1960s aggravated industrial conflict and rendered non-formal system

ineffective. In the process of reviewing the system, National Commission on Labour (NCL) was appointed in 1966.

Now the focus of restructuring shifted from political to intellectual. However, yet another opportunity was lost when there

was an impasse on the NCL recommendations in 1972. The Janta Government in 1978 made, of course, a half-hearted

attempt to reform industrial relations. Unfortunately, the attempt met with strong opposition from all unions. The BMS, for

example, termed it as “a piece of anti-labour, authoritarian and dangerous legislation””.

Several committees were appointed to suggest measures for reforming die IRS. In the process, tripartism was revived in

1980s. Government passed the Trade unions and the Industrial Disputes (Amendment) Bill, 1988. But, it also proved yet
another legislative disaster. The bill was severely criticised by the left parties. It was even viewed by some as a deliberate

attempt to destroy “autonomous; organised or militant trade union movement”.

In consequence, the tripartite deliberations held at the ILC in 1990 decided three measures to reform IR in India:

(i) To constitute a bipartite committee of employers and unions to formulate proposals for a comprehensive legislation;

(ii) To withdraw the Trade Union and the Industrial Disputes (Amendment) Bill, 1988

(iii) To consider the possibility of formulating a bill on workers’ participation in management, 1990. In the 33 rd session of ILC,

another bipartite committee was constituted to recommend changes in the TU and ID Acts. The government introduced a

Bill on Workers, Participation in Management in Parliament in 1990

Thus, the striking feature of the history of IR in India has been that it is dynamic in nature. Particularly since 1991 i.e., the

inauguration of liberalization process, die IR in India is marked by new challenges like emergence of a new breed of

employees (popularly termed as ‘knowledge workers’), failure of trade union leadership, economic impact, and employers’

insufficient response”.

MEANING AND DEFINITION OF INDUSTRIAL RELATION

The relationship between Employer and employee or trade unions is called Industrial
Relation. Harmonious relationship is necessary for both employers and employees to
safeguard the interests of the both the parties of the production. In order to maintain good
relationship with the employees, the main functions of every organization should avoid
any dispute with them or settle it as early as possible so as to ensure industrial peace and
higher productivity. Personnel management is mainly concerned with the human relation
in industry because the main theme of personnel management is to get the work done by
the human power and it fails in its objectives if good industrial relation is maintained. In
other words good Industrial Relation means industrial peace which is necessary for better
and higher productions.

Concept of Industrial Relations:

The term ‘Industrial Relations’ comprises of two terms: ‘Industry’ and ‘Relations’. “Industry”
refers to “any productive activity in which an individual (or a group of individuals) is (are)
engaged”. By “relations” we mean “the relationships that exist within the industry between the
employer and his workmen.”.
The term industrial relations explains the relationship between employees and management
which stem directly or indirectly from union-employer relationship.

Definitions:
The term ‘industrial relations’ has been variously defined. J.T. Dunlop defines industrial
relations as “the complex interrelations among managers, workers and agencies of the
governments”.
According to Dale Yoder “industrial relations is the process of management dealing with
one or more unions with a view to negotiate and subsequently administer collective
bargaining agreement or labour contract”.
The HR Employee Relations Manager directs the organization's employee relations function.
They develop employee relations policies and ensure consistent application of company policies
and procedures. In addition, they are responsible for employee dispute resolution procedures,
performing internal audits, and taking appropriate action to correct any employee relations issues.

The School of Industrial and Labor Relations at Cornell University was the world's first school for
college-level study in HR located in Ithaca, New York, USA. ILR (Industrial and Labor Relations)
specializes in the fields of human resource management, labor relations, and dispute resolution.
The Center for Human Resources at the University of Pennsylvania was founded in 1921. The
Center's mission is to foster research on the strategic role of HR management in such areas as
employment, labor relations, public policy, diversity, and training and education. The Center
supports its mission through research, regular meetings, information bulletins, and conferences
and public forums.

Importance of Industrial Relations:

The healthy industrial relations are key to the progress and success. Their significance may be
discussed as under –

 Uninterrupted production – The most important benefit of industrial relations is that this
ensures continuity of production. This means, continuous employment for all from manager
to workers. The resources are fully utilized, resulting in the maximum possible production.
There is uninterrupted flow of income for all. Smooth running of an industry is of vital
importance for several other industries; to other industries if the products are
intermediaries or inputs; to exporters if these are export goods; to consumers and workers,
if these are goods of mass consumption.

 Reduction in Industrial Disputes – Good industrial relations reduce the industrial

disputes. Disputes are reflections of the failure of basic human urges or motivations to
secure adequate satisfaction or expression which are fully cured by good industrial
relations. Strikes, lockouts, go-slow tactics, gherao and grievances are some of the
reflections of industrial unrest which do not spring up in an atmosphere of industrial peace.
It helps promoting co-operation and increasing production.
  High morale – Good industrial relations improve the morale of the employees. Employees
work with great zeal with the feeling in mind that the interest of employer and employees is
one and the same, i.e. to increase production. Every worker feels that he is a co-owner of
the gains of industry. The employer in his turn must realize that the gains of industry are
not for him along but they should be shared equally and generously with his workers. In
other words, complete unity of thought and action is the main achievement of industrial
peace. It increases the place of workers in the society and their ego is satisfied. It naturally
affects production because mighty co-operative efforts alone can produce great results.

 Mental Revolution – The main object of industrial relation is a complete mental revolution
of workers and employees. The industrial peace lies ultimately in a transformed outlook on
the part of both. It is the business of leadership in the ranks of workers, employees and
Government to work out a new relationship in consonance with a spirit of true democracy.
Both should think themselves as partners of the industry and the role of workers in such a
partnership should be recognized. On the other hand, workers must recognize employer’s
authority. It will naturally have impact on production because they recognize the interest of
each other.

 Reduced Wastage – Good industrial relations are maintained on the basis of cooperation
and recognition of each other. It will help increase production. Wastage of man, material
and machines are reduced to the minimum and thus national interest is protected.

Thus, it is evident that good industrial relations is the basis of higher production with minimum
cost and higher profits. It also results in increased efficiency of workers. New and new projects
may be introduced for the welfare of the workers and to promote the morale of the people at
work. An economy organized for planned production and distribution, aiming at the realization of
social justice and welfare of the massage can function effectively only in an atmosphere of
industrial peace. If the twin objectives of rapid national development and increased social justice
are to be achieved, there must be harmonious relationship between management and labor.

Objectives of Industrial Relations:

The main objectives of industrial relations system are:-

1. To safeguard the interest of labor and management by securing the highest level of mutual
understanding and good-will among all those sections in the industry which participate in the
process of production.
2. To avoid industrial conflict or strife and develop harmonious relations, which are an essential factor
in the productivity of workers and the industrial progress of a country.
3. To raise productivity to a higher level in an era of full employment by lessening the tendency to high
turnover and frequency absenteeism.
4. To establish and promote the growth of an industrial democracy based on labor partnership in the
sharing of profits and of managerial decisions, so that ban individuals personality may grow its full
stature for the benefit of the industry and of the country as well.
 5. To eliminate or minimize the number of strikes, lockouts and gheraos by providing reasonable
wages, improved living and working conditions, said fringe benefits.
6. To improve the economic conditions of workers in the existing state of industrial managements and
political government.
7. Socialization of industries by making the state itself a major employer
8. Vesting of a proprietary interest of the workers in the industries in which they are employed.

International Labor Organization (ILO)

What Is the International Labor Organization?
The International Labor Organization is a United Nations (UN) agency that aims to "promote decent work throughout the
world."

Understanding the International Labor Organization (ILO)

The International Labor Organization's (ILO) was founded in 1919 and incorporated into the UN as a specialized agency in
1946. The organization's goal is to serve as a uniting force between governments, businesses, and workers. It emphasizes
the need for workers to enjoy "conditions of freedom, equity, security, and human dignity" through their employment.

The ILO promotes international labor standards through its field offices in Africa, Latin America and the Caribbean, the Arab
States, Asia and the Pacific, and Europe and Central Asia. The organization provides training on fair employment
standards, provides technical cooperation for projects in partner countries, analyzes labor statistics and publishes related
research, and regularly holds events and conferences to examine critical social and labor issues. The ILO was awarded the
Nobel Peace Prize in 1969.

International Labour Organization (ILO), specialized agency of the United Nations (UN) dedicated to
improving labour conditions and living standards throughout the world. Established in 1919 by the Treaty of Versailles as
an affiliated agency of the League of Nations, the ILO became the first affiliated specialized agency of the United Nations in
1946. In recognition of its activities, the ILO was awarded the Nobel Prize for Peace in 1969.
The functions of the ILO include the development and promotion of standards for national legislation to protect and improve
working conditions and standards of living. The ILO also provides technical assistance in social policy and administration
and in workforce training; fosters cooperative organizations and rural industries; compiles labour statistics and conducts
research on the social problems of international competition, unemployment and underemployment, labour and industrial
relations, and technological change (including automation); and helps to protect the rights of international migrants
and organized labour.
In its first decade the ILO was primarily concerned with legislative and research efforts, with defining and promoting proper
minimum standards of labour legislation for adoption by member states, and with arranging for collaboration among
workers, employers, government delegates, and ILO professional staff. During the worldwide economic depression of the
1930s the ILO sought ways to combat widespread unemployment. With the postwar breakup of the European colonial
empires and the expansion of ILO membership to include poorer and less developed countries, the ILO addressed itself to
new issues, including the social problems created by the liberalization of international trade, the problem of child labour, and
the relationship between working conditions and the environment.
Among intergovernmental organizations the ILO is unique in that its approximately 175 member states are represented not
only by delegates of their governments but also by delegates of those states’ employers and workers, especially trade
unions. National representatives meet annually at the International Labour Conference. The ILO’s executive authority is
vested in a 56-member Governing Body, which is elected by the Conference. The International Labour Office
in Geneva, Switzerland, composed of the permanent Secretariat and professional staff, handles day-to-day operations
under the supervision of an appointed director general. The ILO has international civil servants and technical-assistance
experts working in countries throughout the world. Among the ILO’s many publications are the International Labour
Review and the Year Book of Labour Statistics.

The International Labour Organization (ILO) is a UN specialized agency which seeks the promotion of
social justice and internationally recognized human and labour rights. The ILO was founded in 1919 and
became the first specialized agency of the United Nations in 1946.

The ILO has four principle strategic objectives:

 to promote and realize standards and fundamental principles and rights at work;
 to create greater opportunities for women and men to secure decent employment;
 to enhance the coverage and effectiveness of social protection for all;
 to strengthen tripartism and social dialogue.

These objectives are realized in a number of ways:

 formulation of international policies and programmes to promote basic human rights, improve
working and living conditions, and enhance employment opportunities;
 creation of international labour standards in the form of Conventions and Recommendations,
backed by a unique system to supervise their application;
 an extensive programme of international technical cooperation;
 training, education, research, and publishing activities to help advance all of these efforts.

The ILO has a tripartite structure unique in the United Nations, in which employers and workers’
representatives – the “social partners” of the economy – have an equal voice with those of
governments in shaping its policies and programmes. The ILO also encourages this tripartism
within its member States by promoting a "social dialogue" between trade unions and employers in
the formulation and implementation of national policy on social, economic and many other issues.
The International Labour Organization (ILO) was founded in 1919 and became the first
specialized agency of the United Nations in 1946. It is the only tripartite agency in the U.N. and
is composed of government, employer and worker representatives. Through the ILO, 183
member states freely and openly debate and elaborate labor standards and policies. [1]

Accordingly, the ILO enables and addresses:

 Tripartism and social dialogue

 International labour standards

 Working out of Poverty

The organization shares the belief that work is central to people's well-being. "Our vision is
based on the premise that universal, lasting peace can be established only if it is based upon
decent treatment of working people." [2]

Mission and Objectives

The organization's mission is to promote rights at work, encourage decent employment
opportunities, enhance social protection, and strengthen dialogue in handling work-related
issues that pertain to freedom, equity, security and human dignity. The ILO acknowledges the
link between labor peace to prosperity and Progress and as such, the success of the
organization's work can serve as an indicator of progress.

Four strategic objectives have been outlined by the ILO:

 Promote and realize standards and fundamental principles and rights at work
 Create greater opportunities for women and men to decent employment and income
 Enhance the coverage and effectiveness of social protection for all
 Strengthen tripartism and social dialogue [3]

International Labour Organization

The International Labour Organization (ILO) was created in 1919. Since 1946 the ILO is a specialized
agency of the UN. The Organization aims at promoting social and economic progress and improving
labour conditions.
The main functions of the ILO are the following:
 creation of coordinated policies and programs directed at solving social and labour issues;
 adoption of international labour standards in the form of conventions and recommendations
and control over their implementation;
 assistance to member-states in solving social and labour problems;
 human rights protection (the right to work, freedom of association, collective negotiations,
protection against forced labour, protection against discrimination, etc.);
 research and publication of works on social and labour issues.
The basis of the ILO is the tripartite principle, i.e. the negotiations within the Organization are held
between the representatives of governments, trade unions, and member-states’ employers.
187 conventions and recommendations on social and labour issues have been adopted since 1919.

The International Labour Conference (ILC) is the ILO superior body convened at least once a year.

The Conference deals with examining and adopting the international norms in the social and labour
sphere, and with discussing universally important questions.

The Governing Body is the ILO executive body which directs the Organization’s activities in the period
between the ILC sessions and defines the order of the Conference decisions’ implementation. The
Governing Body meets three times a year.

The International Labour Office is the ILO permanent secretariat.

The Republic of Belarus has been an ILO member-state since 1954. Belarus ratified 49 ILO
conventions, including 8 fundamental conventions.

Membership in the ILO allows Belarus to study and apply the international practice of settlement of
social and labor issues, to develop social partnership (government – trade unions – employers), to
improve and regulate the labor market. Participation in the work of ILO helps to develop labor laws
based on global experience, to promote entrepreneurship, to solve the problems of employment.

The Republic of Belarus interacts with the ILO on improving the conduct of collective bargaining,
resolving labor disputes and mediation.

The main body cooperating with the ILO is the Ministry of Labour and Social Security of Belarus (the
resolution No.877 ”On Cooperation of the Republic of Belarus with International Organizations and
Interstate Formations“ adopted by the Council of Ministers of the Republic of Belarus on November
21, 2017).

Tripartite Bodies:
The principals and policies of the tripartite body have been a machinery of consultancy at the industrial
and national levels. The tripartite body was established to make peace and improve relations between
management and unions, and maintain smooth functioning of union management relations. It began as a
statutory organization by the recommendation of the Whitey Commission to the ILO in 1931. The
tripartite body had to be sufficiently large to ensure sufficient representation of the various interests
involved; encourage representatives of employers, labor and government to meet regularly; and disallow
individual members from making individual contributions to meetings.

Purpose of Tripartite Body:

a. Bring the aggravated parties together for mutual settlement of differences, and encourage a spirit of
cooperation and goodwill.

b. Promote uniformity in labor laws and legislation.

c. Discuss all matters of All India importance as between employers and employees.

d. Determine a plan for settlement for all disputes.

Fundamentals of Industrial Settlement:

1. Both parties have to realize that the country is breaking away from the past, and this is going to put continuous pressure
on the quality of man-power and demands from human resources.

2. Both parties have to realize that to run a successful and profitable business, team work is extremely important. This
gives rise to timely response and supply of goods to the society.

3.Both the parties accept the charters of "Human Resources Policy" summarized below:

a. Individuals must make every effort to improve their job skills through training and participating in developmental
activities.
 b. Each employee must keep his/her job skills up-to-date with changing business practices and operations.
c. Machineries should be used throughout the year with trained staff readily available to operate it.
d. Indirect employees may be converted to direct employees for increasing business efficiency.
e. Absenteeism and unnecessary delays must be reduced through planning.
f. Short-term employment must be avoided. Long-term employment should be encouraged and highly trained employees
must be hired.
g. The above steps must be utilized to increase company productivity; exploitation of employees must be disallowed.
h. High emphasis must be placed upon the quality of work. The Zero Defect policy must be always followed.
i. Employees must make a stand to follow the "Human Resources Policy" individually or collectively.
j. Both the parties should closely and routinely monitor change in productivity, and take necessary steps to avoid
undesirable consequences.

TRIPARTITE BODIES
 The tripartite body was established to make peace and improve relations between management
and unions, and maintain smooth functioning of union management relations. The tripartite body
had to be sufficiently large to ensure sufficient representation of the various interests involved;
encourage representatives of employers, labor and government to meet regularly; and disallow
individual members from making individual contributions to meetings.
 The aim of the consultative machinery is “to bring the parties together for mutual settlement of
differences in a spirit of cooperation an goodwill” Thus these bodies play the role of consultants.
 The principals and policies of the tripartite body have been a machinery of consultancy at the
industrial and national levels and have shaped Industrial relations in India
 Industrial relations in India have been shaped largely by principles and policies evolved through
tripartite consultative machinery at the industry and national levels.

The purpose of the tripartite body is to

1. Bring the aggravated parties together for mutual settlement of differences, and encourage a
spirit of cooperation and goodwill.
2. Promote uniformity in labor laws and legislation.
3. Discuss all matters of All India importance as between employers and employees.
4. Determine a plan for settlement for all disputes.

TRIPARTITE BODIES – INDIA

 Some of the notable tripartite bodies are-
 The Indian Labour Conference (ILC)
 The Standing Labour Committee (SLC)
 The Committee on Conventions
 The Industrial committee

Other bodies of tripartite nature which deals in various aspects of labour problems -

 Steering Committee on Wages

 Central Implementation and Evaluation Machinery
  Central Boards of Workers’ Education
 National Productivity Council

Indian Labour Conference (ILC) and Standing Labour Committee (SLC) are both important
constituents of tripartite bodies and play a vital role in shaping the IR system of the country. They
have been constituted to suggest ways and means to prevent disputes. The representatives of the
workers and employers are nominated to these bodies by the Central Government in consultation
with the All-India organisations of workers and employers.
The Labour Ministry settles the agenda for ILC/SLC meetings after taking into consideration the
suggestions sent to it by member organisations. These two bodies work with minimum procedural
rules to facilitate free and fuller discussions among the members. The ILC meets once a year,
whereas the SLC meets as and when necessary.

 The function of ILC is to “ advise the Government of India on any matter referred to it for advice,
taking into account suggestions made by the provincial government, the states and representative
of the organisations of workers and employers”
 The function of SLC is to “ consider and examine such questions as may be referred to it by the
Central Government and to render advice, taking into account the suggestions made by various
governments, workers and employers”.

COMMITTEE ON CONVENTIONS
 Committee in Conventions is a tripartite committee set up in 1954. The object was
 To examine the ILO conventions and recommendations which have not so far been
ratified by India.
 To make suggestions with regard to a phased and speedy implementation of ILO
standards.
 It is generally composed of eminent jurists appointed by the Governing Body for three-year
terms. The Experts come from different geographic regions, legal systems and cultures. The
Committee's role is to provide an impartial and technical evaluation of the state of
application of international labour standards.

Industrial Committee
 Industrial Committees are tripartite bodies where the number of workers’ representatives are equal
to the employers’ representatives.
 These were set up to discuss various specific problems special to the industries covered by them
and suggest ways to overcome them.
 These committees provide a forum for the discussion of proposals for legislation and other matters
connected with the labour policy and administration before they brought before the legislature.
 Other tripartite Committees
1. Steering Committee on Wages: It was set up in 1956 and consists of
representatives of state government, employers, workers and an economist.
Its functions were (i)To study trends in wages, production and price. (ii)To
draw a wage map of India (iii)To help laying down principles which will guide
wage fixing authorities
2. Central Boards of Workers’ Education: This was constituted to
encourage growth of strong and well informed trade union movement on
responsible and constructive lines and comprised of representatives of
central & state government, employers and workers
3. National Productivity Council: It encouraged the productivity in the
country and consists of the government, employers’ associations, labourers’
association & organisations and independent experts.
4. Central Implementation and Evaluation Machinery: This is set up to
ensure proper implementation of labour awards, agreements and Code of
Discipline. It consists of 4 representatives each of central employers’ and
workers’ organisations with union labour minister as chairman

Trade unions in India

Trade Unions in India are registered and file annual returns under the Trade Union Act (1926). Statistics
on Trade Unions are collected annually by the Labour Bureau of the Ministry of Labour, Government of
India. As per the latest data, released for 2012, there were 16,154 trade unions which had a combined
membership of 9.18 million (based on returns from 15 States - out of a total of 36 States).[1] The Trade
Union movement in India is largely divided along political lines and follows a pre-Independence pattern of
overlapping interactions between political parties and unions. The net result of this type of system is
debated as it has both advantages and disadvantages. Bharatiya Mazdoor Sangh is the Largest Trade
union of India.[2]
The firm or industry level trade unions are often affiliated to larger Federations. The largest Federations in
the country represent labour at the National level and are known as Central Trade Union Organisations
(CTUO). As of 2002, when the last Trade Union verification was carried out, there are 12 CTUOs
recognised by the Ministry of Labour.[3]
 RECOGNITION OF A UNION - INDUSTRIAL
RELATIONS MANAGEMENT
A recognized trade union represents workers in negotiations with their employer. These negotiations
will usually centre on workers’terms and conditions.
When an employer recognizes a trade union, it will be for bargaining on behalf of a particular group of
workers. This group is often called a‘bargaining unit’.
An independent trade union recognized by an employer has certain legal rights. These include the
rights for its:
a. officials to be given time off work by the employer to carry out their trade union duties
b. members to be given time off work to take part in trade union activities
c. officials to be given information by the employer that they can use in collective bargaining with the
employer
d. learning representatives to be given time off for their duties in relation to the learning and training of
employees and to have training to carry out those duties
An independent trade union recognized by an employer also has the right to be consulted by the employer about
certain issues. These include:
 health and safety matters
 when the employer is thinking about making a group of workers that includes trade union members
redundant
 when the transfer of the employer’s business is being considered
A trade union can become recognized by making a voluntary agreement or following a statutory procedure
involving the Central Arbitration Committee(CAC).

Voluntary recognition
If your employer does not recognize a trade union in your workplace, then a trade union can become recognized
by making a voluntary agreement with your employer. This is the way most recognition arrangements in the UK
are established.

Statutory recognition
If your employer will not make a voluntary agreement with a trade union, then the trade union can follow a
statutory procedure for recognition. The statutory procedure applies to employers that have 21 or more workers.

“recognition” means recognition given by an employer in accordance with the provisions of

these Regulations to a trade union of employees recognising it as the negotiating body for
collective bargaining under Part III of the Act.
Trade union of employees may claim recognition
3.—(1) A trade union of employees may serve on an employer a claim for recognition in Form A
set out in the Schedule.
(2) An employer upon whom a claim for recognition has been served shall, within 7 working days
after the service of the claim, either give recognition to the trade union or, if he disputes the claim,
notify the Commissioner in writing his grounds for not giving recognition.
(3) Upon receipt of a notification from an employer under paragraph (2), the Commissioner may in
his discretion by notice in writing inform the employer that a secret ballot shall be taken in accordance
with such directions as the Commissioner may give.
(4) A copy of a notice, served on the employer under paragraph (3), shall be sent to the trade union
or, if there is more than one trade union of employees, the trade unions of employees concerned.

Commissioner may require assistance from trade union and employer

4.—(1) When the Commissioner has served a notice on the employer under regulation 3(3), the
employer and the trade union or trade unions of employees concerned shall furnish the Commissioner
with such information as he may require and shall give every assistance to the Commissioner to enable
him to conduct the secret ballot in accordance with the decision of the Commissioner under
regulation 3(3).
(2) No person, employer or trade union of employees shall in any way obstruct the taking of the
secret ballot.
(3) The Commissioner shall, as soon as the results of the secret ballot are known, communicate the
results to the employer and the trade union or trade unions of employees concerned.
(4) When the results of a secret ballot have been communicated to an employer under paragraph (3),
the employer shall, if the results of the secret ballot show that the majority of the employees entitled to
vote are members of a particular trade union of employees, give recognition to that trade union within 3
working days of the date of the receipt of the results.

Secret ballot
5.—(1) Subject to paragraph (2), all persons employed by the employer on the date on which a
claim for recognition is served shall be entitled to vote in a secret ballot.
(2) The following persons shall not be entitled to vote in a secret ballot:
(a) partners in a partnership business;
(b) persons employed after the date on which a claim for recognition has been served;
(c) persons employed temporarily for a period not exceeding 3 months;
(d) persons who are on probation and who have been on probation for less than 3 months on the
date on which a claim for recognition is served.
(3) Any dispute between an employer and a trade union or trade union of employees as to whether
any employee is entitled to vote in a secret ballot, in accordance with paragraph (1), shall be referred to
the Commissioner whose decision shall be final.
Employer to communicate with recognised trade union
6. An employer who gives recognition to a trade union of employees under regulation 3(2) or 4(4)
shall communicate such recognition to the trade union of employees in Form B set out in the Schedule.

Trade union to claim recognition

7. No trade union of employees shall serve a claim for recognition within 6 months of the date of a
secret ballot.

Penalties
8. Any —
(a) person who contravenes regulation 4(2);
(b) employer who contravenes regulation 3(2) or regulation 4(1), (2) or (4); or
(c) trade union of employees which contravenes regulation 4(1) or (2) or regulation 7,
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000.

Problems Facing Industrial Relations

Industrial relations is a fancy word that really means the ways in which senior- and mid-level managers
at your company interact with rank-and-file employees. Regardless of your organizational structure,
there will always be challenges in employee relations that you must handle before these challenges
become major problems. These challenges are the result of the divide that exists at your company
between those who make decisions and those who must implement those decisions. Understanding the
common problems faced by employees in organization is the key to maintaining a harmonious
relationship between management and staff.

Lack of Privacy

One of the biggest challenges of employee relations is the fact that there is no presumption of privacy when
business owners hire employees. Many companies have policies that allow security personnel to monitor
internet use, phone calls, voicemails, and email correspondence. Technology has also increased the problems
faced by employees in organization because of the increased intrusion of video and audio surveillance. When
employees feel as if every move they make is being monitored, they lose trust in upper management and
company leaders.

It's an "Us Against Them" Mentality

Another of the pressing problems faced by employees in organization is that many workers believe that a
significant divide exists between a company's workers and managers. This is a natural reaction by a group of
people who understand that they must often subordinate their own desires to implement the will of
management. This division can cause a number of issues, such as contract negotiation problems and strikes,
which can require the intervention of trade and labor unions. However, if you establish the proper balance
between empowering your employees, and maintaining a chain-of-command, you can help resolve one of the
biggest challenges in industrial relations.

Inflexibility of Employer

Business owners that run their companies like an autocracy, can trigger challenges in industrial relations
because they create an inflexible environment. When an employer is inflexible, it can stifle employee creativity,
especially if employees believe that management doesn’t solicit their ideas and suggestions, and is hostile to
any suggestions or ideas that employees do make. The problem is that when management restricts creativity
and imagination, it can also stifle innovation and compromise the company’s competitive position within its
industry. Employers that allow employees to participate in running the company by soliciting, and using their
ideas and suggestions often find a more productive business environment.

Gender Wage Disparity

In some companies, the gap between what a woman earns for a position versus what a man earns for the
same position, is another significant challenge in industrial relations. Although the latest research suggests that
the gender pay gap is narrowing, many instances still exist in which women discover that they are being paid
less than a male colleague for the same work. This can create conflict, especially if a company’s management
is predominantly male. Although there are multiple factors that can lead to a gender pay gap, the usual
perception of female employees is that management may not value their contribution as much as they do that
of male employees. Business owners that are proactive at ensuring that those men and women who have
similar skills, talents, and prior experience, will earn the same wage -- and this can help prevent this problem.

Narrow Focus of Employees

Another issue that arises out of industrial relations is the narrow focus that some employees have about their
role in a company. An employee might regard his task as only a job that he must complete, rather than a role
he can examine as to how he benefits the organization. Many employees see their managers as people who
give orders, rather than as facilitators who can help employees achieve professional goals. Forward-thinking
business owners, who embrace a team concept and who give employees latitude to develop ideas and make
important decisions without oversight, can offset this problem.
Roles And Responsibilities Of Trade Union
Management Essay
Trade Union is defined in the Employment Relations Act 2008 (Appendix 1) as “an association of
persons, whether registered or not, having as one of its objects the regulation of employment
relations between workers and employers”

The Trade Union or Labour Union movement is a continuous and voluntary association whose
membership comprises of salary earners, employees and union leaders. Those members have
bonded together motivated by a simple motto “Unity makes strength”. Workers will therefore
utilise trade unions as their representative voice when dealing with employers or on the board of
directions.

Independently, the workers do not bear the power to defy the top management. Therefore they
grouped and seek to institute their terms and conditions of employments. When they realised
that negotiating as an individual, the manager would be more powerful, due to the fact that an
individual would not matter as much a group in regard of running an organisation.

According to Cunnison, “Trade Union is a monopolistic combination of wage earners who stand
to the employers in a relation of dependence for the sale of their labour and even for the
production, and that the general purpose of the association in view of that dependence is to
strengthen their power to bargain with the employers”

The main role of trade union is to ensure the welfare of its members such as safeguarding the
interests of its members, protecting the reliability of its trade, achieving higher wages by securing
economic benefits. It also optimises the working conditions at the workplace and guarantees a
job security while protecting members against unfair dismissal at workplace.

Through its leadership, trade union engages in collective bargaining, whereby labour contracts
are negotiated with the employers. Also it acts as a recruiting manager, the Union leaders
interfere with the recruitment and selection of the company, its intention is to maximise the
number of employees an employer can hire.

2.2 Hierarchy of Trade Unions

There is a hierarchy in Unions, we had identified; the confederation, the federations and the trade
unions. Regarding the confederation, there are one main which is Mauritius Labour Congress and
it is affiliated to the International Confederation of Free Trade Unions (ICFTU).In the category of
federation there are; National Trade Union Confederation (NTUC) which is affiliated with the
International Trade Union Confederation (ITUC) and the Mauritius Trade Union Congress (MTUC).
Finally, the trade unions which are affiliated to the NTUC; The Federation of Civil Service Unions,
Federation of Progressive Unions, Federation des Travailleurs Unis, Confederation Mauriciennes
des Travailleurs, General Workers Federation and Federation of Free Workers.

2.3 Structure of Trade Union

The trade unions structure is divided into several parts, namely:

The Annual Delegates Congress

It is the authority which governs the federation.

The Executive Council

It comprises of one representative of each affiliates which is usually the secretary or the president
and the Bureau members and two observers per affiliates. Once every two months they conduct
meeting regarding applications for affiliates from trade unions and affiliation of the Federation to
any local, regional or international organisation promoting the interest of the workers and to
discuss disagreements between different affiliates. Meeting can be scheduled on the demand of
the President or the Bureau or of the members of the Executive Council too.

The Bureau

It comprises of the President, the General Secretary and the eight elected members. Among them,
one is the 1st Vice president and another is the 2nd vice president, a 3rd as Assistant Treasurer
and a fourth one who is the organising secretary.

President

He represents the Federation and he is the spokesman of the federation.

General secretary

The General Secretary arranges meetings and draw up the minutes of the meeting. Along with the
General Secretary, Deputy General Secretary and the Assistant General make up the Secretariat of
Federation.

Treasurer

He is in charge of the accounts of the federation.

Organising Secretary

He is in charge of organising events like training sessions, seminars, workshop among others.
Public Relation Officer

He deals with the media for conferences, coverage, reports and other information that will be
published by the media.

2.4 Nature and Scope of Trade Union

The existence of an influential and recognised trade union is a pre-requisite to the industrial
development pace of the country. With modernization in different sectors and the formation of
new one such as the technological one as well as the tourism sector, human resources were
required. However, mistreatment of the Mauritian labour force appears. This is where the trade
union emerged; they ensured that the human rights of their members are respect as per the laws
and the constitution.

Trade Unions are currently considered as a sub-system which attends a precise sub-groups
interest. When defending a particular sector they consider themselves as an integral part of the
organisation in respect to the feasibility, growth and development of the community of which
they formed part of.

The influence of Trade Unions is of key importance for their members in the following ways:

First, they are more effective and efficient when the need of negotiation is required between
employers and employees by attempting to create a win-win situation.

They facilitate the flow of communication between workers and the management, by providing
the guidance and support to both of them.

The Union leaders will seek a health and safety in the working environment.

In addition, they also act as an educational institution; they provide different types of courses to
their members.

They also accelerate the pace of economic development for instance; they act as a recruiting and
selecting agent for the unemployed workers, managing conflicts in the organisation, inculcating
corporate social responsibilities to the members among others.

2.5 Objectives of trade unions.

The main body of a trade union usually consists of individual workers, sometimes professionals
and past workers. Their primary aim is to ensure that the employment conditions of employees
are respected and that fair working conditions are offered. However, trade unions also engage in
issues like:

Negotiation
Representation

Information and advice

Member services

Negotiation
One of the main targets of trade unions is to negotiate with employers about the matters
affecting their members and other employees at work. If a union is formally recognised by an
employer, it can negotiate with the employer over terms and conditions. These negotiations are
commonly known as ‘collective bargaining’.

Any trade union works to protect and advance the interests of its members. One of the ways it
achieves this is by collectively bargaining with employers about the pay and conditions under
which its members work. The negotiation process normally deals with matters such as working
rules and regulations, complaint procedures, hiring principle, dismissing or promoting employees,
workplace safety and policies etc. Some trade unions even have the power to negotiate rates of
pay, bonuses for target achievement, employment conditions and job descriptions on behalf of
the employees. For collective bargaining to be effective, unions and employers need to agree on
how the arrangement is to operate. The objective of that collective bargaining or negotiation
process is to settle with a mutual agreement also known as ‘collective agreement’ between the
management and the trade union.

Representing Body
Employees and other workers have the right to be accompanied at a disciplinary or grievance
hearing. They can either choose a co-worker or a union representative. Often, the union
representative, will be a workplace representative who is also a co-worker and will support the
employee on the board meeting.

Information and Advice

If someone forms part of a union he/she can also ask them for advice. Unions are experts at
solving problems at work. Trade unions provide staff with information, advice and guidance about
any work related problems.

Member Service
Trade unions provide its members with a variety of services such as training, insurance, financial
assistance and legal advices, sickness benefits, education facilities in some cases, guarantee of
satisfactory work conditions in areas such as health and safety as well as equal opportunities.

Voice in decision affecting Workers

Trade unions act as a “spokesperson” for the staff. When matters concerning an individual
employee or a group of workers arise, the trade unions job is to voice out the problem in order to
negotiate for a solution. In case no agreement is settled or respected, the trade union members
may enforce strikes or resistance to lockouts. They can also intervene in order to resist schemes of
the management which reduce employment, e.g. restructuring and automation

2.6 Types of Trade Union

Craft or Occupation Union.

This type of union was the earliest type developed, it comprised of employees of a particular craft
or skill regardless of place of work. The advantage of craft unionism is the sense of solidarity, as
there is a feeling of common interest between the members. In addition, as this union bears
skilled workers, they have a good economic position for collective bargaining. On the other side,
more and more new mechanical devices were being developed, the need for large numbers of
skilled workers decreased.

One- Shop Union or House Union

The one-shop union organizes all workers in the same establishment or factory. This type of union
has the advantage of being relatively easy to organize because all workers share a common goal
in securing a good collective agreement for their particular factory. However, as it is small, it has
little bargaining power and it is easily dominated by management.

Common Employer Union.

2.7 Characteristic of Trade Union

Trade unions have shown remarkable progress since their inception in Mauritius and as the union
is an essential and dynamic aspect of the society it bears special characteristics such as:

Trade Union come together for common goals and interest

The members have some materials of collective interest such as improving working conditions,
better wages, benefits, job security among others. The trade unions have the right to contest a
managerial decision, if they considered that their members are at risk with the outcome.

Trade Union is an association of workers and salary earners:

Unions are essentially a cooperative labour marketing association whose aim is to safeguard
human rights on one or more labour market. In addition, they also bear a hand in the progress of
the society, cultural interest and political views of its members.

Trade unions have been implemented so as each sector of the working class bear a specific union.
Mauritius therefore bears different Union association such as:

Agricultural Research & Extension Unit (AREU)

Mauritius Labour Congress (MLC)

Mauritius Trade Union Congress (MTUC)

National Trade Union Confederation (NTUC)

Trade Unions are basically voluntary organizations:

Members of any trade union are voluntary in nature. They are completely free to become a
member of a Trade Union or not; none is constrained to subscribe to a Trade Union. If any
individual is forced to join a Union, the very essence of trade of trade unionism is defeated.

Unions are egalitarian bodies:

The Unions are self-governed; this is the reason why they can effectively act in our society. The
union leaders are voted by the members and perform as per the Trade Union Act.

The Trade Union is a continuous association

Union is not a daily affair. In order to work effectively for their adherents they ask a long term
membership

Constant evolution in the characteristic of Trade Union

With this dynamic era, the union continually update their techniques and amend their work. With
new complications in the workplace, the unions need to find infinite approaches so as to serve the
union members.

Rapport with the Management:

The unions have the responsibility to improve the employers and employees relationship. They go
through the process of negotiation and collective bargaining with the direction of the members’
organisation concerning their problems. In so doing, the employer and employee relationship is
enriched and enhance the quality and welfare of the employees.

2.8 Functions of Trade Unions

Broadly speaking, trade unions perform two types of functions:

Militant Function
Amongst the various activities performed by trade unions is the betterment of the position of
their members in relation to their employment. The aim of such activities is to ensure that all the
clauses of the hiring and psychological contract are respected. When the union fails to accomplish
these aims through collective bargaining and negotiation, in extreme conditions they adopt
drastic measures in the form of go-slow, strike, boycott, work sabotage etc. to make the
management react and reconsider their requests. Hence, these functions of the trade unions are
known as militant or fighting functions.

Fraternal Function
Another actions performed by trade unions are to provide help to its members in needy times,
and improving their efficiency. Trade unions try to nurture a spirit of cooperation, mutual aid and
promote friendly relationships and sharing of knowledge and culture among their colleagues. In
some cases, they also arrange for legal assistance. Besides, these, they undertake many welfare
measures for their members, e.g., school for the education of children, library, reading-rooms, in-
door and out-door games, and other recreational facilities. These activities, which may be called
fraternal functions, obviously depend on the availability of funds, which the unions raise by
subscription from members and donations from outsiders, and also on their competent and
enlightened leadership. Another broad classification of the functions of unions may be as follows:

Intra-mural activities: These deals with whatever happens on the site of work and has direct
impact on employees e.g. wages, strikes…

Extra-mural activities: These activities help the employees to maintain and improve their efficiency
or productivity e.g., methods intended to foster a spirit of cooperation, promote friendly
relations…

Political activities: Modern trade unions also take up political activities to achieve their objectives.
Such activities may be related to the formation of a political party or those reflecting an attempt
to seek influence on public policy relating to matters connected with the interests of working
class

Other Functions
Trade unions have a number of functions, one more important than the other depending on the
situations; however the five main general principles developed have been:

The service function

The representative function

The regulatory function

The government function

The public administration function

The service function

This involves the delivery of services and assistance to the union members.

The representative function

This implies that the trade union will act like a delegate for the members at the workplace.

The regulatory function

This enables trade unions to actively participate in rule-making over the workplace. This can be
done either:

directly – multi-employer collective bargaining e.g. through the Joint Industrial Council

Or
indirectly – through regulatory legislation

The government and public administration function

Trade unions engage with the government to assure that they can accomplish their respective
function within the law.

Trade unions also play an important role in:

improving bottom-up communication in order to increase commitment of employees in meeting
the organization’s objectives
negotiating improvements to pay and working conditions to retain the people
encouraging companies to invest in training and development for better performance and
personal as well as professional development of employees
acting as a positive change agent thus gaining employees’ support for the smooth running of the
organization
Protecting the interests of employees by taking active participation in the management.
safeguarding organizational stability, growth, and leadership
unit 5
Collective bargaining
Collective bargaining is a process of negotiation between employers and a group of employees aimed at
agreements to regulate working salaries, working conditions, benefits, and other aspects of workers'
compensation and rights for workers. The interests of the employees are commonly presented by
representatives of a trade union to which the employees belong. The collective agreementsreached by these
negotiations usually set out wage scales, working hours, training, health and
safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs.[1]
The union may negotiate with a single employer (who is typically representing a company's shareholders) or
may negotiate with a group of businesses, depending on the country, to reach an industry-wide agreement. A
collective agreement functions as a labour contractbetween an employer and one or more unions. Collective
bargaining consists of the process of negotiation between representatives of a union and employers (generally
represented by management, or, in some countries such as Austria, Sweden and the Netherlands, by
an employers' organization) in respect of the terms and conditions of employment of employees, such as
wages, hours of work, working conditions, grievance procedures, and about the rights and responsibilities of
trade unions. The parties often refer to the result of the negotiation as a collective bargaining agreement (CBA)
or as a collective employment agreement (CEA).

Collective Bargaining: Definition, Types, Features and

Importance
Definition of Collective Bargaining:
Industrial disputes between the employee and employer can also be settled by discussion and negotiation
between these two parties in order to arrive at a decision.

This is also commonly known as collective bargaining as both the parties eventually agree to follow a
decision that they arrive at after a lot of negotiation and discussion.

According to Beach, “Collective Bargaining is concerned with the relations between unions reporting
employees and employers (or their representatives).

It involves the process of union organization of employees, negotiations administration and interpretation
of collective agreements concerning wages, hours of work and other conditions of employees arguing in
concerted economic actions dispute settlement procedures”.

According to Flippo, “Collective Bargaining is a process in which the representatives of a labor

organization and the representatives of business organization meet and attempt to negotiate a contract or
agreement, which specifies the nature of employee-employer union relationship”.

“Collective Bargaining is a mode of fixing the terms of employment by means of bargaining between
organized body of employees and an employer or association of employees acting usually through
authorized agents. The essence of Collective Bargaining is bargaining between interested parties and not
from outside parties”.
According to an ILO Manual in 1960, the Collective Bargaining is defined as:
“Negotiations about working conditions and terms of employment between an employer, a group of
employees or one or more employers organization on the other, with a view to reaching an agreement.”

It is also asserted that “the terms of agreement serve as a code defining the rights and obligations of each
party in their employment relations with one another, if fixes large number of detailed conditions of
employees and during its validity none of the matters it deals with, internal circumstances give grounds for
a dispute counseling and individual workers”.

Collective Bargaining Involves:

(i) Negotiations

(ii) Drafting

(iii) Administration

(iv) Interpretation of documents written by employers, employees and the union representatives

(v) Organizational Trade Unions with open mind.

Forms of Collective Bargaining:

The working of collective bargaining assumes various forms. In the first place, bargaining may be between
the single employer and the single union, this is known as single plant bargaining. This form prevails in the
United States as well as in India.

Secondly, the bargaining may be between a single firm having several plants and workers employed in all
those plants. This form is called multiple plants bargaining where workers bargain with the common
employer through different unions.

Thirdly, instead of a separate union bargaining with separate employer, all the unions belonging to the
same industry bargain through their federation with the employer’s federation of that industry. This is
known as multiple employer bargaining which is possible both at the local and regional levels. Instances in
India of this industry-wide bargaining are found in the textile industry.

The common malady of union rivalry, small firms and existence of several political parties has given rise to
a small unit of collective bargaining. It has produced higher labour cost, lack of appreciation, absence of
sympathy and economic inefficiency in the realm of industrial relationships. An industry-wide bargaining
can be favourable to the economic and social interests of both the employers and employees.

Essential Pre-Requisites for Collective Bargaining:

Effective collective bargaining requires the following prerequisites:
(i) Existence of a strong representative trade union in the industry that believes in constitutional means for
settling the disputes.

(ii) Existence of a fact-finding approach and willingness to use new methods and tools for the solution of
industrial problems. The negotiation should be based on facts and figures and both the parties should
adopt constructive approach.

(iii) Existence of strong and enlightened management which can integrate the different parties, i.e.,
employees, owners, consumers and society or Government.

(iv) Agreement on basic objectives of the organisation between the employer and the employees and on
mutual rights and liabilities should be there.

(v) In order that collective bargaining functions properly, unfair labour practices must be avoided by both
the parties.

(vi) Proper records for the problem should be maintained.

vii) Collective bargaining should be best conducted at plant level. It means if there are more than one plant
of the firm, the local management should be delegated proper authority to negotiate with the local trade
union.

(viii) There must be change in the attitude of employers and employees. They should realise that
differences can be resolved peacefully on negotiating table without the assistance of third party.

(ix) No party should take rigid attitude. They should enter into negotiation with a view to reaching an
agreement.

(x) When agreement is reached after negotiations, it must be in writing incorporating all term of the
contract.

It may be emphasised here that the institution of collective bargaining represents a fair and democratic
attempt at resolving mutual disputes. Wherever it becomes the normal mode of setting outstanding issues,
industrial unrest with all its unpleasant consequences is minimised.

Main Features of Collective Bargaining:

Some of the salient features of collective bargaining are:
1. It is a Group Action:
Collective bargaining is a group action as opposed to individual action. Both the parties of settlement are
represented by their groups. Employer is represented by its delegates and, on the other side; employees
are represented by their trade union.
2. It is a Continuous Process:
Collective bargaining is a continuous process and does not end with one agreement. It provides a
mechanism for continuing and organised relationship between management and trade union. It is a
process that goes on for 365 days of the year.

3. It is a Bipartite Process:
Collective bargaining is a two party process. Both the parties—employers and employees— collectively
take some action. There is no intervention of any third party. It is mutual given-and-take rather than take-it-
or-leave-it method of arriving at the settlement of a dispute.

4. It is a Process:
Collective bargaining is a process in the sense that it consists of a number of steps. The starting point is
the presentation of charter of demands by the workers and the last step is the reaching of an agreement,
or a contract which would serve as the basic law governing labour-management relations over a period of
time in an enterprise.

5. It is Flexible and Mobile and not Fixed or Static:

It has fluidity. There is no hard and fast rule for reaching an agreement. There is ample scope for
compromise. A spirit of give-and-take works unless final agreement acceptable to both the parties is
reached.

6. It is Industrial Democracy at Work:

Collective bargaining is based on the principle of industrial democracy where the labour union represents
the workers in negotiations with the employer or employers. Industrial democracy is the government of
labour with the consent of the governed—the workers. The principle of arbitrary unilateralism has given
way to that of self-government in industry. Actually, collective bargaining is not a mere signing of an
agreement granting seniority, vacations and wage increase, by sitting around a table.

7. It is Dynamic:
It is relatively a new concept, and is growing, expanding and changing. In the past, it used to be
emotional, turbulent and sentimental, but now it is scientific, factual and systematic.

8. It is a Complementary and not a Competitive Process:

Collective bargaining is not a competitive process i.e., labour and management do not coopt while
negotiating for the same object. It is essentially a complementary process i.e., each party needs
something which the other party has, namely, labour can put greater productive effort and management
has the capacity to pay for that effort and to organise and guide it for achieving the enterprise’s objectives.

The behavioural scientists have made a good distinction between “distributive bargaining” and “integrative
bargaining”. The former is the process of dividing up the cake which represents what has been produced
by the joint efforts of management and labour.
In this process, if one party wins something, the other party, to continue the metaphor of the cake, has a
relatively smaller size of the cake. So it is a win-lose’ relationship. The integrative bargaining, on the other
hand, is the process where both the parties can win—each party contributing something for the benefit of
the other party.

9. It is an Art:
Collective bargaining is an art, an advanced form of human relations.

Means of Collective Bargaining:

Generally, there are four important methods of collective bargaining, namely, negotiation, mediation,
conciliation and arbitration for the settlement of trade disputes. In this context R.F. Hoxie said that
arbitration is often provided for in collective bargaining under certain contingencies and for certain
purposes, especially when the parties cannot reach agreement, and in the interpretation of an agreement
through negotiation.

Conciliation is a term often applied to the art of collective bargaining, a term often applied to the action of
the public board which attempts to induce collective bargaining.

Mediation is the intervention usually uninvited, of some outside person of body with a view of getting
conciliation or to force a settlement, compulsory arbitration is extreme mediation. All these things are aids
or supplement to collective bargaining where it breaks down. They represent the intervention of outside
parties.

Constituents of Collective Bargaining:

There are three distinct steps in the process of collective bargaining:
(1) The creation of the trade agreement,

(2) The interpretation of the agreement, and

(3) The enforcement of the agreement.

Each of these steps has its particular character and aim, and therefore, each requires a special kind of
intellectual and moral activity and machinery.

1. The Creation of the Trade Agreement:

In negotiating the contract, a union and management present their demands to each other, compromise
their differences, and agree on the conditions under which the workers are to be employed for the duration
of the contract. The coverage of collective bargaining is very uneven; in some industries almost all the
workers are under agreement, while in others only a small portion of the employees of the firms are
covered by the agreement.
The negotiating process is the part of collective bargaining more likely to make headline news and attract
public attention; wage increases are announced, ominous predictions about price increase are reduction
in employment are made.

2. The Interpretation of the Agreement:

The administrative process is the day-to-day application of the provisions of the contract to the work
situation. At the time of writing the contract, it is impossible to foresee all the special problems which will
arise in applying its provisions. Sometimes, it is a matter of differing interpretations of specific clause in the
contract, sometimes; it is a question of whether the dispute is even covered by the contract. Nevertheless,
each case must somehow be settled. The spirit of the contract should not be violated.

3. Enforcement of the Agreement:

Proper and timely enforcement of the contract is very essential for the success of collective bargaining. If
a contract is enforced in such way that it reduces or nullifies the benefits expected by the parties, it will
defeat basic purpose of collective bargaining. It may give rise to fresh industrial disputes. Hence, in the
enforcement of the contract the spirit of the contract should not be violated.

However, new contracts may be written to meet the problems involved in the previous contract.
Furthermore, as day-to-day problems are solved, they set precedents for handling similar problems in
future. Such precedents are almost as important as the contract in controlling the working conditions. In
short, collective bargaining is not an on-and-off relationship that is kept in cold storage except when new
contracts are drafted.

Theories of Collective Bargaining:

There are three important concepts on collective bargaining which have been discussed as
follows:
1. The Marketing Concept and the Agreement as a Contract:
The marketing concept views collective bargaining as a contract for the sale of labour. It is a market or
exchange relationship and is justified on the ground that it gives assurance of voice on the part of the
organised workers in the matter of sale. The same objective rules which apply to the construction of all
commercial contracts are invoked since the union-management relationship is concerned as a commercial
one.

According to this theory, employees sell their individual labour only on terms collectively determined on
the basis of contract which has been made through the process of collective bargaining.

The uncertainty of trade cycles, the spirit of mass production and competition for jobs make bargain a
necessity. The trade union’s collective action provided strength to the individual labourer.

It enabled him to resist the pressure of circumstances in which he was placed and to face an unbalanced
and disadvantageous situation created by the employer. The object of trade union policy through all the
maze of conflicting and obscure regulations has been to give to each individual worker something of the
indispensability of labour as a whole.

It cannot be said whether the workers attained a bargaining equality with employers. But, collective
bargaining had given a new- relationship under which it is difficult for the employer to dispense without
facing the relatively bigger collective strength.

2. The Governmental Concept and the Agreement as Law:

The Governmental Concept views collective bargaining as a constitutional system in industry. It is a
political relationship. The union shares sovereignty with management over the workers and, as their
representative, uses that power in their interests. The application of the agreement is governed by a
weighing of the relation of the provisions of the agreement to the needs and ethics of the particular case.

The contract is viewed as a constitution, written by the point conference of union and management
representative in the form of a compromise or trade agreement. The agreement lays down the machinery
for making executing and interpreting the laws for the industry. The right of initiative is circumscribed
within a framework of legislation.

Whenever, management fails to conform to the agreement of constitutional requirements, judicial

machinery is provided by the grievance procedure and arbitration.

This creates a joint Industrial Government where the union share sovereignty with management over the
workers and defend their group affairs and joint autonomy from external interference.

3. The Industrial Relations (Managerial) Concept as Jointly Decided Directives:

The industrial relations concept views collective bargaining as a system of industrial governance. It is a
functional relationship. Group Government substitutes the State Government. The union representative
gets a hand in the managerial role. Discussions take place in good faith and agreements are arrived at.
The union joins with company officials in reaching decisions on matters in which both have vital interests.
Thus, union representatives and the management meet each other to arrive at a mutual agreement which
they cannot do alone.

To some extent, these approaches represent stage of development of the bargaining process itself. Early
negotiations were a matter of simple contracting for the terms of sale of labour. Developments of the latter
period led to the emergence of the Government theory. The industrial relations approach can be traced to
the Industrial Disputes Act of 1947 in our country, which established a legal basis for union participation in
the management.

Importance of Collective Bargaining:

The collective bargaining advances the mutual understanding between the two parties i.e., employees and
employers.
The role of collective bargaining may be evaluated from the following point of view:
(1) From Management Point of View:
The main object of the organisation is to get the work done by the employees at work at minimum cost
and thus earn a high rate of profits. Maximum utilization of workers is a must for the effective
management. For this purpose co-operation is required from the side of the employees and collective
bargaining is a device to get and promote co-operation. The labour disputes are mostly attributable to
certain direct or indirect causes and based on rumors, and misconceptions. Collective bargaining is the
best remedial measure for maintaining the cordial relations.

(2) From Labour and Trade Union Point of View:

Labour has poor bargaining power. Individually a worker has no existence because labour is perishable
and therefore, the employers succeed in exploiting the labourers.

The working class in united form becomes a power to protect its interests against the exploitation of the
employers through the process of collective bargaining.

The collective bargaining imposes certain restrictions upon the employer. Unilateral action is prevented.
All employees are treated on equal footings. The conditions of employment and rates of wages as
specified in the agreement can be changed only through negotiations with labour. Employer is not free to
make and enforce decisions at his will.

Collective bargaining can be made only through the trade unions. Trade unions are the bargaining agents
for the workers. The main function of the trade unions is to protect the economic and non- economic
interests of workers through constructive programmes and collective bargaining is one of the devices to
attain that objective through negotiations with the employers, Trade unions may negotiate with the
employer for better employment opportunities and job security through collective bargaining.

(3) From Government Point of View:

Government is also concerned with the process of collective bargaining. Government passes and
implements several labour legislations and desires it to be implemented in their true sense. If any person
violates the rules and laws, it enforces them by force.

Collective bargaining prevents the Government from using the force because an amicable agreement can
be reached between employer and employees for implementing the legislative provisions. Labour
problems shall be minimised through collective bargaining and industrial peace shall be promoted in the
country without any force.

Collective bargaining is a peaceful settlement of any dispute between worker and employers and therefore
it promotes industrial peace and higher productivity resulting an increase in the Gross National Product or
the national income of the country.
Main Hindrances for Collective Bargaining:
The main objective of developing collective bargaining technique is to improve the workers-management
relations and thus maintain peace in industries. The technique has developed in India only after India got
independence and got momentum since then.

The success of collective bargaining lies in the attitude of both management and workers which is actually
not consistent with the spirit of collective bargaining in India. There are certain problems which hinder the
growth of collective bargaining in India.

The following factors or activities act as hindrances to effective collective bargaining:

(1) Competitive Process:
Collective bargaining is generally becoming a competitive process, i.e., labour and management compete
each other at negotiation table. A situation arises where the attainment of one party’s goal appears to be
in conflict with the basic objectives of the other party.

(2) Not Well-Equipped:

Both the parties—management and workers—come to the negotiation table without doing their homework.
Both the parties start negotiations without being fully equipped with the information, which can easily be
collected from company’s records. To start with, there is often a kind of ritual, that of charges and counter
charges, generally initiated by the trade union representatives. In the absence of requisite information,
nothing concrete is achieved.

(3) Time to Protest:

The immediate objective of the workers’ representatives is always some kind of monetary or other gains,
accrue when the economy is buoyant and the employer has capacity to pay. But in a period of recession,
when demand of the product and the profits are falling, it is very difficult for the employer to meet the
demands of the workers, he might even resort to retrenchment or even closure collective bargaining is no
answer to such a situation.

(4) Where Prices are Fixed by the Government:

In industries, where the prices of products are fixed by the Government, it becomes very difficult for the
employer to meet the demands of workers which would inevitably lead to a rise in cost of the products
produced. Whereas the supply price to the consumers cannot be increased. It will either reduce the profits
of the firm or increase the loss. In other words, it will lead to closure of the works, which again is not in the
interest of the workers.

(5) Outside Leadership:

Most of the Indian trade unions are led by outsiders who are not the employees of the concerned
organisations. Leader’s interests are not necessarily to be identical with that of the workers. Even when
his bonafides are beyond doubt, between him and the workers he leads, there cannot be the degree of
understanding and communication as would enable him to speak on behalf of the workers with full
confidence. Briefly, in the present situation, without strong political backing, a workers’ organisation cannot
often bargain successfully with a strong employer.

(6) Multiplicity of Trade Unions:

One great weakness of collective bargaining is the multiplicity of trade unions. In a multiple trade union
situation, even a well recognised, union with long standing, stable and generally positive relationship with
the management, adopts a militant attitude as its deliberate strategy.

In Indian situation, inter-union rivalries are also present. Even if the unions combine, as at times they do
for the purpose of bargaining with the employer they make conflicting demands, which actually confuse
employer and the employees.

(7) Appointment of Low-Status Executive:

One of the weaknesses of collective bargaining in India is that the management deputes a low-status
executive for bargaining with the employees. Such executive has no authority to commit anything on
behalf of the management. It clearly indicates that the management is not at all serious and the union
leaders adopt other ways of settling disputes.

(8) Statutory Provisions:

The constraints are also imposed by the regulatory and participative provisions as contained in the
Payment of Wages Act, the Minimum Wages Act, and Payment of Bonus Act etc. Such provisions are
statutory and are not negotiable.

(9) Fresh Demands at the Time of Fresh Agreement:

At the time when the old agreement is near expiry or well before that, workers representatives come up
with fresh demands. Such demands are pressed even when the industry is running into loss or even
during the period of depression. If management accepts the demand of higher wages and other benefits, it
would prefer to close down the works.

(10) Agreements in Other Industrial Units:

A prosperous industrial unit in the same region may agree with the trade unions to a substantial increase
in wages and other benefits whereas a losing industry cannot do that. There is always pressure on the
losing industries to grant wages and benefits similar to those granted in other (relatively prosperous) units
in the same region.

Scope of Collective Bargaining:

Collective bargaining broadly covers subjects and issues entering into the conditions and terms of
employment. It is also concerned with the development of procedures for settlement of disputes arising
between the workers and management.
A few important issues around which collective bargaining enters in this developing country are
as follows:
“Recognition of the union has been an important issue in the absence of any compulsory recognition by
law. In the under-developed countries in Asia, however, on account of the tradition concept of
management functions and the immaturity of the industrialist class there is much resistance from the
employers to recognise the status of the unions.”

Bargaining upon wage problems to fight inflation or rising cost of living and to resist wage cuts during
depression has resulted in several amicable agreements. But, no statistics are available for such amicable
settlements. Therefore, Daya, points out, “It has been customary to view collective bargaining in a pattern
of conflict; the competitively small number of strikes and lock-outs attract more attention than the many
cases of peaceful settlement of differences.”

Another issue on which bargaining takes place is seniority, but in India, it is of less importance than in
western countries. But, in India, lay-off, retrenchment, dismissal, rationalisation and participation in the
union activities have been important issues for collective bargaining.

Regarding bargaining on hours of work, it has recognized that “in one form or another subject of working
time will continue to play an important part in collective bargaining; although the crucial battles may be
well fought in the legislative halls.”

Overtime work, holidays, leave for absence and retirement continue to be issues for bargaining in India,
although they are not regarded as crucial.

The union security has also been an issue for collective bargaining, but it could not acquire much
importance in the country, although stray instances are found. The Tata Workers union bargained with M/s
Tata Iron and Steel Co. Ltd., Jamshedpur, on certain issues, one of which was union security and in the
resulting agreement some of the union security clauses were also included.

The production norms, technical practices, details of working rules, standards of performance, allowance
of fatigue, hiring and firing, protection of life and limb, compensation for overtime, hours of work, wage
rates and methods of wage payments, recognition of unions, retrenchment, union security, holidays and
competence of workmen form the subjects of negotiations and agreements through collective bargaining.
Customary practices are evolving procedures to extend the area of collective bargaining. Collective
bargaining has been giving official sanction to trade experiences and agreements.

Collective bargaining, thus, covers the negotiation, administration, interpretation, application and
enforcement of written agreement between employers and unions representing their employees setting
forth joint understanding, as to policies and procedures governing wages, rates of pay, hours of work and
other conditions of employment.
Collective Bargaining in the Post- Independence Period:
Before Independence, the collective bargaining as it was known and practised was virtually unknown in
India. It was accepted, as a matter of principle, for usage in union management relations by the state.

Though it was emphasised in the First Five Year Plan that the State would encourage mutual settlement,
collective bargaining and voluntary arbitration; to the utmost extent and thereby reduce number of
intervention of the state in union management relations.

However, because of the imperatives of political and economic factors, the State was not prepared to
encourage voluntary arbitrations and negotiations and the resulting show of strength by the parties. The
State, therefore, armed itself with the legal powers which enabled it to refer disputes to an arbitrator or an
adjudicator if the two parties fail to reach a mutually acceptable agreement.

This move of compulsory arbitration and adjudication was opposed by several labour leaders because
they believed that this would destroy the picture of industrial relations in India. Dr. V.V. Giri expressed his
views on this point at the Indian Labour Conference in 1952, “Compulsory arbitration” he declared, “has
cut at the very root of trade union organisation…If the workers find that their interests are best promoted
only by combining, no greater urge is needed to forge a band of strength and unity among them. But
compulsory arbitration sees to it that such a band is not forged… It stands there is a policeman looking out
for signs of discontent, and at the slightest provocation, takes the parties to the court for a dose of costly
and not wholly satisfactory justice.”

Despite this controversy, collective bargaining was introduced in India for the first time in 1952, and it
gradually gained importance in the following years. The information, however, on the growth of collective
bargaining process is very meager, and the progress made in this respect has not been very conspicuous,
though not negligible. The data released by the Labour Bureau show that the practice of determining the
rates of wages and conditions of employment has spread to most of the major segments of the national
economy.

A sample, study covering the period from 1956 to 1960 conducted by the Employer’s Federation of India
has revealed that collective bargaining agreements have been arrived in respect of disputes ranging from
32 to 49 percent. Most of the collective bargaining agreements have been entered into at plant level. In
this connection, the National Commission on Labour has thrown ample light on the progress of collective
agreement.

In its own words, “Most of the collective bargaining (agreements) has been at the plant level, though in
important textile centres like Bombay and Ahmedabad industry level agreements have been (fairly)
common… Such agreements are also to be found in the plantation industry in the South, and in Assam,
and in the coal industry. Apart from these, in new industries—chemicals, petroleum, oil refining and
distribution, aluminium and electrical equipment, automobile repairing—the arrangement for the settlement
of disputes through voluntary agreements have become common in recent years. In the ports and docks,
collective agreements have been the role at individual centres. On certain matters affecting all the ports,
all India agreements have been reached. In the banking industry, after the series of awards, employers
and unions have, in recent years, come closer to reach collective agreements. In the Life Insurance
Corporation (LIC) with the exception of the Employer’s decision to introduce automation which has
disturbed industrial harmony in some centres, there has been a fair measure of discussion across the
table by the parties for the settlement of disputes.”

The collective bargaining reached has been of three types:

(1) Agreement arrived at after voluntary direct negotiations between the parties concerned. Its
implementation is purely voluntary;

(2) Agreements between the two parties, though voluntary in nature, are compulsory when registered as
settlement before a conciliator; and

(3) Agreement which have legal status negotiated after successful discussion between the parties when
the matter of dispute is under reference to industrial tribunal/courts.

Many agreements are made voluntarily but compulsory agreements are not negligible. However, collective
bargaining and voluntary agreements are not as prominent as they are in other industrially advanced
countries. The practice of collective bargaining in India has shown much improvement after the passing of
some legislation like The Industrial Disputes Act 1947 as amended from time to time. The Bombay
Industrial Relations Act 1946 which provided for the rights of workers for collective bargaining. Since then,
a number of collective bargaining agreements have been entered into.

Issues Involved in Collective Agreements:

A study conducted by the Employer’s Federation of India revealed that out of 109 agreements, ‘wages’
was the most prominent issue in 96 cases (88 percent) followed by dearness allowance (59 cases)
retirement benefits (53 cases), bonus (50 cases) other issues involved were annual leave, paid holidays,
casual leave, job classification, overtime, incentives, shift allowance, acting allowance, tiffin allowance,
canteen and medical benefits.

A study of various collective agreements entered into in India, certain trends in collective bargaining are
noticeable.

These are:
(i) Most of the agreements are at plant level. However, some industry-level agreements are also there;

(ii) The scope of agreements has been widening now and now includes matters relating to bonus,
productivity, modernisation, standing orders, voluntary arbitration, incentive schemes, and job evaluation;

(iii) Long term agreements ranging between 2 to 5 years, are on increase;

(iv) Joint consultation in various forms has been provided for in a number of agreements; and feasible and
effective.

Reasons for the Growth of Collective Bargaining:

The growth of collective bargaining in India may be attributed to the following factors:
(1) Statutory Provisions:
Which have laid down certain principles of negotiations, procedure for collective agreements and the
character of representation of the negotiating parties?

(2) Voluntary Measures:

Such as tripartite conferences, joint consultative boards, and industrial committees at the industry level
have provided an ingenious mechanism for the promotion of collective bargaining practices.

(3) Several Governments Measures:

Like schemes for workers’ education, labour participation in management, the evolution of the code of
Inter-union Harmony, the code of Efficiency and Welfare, the Code of Discipline, the formation of Joint
Management Councils, Workers Committees and Shop Councils, and the formulations of grievances
redressal procedure at the plant level— have encouraged the collective bargaining.

(4) Amendments to the Industrial Disputes Act:

The Amendments to the Industrial Disputes Act in 1964 provided for the termination of an award or a
settlement only when a proper notice is given by the majority of workers. Agreements or settlements which
are arrived at by a process of negotiation on conciliation cannot be terminated by a section of the workers.

(5) Industrial Truce Resolution:

The Industrial Truce Resolution of 1962 has also influenced the growth of collective bargaining. It provides
that the management and the workers should strive for constructive cooperation in all possible ways and
throws responsibility on them to resolve their differences through mutual discussion, conciliation and
voluntary arbitration peacefully.

Government Policy to Encourage Collective Bargaining:

Ever since independence, it has been the declared policy of the Central Government to encourage trade
unions development and the settlement of differences in industry by mutual agreement.

Article 19 of the constitution guarantees for all citizens the right to form associations or unions, only by
reserving to the state powers in the interest of public order to impose reasonable restrictions on the
exercise of this right.
The Industrial policy Resolution of 1956 declared that, “in a socialist democracy labour is a partner in the
common task of development”, thus following out the resolution of the Lok Sabha of 1954 which set India
on the path towards a “‘socialistic pattern of society.”

The Second Five Year Plan in 1956 was more specific and declared:
“For the development of an undertaking or an industry, industrial peace is indispensable; obviously, this
can best be achieved by the parties themselves. Labour legislation and the enforcement machinery set up
for its implementation can only provide a suitable framework in which employees and workers can
function.”

Has Government Discouraged Collective Bargaining?

It is obvious, that the declared policy of the government laid emphasis on the voluntary settlement of
differences in industry. But industrial legislation since independence and government intervention to
establish various standards of working conditions and machinery for compulsory arbitration of disputes
have limited the scope of collective bargaining.

The areas that are covered by labour legislation are mainly physical working conditions and terms of
employment, and to the extent that these are prescribed by law the scope of collective bargaining is
limited.

The Industrial Employment (Standing Order) Act, 1948 makes compulsory the drawing up conditions of
employment relating to methods of paying wages, hours of work, over time, shifts, holidays, termination of
employment and disciplinary action, but not through joint negotiation. There is no statutory requirement
that employer should discuss the draft standing orders with the union.

The Minimum Wages Act, also passed in 1948, has given statutory power to appropriate government to fix
minimum wages in certain scheduled employments. The object of this legislation was to secure a
minimum in those occupations or industries where the worker were not sufficiently organised to be able to
negotiate reasonable wages for themselves.

If the government was committed to support the principle of collective bargaining, why no attempt was
made to encourage it by legislation? The Trade Union Amendment Act, passed in 1947, did not in fact
provide for the compulsory recognition by the employers of representative trade unions, but this act was
never notified and so never came into force.

It is arguable that some legislative action to compel recognition of the more stable unions might have
helped to create a better climate for encouragement of voluntary settlement in industry.

The attitude of the management and unions was commonly “Let the issue go to the tribunal”, with the
result that little real effort was made towards mutual settlement and conciliation officers found little
response to their efforts at meditation. References to the adjudication piled up, the industrial tribunals
were overwhelmed with cases, and lengthy delays and general frustration resulted.

From the above facts, it looks that the Government has discouraged the Development of Collective
Bargaining in India. But the truth is that, the Government intention has never been to discourage it. In fact,
the labour in India is not very well organised and it is not expected that it would be able to get its due
share through collective bargaining.

Hence, the government has tried to protect in the interests of labour by passing the various acts such as
the Factory Act of 1948. Employees State Insurance Act, 1948 and Minimum Wages Act. Hence, the
cases involving industrial disputes should be to compulsory arbitration.

Khandubhai Desai, the then Labour Minister, stated in July 1956 that voluntary agreement to refer
questions to arbitration was the best solution. But he added complete laissez-faire is out of date. Society
cannot allow workers or management to follow the law of jungle. Therefore, as a last resort, the
government has taken powers to refer disputes to adjudication.

It has, further, been argued that in a planned economy, the relations between the labour and management
have also to be on planned basis.

They cannot be allowed to upset the production target just because one of the parties would not like to
settle the disputes in fair manner.

Therefore, the Government of India under Industrial Disputes Act 1947 has created the following
seven different authorities for the prevention and settlement of disputes:
1. Workers Committees.

2. Conciliation Officer.

3. Board of Conciliation.

4. Court of Enquiry.

5. Labour Courts.

6. Industrial Tribunals.

7. National Tribunals.

The important characteristic of the above machinery for the prevention and settlement of disputes is that,
there is full scope for the settlement of dispute through collective bargaining and if it is not settled by
Works Committees, Conciliation Officer, Board of Conciliation, only then, it is referred to Court of Enquiry
and Labour Courts. The decision of the Labour Courts, Industrial Tribunal and National Tribunal is binding
on both the parties.

Advantages of Collective Bargaining:

Perhaps the biggest advantage of this system is that, by reaching a formal agreement, both sides come to
know exactly what to expect from each other and are aware of the rights they have. This can decrease the
number of conflicts that happen later on. It also can make operations more efficient.
Employees who enter collective bargaining know they have some degree of protection from employer
retaliation or being let go from the job. If the employer were dealing with just a handful of individuals, he
might be able to afford to lose them. When he is dealing with the entire workforce, however, operations
are at risk and he no longer can easily turn a deaf ear to what his employees are saying.
Even though employers might need to back down a little, this strategy gives them the benefit of being able
to deal with just a small number of people at a time. This is very practical in larger companies where the
employer might have dozens, hundreds or even thousands of workers on his payroll. Working with just a
few representatives also can make the issues at hand seem more personal.
Agreements reached through these negotiations usually cover a period of at least a few years. People
therefore have some consistency in their work environment and policies. This typically benefits the
company’s finance department because it knows that fewer items related to the budget might change.
On a broad scale, using this method well can result in more ethical way of doing business. It promotes
ideas such as fairness and equality, for example. These concepts can spill over into other areas of a
person’s life, inspiring better general behavior towards others.
Disadvantages of Collective Bargaining:
A major drawback to using this type of negotiation system is that, even though everyone gets a say in
what happens, ultimately, the majority rules, with only a few people determining what happens too many.
This means that a large number of people, particularly in the general workforce, can be overshadowed
and feel like their opinion doesn’t really matter. In the worst case scenario, this can cause severe division
and hostility in the group.
Secondly, it always requires at least two parties. Even though the system is supposed to pull both parties
together, during the process of trying to reach an agreement, people can adopt us-versus-them mentality.
When the negotiations are over, this way of looking at each other can be hard to set aside, and unity in
the company can suffer.
Collective bargaining can also be costly, both in terms of time and money. Representatives have to
discuss everything twice—once at the small representative meetings, and again when they relay
information to the larger group. Paying outside arbitrators or other professionals quickly can run up a fairly
big bill, and when someone else is brought in, things often get slower and more complex because even
more people are involved.
Some people point out that these techniques have a tendency to restrict the power of employers.
Employees often see this as a good thing, but from the company’s perspective, it can make even basic
processes difficult. It can make it a challenge to deal with individual workers, for example.
The goal of the system is always to reach a collaborative agreement, but sometimes tensions boil over. As
a result, one or both parties might feel they have no choice but to muscle the other side into giving up.
Workers might do this by going on strike, which hurts operations and cuts into profits. Businesses might
do this by staging lockouts, which prevents members’ of the workforce from doing their jobs and getting
paid, negatively effecting income and overall quality of living.
Lastly, union dues are sometimes an issue. They reduce the amount of take-home pay a person has,
because they usually are deducted right from his paycheck. When things are good in a company and
people don’t feel like they’re getting anything from paying the dues, they usually become unhappier about
the rates.
The idea of collective bargaining emerged as a result of industrial conflict and growth of trade union
movement and was first given currency in the United States by Samuel Crompers. In India the first
collective bargaining agreement was conducted in 1920 at the instance of Mahatma Gandhi to regulate
labour management relation between a group of employers and their workers in the textile industry in
Ahmadabad
Is minimum wage law justified?
Minimum wage law creates issues like unemployment. Yet most countries of the world have minimum
wage law.
The minimum wage law is justified on the following grounds:
(i) First, the problem of unemployment that might erupt is slight exaggeration. Practically labour supply is
heterogeneous consisting of unskilled, skilled, highly specialized and educated labour. All other categories
of labour – other than unskilled and unorganized labour – are paid wages much higher than the minimum
wage fixed by the law.
Therefore, the negative unemployment effective of the minimum wage law is confined to the category of
unskilled labour. Therefore, the minimum wage law of protecting the interest of the weaker section of
labour is not as high as projected above.
(ii) Second, the negative employment effect that minimum wage law may create is moderated by the
positive employment effect of higher wage earnings. Higher wage incomes lead to higher consumption.
Increase in demand for consumer goods, increases demand for labour and also open up new
opportunities for employment. There is, therefore justification of minimum wage law.
(iii) Third, Inflation erodes the real income and real wage. The existence of minimum wage law provides
an opportunity and need for upward revision of the wage rate.
(iv) Fourth, one major purpose of the minimum wage law is to promote social equity through a more
equitable distribution of income.
Workers Participation in
Management : Definition,
Characteristics and Objectives
Definition:
Like other behavioural terms, WPM means different things to different people depending upon their
objectives and expectations. Thus, WPM is an elastic concept. For example, for management it is a joint
consultation prior to decision making, for workers it means co-determination, for trade unions It is the
harbinger of a new order of social relationship and a new set of power equation within organisations, while
for government it is an association of labour with management without the final authority or responsibility
in decision making.

Let us also go through some important definitions of WPM.

According to Keith Davis, “Workers’ participation refers to the mental and emotional involvement of a
person in a group situation which encourages him to contribute to group goals and share in responsibility
of achieving them”.

In the words of Mehtras “Applied to industry, the concept of participation means sharing the decision-
making power by the rank and file of an industrial organisation through their representatives, at all the
appropriate levels of management in the entire range of managerial action”.

A clear and more comprehensive definition of WPM is given by the International Labour Organisation
(ILO).

According to the ILO:

“Workers’ participation may, broadly be taken to cover all terms of association of workers and their
representatives with the decision-making process, ranging from exchange of information, consultations,
decisions and negotiations to more institutionalized forms such as the presence of workers’ members on
management or supervisory boards or even management by workers themselves as practised in
Yugoslavia”.

In Yugoslavia, WPM is governed by the Law on Workers’ Management of State Economic Enterprises and
Higher Economic Association. The Act consists of a three-tier participation structure: collective bargaining,
workers’ council, and hoard of management.

In fact, the basic reason for differences in perception of WPM is mainly due to the differential pattern of
practices adopted by various countries while implementing workers’ participation in management.

For example, in Great Britain and Sweden, WPM is in the form of Joint Consultation through Joint
Consultative Committees, Works Committees in France, Co-determination Committees in West Germany,
Joint Work Council in Belgium, Workers’ Council and Management Board in Yugoslavia and Union
Management Co-operation in USA.

In India, WPM is in the form of, what we call Labour Management Cooperation and Workers’ Participation
in Management. It is implemented through the agencies like Works Committees, Joint Management
Councils (JMCs) Shop Councils, Unit Councils and Joint Councils. Notwithstanding, these different forms
of WPM differ only in degree, not in nature.

Be the perceptual differences as these may, WPM is a system of communication and consultation, either
formal or informal, by which the workers of an organisation are kept informed, as and when required,
about the affairs of the undertaking and through which they express their opinion and contribute to
decision-making process of management.

Characteristics:
The following are the main characteristics of WPM:
1. Participation implies practices which increase the scope for employees’ share of influence in decision-
making process with the assumption of responsibility.

2. Participation presupposes willing acceptance of responsibility by workers.

3. Workers participate in management not as individuals but as a group through their representatives.

4. Worker’s participation in management differs from collective bargaining in the sense that while the
former is based on mutual trust, information sharing and mutual problem solving; the latter is essentially
based on power play, pressure tactics, and negotiations.

5. The basic rationale tor worker’s participation in management is that workers invest their Iabour and their
fates to their place of work. Thus, they contribute to the outcomes of organization. Hence, they have a
legitimate right to share in decision-making activities of organisation.

Objectives:
The objectives of WPM are closely netted to the ration-able for WPM. Accordingly, the objectives of WPM
vary from country to country depending on their levels of socio-economic development political
philosophies, industrial relations scenes, and attitude of the working class.

To quote, the objective of WPM is to co-determine at the various levels of enterprises in Germany, assign
the final to workers over all matters relating to an undertaking in Yugoslavia, promote good communication
and understanding between labour and management on the issues of business administration and
production in Japan, and enable work-force to influence the working of industries in China, for example.

In India the objective of the government in advocating for workers’ participation in management, as stated
in the Industrial Policy Resolution 1956, is a part of its overall endeavour to create a socialist society,
wherein the sharing of a part of the managerial powers by workers is considered necessary.

The objective of WPM, as envisaged in the Second Five Year Plan of India is to ensure:
1. Increase in productivity for the benefit of all concerned to an enterprise, i.e., the employer, the
employees and the community at large.

2. Satisfaction of worker’s urge for self-expression in the matters of enterprise management.

3 Making employees better understood of their roles in the organisation.

In ultimate sense, the objective of WPM in India is to achieve organizational effectiveness and the
satisfaction of the employees.

Accordingly, the objectives of WPM in India are to:

1. Promote mutual understanding between management and workers, i.e., industrial harmony.

2. Establish and encourage good communication system at all levels.

3. Create and promote a sense of belongingness among workers.

4. Help handle resistance to change.

5. Induce a sense among workers to contribute their best for the cause of organisation.

6. Create a sense of commitment to decisions to which they were a party.

Levels of Participation:
Having known the objectives of WPM, the question then is to what extent workers can participate in
decision-making process. In other words, it is important to know the extents/levels of co-determination in
an organisation.

Viewed from this angle, Mehtras has suggested five levels of workers’ participation ranging from the
minimum to the maximum. Since these levels of workers’ influence the process and quality of decision
making in an organisation. We are therefore highlighting here these levels briefly ranking them from the
minimum to the maximum level of participation.

Informative Participation:
This refers to management’s information sharing with workers on such items those are concerned with
workers. Balance Sheet, production, economic conditions of the plant etc., are the examples of such
items. It is important to note that here workers have no right of close scrutiny of the information provided
and management has its prerogative to make decisions on issues concerned with workers.
Consultative Participation:
In this type of participation, workers are consulted in those matters which relate to them. Here, the role of
workers is restricted to give their views only. However the acceptance and non-acceptance of these views
depends on management. Nonetheless, it provides an opportunity to the workers to express their views on
matters involving their interest.

Associative Participation:
Here, the role of the workers’ council is not just advisory unlike consultative participation. In a way, this is
an advanced and improved form of consultative participation. Now, the management is under a moral
obligation to acknowledge, accept and implement the unanimous decision of the council.

Administrative Participation:
In the administrative participation, decisions already taken are implemented by the workers. Compared to
the former three levels of participation, the degree of sharing authority and responsibility by the workers is
definitely more in this participation.

Decisive Participation:
Here, the decisions are taken jointly by the management and the workers of an organisation. In fact, this is
the ultimate level of workers’ participation in management.

Characteristics of workers’ participation in management:

(1) Participation implies mental and emotional involvement rather than muscular activity.

(2) It motivates the employees to contribute their maximum and provides an opportunity to workers to
direct their initiative and creativity towards the objectives of the group.

(3) It encourages people to accept responsibility for an activity as they feel self involved in the group.

Thus, we can conclude that participation provides an opportunity to every member of the organisation to
contribute his brain and ingenuity as well as his physical efforts for the improvement of organisational
effectiveness and at the same time enhancing his own economic welfare. It also develops in them a sense
of organisational loyalty and involvement.

Objectives:
The main aim of business enterprises now-a-days is shifting towards maximisation of economic welfare
rather than the maximisation of profits. The basic idea of labour participation in management is to get the
fullest co-operation of workers. The success of such participation depends on the existence of cordial
industrial relations.

It is not a matter of a man being accorded the privilege of stating a complaint or offering a suggestion, but
of having a recognised responsibility for doing so because he is an employee and, therefore, a joint
partner in the enterprise in which he is investing not money but his life. A close rapport is established
between the employer and employees that motivates them to work together productively and co-
operatively.

The following are the main objectives of workers’ participation in management:

(i) To raise productivity, production and efficiency of workers.

(ii) To improve morale of workers.

(iii) To satisfy the desire of workers for self- expression.

(iv) To promote industrial peace in the concern.

(v) To have better industrial relations and establish harmonious relations between the workers and
management.

(vi) To evoke the fullest collaboration of the employees.

(vii) To encourage social education which promotes solidarity in the working class?
 In a nutshell, Participation aims at increasing production and productivity to strengthen the national
economy and to serve the people in a better way.

Workers Participation in Management in Indian Industries

Workers’ participation in Management in India was given importance only after Independence. Industrial
Disputes Act,1947 was the first step in this direction, which recommended for the setting up of works
committees. The joint management councils were established in 1950 which increased the labour
participation in management. Since July 1975 the two-tier participation called shop councils at shop level
and Joint councils were introduced. Workers’participation in Management Bill, 1990 was introduced in
Parliament which provided scope for up liftment of workers.

Reasons for failure of Workers participation Movement in India:

1. Employers resist the participation of workers in decision-making. This is because they feel that workers
are not competent enough to take decisions.
2. Workers’ representatives who participate in management have to perform the dual roles of workers’
spokesman and a co-manager. Very few representatives are competent enough to assume the two
incompatible roles.
3. Generally Trade Unions’ leaders who represent workers are also active members of various political
parties. While participating in management they tend to give priority to political interests rather than the
workers’ cause.
4. Schemes of workers’ participation have been initiated and sponsored by the Government.However, there
has been a lack of interest and initiative on the part of both the trade unions and employers.
5. In India, labour laws regulate virtually all terms and conditions of employment at the workplace.
Workers do not feel the urge to participate in management, having an innate feeling that they are born to
serve and not to rule.
6. The focus has always been on participation at the higher levels, lower levels have never been allowed to
participate much in the decision-making in the organizations.
7. The unwillingness of the employer to share powers with the workers’ representatives, the disinterest of
the workers and the perfunctory attitude of the government towards participation in management act as
stumbling blocks in the way of promotion of participative management.
Measures for making Participation effective:
1. Employer should adopt a progressive outlook. They should consider the industry as a joint endeavor in
which workers have an equal say. Workers should be provided and enlightened about the benefits of
their participation in the management.
2. Employers and workers should agree on the objectives of the industry. They should recognize and
respect the rights of each other.
3. Workers and their representatives should be provided education and training in the philosophy and
process of participative management. Workers should be made aware of the benefits of participative
management.
4. There should be effective communication between workers and management and effective consultation
of workers by the management in decisions that have an impact on them.
5. Participation should be a continuous process. To begin with, participation should start at the operating
level of management.
6. A mutual co-operation and commitment to participation must be developed by both management and
labour.
Modern scholars are of the mind that the old adage “a worker is a worker, a manager is a manager; never the
twain shall meet” should be replaced by “managers and workers are partners in the progress of business”