HRM END SEM

1. Introduction to HRM
A. Importance of HRM

 Strategic Resource: Human resources are key to achieving organizational goals.

 Improves Productivity: Training, motivation, and performance management increase
efficiency.
 Employee Satisfaction: Proper HRM builds morale and reduces turnover.
 Legal Compliance: Helps the company follow labor laws and avoid penalties.
 Organizational Growth: HRM supports innovation and adapts workforce to changes.

B. Functions of HRM

1. Recruitment and Selection: Hiring right talent for the right job.
2. Training and Development: Enhancing employee skills and preparing them for
higher roles.
3. Performance Management: Evaluating and improving employee performance.
4. Compensation and Benefits: Fair pay and additional incentives.
5. Employee Relations: Managing grievances, conflicts, and maintaining harmony.
6. Compliance: Ensuring adherence to employment laws and regulations.
7. HR Planning: Forecasting future manpower needs.

2. Scope of HRM
 Human Resource Planning: Estimating current and future HR needs.
 Job Analysis and Design: Understanding job roles and structuring them well.
 Employee Hiring: Recruiting and selecting employees.
 Training and Development: Employee upskilling.
 Wage and Salary Administration: Deciding pay structure and allowances.
 Employee Welfare: Providing non-wage benefits like health care and housing.
 Labor Relations: Handling unions and collective bargaining.

3. HRM in a Changing Environment

 Technology Impact: Automation and AI changing skill requirements.
 Globalization: Need for managing diverse and dispersed teams.
 Changing Workforce: More women, gig workers, and remote workers.
 Legal Changes: Frequent updates in labor laws.
 Employee Expectations: More focus on work-life balance and flexible work.
4. Manpower Planning
A. Manpower Planning Process

1. Analyzing Organizational Objectives: Understanding business goals.

2. Inventory of Current Manpower: Assess current employee skills and numbers.
3. Forecasting Demand and Supply:
o Demand Forecasting: Estimate future workforce needs.
o Supply Forecasting: Check availability of workers internally and externally.
4. Identifying Gaps: Find the gap between demand and supply.
5. Action Plan: Hiring, training, or restructuring as needed.
6. Monitoring and Review: Regular updates to the plan.

5. Job Description and Job Specification

A. Job Description

 A document that describes what a job involves.

 Includes: job title, duties, responsibilities, working conditions.

Example:
Job Title: Sales Manager
Duties: Lead sales team, meet targets, report performance.

B. Job Specification

 A document that lists qualifications required to perform a job.

 Includes: education, skills, experience, personality traits.

Example:
Qualifications: MBA in Marketing, 3+ years of experience, good communication skills.

6. Job Analysis
 Definition: Collecting information about a job’s tasks, responsibilities, and required
skills.
 Purpose: To prepare job description and specification.
 Methods: Interviews, questionnaires, observations.

7. Job Design
  Definition: Structuring tasks, duties, and responsibilities to make a job efficient and
motivating.
 Objective: To improve employee satisfaction and productivity.

8. Techniques of Job Design

1. Job Enlargement: Adding more tasks of similar level (horizontal expansion).
Example: A clerk also handles photocopying.
2. Job Enrichment: Adding responsibilities to make job more rewarding (vertical
expansion).
Example: A cashier allowed to approve discounts.
3. Job Rotation: Shifting employees between different jobs to reduce boredom.
Example: Rotating workers between reception, filing, and billing.
4. Work Simplification: Breaking tasks into smaller steps for better efficiency and less
training.
Used in assembly lines.

CO-2

Module 2 in HRM, focusing on Employee Selection and Development, covers a range of

HR processes that are key for hiring, training, and evaluating employees effectively. Here's a
more detailed breakdown of each process:

1. Recruitment

Recruitment is the process of attracting candidates to apply for open positions within an
organization. It involves a series of steps to generate a pool of qualified candidates for
selection.

 Types of Recruitment:
o Internal Recruitment: Filling vacancies from within the organization by
promoting or transferring existing employees.
o External Recruitment: Seeking candidates from outside the organization,
which includes:
 Job advertisements (online job boards, newspapers, etc.)
 Employee referrals
 Recruitment agencies
 Campus recruitment
 Job fairs
 Recruitment Strategies:
o Job Analysis: The foundation of recruitment, identifying key responsibilities,
required skills, and qualifications.
o Job Description: Detailed outline of job responsibilities, expectations, and
required skills.
o Employer Branding: Presenting the organization as an attractive place to
work.
 Factors to Consider:
 o Job Requirements: Skills, experience, and qualifications needed.
o Diversity: Ensuring a diverse workforce.
o Cultural Fit: Attracting candidates who align with company values and
culture.

2. Selection

Selection refers to the process of evaluating and choosing the best candidate from a pool of
applicants. It's a critical step for ensuring that the right person is chosen for the job.

 Steps in the Selection Process:

1. Screening of Applications: Reviewing resumes and cover letters to shortlist
candidates.
2. Preliminary Interviews: Conducting brief interviews (often by phone or
video) to assess basic qualifications.
3. Selection Tests: Administering tests to evaluate specific skills, cognitive
abilities, or personality traits.
4. In-depth Interviews: Structured, semi-structured, or unstructured interviews
to assess the candidate's fit for the role.
5. Background Checks: Verifying employment history, educational
qualifications, and criminal records.
6. Job Offer: Extending the job offer to the selected candidate.
 Selection Methods:

o Structured Interviews: Standardized set of questions asked to every

candidate.
o Unstructured Interviews: Informal, free-flowing conversation.
o Psychometric Tests: Assessing intelligence, cognitive abilities, and
personality.
o Assessment Centers: Realistic job tasks, group exercises, and simulations to
evaluate a candidate's suitability.
 Selection Criteria:
o Skills: Technical abilities specific to the job.
o Experience: Previous work experience in similar roles.
o Cultural Fit: Alignment with organizational values and team dynamics.
o Potential for Growth: Ability to take on more responsibility over time.

3. Induction (Onboarding)

Induction is the process of introducing new employees to the organization and their role. It
ensures that new hires feel welcomed, prepared, and engaged from day one.

 Purpose:
o To ensure new employees understand the company’s culture, values, policies,
and procedures.
o To provide necessary training to perform their job effectively.
o To help them integrate into the team and build relationships with colleagues.
 Key Components:
 1. Orientation: A formal introduction to the company’s mission, vision, values,
and operations.
2. Training: Providing the new hire with the tools and knowledge necessary for
the job.
3. Socialization: Encouraging interaction with coworkers and key leaders in the
company to build relationships and networks.
4. Mentorship: Pairing the new hire with a mentor or buddy to guide them
through the onboarding process.
5. Feedback and Support: Regular check-ins to assess how the new employee
is adjusting to the job.

4. Training and Development

Training and Development focuses on improving the skills of employees to meet current
job demands (training) and preparing them for future roles (development).

 Training:
o Goal: To improve the skills required to perform the current job effectively.
o Methods:
 On-the-job training
 Classroom-based workshops
 E-learning
 Simulation-based training
 Role-playing
 Coaching and mentoring
 Development:
o Goal: To help employees grow for future roles and responsibilities within the
organization.
o Methods:
 Job rotation (moving employees across different roles to expand skills)
 Leadership development programs
 Succession planning
 Mentoring and coaching
 External courses or certifications
 Importance of Training and Development:
o Enhances employee skills and competencies.
o Increases employee motivation and job satisfaction.
o Prepares employees for higher responsibilities and leadership roles.
o Helps the organization maintain competitiveness and productivity.

5. Performance Appraisal

Performance Appraisal is the process of assessing and reviewing an employee’s job

performance. It provides valuable feedback for employee development, compensation, and
promotion decisions.

 Purpose:
o To assess how well an employee is performing their job.
o To identify strengths and areas for improvement.
 o To provide feedback that helps in career development.
o To make decisions related to promotions, salary increases, or terminations.
 Methods of Performance Appraisal:

1. Rating Scales: Managers rate employees on specific criteria (e.g.,

communication, teamwork, job knowledge).
2. 360-Degree Feedback: Collecting feedback from multiple sources
(supervisors, peers, subordinates, and sometimes customers).
3. Self-Appraisal: Employees evaluate their own performance.
4. Objective Setting and Evaluation: Setting measurable objectives at the
beginning of the year and evaluating performance against those goals.
5. Behaviorally Anchored Rating Scales (BARS): Rating performance based
on specific behaviors tied to job duties.
 Uses of Performance Appraisal:

o Compensation Decisions: Linking performance to pay raises, bonuses, and

promotions.
o Employee Development: Identifying areas for training and development.
o Career Pathing: Helping employees plan for their future career growth within
the organization.
o Motivation and Engagement: Providing recognition and constructive
feedback.

C0-3

Module 3 in HRM focuses on Compensation Planning, which is critical for attracting,

retaining, and motivating employees. It includes various components such as compensation,
job evaluation, employee benefits and welfare, salary administration, and employee
discipline. Here's an overview of each topic:

1. Employee Compensation

Employee Compensation refers to the total amount of monetary and non-monetary rewards
that employees receive in exchange for their work. It can be broken down into:

 Direct Compensation:
o Wages: Hourly pay or salary-based compensation.
o Bonuses: Extra payments based on performance or company profits.
o Commissions: Payments based on sales or performance metrics.
 Indirect Compensation:
o Benefits: Non-cash perks such as healthcare, retirement plans, and stock
options.
o Non-Monetary Rewards: Recognition, career development opportunities, or
flexible working arrangements.
 Equity-Based Compensation: Stock options or shares granted to employees, often
linked to long-term company success.

Factors Affecting Compensation:

  Market rates (industry standards).
 Internal equity (comparing pay across similar roles within the organization).
 External equity (comparing with competitors).
 Job complexity and employee experience.

2. Job Evaluation

Job Evaluation is the systematic process of determining the relative worth of jobs within an
organization to establish fair compensation.

 Purpose:
o To ensure equitable pay for different jobs based on the value they bring to the
organization.
o To prevent pay disparities and internal conflicts.
 Methods of Job Evaluation:

1. Ranking Method: Jobs are ranked from highest to lowest based on their
overall importance.
2. Point Method: Jobs are evaluated based on specific criteria (e.g., skills,
responsibilities, and effort), with points assigned to each factor.
3. Factor Comparison Method: Jobs are compared against key compensable
factors (e.g., skill, responsibility, effort, working conditions).
4. Classification Method: Jobs are grouped into classes or grades based on
predefined job descriptions and characteristics.

3. Employee Benefits and Welfare

Employee Benefits and Welfare are non-wage compensations provided to employees in

addition to their salary. These benefits enhance the well-being of employees and support their
health, safety, and work-life balance.

 Types of Employee Benefits:

o Health Benefits: Medical, dental, and vision insurance.
o Retirement Plans: Pension plans, 401(k) plans, or other retirement savings
schemes.
o Paid Leave: Vacation days, sick leave, parental leave, and holidays.
o Insurance: Life insurance, disability insurance.
o Other Benefits: Stock options, wellness programs, gym memberships, and
education reimbursements.
 Employee Welfare:
o Programs aimed at improving employees' quality of life and job satisfaction,
including wellness programs, counseling services, and recreational activities.
o Work-Life Balance Initiatives: Flexible work schedules, telecommuting
options, and childcare support.

Purpose:

 To increase employee satisfaction and motivation.

 To retain employees by offering competitive benefits.
  To help employees manage personal responsibilities while still contributing to the
organization.

4. Compensation and Salary Administration

Compensation and Salary Administration refers to managing the structure,

implementation, and periodic adjustments of salary and compensation systems within the
organization.

 Salary Structures:
o Pay Grades: Grouping jobs with similar responsibilities and compensation
levels into pay grades.
o Salary Bands: Establishing a range of salary levels for each position, usually
based on experience or performance.
o Pay Scales: The range of pay rates for specific job roles.
 Salary Review and Adjustments:
o Annual salary reviews based on factors such as performance appraisals,
market conditions, and cost of living adjustments.
o Merit-based Pay: Performance-based salary increases or bonuses.
o Cost of Living Adjustments (COLA): Salary adjustments based on inflation
or changes in living expenses.
 Ensuring Fairness and Equity:
o Ensuring pay equity across similar job roles and in comparison to industry
standards.
o Monitoring for internal and external pay disparities.

5. Employee Discipline

Employee Discipline refers to managing employee behavior and ensuring adherence to

company policies, rules, and regulations. It aims to maintain a positive work environment by
addressing violations and reinforcing appropriate conduct.

 Purpose:
o To correct undesirable behavior.
o To prevent disruptions and ensure productivity.
o To uphold the organization’s culture and values.
 Types of Employee Misconduct:
o Minor Infractions: Tardiness, dress code violations, and failure to meet
expectations.
o Serious Infractions: Theft, harassment, insubordination, or violation of safety
standards.
 Disciplinary Procedures:

1.Informal Counseling: Verbal discussions to address minor issues.

2.Written Warning: Formal documentation of the issue and expectations for
improvement.
3. Suspension: Temporary removal from the workplace for serious offenses.
4. Termination: Dismissal from the company for severe or repeated misconduct.
 Progressive Discipline Process:
 o A step-by-step approach to discipline, where the severity of penalties increases
with repeated offenses.
o The goal is to allow employees the opportunity to correct their behavior before
more severe actions are taken.

Fairness in Discipline:

 Ensure consistency and fairness in applying disciplinary actions.

 Avoid discrimination and bias in the process.
 Provide employees with the opportunity to explain their side of the story.

C0-4

Module 4 in HRM covers crucial processes related to Integration and Separation, employee
relations, and new trends in HRM. Here’s a detailed breakdown of each area:

1. Integration and Separation

These processes focus on how employees join and leave an organization, ensuring smooth
transitions and maintaining organizational health.

Suspension, Dismissal, and Retrenchment

 Suspension: A temporary removal of an employee from their duties, often due to

alleged misconduct or to allow for investigation. This is typically a disciplinary action
pending further review.
 Dismissal: Permanent termination of employment, often due to serious misconduct,
performance issues, or failure to adhere to company policies.
o Types of Dismissal:
 Summary Dismissal: Immediate termination for gross misconduct
(e.g., theft, violence).
 Dismissal with Notice: Termination after a specific notice period or in
accordance with contractual terms.
 Retrenchment: A form of involuntary separation due to economic reasons such as
downsizing, restructuring, or closure of a department. It involves laying off
employees to reduce costs.

Legal Considerations:

 Ensure compliance with labor laws and contractual obligations.

 Provide adequate notice or compensation as per local regulations.

Employee Grievance Handling

 Definition: The process of addressing employees' concerns, complaints, or

dissatisfaction regarding their work environment, management, or policies.
 Grievance Redressal Procedure:
1. Informal Stage: Employees discuss grievances with their immediate
supervisor.
 2. Formal Stage: If unresolved, the grievance is escalated to HR or higher
management.
3. Third-Party Intervention: In some cases, external mediation or arbitration
might be used to resolve the dispute.
 Importance: A well-managed grievance system promotes a fair work environment,
reduces conflicts, and enhances employee engagement.

Trade Unionism and Collective Bargaining

 Trade Unions: Employee organizations formed to protect workers' rights, negotiate

on wages, benefits, working conditions, and job security.
 Collective Bargaining: The process of negotiations between the employer and the
union representatives to establish working conditions, compensation, and other
employee-related policies.
o Types:
 Distributive Bargaining: Focuses on the distribution of limited
resources (e.g., wages, benefits).
 Integrative Bargaining: Aiming to find mutually beneficial solutions
to issues.
 Importance: Trade unions and collective bargaining help protect employee rights,
ensure fair compensation, and improve workplace conditions.

Industrial Democracy

 Definition: The concept that employees should have a say in decision-making

processes within the organization, especially in matters affecting their work and well-
being.
 Components:
o Works Councils: Committees of employees that collaborate with
management to make decisions on workplace matters.
o Employee Representation: Employees are involved in decisions regarding
working hours, safety, and organizational policies.
 Goal: To foster a more democratic and inclusive workplace, where employees feel
valued and have a stake in organizational success.

2. New Trends in HRM

The field of HRM is evolving, especially with globalization, technological advancements,

and changes in workforce dynamics. Key trends include:

HRM in India

 Focus on Employee Welfare: Indian HRM places significant importance on

employee benefits, welfare, and work-life balance.
 Labor Laws: India has strict labor laws that impact hiring, termination, and
compensation. Compliance with these laws is critical.
 Technology in HRM: Increasing use of technology for HR processes, including
automation, AI, and data analytics.
 Diversity and Inclusion: Efforts to promote gender equality, diversity in the
workforce, and inclusive practices.
  Skill Development: Focus on upskilling and reskilling to meet the needs of the
rapidly changing job market.

HRM in International Firms

 Global Workforce: Managing a diverse workforce across multiple countries and

cultures.
 Cross-Cultural Training: Ensuring that employees are aware of cultural differences
and are trained to work in a global environment.
 Expatriate Management: Managing employees who work in foreign countries,
including handling relocation, cultural adaptation, and repatriation.
 Compliance with International Labor Laws: Ensuring that the company complies
with labor laws in each country they operate in.
 Global Talent Acquisition: Attracting and retaining the best talent from around the
world.

Talent Management

 Definition: The process of identifying, developing, and retaining high-potential

employees to meet organizational goals.
 Components:
o Talent Acquisition: Recruiting the right talent to meet organizational needs.
o Talent Development: Providing opportunities for growth, learning, and career
progression.
o Succession Planning: Ensuring that high-potential employees are prepared to
fill leadership roles in the future.
 Importance: Effective talent management ensures that the organization has the right
skills and leadership to remain competitive.

HR Accounting

 Definition: The practice of valuing human resources as assets and tracking their
financial contribution to the organization.
 Methods:
o Human Capital Accounting: Valuing the economic value of employees’
knowledge, skills, and experience.
o Cost-Benefit Analysis: Measuring the return on investment (ROI) of HR
activities such as training, recruitment, and employee development.

HR Audit

 Definition: A systematic review of an organization's HR policies, practices, and

systems to ensure they are effective, compliant, and aligned with organizational goals.
 Purpose:
o To evaluate HR processes for efficiency and effectiveness.
o To ensure compliance with labor laws and company policies.
o To identify areas for improvement in HR practices.
 Key Areas of Audit:
o Recruitment and staffing.
o Compensation and benefits.
 o Training and development.
o Employee relations and grievance handling.
o Legal compliance.

HR Information Systems (HRIS)

 Definition: A software solution that integrates all HR functions into a single platform,
making it easier to manage HR data, track performance, and make informed
decisions.
 Features:
o Employee Data Management: Storing and managing personal, professional,
and compensation information.
o Payroll Management: Automating payroll processing and ensuring
compliance with tax regulations.
o Performance Tracking: Monitoring and evaluating employee performance.
o Recruitment and Onboarding: Managing job postings, applications, and
new hire integration.
 Importance: HRIS streamlines HR operations, improves data accuracy, and provides
actionable insights for decision-making.