3 HUMAN RESOURCE MANAGEMENT

UNIT I: Introduction of HRM: meaning, nature, objectives and scope, Functions of Human Resource
Management, significance of Human Resource Management-Role and Qualities of HR manager.
UNIT II: Human Resource Planning: Recruitment and selection- Job analysis--process of job
Analysis-Job discretion- Job specification- Methods of job analysis -Job Design-Job rotationJob
enlargement-job enrichment-Job description-Job specification-Recruitment-sources of recruitment-
Selection-Selection Procedure, Employment, Interview Procedure
UNIT III: Training and Development: Meaning, Importance-Training-types, methods of Training
Learning-Learning principles- Management Development programme-Job evaluation Performance
appraisal and career planning- Need and importance- objectives-process-methods and problems of
performance appraisal- Concept of career planning –features-methods –uses career Development-
Transfer-Promotion-code of conduct
UNIT IV: Compensation management : Compensation Planning-Objectives-Principles of
compensation –Pay Structure – Incentives- Rewards, Intrinsic, extrinsic- Fringe Benefits-Stress
Management - Quality of Work Life.
UNIT V: Grievance redressel procedure: Discipline- essentials of a good discipline system
Disciplinary Process -approaches- punishment-exit interview-. Legislative Framework - Trade
Unions - Managing Conflicts - - Collective Bargaining - Labor participation in management and
workers empowerment.
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UNIT I: Introduction of HRM

Different terms are used to denote Human Resource Management. They are, Labour Management,
Labour Administration, Labour Management Relations, Employee-Employer Relations, Industrial
Relations, Personnel Administration, Personnel Management, Human Capital Management, Human
Asset Management, Human Resource Management and the like.
HRM is managing employment, development, compensation and utilization of HR.
According to P.Subba Rao- HRM is managing (planning , organising, directing and controlling)
employing, developing and compensating HR in creating and developing human relations and
utilization of HR with a view to contribute proportianately to the organizational, individual and
social goals.
HRM can be summarized as follows:
i. HRM is concerned with employees both as individual as a group in attaining goals.
ii. It is concerned with development of HR.
iii. It covers all levels of employees and categories.
iv. It applies to the employees of all types of organizations.
v. It is a continuous and unending process.
 vi. It aims at attaining the goals of the organisation, individual and society in an integrated
approach.
vii. vii. HRM is a responsibility of all line managers and function of staff function.

Scope of Human Resource:

The scope of Human Resource Management refers to all the activities that come under the banner
of Human Resource Management. These activities are as follows.
Human resources planning :-
Human resource planning or Human Resource Planning refers to a process by which the company
to identify the number of jobs vacant, whether the company has excess staff or shortage of staff
and to deal with this excess or shortage.
Job analysis design :-
Another important area of Human Resource Management is job analysis. Job analysis gives a
detailed explanation about each and every job in the company.
Recruitment and selection :-
Based on information collected from job analysis the company prepares advertisements and
publishes them in the newspapers. This is recruitment. A number of applications are received after
the advertisement is published, interviews are conducted and the right employee is selected thus
recruitment and selection are yet another important area of Human Resource Management.
Orientation and induction :-
Once the employees have been selected an induction or orientation program is conducted. This is
another important area of Human Resource Management. The employees are informed about the
background of the company, explain about the organizational culture and values and work ethics
and introduce to the other employees.
Training and development :-
Every employee goes under training program which helps him to put up a better performance on
the job. Training program is also conducted for existing staff that have a lot of experience. This is
called refresher training. Training and development is one area where the company spends a huge
amount.
Performance appraisal :-
Once the employee has put in around 1 year of service, performance appraisal is conducted that is
the Human Resource department checks the performance of the employee. Based on these
appraisal future promotions, incentives, increments in salary are decided.
Compensation planning and remuneration :-
There are various rules regarding compensation and other benefits. It is the job of the Human
Resource department to look into remuneration and compensation planning.
Objectives: (Any 7)
Survival and growth are fundamental objectives. The objectives of the HRM may be as follows:
i. To create and utilise an able and motivated workforce, to accomplish the basic
organisational goals.
ii. To establish and maintain sound organisational structure and desirable working
relationships
iii. To secure the integration of individual and groups
iv. To create facilitates and opportunities for individual and groups.
v. To attain effective utilization of human resources in the achievement of organizational goals.
vi. To identify and satisfy individual and group needs
vii. To maintain high employee morale and sound human relations.
viii. To strengthen and appreciate the human assets continuously by providing training and
development.
ix. To provide an opportunity for expression and voice in management.
x. To provide fair, acceptable and efficient leadership.
xi. To provide facilities and conditions of work and creation of favourable atmosphere for
maintaining stability of employment.

FUNCTIONS OF HRM:
The functions of HRM can be classified into two categories.
I.Managerial Function, and II. Operative Function.
I. MANAGERIAL FUNCTION: Managerial functions of HRM involve planning, organising, controlling
and directing.
i. Planning: It is a predetermined course of action. It involves planning of HR, Requirements,
Recruitment, Selection, Training etc.
ii. Organisation: An organisation is a means to an end. Organisation establishes relationship
among the employees so that they can collectively contribute to the attainment of company
goals.
iii. Directing: The next logical function after completing planning and organising is the
execution of the plan. Direction is an important managerial function in building sound
industrial and human relations besides securing employees contributions.
iv. Controlling: It involves checking, verifying and comparing of the actuals with the plans,
identification of deviations, if any, correcting of identified deviations.
 II. OPERATIVE FUNCTIONS: The operative function of HRM are related to specific activities
of personnel management viz., employment, development, compensation and relations.
A. Employment: it covers
i. Job Analysis, ii. Human Resource Planning, iii. Recruitment, iv. Selection, v. Placement, vi.
Induction and Orientation.
b. Human Resource Development: It is the process of improving, moulding and changing the skill,
knowledge, creative ability, aptitude, attitude, values, commitment, etc., based on present and
future job and organisational requirement. This function includes: i. Performance Appraisal, ii.
Training, iii. Management Development, iv. Career Planning and Development Internal Mobility-
Promotion, Transfer) v. Organisation Development.
c. Compensation: It is a process of providing adequate, equitable and fair remuneration to the
employees. It includes: i. Job Evaluation, ii. Wage and Salary Administration, iii. Incentives, iv.
Bonus, v. Fringe Benefits, vi. Social Security Measures.
d. Human Relations: Human Relations is an area of management in integrating people into work
situation in a way that motivates them to work together productively, co-operatively and with
economic, psychological and social satisfaction. It covers: i. motivating the people, ii. Boosting
employee morale, iii. Developing communication skills, iv. Developing Leadership Skills, v.
Redressing Employee Grievances, vi. Improving Quality of Work Life etc.,
e. Effectiveness of Human Resource Management: Effectiveness of various personnel programmes
and practices can be measured or evaluated by means of organisational Health and Human
Resource Accounting etc.,
i. Organisational Health: It can be studied through the result of the employees contribution to
the organisation and the employees job satisfaction.
ii. HRM Accounting, Auditing and Research: Effectiveness of HRM can also be found out
through human resource accounting, audit and research.
Nature of Human Resource Management (Any 7)
Human resource management brings people together in an organisation. Why? To make sure both
individual and organisation goals are fulfilled! The following features characterise the nature of
human resource management:-
 Managerial Process - Human resource management is a vital part of management that
includes planning, organising, staffing, directing, and controlling human resources to achieve
organisational success. It is a managerial process that effectively utilises human resources to
attain organisational goals and objectives.
 Both Art and Science - Human resource management is a mixture of both art and science. It
is an art as it deals with qualitative attributes like creativity, knowledge, skills, and talent of
the personnel. In simple words, HRM is the art of getting things done by others effectively.
HRM is a science as it requires different scientific techniques for activities like recruitment,
selection, training, and appraisal of employees.
 Pervasive Force - Human resource management, being an inherent part of an organisation,
is pervasive in nature. It means that HRM is present in different functional areas of
management, like finance, marketing, and production, in all commercial and non-
commercial enterprises. Everyone in the organisation, from the top to the lowest level, must
perform HRM functions regularly.
 Improve Employee Relations - Human resource management is concerned with building
healthy relationships between employees at various organisational levels. Every individual
has different needs, goals, and expectations. HRM deals with these individual factors and
motivates employees to reach their maximum potential. Moreover, it creates an
organisational culture that fosters learning and growth.
 People-Centred - The nature of human resource management is people-centred and
relevant in all types of organisations. It is concerned with every employee from the top to
the bottom level. HRM value people both as individuals and as a group. Furthermore, it
encourages people to develop their full potential and fulfil individual and organisational
goals.
 Development-Oriented - The development of the workforce in an organisation is crucial to
the nature of human resource management. HR managers use various tools to help
employees understand their strengths and unleash their potential. Regular training
programs can benefit employees by improving their skills. Also, monetary and non-
monetary reinforcement can help people stay motivated to perform better.
 Action Oriented - While human resource management does follow the rules and policies, its
main focus is on action and results rather than rules. A human resource manager stresses
the importance of providing effective solutions for employee problems, tensions, or
controversies.
 Forward-Looking - Sustaining in the competitive business environment requires
organisations to plan long-term strategies. HRM is a future-oriented approach that evaluates
the human resource requirements and ensures the availability of required personnel in the
right place at the right time. With the forward-looking nature of human resource
management, managers prepare employees by motivation, training, and development to
face current and future challenges in the changing business environment.
 Continuous Process - Human resource management is not a ‘one-time’ function. Rather, it is
a never-ending process that must be performed continuously to achieve organisational
objectives effectively. It involves a series of tasks, beginning with identifying the human
resource requirement and continuing with recruitment, training, performance evaluation,
and appraisal.
 Interdisciplinary Function - Human resource management is multidisciplinary in nature. HR
managers utilise knowledge and inputs from various disciplines to manage the
workforce effectively. The five major disciplines in HRM include management,
communication, psychology, sociology, and economics. In order to effectively manage
human resources, one must understand the contribution of all these disciplines to HRM.
 • Basis of Other Functional Areas - HRM is the basis of all other functional areas of
management, such as finance, production, and marketing. The effectiveness of each of these
departments depends on the effectiveness of their human resource management.
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Qualification and Qualities of HR Managers:

The function of HR manager varies from organisation to organisation both in nature and degree.
Hence the qualification required of a HR manager varies from organisation to organisation
depending on its nature, size, location etc.,
I. Personal attributes: a. must have initiative, resourcefulness, depth of perception, maturity in
judgement and analytical ability, freedom from bias, intellectual integrity thorough with labour
laws, understanding human behaviour, familiar with human needs, wants, hopes, desires, values
and aspirations. Should possess other attributes like, intelligence, education skills, discriminating
skills, executing skills.
II. Experience and Training: Previous experience is undoubtedly an advantage, provided the
experience was in an appropriate environment. Training, in psychological aspects, labour
legislations and more specifically in HR management and in General Management is an additional
benefit.
III. Professional Attitude: Professional attitude is more necessary, particularly in Indian context.
He should have the knowledge of various disciplines like, technology, engineering, management,
sociology, psychology, philosophy, human psychology, economics, commerce and law.

Importance of HR managers in organisations

 Strategy management: This is an important aspect of any organisation and plays a vital role
in human resource management. HR managers manage strategies to ensure the
organisation reaches its business goals, as well as contributing significantly to the corporate
decision-making process, which includes assessments for current employees and predictions
for future ones based on business demands.
 Benefits analysis: HR managers work towards reducing costs, such as with recruitment and
retention. HR professionals are trained to conduct efficient negotiations with potential and
existing employees, as well as being well-versed with employee benefits that are likely to
attract quality candidates and retaining the existing workforce.
 Training and development: Since HR managers contribute significantly to training and
development programmes, they also play a pivotal role in strengthening employer-
employee relationships. This contributes to the growth of employees within the company,
hence enhancing employee satisfaction and productivity.
 Interactivity within employees: HR managers are responsible for conducting activities,
events and celebrations in the organisation which gives way to team building opportunities.
Moreover, it enhances interactivity within employees and instils a sense of trust and respect
among peers.
  Conflict management: The department to go to when any kind of professional conflict arises
between employees is HR. They ensure that issues and conflicts are resolved effectively,
approaching the problem with an unbiased attitude and encouraging effective
communication to reach a solution. In addition, they help employees understand various
ways of developing effective work relationships and the importance of not letting personal
judgement affect their behaviour.
 Establishing a healthy work culture: A healthy work culture is pivotal in bringing out the
best in employees. HR managers contribute significantly in setting up a healthy and friendly
work culture, which further translates into better productivity among employees.
 Compliance: HR professionals work towards making the organisation compliant with
employment laws, as well as maintaining records of hiring processes and applicants’ log.
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UNIT II: Human Resource Planning

Recruitment - In simple terms recruitment is understood as the process of searching for and
obtaining applicants for jobs from among whom the right people can be selected. A formal
definition is
It is the process of finding and attracting capable applicants for employment. The process begins
when new recruits are sought and ends when their applications are submitted. The result is a pool
of applicants from which new employees are selected. `
Factors Effecting
External Factors:
 Supply and Demand: Refers to the balance between the availability of qualified candidates
(supply) and the number of job openings (demand) in the market.
 Unemployment Rate: The overall rate of unemployment in the region or country can impact
the availability of candidates and their willingness to change jobs.
 Labour Market: The overall state of the job market, including industry trends, economic
conditions, and competition for talent.
 Political and Legal Considerations: Government policies, regulations, and labor laws that
can affect recruitment practices, such as immigration laws, minimum wage regulations, and
anti-discrimination laws.
 Company's Image: The reputation and brand image of the company can influence the
attractiveness to potential candidates.
Internal Factors:
 Recruitment Policy: The company's specific guidelines and procedures for recruitment,
including the hiring process, job descriptions, and selection criteria.
  Temporary and Part-time Employees: The company's use of temporary or part-time workers
can impact the need for permanent hiring.
 HRP Policy: The company's overall human resource planning strategy, which includes
forecasting future staffing needs and developing recruitment plans.
 Size of the Organization: The size of the company can influence the scale and complexity of
the recruitment process.
 Cost of Recruiting: The budget allocated for recruitment activities, including advertising,
screening, and interviewing, can affect the scope and methods of recruitment.
These factors interact and influence each other, shaping the overall recruitment landscape and the
strategies that organizations need to adopt to attract and hire the right talent.

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Recruitment Process
The process comprises of five interrelated stages viz; planning, strategy development, searching,
screening, evaluation and control.
1. Recruitment Planning
 Number
 Type of Contacts
2. Strategy Development
 Make or Buy Employees
 Technological Sophistication
 Where To Look
 How To Look
3. Searching (Appropriate candidates for the organization)
4 Screening (Weeding out unnecessary applications)
5. Evaluation and Controlling (Since cost are incurred in Recruitment)

SOURCE OF RECRUITMENT:
Internal Source:
 Present Permanent Employees: Promoting or transferring existing employees to fill
vacancies.
 Present Temporary/Casual/Part-time Employees: Converting existing temporary or part-
time employees to permanent positions.
  Retrenched and Retired Employees: Rehiring former employees who were laid off or
retired.
 Dependents of Present/Deceased/Disabled Employees: Hiring dependents of current or
deceased employees.
 Employee Referrals: Encouraging current employees to refer qualified candidates.
External Source:
 Campus Recruitment: Hiring directly from educational institutions.
 Private Employment Agencies/Consultants: Using external agencies to find and recruit
candidates.
 Public Employment Agencies: Utilizing government-run employment agencies to source
candidates.
 Professional Associations: Networking with professional organizations to identify potential
candidates.
 Data Banks: Using online databases or job boards to search for candidates.
 Casual Applicants: Individuals who directly apply for job openings without any specific
referral or recommendation.
 Similar Organizations: Sourcing candidates from other organizations in the same industry or
field.
 Trade Unions: Collaborating with labor unions to identify potential candidates.
Modern Sources
 Walk-In: Conducting open recruitment events where candidates can directly visit the
organization and apply.
 Consult-In: Hiring consultants or recruitment agencies to identify and source suitable
candidates.
 Head Hunting: Actively seeking out specific individuals with the desired skills and
experience, often for high-level positions.
 Body Shopping: Contracting with staffing agencies to provide temporary or contract
workers.
 Business Alliances: Acquiring or merging with other companies, which can lead to the
integration of their workforce.
 E-Recruitment: Utilizing online platforms and digital tools to source and attract candidates,
such as job boards, social media, and company websites.
These sources provide different avenues for organizations to find and attract suitable candidates
for their vacancies. The choice of source often depends on factors such as the urgency of the hiring
need, the specific skills and experience required, and the company's recruitment budget and
strategy.
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SELECTION - Choosing the most appropriate candidates and offering them job. Guiding policy in
selection is the intention to choose the best qualified and suitable candidates for each unfilled job.
The success or failure of the most organizations largely depends on the effectiveness of its
selection process. Some private agencies/consultants in india perform the function of recruitment
and selection so as to enable the organization to concentrate on their main functions.
Selection Procedure: There is no standard selection procedure for selection of the candidates .
Generally, it depends upon the size, nature of the company, kind and number of persons to be
employed and government regulations to be followed.
STEPS IN SCIENTIFIC SELECTION:
1. Job Analysis: Every organization should finalize the job analysis, job description and job
specification and employee specification before going for further selection steps.
2. Recruitment: It refers to the process of searching for the prospective candidate and stimulating
them to apply for the jobs.
3. Application Form: It is also known as Application blank. It is widely accepted technique to secure
information from the prospective candidate. It provides basic date and information of the
candidate. Ex.
a. Personal background information.
b. b. Educational attainments
c. c. Work Experience
d. d. Salary
e. e. Personal Items
f. f. References.
g. 4. Written Examination
h. 5. Preliminary Interview
i. 6. Group Discussion
j. 7. Tests:
The objective of test is to solicit further information to assess the employee suitability to the job.
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JOB DESIGN - Job design is the process of organizing a job or set of tasks to improve employee
performance and organizational effectiveness. It involves structuring roles and responsibilities, and
determining how tasks are allocated, performed, and managed.
Job design can help to:
 Improve productivity - Well-designed jobs reduce wasted time and resources, and optimize
task sequencing.
  Increase employee satisfaction - Tailoring jobs to employees' skills and interests can
increase motivation and job satisfaction.
 Reduce turnover and absenteeism - Effective job design can lead to reduced turnover and
absenteeism.
 Create good quality jobs - Job design is a key element in creating good quality jobs that
benefit both workers and employers.

Job Rotation: It refers to the movement of an employee from one job to another. Jobs themselves
are not actually changed, only employees are rotated among various jobs.
This measure relieves the employee from boredom and monotony, improves employee’s skills
regarding various jobs.
Job Enlargement: In simple way it is Horizontal loading of the job.
Adding more and different tasks to a specialized job to provide greater variety.
This technique though leads to higher wages, it improves workers satisfaction, quality of
production and overall efficiency of the organization.
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Job Enrichment: In simple terms it is nothing but vertical loading of the job.
Adding duties and responsibilities that will provide for skill variety, task identity, task significance,
autonomy and feedback on job performance.
One of the combinations of the following techniques can be used for designing enriched jobs.
Techniques of Job Enrichment:
 Increasing the responsibility of the activity
 Providing wider scope, more sequence and increased pace of the work
 Giving a natural unit of work either to an employee or group of employees
 Providing the freedom of work by minimising controls
 Allowing the employees to set their own standards.
 Allowing the employees the control information and allow them to control their own
performance
 Encouraging employees participation in planning, innovation and creation.
 ____________________________________________________________________________

Job Analysis: It is the determination of the tasks which comprises the job of the skill, knowledge,
abilities and responsibilities required of the worker of a successful performance and which
differentiate one job to another.
Process of Job Analysis:
Process of job analysis goes through six steps.
 Collection of background information: consists of organization charts, class specification
and existing job description.
 Selection of representative position to be analysed: It is too time consuming and difficult to
analyse all jobs.
 Collection of job analysis of data: Collection of data about features of the job, required
employee behaviour and human requirement.
 Developing Job description: Describing the job functions, duties, responsibilities,
operations, etc.,
 Developing Job Specification: This step involves conversion of the job description
statements into a job specification.
 Developing Employee Specification: This final step involves conversion of specifications of
human qualities under job specification into an employee specification. It describes physical
qualification, educational qualification, experience etc.,

Methods of job analysis - There are several common methods when performing a job analysis (7)
Observation method - The observation method is when an outside analyst observes an employee
and the tasks they perform. They'll often shadow the employee for several days as they perform
their duties, attend meetings and evaluate their workload to understand the role's essential
functions. While observing, the analyst takes detailed notes about the role, including what tools
they use, how long they spend on tasks and who they interact with to complete their jobs.
Interview method - The interview method is when the analyst questions an employee about their
role. They hope to learn the same aspects of the job they might see in the observation method, like
what systems they use, what processes they follow and how they apply their skills to achieve
results. With this method, the interviewee can formulate their own working styles to perform a
particular role. Analysts may interview several people in the same role to get a more holistic view
of the responsibilities.
Questionnaire method - The questionnaire method is when analysts create a series of questions
for employees to answer about their jobs. They often ask the employee's managers and others on
the team about their perceptions of the role to identify any gaps between expectations. These
questions can include asking employees about how they spend each day, what their priorities are
and how they effectively perform their duties.
Daily method - The daily method is when an employee creates a record daily of the tasks they
perform. This can be over a set period of time, like a week, where they detail their activities and
the length, they spend on each. This can be an objective way to understand how employees spend
their time and can identify areas where an employee might shift their attention to more important
responsibilities.
Functional job analysis method - Functional job analysis is a formal method to evaluate a job and
capture quantitative results. This means they might combine several other methods to understand
everything about the role itself and the person performing them. Analysts can identify what the
individual and technical limitations are within a role to suggest areas for change. Companies often
use the functional job analysis method to create new job descriptions or postings based on what's
needed to perform the roles.
Job inventories method - Job inventories involve a structured checklist that employees can check
off to verify that they're completing certain tasks. This usually comes from a role's job description
or management expectation to ensure they're performing certain duties or using certain tools.
These checklists can focus on the tasks themselves, the team members or the qualifications for
each role.
Job performance method - The job performance method is when an analyst actually performs the
role of the employee to understand more about it. This might mean they answer emails, perform
physical tasks and interact with colleagues or systems to learn what an employee experiences.
With this first-hand experience, they can determine what some of the issues and requirements are
and how companies might properly detail these in a job description.
____________________________________________________________________________

JOB DESCRIPTION: Job Description is an important document which is basically descriptive in

nature and contains a statement of job analysis. It tells us what should be done, and why should be
done, and where it should be performed.
Contents of Job description:
 Job title
 Location of the Job
 Supervision given and received
 Materials, tools, Machinery and equipment worked with.
 Designation of the immediate supervisor and subordinates
 Other levels: pay, D.A, other allowances, bonus, incentive, wage, method of payment, hours
of work, shift, break
 Complete list of duties to be performed separated according to daily, weekly, monthly and
casual, and estimated time to spent on each duty
 Definition of unusual terms
 Conditions of work: Location, time, speed of work, accuracy, health hazards, accident
hazards
 Training and Development
 Promotional chances and channels
____________________________________________________________________________
JOB SPECIFICATION: A statement of the minimum acceptable human qualities necessary to
perform a job properly. The first step in the job specification is to prepare a list of all jobs in the
company and where they are located. The second step is to secure and write up information about
each of the job in the organization. Usually this information includes:
 Physical Specifications
 Mental Specifications
 Emotional and Social specification, and
 Behavioural Specifications
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Job discretion refers to the degree of decision-making authority and latitude an employee has in a
job role. It's used to differentiate positions within a job classification series. Job discretion is based
on the amount of independent judgment and initiative an employee has.
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UNIT III: Training and Development

Training and Development in HRM - Training and development in human resource management
are educational and skill-building activities intended to improve the knowledge and skills of
employees. Training and development activities aim to sharpen your employees’ existing skills and
impart new knowledge. An effective training and development program is designed based on an
analysis of an organization’s training needs to improve employee performance.

Types of Training and Development in HRM

There are several types of training and development activities undertaken to either upskill or reskill
employees. The various types of training and development include:
 Technical Training - Depending on the role and the industry, training on a specific
technological aspect might be required. For example, in the retail industry, technical training
could entail training on CRM systems. Likewise, in the hospitality industry, a restaurant
executive might need training on the use of software tools to take customer orders.
Technical training could be provided with in-house resources or with external trainers.
 Quality Training - Quality training involves educating employees on the measures to detect,
prevent and eliminate causes for the poor quality of products or services. This often
includes training employees on ISO standards that measure quality based on defined
metrics. Training employees on quality standards improve organizational performance,
provides cost savings, and confers the organization with a competitive edge.
 Skills Training - This type of training is conducted to impart specific skills for the employees
to perform their job. Skills training is typically conducted using in-house resources and could
include training on operating production machinery, being a better salesman, etc.
  Soft Skills Training - Soft skills training is concerned with the overall development of
employees by improving their personality, communication skills, ethics training, etc. It helps
produce employees who present themselves as better citizens who can perform better at
work.
 Safety Training - Safety training equips employees with the skills and knowledge to adopt
safe work practices and protect themselves and their colleagues from work-related injuries.
Safety training also helps employees detect and report hazards at work. An integral part of
safety training is fire drills, administering first aid, construction safety, Hazmat safety, etc.
Safety training is vital for employee protection and preventing workflow interruption due to
worker injury.
 ____________________________________________________________________________

Why is training and development important?

Successful businesses understand that it’s more beneficial and cost-effective to develop their
existing employees instead of seeking out new talent.
The top ten benefits of employee training and development programs include:
 Increased productivity: When employees stay current with new procedures and
technologies, they can increase their overall output.
 Reduced micromanagement: If workers feel empowered to perform a task, they typically
require less oversight and work more independently.
 Train future leaders: Organizations must have a solid pipeline of well-trained and innovative
potential leaders to grow and adapt over time.
 Increased job satisfaction and retention: Well-trained employees gain confidence in their
abilities, leading to greater job satisfaction, a reduction in absenteeism and overall
employee retention.
 Attract highly skilled employees: Top recruits are attracted to firms with an identifiable
career path based on consistent training and development.
 Increased consistency: Well-organized training helps ensure that tasks are performed
uniformly, resulting in tight quality control that end users can trust.
 Increased camaraderie: Training and development help create a sense of teamwork and
collaboration.
 Bolstered safety: Continuous training and development help ensure that employees have
the knowledge and skills to perform a task safely.
 Ability to cross-train: Providing consistent training creates a knowledgeable team overall
where employees can help train or assist each other as needed.
 Added innovation: Consistently trained employees can help develop new strategies and
products, contributing to the company’s bottom line and continued success.
Different methods of training for employees - There are different methods of training to train
employees. A company can choose a combination of training methods to train employees
depending upon which method suits the content material and what works best for the learners.
Here are the nine most popular training methods for employees:
1. Technology-based learning - Computer-based training (CBT) or e-learning is another term for it.
Both basically refer to the same thing with the only key difference, e-learning is entirely online
whereas computer-based training includes any kind of training that takes place on the computer.
The, major advantage of technology-based learning is its scalability and flexibility. Any number of
individuals can participate at the same time and progress at their own pace in this training method.
It also removes the requirement of an in-person facilitator. This type of training often mimics
traditional classroom-style teaching by providing a voiceover with visuals that support the content.
Usually, resources such as videos and additional reading accompany the material to aid in the
training process.
2. On-the-job training - It is one of the most common types of training methods. On-the-job or
hands-on training focuses primarily on the practical skills necessary for the job. This training
method helps new hires begin working immediately. In some cases, it may be beneficial to
incorporate an employee shadowing component. It may also allow new hires to gain a little insight
into the context and job requirements before trying it on their own.
3. Instructor-led training - It is a classroom-style training where an instructor prepares and leads
the experience, usually using visual components in a lecture-style presentation. It has many
benefits, including that trainees can interact with the trainer and questions of trainees that might
otherwise go unaddressed in other training methods can get enough attention. It also allows
developing a relationship between the trainer and the trainee and among the employees
undergoing the training together. The, major challenge for this training method is its scalability. If
the classroom is too large, it can hinder the one-on-one interaction of instructors and the
employees. Also, it may require in-person monitoring throughout the training. Trainers may require
extra efforts to engage trainees and maintain their interest in the training.
4. Case studies - When it comes to enhancing analytical and problem-solving skills, case studies
may be the most effective training method. In this method, trainees get scenarios, either real or
imaginary, that depict common work situations. Either independently or in a group, the employees
then get instruction to analyse the case and come up with the best possible solutions and
scenarios. After that, the trainer reviews the pros and cons of each option to help trainees enhance
their skills.
5. Lectures and group training - When an organisation requires to share information with a large
group of employees, a lecture or group training may be an effective method. It can be an efficient
way to ensure that all employees are receiving a consistent message and it can be helpful to gather
everyone together to observe the beginning of the execution of any new procedures or guidelines.
It is also a cost-effective way to train a group of people at once. This, training method may not be
appropriate in all situations as it can limit the possibility for two-way communication only if the
structure of the day includes enough opportunities for feedback. It can also be challenging to
determine whether everyone in a group training situation has an equal understanding of the
materials, which can result in some trainees getting more benefit than others.
____________________________________________________________________________

Performance Appraisal
The term “performance appraisal” refers to the regular review of an employee’s job performance
and overall contribution to a company. Also known as an annual review, employee appraisal,
performance review, or evaluation, 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, semiannual, or quarterly.
Methods of Performance Appraisals
Performance appraisals come in many forms. Managers and human resources staff responsible for
these appraisals need to choose the best methods based on the size of their organization and what
sorts of responsibilities the employees fulfill.
1. 720-Degree Feedback - You could say that this method doubles what you would get from the
360-degree feedback! The 720-degree feedback method collects information not only from within
the organization but also from the outside, from customers, investors, suppliers, and other
financial-related groups.
2. The Assessment Center Method - This method consists of exercises conducted at the company's
designated assessment center, including computer simulations, discussions, role-playing, and other
methods. Employees are evaluated based on communication skills, confidence, emotional
intelligence, mental alertness, and administrative abilities. The rater observes the proceedings and
then evaluates the employee's performance at the end.
3. Checklist Method - This simple method consists of a checklist with a series of questions that
have yes/no answers for different traits.
4. Customer/Client Reviews - This method fits best for employees who offer goods and services to
customers. The manager asks clients and customers for feedback, especially how they perceive the
employee and, by extension, the business.
5. Field Review Method - An HR department or corporate office representative conducts the
employee's performance evaluation.
6. Management By Objective (MBO)
This process involves the employee and manager working as a team to identify goals for the former
to work on. Once the goals are established, both parties discuss the progress the employee is
making to meet those goals. This process concludes with the manager evaluating whether the
employee achieved the goal.
7. Performance Tests and Observations
This method consists of an oral test that measures employees' skills and knowledge in their
respective fields. Sometimes, the tester poses a challenge to the employee and has them
demonstrate their skills in solving the problem.
8. Project Evaluation Review
This method involves appraising team members at the end of every project, not the end of the
business year.

Criticisms of Performance Appraisals - While performance appraisals can be useful in evaluating

employee performance and providing feedback, there are also some criticisms of the process. Here
are some of the main criticisms of performance appraisals:
 Subjectivity: Performance appraisals can be subjective, and different evaluators may have
different opinions on an employee’s performance. This can lead to inconsistencies in the
evaluation process and may result in unfair evaluations.
 Bias: Evaluators may have biases that can influence their evaluations, such as personal
preferences, stereotypes, or prejudices. This can lead to unfair evaluations and may
contribute to discrimination in the workplace.
 Lack of reliability: Performance appraisals may lack reliability if they are not based on
objective criteria or if evaluators do not have a clear understanding of the criteria they are
using to evaluate performance.
 Lack of validity: Performance appraisals may lack validity if they do not accurately measure
what they are intended to measure. For example, if the appraisal criteria are not directly
related to job performance, the appraisal may not accurately reflect an employee’s
performance.
 Negative impact on morale: Performance appraisals can sometimes have a negative impact
on employee morale, particularly if employees perceive the evaluation process as unfair or if
they receive negative feedback without adequate support or guidance for improvement.
 Focus on individual performance: Performance appraisals may focus too much on individual
performance and may not take into account the contributions of teams or the broader
context of the organization.
Overall, while performance appraisals can be a useful tool for evaluating employee performance, it
is important to be aware of these criticisms and to work to address them in the evaluation process.
This may involve implementing objective criteria, providing training for evaluators, and ensuring
that employees receive constructive feedback and support for improvement.
Significance of Performance Appraisals - Performance appraisals are significant in a variety of ways
for both employees and organizations. Here are some of the key reasons why performance
appraisals are important:
 Feedback and development: Performance appraisals provide employees with feedback
about their job performance, identifying areas where they are excelling and areas where
they need to improve. This feedback can help employees to develop their skills and improve
their performance, which can increase their job satisfaction and motivation.
  Goal setting: Performance appraisals often involve setting goals for the upcoming year or
performance period. This gives employees a clear understanding of what is expected of
them and provides a roadmap for their development.
 Performance-based decisions: Performance appraisals are often used as a basis for making
decisions about promotions, salary increases, and other job-related matters. By providing an
objective evaluation of an employee’s performance, performance appraisals help to ensure
that decisions are based on merit rather than favouritism or personal biases.
 Communication and collaboration: Performance appraisals provide an opportunity for
managers and employees to have a conversation about the employee’s job performance.
This can help to build trust and improve communication and collaboration between
employee and their manager.
 Legal compliance: In some industries and jurisdictions, performance appraisals are required
by law or regulation. By conducting regular performance appraisals, organizations can
ensure that they comply with legal requirements.
 Alignment with organizational goals: Performance appraisals help to align employee goals
and performance with the overall goals of the organization. By providing feedback on how
an employee’s performance supports the organization’s mission and objectives,
performance appraisals can help to ensure that everyone is working towards the same
goals.
 Recognition and rewards: Performance appraisals can be used to recognize and reward
employees who are performing well. This can include bonuses, promotions, or other forms
of recognition that can help to boost employee morale and motivation.
 Identification of training needs: Performance appraisals can help to identify areas where
employees may need additional training or development. This can help organizations to
provide targeted training that addresses specific skills or knowledge gaps.
Objectives of Performance Appraisals
The primary objectives of performance appraisals are to evaluate and assess employee
performance, provide feedback on areas of strengths and areas for improvement, set performance
goals, and make decisions regarding employee development and career growth. Here are some
specific objectives of performance appraisals:
 Evaluate employee performance: One of the main objectives of performance appraisals is
to evaluate employee performance objectively and systematically. This involves assessing
employee performance against specific job-related criteria, such as job duties, performance
goals, and key performance indicators.
 Provide feedback: Performance appraisals provide employees with feedback on their job
performance, highlighting areas where they are doing well and areas where they need to
improve. Feedback can be constructive and positive way, focusing on specific actions and
behaviours that can be improved.
  Set performance goals: Performance appraisals help to set performance goals that are
aligned with the organization’s goals and objectives. These goals can be used to motivate
employees and provide a clear path for career development.
 Identify training and development needs: Performance appraisals can help to identify areas
where employees may need additional training or development to improve their job
performance. This can help employees to develop new skills and knowledge and improve
their overall performance.
 Determine compensation and rewards: Performance appraisals are often used to
determine compensation and rewards for employees based on their job performance. This
can include bonuses, salary increases, promotions, and other forms of recognition.
 Support performance management: Performance appraisals are an important tool for
performance management, which involves setting expectations, measuring performance,
and providing feedback and coaching to employees to improve their performance.
 Identify potential for career growth: Performance appraisals can help to identify employee
yees who have the potential for career growth and development. This can include
identifying employees who have the skills and experience to take on new responsibilities or
roles within the organization.
So, the objectives of performance appraisals are to evaluate employee performance, provide
feedback, set performance goals, identify training and development needs, determine
compensation and rewards, support performance management, and identify the potential for
career growth.
The six steps of the performance appraisal process
 Establish performance standards
 Communicate performance standards
 Measure actual performance
 Compare actual performance to performance standards
 Discuss the results and give feedback
 Decide on a follow-up plan
____________________________________________________________________________

Job Evaluation
Job evaluation is a systematic process that determines the relative value of jobs within an
organization to ensure fair compensation for employees. It's used to establish a compensation
structure, set pay grades, and determine the starting salary for new employees.
 Ensure fair pay: Compare job functions and demands to establish a fair and equitable pay
structure
 Improve employee performance: Provide constructive feedback on strengths and areas for
improvement
  Identify training needs: Identify training or development needs for individual employees or
the organization
Job evaluations are usually conducted by a team of senior employees, but employers may also hire
consultants to maintain objectivity. The frequency of evaluations depends on the organization's
needs and goals, but some companies may evaluate jobs annually, every six months, or every
quarter.
There are several methods for evaluating jobs, including:
 Point-factor method: Assigns points to each factor that's used to evaluate a job, such as
skills required, responsibilities, and working conditions
 Job classification method: Divides jobs into classes based on things such as skills,
experience, authority level, and department
 Job ranking method: Ranks jobs based on their titles and importance
The method chosen for a job evaluation should consider the organization's size, the nature of the
jobs, the resources available, and the organization's culture.
____________________________________________________________________________

Career planning - Career planning is the process of choosing what you want to do with your work
life and how you will accomplish that goal. It involves a comprehensive assessment of your abilities
to determine which professional route is most suited to your strengths, interests, motivations and
values, and then assessing what the opportunities are within that career or industry.
Career planning is not just a one-and-done activity to guide your initial job search. Rather, it’s a
process you can revisit whenever you, or the world around you, change and you need to reorient
yourself around a different role that makes you happy.
Career development - Career development is the process of constant learning, gaining experience,
and refining goals as you move along your chosen career path. Development can be as simple as
learning a new skill or as complex as taking on a new role in your field. For some, career
development is synonymous with climbing the career ladder. For others, it involves sideways steps
or building a portfolio career that’s made up of multiple passions and income streams. Whatever
the case, career development requires you to make ongoing changes to consistently build on
yourself as you become a better, more well-rounded employee.
Benefits of Career Planning and Development:
 Enhanced Employee Satisfaction: When employees feel valued and have opportunities for
growth, they are more satisfied and engaged in their work.
 Increased Productivity: A well-developed workforce is more productive and efficient,
contributing to organizational success.
 Improved Retention: Career development programs can help retain top talent by providing
opportunities for advancement and growth.
 Enhanced Organizational Performance: A skilled and motivated workforce leads to better
overall organizational performance.
Key Steps in Career Planning and Development:
1. Self-Assessment:
o Identify your strengths, weaknesses, interests, and values.
o Assess your current skills and knowledge.
o Reflect on your career goals and aspirations.
2. Goal Setting:
o Set clear and achievable short-term and long-term career goals.
o Ensure your goals align with your personal and professional values.
3. Skill Development:
o Identify the skills and knowledge needed to achieve your goals.
o Develop a plan to acquire these skills through training, education, or on-the-job
experience.
4. Action Planning:
o Create a detailed action plan outlining the steps needed to achieve your goals.
o Set deadlines and milestones to track your progress.
5. Mentoring and Networking:
o Seek guidance from mentors and build relationships with professionals in your field.
o Attend industry events and conferences to expand your network.
6. Regular Review and Adjustment:
o Regularly review your career plan and make adjustments as needed.
o Be flexible and adaptable to changing circumstances.
By investing in career planning and development, individuals can take control of their professional
journey and achieve their full potential. Organizations can also benefit from a more engaged,
skilled, and motivated workforce.
____________________________________________________________________________

Management Development Programme - A Management Development Programme (MDP) is a

short-term corporate training program that helps business professionals develop their skills and
understanding of business. MDPs can help managers and executives at different levels of an
organization become more effective leaders and improve their competencies.
MDPs can cover a variety of topics, including:
Finance, Marketing, Human resources, Operations, Project management, Information systems,
Industrial relations, Data analytics, Leadership development, and Digital marketing.
____________________________________________________________________________
Key Learning Principles for Employee Training
1. Higher motivation and sense of self-direction - Many learning programs tend to be directive,
often spoon-feeding information to employees. Yet, a motivated employee with a clear sense of
direction tends to take initiative in their learning journey. By fostering an environment that
emphasizes self-motivation and direction, you’re effectively empowering employees to become
proactive learners. This not only makes them more invested in the learning process but also
ensures they seek out additional knowledge proactively.
2. Desire to choose how to learn - In today’s diverse workplaces, it’s not uncommon to find people
with different learning preferences and backgrounds. Some may prefer visual aids, while others
might lean towards hands-on experiences or discussions. Recognizing this diversity and offering
flexibility in how to learn acknowledges every individual’s unique learning style. By offering
choices, you can increase engagement and ensure that the learning resonates with everyone,
regardless of their preferences.
3. Use of life experiences to learn - Every employee brings a wealth of personal and professional
experiences to the table. Instead of sidelining these experiences, integrating them into the learning
process can offer real-world context. This not only makes learning sessions more relatable but also
encourages a culture of sharing and collective growth. Such an approach can turn development
sessions into online employee training platforms, enriching the learning experience for all.
4. Acknowledgment of the value of mentorship and support
While structured training has its place, the role of mentors cannot be overstated. These seasoned
professionals provide real-world insights, guide newcomers through challenges, and offer
invaluable feedback. Encouraging mentorship can expedite the learning curve for many employees,
making them feel more integrated into the company culture and better equipped to handle their
roles.
5. Focus on results - It’s easy to get caught up in the intricacies of a study module, but at the end of
the day, the outcome truly matters. By steering the learning towards tangible results, employees
can clearly see the connection between what they learn and how it impacts their role. Such a
result-oriented approach can lead to a more focused and driven learning experience, ensuring that
the training’s ultimate goals are always in sight.
6. Openness to new ways of learning - The digital era has revolutionized how we approach
learning. From AR-driven experiences to interactive webinars, the tools at our disposal are
numerous. Encouraging a culture that is open to these new methods ensures that learning remains
modern and engaging. Moreover, by leveraging modern tools, the learning process can be made
more immersive and effective, catering to today’s digital-native workforce.
7. Emphasis on the practicality of learning - While theoretical knowledge forms the foundation of
any course, its practical application truly drives the point home. By weaving in real-world scenarios
and hands-on tasks into the curriculum, employees can immediately see the relevance of their
education. Such a pragmatic approach ensures that learners are not just passive recipients of
knowledge but active participants ready to apply what they’ve learned at the workplace.
____________________________________________________________________________
Transfer and Promotion in HRM
Transfer and promotion are two key HR practices that significantly impact employee morale,
productivity, and overall organizational performance.
Transfer
A transfer implies a lateral movement of an employee in the hierarchy of positions with the same
pay and status. Transfers may be either company initiated or employee initiated. In fact, a transfer
is a change in job assignment. It may involve a promotion, demotion or no change at all in status
and responsibility.
Transfers from one job to another may be either temporary or permanent.
Reasons for Transfer:
 Organizational Needs: To fill vacancies, rebalance workloads, or address operational
requirements.
 Employee Development: To provide employees with new challenges, broaden their
experience, or develop new skills.
 Employee Preference: To accommodate personal preferences or family circumstances.
 Performance Issues: To address performance issues or disciplinary problems.
Types of Transfers:
 Lateral Transfer: Moving an employee to a position of similar level and responsibility.
 Vertical Transfer: Moving an employee to a higher-level position, often involving increased
responsibility and authority.
 Geographical Transfer: Moving an employee to a different location within the organization.

Promotion
Promotion is an upward movement of employee in the organization to another job, higher in
organisation’s hierarchy. In the new job, the employee finds a change in salary, status,
responsibility and grade of job or designation. As a whole, the organization perceives the staffing of
vacancy worth more than the employee’s present position. In contrast to promotion when the
salary of an employee is increased without a corresponding change in the job-grade, it is known as
‘upgrading’. But when promotion does not result in change in pay, it is called ‘dry promotion’.
Promotion is a method of internal mobility.
Reasons for Promotion:
 Performance Excellence: Recognizing and rewarding outstanding performance.
 Potential and Skill Development: Identifying and nurturing high-potential employees.
 Succession Planning: Developing future leaders within the organization.
 Organizational Needs: Filling key positions with qualified individuals.
Factors to Consider for Promotions:
 Performance: Consistent and outstanding performance.
 Potential: Demonstrated ability to handle increased responsibility.
 Qualifications and Experience: Relevant education, certifications, and work experience.
 Skills and Competencies: Possession of the necessary skills and abilities.
 Attitude and Behavior: Positive attitude, strong work ethic, and good interpersonal skills.
By effectively managing transfers and promotions, organizations can create a motivated and
engaged workforce, improve employee retention, and enhance overall organizational performance.
____________________________________________________________________________

Code of Conduct - A code of conduct is a collection or set of principles, rules and policies about
how employees can and cannot behave during working hours. It outlines the internal guidelines for
all employees and works as an external statement for corporate values and commitment. In an
office setting, a code of conduct can support decision making as it gives a detailed structure to
follow.
Why is a code of conduct important?
A code of conduct is important in the workplace because it serves as a handbook on how
employees act while performing their everyday tasks. It is important because of the following
reasons:
Outlines a company's principles and values
When a company displays their code of conduct on their website, it helps potential job candidates
and clients learn more about its vision, principles and values. Based on this, an employee can
decide whether they share the same values and fit into its culture.
Provides guidelines of employee behaviour
Having a code of conduct gives you a structure to follow from the moment you join a new
company. It reduces the instances of problems coming up because you will always follow the most
appropriate behaviour. Also, a code clearly outlines the difference between appropriate and
inappropriate behaviour, which helps in strengthening relationships with your colleagues.
Accelerates career growth
When you know what to do and what to avoid, problems and dilemmas rarely occur at work. You
may not realise that asking other employees to punch for you or sharing business information with
outsiders is an unfair practice. But with a code of conduct, you avoid such practices. This can help
accelerate your career growth because you utilise your energy in productive activities.
Increases employee morale - When every employee respects each other, it builds long-lasting
relationships and boosts the entire team's morale. Employees prefer working in an organisation
that boosts morale because they feel respected and valued. It also helps bring out your full
potential and you work towards achieving a common business goal.
Ensures compliance with the legal system
A code addresses issues like workplace discrimination and harassment. It ensures that you adhere
to the company's policies and ensure compliance with the central and state legal system. When
you act within the law, it improves your company's credibility and helps in building its brand.
Produces a compliant culture
Candidates prefer to work in companies with a robust and in-depth code of conduct because it
helps them understand the process for solving work-related problems. Also, these rules make it a
lot easier to report a violation of your company's policies. With a streamlined process in place, it
becomes easier to ensure compliance.

Types of code of conduct

An employer may choose to include different types of codes of conduct in their employee
handbook. Here are some important ones:
Financial Integrity and Responsibility - The company is committed to honest and transparent
financial practices, including accurate reporting, ethical accounting, responsible spending, and
compliance with financial regulations.
Confidential Information - The company prioritizes the protection of sensitive information,
including customer data and proprietary information. Access is restricted, and security measures
are in place to safeguard this information.
Harassment and Discrimination - The company maintains a zero-tolerance policy for harassment
and discrimination. It fosters a respectful and inclusive work environment and takes swift action to
address any complaints.
Dress Code - The company has a professional dress code that reflects its culture and industry
standards. Employees are expected to dress appropriately for the workplace.
Leave Policy - The company offers a comprehensive leave policy, including paid time off and
emergency leave options. Clear guidelines exist for requesting and approving leave.
Break-Time Policy - The company provides regular, scheduled break times to ensure employee
well-being and productivity.
Illegal Activity - The company has a strict policy against illegal activities and will take immediate
action to address any such issues.
Internet Usage Policy - The company provides internet access for work purposes. Employees are
expected to use it responsibly and productively.
Absenteeism - The company has clear attendance policies, including requirements for approval of
absences. Excessive or unexplained absences may result in disciplinary action.
Environmental Concerns - The company is committed to environmental sustainability and reducing
its impact on the environment. It implements measures to reduce waste, conserve energy, and
comply with environmental regulations.
____________________________________________________________________________

UNIT IV: Compensation management

compensation management
Compensation management is the process of establishing, executing, and determining employee
pay levels, perks, and incentives.
It seeks to recruit, retain, and inspire salespeople by offering fair and competitive pay packages
based on market compensation analysis. Tying compensation and incentives to individual and
organizational success also assists firms in aligning employee behavior and performance with
company objectives.
Objectives of Compensation Management
1. Attract and Retain Talent: To remain competitive, organizations must not only attract skilled
individuals but also retain them. This involves crafting compensation packages that go beyond
industry norms, offering attractive remuneration to secure and keep top-tier talent. In a fiercely
competitive job market, distinctive and compelling compensation becomes a strategic tool for
talent acquisition and retention.
2. Motivate Employees: Compensation is a potent motivator when structured thoughtfully. By
establishing clear links between employee efforts and rewards, organizations encourage high
performance. Well-designed compensation systems contribute to fostering a culture of
achievement and dedication, where employees are driven to excel due to the tangible connection
between their contributions and financial recognition.
3. Fair and Equitable Treatment: The objective of ensuring fairness and equity in compensation
extends beyond the monetary aspect. Transparent pay structures are vital for maintaining a
positive work environment. Open communication about compensation criteria reduces
dissatisfaction among employees, creating a sense of trust and loyalty. Fair compensation practices
contribute significantly to employee satisfaction and the overall well-being of the workforce.
4. Cost Control: Striking a balance between offering competitive compensation and managing costs
is a delicate but crucial aspect of compensation management. Effective strategies involve
meticulous budgetary considerations to sustain reward programs without compromising the
organization's financial stability. This requires a comprehensive understanding of market trends,
internal financial capabilities, and the strategic alignment of compensation with overall business
objectives.
5. Legal Compliance: Compliance with labour laws and regulations is not only a legal necessity but
also a fundamental objective for compensation management. Adhering to legal requirements
mitigates the risk of legal issues, lawsuits, and penalties. Beyond safeguarding the organization's
reputation, it reinforces the commitment to ethical employment practices. Regular reviews and
adjustments to compensation systems ensure alignment with evolving legal frameworks,
maintaining the organization's integrity and legal standing.
Compensation principles
 Fairness - Ensure that employees receive equitable pay for their contributions and
responsibilities.
 Equity - Ensure that employees receive comparable salary packages and rewards.
 Market competitiveness - Be aware of the competitive nature of the market and recognize
the role of compensation in attracting and retaining talent.
 Regulatory compliance - Adhere to laws and regulations governing minimum wage,
overtime pay, equal pay, and other labour standards.

Compensation Planning:
Compensation planning is the process of defining and implementing the strategies that will be used
to attract, motivate, and retain talent. It typically involves salary, bonuses, benefits, and other
types of compensation.
It's important to balance what employees deserve and what employers can afford when deciding
about compensation plans.
Compensation planning is an aspect of talent management. Compensation planners work closely
with other departments, such as finance, accounting, and legal. They ensure the company's
compliance with tax law and other regulations.
Purpose of Compensation Planning:
Compensation planning is essential for all HR systems. It helps provide direct compensation for
overtime, productivity, and other related activities not directly related to job duties.
In other words, compensation planning allows employees to earn compensation for their work
beyond their contracted hours. It helps them get compensated without spending a great deal of
their time managing their compensation accounts.
The overall goal of any business is to make a profit. To do so, you need to spend less than what you
make. When it comes to compensations, a few different areas need to be addressed for the
company to stay profitable.

The compensation planning process (Last 2 steps can be Neglected)

 Outline your Objectives
Define clear compensation goals and targets. Allocate budget based on roles and job
descriptions.
 Appoint A Manager
Designate a manager to oversee the compensation plan. They should work with HR,
considering budget, industry benchmarks, and hierarchy.
 Determine A Compensation Goal
Set a vision for your compensation strategy. Decide your market competitiveness (e.g., pay
vs. benefits).
 Organize Jobs in A Matrix By Ranking Them
Rank jobs and categorize them by importance. Create pay scales for different levels (e.g.,
mid-level vs. entry-level). Consider job roles, market rates, and employee expectations.
 Develop A Grade System According To The Seniority
Establish a seniority/grade system within job classifications. Create career ladders for
advancement and compensation growth. Reward high performance with career progression.
 Decide On Your Compensation Strategy
Set pay rates and salary ranges for each position. Finalize the organizational budget. Choose
compensation methods (salary, commission, hourly, etc.).
 Ensure All Policies Are in Place
Align compensation with existing policies (payroll, benefits, etc.). Address related areas like paid
holidays and healthcare.
 Get the Approval
Obtain leadership approval for the compensation plan. Engage team members and clarify their
roles.
 Plan A Communication Strategy
Communicate the compensation plan to all employees. Use multiple channels and provide
translations as needed. Gather feedback for future improvements.
 Adapt Or Evolve As Needed
Monitor and adjust the plan for compliance and competitiveness. Regularly review pay
practices and make necessary changes.
____________________________________________________________________________

Objectives of Sound Compensation Management:

 To acquire qualified competent personnel: Offer competitive pay and benefits to attract the
most skilled and capable individuals to join the organization.
 To retain the present employees: Ensure employees feel valued and fairly compensated,
reducing turnover and maintaining a stable workforce.
 To secure internal equity and external equity: Establish a fair pay structure within the
company, where similar jobs receive similar pay, and ensure compensation is competitive
with market rates for comparable roles.
 To ensure desired behaviour: Link compensation to performance and company goals,
motivating employees to achieve objectives and contribute to organizational success.
  To keep labour and administrative cost in line with ability to pay: Manage compensation
expenses effectively, ensuring they align with the company's financial resources and
profitability.
 To protect the public as a progressive, employers and to comply with the wage
legislations: Adhere to all relevant labour laws and regulations, demonstrating ethical and
responsible employment practices.
 To facilitate pay roll administration of budgeting and wage and salary control: Streamline
payroll processes, enabling efficient budgeting, and maintain accurate control over wages
and salaries.
 To simplify collective bargaining procedures and negotiations: Create a clear and
transparent compensation system that facilitates productive discussions with unions and
employee representatives.
 To promote organisation feasibility: Align compensation strategies with the long-term goals
and sustainability of the organization, contributing to its overall success and viability.
 ____________________________________________________________________________

Factors Influencing Compensation Levels:

1. Job Needs: The specific skills, responsibilities, and demands of a job directly impact its
required compensation.
2. Ability to Pay: A company's financial health and profitability set the limits on how much it
can afford to pay its employees.
3. Cost of Living: Compensation must often be adjusted to reflect the expenses employees
face in their geographic location.
4. Prevailing Wage Rates: Market rates for similar jobs in the industry and region serve as a
benchmark for setting competitive pay.
5. Unions: Collective bargaining agreements negotiated by unions can significantly influence
wage rates and benefit packages.
6. Productivity: Employee performance and output can be tied to compensation, with higher
productivity often leading to higher pay.
7. State Regulation: Labor laws and regulations at the state level, such as minimum wage and
overtime rules, affect compensation practices.
8. Demand and Supply of Labour: When demand for specific skills is high and supply is low,
compensation tends to increase, and vice versa.
____________________________________________________________________________

Pay Structure:
A comprehensive understanding of the salary structure is crucial for both HR and finance teams, as
well as for candidates assessing job opportunities. A clearly outlined salary structure not only
clarifies pay distribution, but also supports organizational objectives.
What is a Salary Structure or a Pay Structure?
A salary structure also known as compensation structure or pay structure, refers to the framework
that displays how employees are paid.
It further provides a systematic approach to establishing pay levels for different roles and
responsibilities within a company. Salary structure includes various components such as base
salary, allowances, bonuses, benefits, deductions, perks.
Moreover, a pay structure consists of salary grades or pay grades, which group together jobs with
similar pay levels in the market. It offers valuable insights into creating a competitive and fair
compensation framework.
Types of Pay Structures (Any 5)
Global pay structures can vary significantly based on factors such as industry norms, company size,
and geographical presence. Each structure may additionally have its advantages and challenges.
 Traditional and Hierarchical Structure
This is a commonly used pay structure. Employees move up in the hierarchy based on
performance, experience, and seniority. Consequently, the salary increases at each level. Though
this approach rewards loyalty and longevity, it may discourage high performers from working at
lower levels.
 Graded Structure
In this structured approach, jobs are categorized into specific grades. Employees accordingly
progress through these grades annually or bi-annually as part of their performance reviews. This
system strongly motivates employees by providing clear advancement opportunities based on their
performance and achievements.
 Step Structure
The Step Structure rewards employees based on their tenure, thus aiming to encourage loyalty
with incremental pay raises.
However, its focus on tenure may limit career advancement opportunities compared to structures
emphasizing performance or skills. Nonetheless, it effectively enhances employee retention and
stability in organizations valuing longevity and experience.
 Broadband Structure - The Broadband Salary Structure reduces pay grades and widens
salary ranges, allowing flexibility in setting salaries based on experience and performance.
While this may lead to larger salary disparities among employees in similar roles and quick
salary cap reach, but it remains popular for its adaptability to market conditions and
organizational needs.
 Market-based Structure - This approach sets salaries based on industry standards, job
demand and regional factors. Thus, this strategy may attract top talent and improve
retention rates.
However, it may increase labor costs and potentially discourage internal career growth and
promotions due to competitive external benchmarks.
  Skill-based Structure
A skill-based structure pays employees based on their skills and qualifications. It values each
employee’s abilities and encourages them to develop professionally.
However, it might create competition instead of teamwork and could lead to differences in wages
among employees based on their skills.
 Flat Structure
This gives every employee the same base pay, no matter their role, experience, or tenure.
Performance bonuses or profit-sharing may be added, but everyone starts with an equal base
salary.
Moreover, this fairness aims to foster teamwork, but it might not motivate top performers who
could feel their efforts aren’t rewarded differently.
____________________________________________________________________________

Reward:
Organisations expect efficient performance from their employees in order to contribute to the
attainment of the individual goals. Organisation reward their employees who contributed to the
achievement of organisational goals.

Types of Rewards:
Intrinsic rewards are the satisfiers that the employees get from the job itself. These rewards
include, pride in ones work, having a feel of accomplishment, being a member of a team, job
enrichment etc.
Extrinsic rewards include wage/salary, fringe benefits, welfare measures, promotions, incentives
etc. These benefits are external to the job and come from management.
Financial vs Non financial Rewards:
Rewards are two types viz., financial rewards and non financial rewards. Financial Rewards include
wages/salaries, allowances, incentive payments, bonuses, profit sharing and the like.
Non financial rewards include canteen facilities, conveyance facilities, medical care, paid vacations,
paid sick leave etc.
Performance based vs Membership based Rewards:
The rewards that the organisation allocates are based on either performance criteria or
membership criteria. Performance based rewards are exemplified by the use of commissions,
incentive pay, piece work, pay plans, group bonuses etc.
Membership rewards are allocated to all employees as they are the employees of the organisation.
These include: basic salary/pay, dearness allowance based on the cost of living index, HRA, City
compensatory allowance etc.
____________________________________________________________________________
Employee Incentives
An incentive is an object or item of value or desired action or event that spurs an employee to do
more of whatever was encouraged by the employer through the chosen incentive. The kinds of
incentives that are available for employers to be used at work. Sure, that others would categorize
these incentives in a different manner, but these four categories work for me.
Compensation incentives may include items such as raises, profit sharing, signing bonuses, and
stock options. Recognition incentives would include actions such as thanking employees for the
work, praising employees for the good work, presenting employees with a certificate of
achievement for them to feel motivated, or announcing an accomplishment at a company meeting
for a sense of achievement.
Rewards incentives include items such as gifts, monetary rewards, service award presents, and also
items such as gift certificates. An additional example also is employee referral awards that some
companies use to encourage employees to refer to job candidates.
____________________________________________________________________________

Employee Benefits:
 Objectives of fringe benefits:
1. To create and improve sound industrial relations.
2. To motivate the employees by identifying and satisfying their unsatisfied needs.
3. To provide security to the employees against social risks like old age benefits and maternity
benefits.
4. To protect the health of the employees and to provide safety to the employees against
accidents.
5. To promote employees welfare
6. To create a sense of belongingness among employees and to retain them.
7. To meet the requirements of various legislations relating to fringe benefits.
Types of Fringe Benefits:
a. Payment for time not worked: Compensation for periods when employees are not actively on
the job, such as vacations, holidays, and sick leave.
b. Employee Security: Benefits aimed at protecting employees from job loss or income disruption,
like severance pay or unemployment insurance.
c. Safety and Health: Measures and programs focused on preventing workplace accidents and
promoting employee well-being, such as safety training and ergonomic assessments.
d. Workmen's Compensation: Financial support and medical coverage for employees who sustain
injuries or illnesses on the job.
e. Health Benefits: Coverage for medical, dental, and vision expenses, often including preventive
care and wellness programs.
f. Welfare and Recreational benefits: Benefits that enhance employees' quality of life outside
work, such as childcare assistance, fitness memberships, or company-sponsored social events.
g. Old age and retirement benefits: Plans designed to provide financial security during employees'
retirement years, including pensions and 401(k) or similar savings plans.
____________________________________________________________________________

Stress Management:
Stress is the way human beings react both physically and mentally to changes, events, and
situations in their lives. People experience stress in different ways and for different reasons.
The reaction is based on your perception of an event or situation. If you view a situation negatively,
you will likely feel distressed—overwhelmed, oppressed, or out of control.
Causes of Stress: The most frequent reasons for “stressing out” fall into three main categories:
1. The unsettling effects of change
2. The feeling that an outside force is challenging or threatening you
3. The feeling that you have lost personal control.
Stress is defined as an adaptive response to an external situation that results in physical,
psychological, and/or behavioural deviations for organisational participants.
The following are the features of stress:
 Stress is both psychological and physical aspect.
 It is common to both the genders.
 It results from the deviation of expectations from actual situation.
 It is symptomatic. Potential stress appears with the symptoms. If the potential stress is
ignored it leads to actual stress.
 Stress is treated to be negative. Nevertheless, it has positive consequences.

Causes of Stress
The variables that convert potential stress into actual stress are known as stressors. Thus, stressors
can be intra- organisational and extra organisational.
Intra-organisational stress arises out of individual, group, and organisational factors. Extra
organisational factors relate to environment of the organisation. Let us learn them in detail.
Individual Factors: Individual factors, which cause stress include: personality and individual
differences, family problems, economic problems, life styles and role demands.
In modern organisations, number of factors create an environment of stress. The changing
environmental dynamics, globalisation, organisational adjustments like mergers and acquisitions
lead to stress among employees.
In addition, a number of internal organisational factors cause employee stress. Some of them
are:poor working conditions, strained labour management relations, disputed resource allocations,
co-employee behaviour, organisational design and policies, unpleasant leadership styles of the
boss, misunderstandings in organisational communication, bureaucratic controls, improper
motivation, job dissatisfaction, and less attention to merit and seniority.
Extra-Organisational Factors:
Environmental Factors: Environmental factors are extra organisational. Nevertheless, they create
job stress in the individuals. These are internal and external factors. Most of the internal
environmental factors relate to the organisational goals, management systems, structure,
processes and design of organisations. They are discussed in the preceding section.
External environmental factors relate to the general environment of the organisation. They are
political, economical, technological, legal, ecological, governmental, social, cultural and ethical.
____________________________________________________________________________

Meaning and Concept of QWL: The phrase ‘Quality of Work Life’ (QWL) connotes different
meanings to different people. Some consider it an industrial democracy or co-determination with
Meaning and Concept of QWL increased employee participation in the decision making process.
For others, particularly managers and administrators, the term denotes improvement in the
psychological aspects of work to improve productivity.
Unions and workers interpret it as more equitable sharing of profits, job security, healthy and
congenial working conditions.
Still others view it as improving social relationship at workplace through autonomous work groups.
Management considers it as a broader view of changing the entire organizational climate by
humanizing work, individualizing organizations, and developing the structural and managerial
systems.
Broadly, the concept of QWL involves four major aspects: (i) safe work environment, (ii)
Democracy (autonomy and opportunity to use abilities), (iii) suitable working time, and (iv)
appropriate salary.
The concept of QWL is based on the assumption that a job is more than just a job; it is the centre
of a person’s life. In recent years there has been increasing concern for QWL due to the following
factors: · increase in education level and consequently job aspirations of employees;
____________________________________________________________________________
UNIT V: Grievance
WORKERS PARTICIPATION IN MANAGEMENT
The concept participative management and workers participation in management are used
interchangeably. The concept of workers’ participation in management is considered as a
mechanism where workers have a say in the decision-making process of an enterprise.
The concept of workers’ participation in management crystalizes the concept of Industrial
Democracy and indicates an attempt on the part of an employer to build his employees in to a
team which work towards the achievement of common objective.
OBJECTIVES OF WORKERS’ PARTICIPATION IN MANAGEMENT:
The main objectives of workers participation in management include:
1. To promote increased productivity for the advantage of the organisation, workers and
society at large.
2. To provide a better understanding to employees about their role and place in the process of
attainment of organisational goal.
3. To satisfy workers social and esteem needs.
4. To strengthen labour management cooperation and thus maintain industrial peace.
5. To build most dynamic Human Resource.
6. To build the nation through entrepreneurship and economic development.
7. An instrument for improving efficiency of the company.
Empowerment is the process of giving employees in the organisation the power, authority,
responsibility, resources, freedom to take decisions and solve work related problems. The
empowered employees become “self directed” and “self controlled”. Empowerment focuses on
employees to make use of their full potential.
Actions for empowering employees:
1. Delegate authority: Give employees decision-making power.
2. Enable participation: Involve them in decision-making.
3. Support self-management: Allow them to manage their work.
4. Enrich jobs: Add challenging tasks for growth.
5. Creating self-managed work teams: Empowering teams to handle tasks and decisions
independently.
6. Creating jobs that provide intrinsic feedback: Designing roles where employees can see the
direct impact of their work.
7. Installation of upward performance appraisal: Allowing employees to provide feedback on
their managers.
 8. Lessening of formalities: Reducing rigid structures and bureaucracy.
9. Creative supportive culture: Fostering an environment that encourages innovation and
collaboration.
10. Encouraging goal setting: Empowering employees to define and pursue their own
objectives.
11. Educating and training employees: Investing in employee development to enhance their
skills and knowledge.

CONFLICT MANAGEMENT
Conflict management is an umbrella term for the way we identify and handle conflicts fairly and
efficiently. The goal is to minimize the potential negative impacts that can arise from
disagreements and increase the odds of a positive outcome.
What is conflict management?
Conflict management refers to the way you handle disagreements. On any given day, you may have
to deal with a dispute between you and another individual, your family members, or fellow
employees.
Although there are many reasons people disagree, many conflicts revolve around:
• Personal values (real or perceived)
• Perceptions
• Conflicting goals
• Power dynamics
• Communication style
Conflict Management Styles:
It's human to deal with conflict by defaulting to what's comfortable. According to University of
Pittsburgh professors of management Ken Thomas and Ralph Kilmann, most people take one of
two approaches to conflict management, assertiveness or cooperativeness. From these approaches
come five modes or styles of conflict management:
1. Accommodating - An accommodating mode of conflict management tends to be high in
cooperation but low in assertiveness. When you use this style, you resolve the disagreement by
sacrificing your own needs and desires for those of the other party.
2. Avoiding
When avoiding, you try to dodge or bypass a conflict. This style of managing conflicts is low in
assertiveness and cooperativeness.
Avoidance is unproductive for handling most disputes because it may leave the other party feeling
like you don't care. Also, if left unresolved, some conflicts become much more troublesome.
3. Collaborating
A collaborating conflict management style demands a high level of cooperation from all parties
involved. Individuals in a dispute come together to find a respectful resolution that benefits
everyone.
Collaborating works best if you have plenty of time and are on the same power level as the other
parties involved. If not, you may be better off choosing another style.
4. Competing
This style is high in assertiveness and low in cooperation. In other words, it's the opposite of
accommodating.
While you might think this style would never be acceptable, it's sometimes needed when you are
in a higher position of power than other parties and need to resolve a dispute quickly.
5. Compromising
Compromising demands moderate assertiveness and cooperation from all parties involved. With
this type of resolution, everyone gets something they want or need.
This style of managing conflict works well when time is limited.
____________________________________________________________________________

COLLECTIVE BARGAINING
Collective Bargaining is a method by which trade unions protected and improved the conditions of
their members’ working lives. It is nothing but process where employees bargain collectively with
the employer.
Alright, here's a one-line explanation for each characteristic of collective bargaining:
Characteristics of Collective Bargaining:
1. Group Action: It involves a collective of workers, not individuals, negotiating with
management.
2. Flexible and mobile: The process can adapt to changing circumstances and move between
different stages.
3. Two party process: It's a negotiation specifically between employers and employee
representatives.
4. Continuous process: Bargaining is ongoing, not a one-time event, with agreements subject
to revisions.
5. Dynamic: The process is constantly evolving based on economic, social, and political factors.
6. Industrial Democracy at work: It allows workers a voice in determining their working
conditions.
7. Not a competitive process: It's about finding mutual agreement, not winning at the other's
expense.
8. An Art: It requires skill, tact, and negotiation expertise to achieve successful outcomes.
Collective Bargaining plays a vital role in setting and preventing Industrial Disputes. Specifically its
importance is evident from the following:
1. Increase the economic strength of the unions and Management.
2. Secure prompt and fair redressal of grievance.
3. Avoid interruptions in work
4. Lay down fair rates of wages and norms of working conditions
5. Promotes the stability and prosperity of the plant.
6. It provides a method for regulation of the condition of employment.
7. Achieve an efficient operation of the plant.

Prerequisites for the Success of Collective Bargaining: (Any 5)

1. Equal Bargaining Power: Both management and labor must have a balanced ability to
influence the outcome.
2. Representative Union: The union must genuinely represent the majority of the workers
involved.
3. Quick Disposal: Issues must be resolved in a timely manner to maintain momentum and
trust.
4. Desire to settle: Both parties must genuinely aim for an agreement rather than prolonging
conflict.
5. Union Cooperation: The union leadership and members must work together cohesively.
6. Mutual Respect: Both sides must acknowledge and value the other's position.
7. No Unfair Practices: Neither party should engage in deceptive or manipulative tactics.
8. Positive Attitude: A constructive and optimistic approach is essential for productive
negotiations.
9. Give and Gain: Both parties need to be willing to compromise and find mutually beneficial
solutions.
10. Respect Previous Agreements: Past agreements should be honored to build trust and
ensure future cooperation.

Functions of Collective Bargaining: (Any 7)

 Economic Strength: Enables workers to collectively improve their economic standing.
 Fair Redressal: Provides a mechanism for addressing grievances and resolving disputes
equitably.
  Norms: Establishes standards and rules for workplace conditions and practices.
 Efficiency: Streamlines labor relations, potentially reducing disruptions and increasing
productivity.
 Stability: Creates a predictable and stable environment for both employers and employees.
 Regulation: Provides a framework for regulating employment conditions through negotiated
agreements.
 Solution: Offers a structured process for finding mutually acceptable solutions to workplace
issues.
 New Procedures: Facilitates the development of new work practices and procedures
through negotiation.
 Flexible Means: Allows for adaptable solutions to changing economic and workplace
conditions.
 Democratic Principles: Upholds democratic values by giving workers a voice in their
employment terms.
 ____________________________________________________________________________

EXIT INTERVIEW
An exit interview is an exchange that takes place between an employee who is leaving the
business, and their manager or a member of HR.
However, it’s recommended that an HR representative conduct exit interviews as they are a neutral
third party who is committed to confidentiality.
An exit interview offers leaving employees a chance to be candid with their reasons for leaving, any
issues they may have experienced while working for the company, and suggestions for
improvements.
They are likely to be more open and forthcoming with their true opinions than an employee who is
not leaving the company, which makes it a unique opportunity to identify problem areas.
How to conduct effective exit interviews
There are a number of steps you can follow to conduct effective exit interviews in your organization
and ensure a positive offboarding experience for your leaving employees while gaining valuable
insight into how your company can do better.
Make exit interviews a part of your offboarding process
Integrating exit interviews into your official offboarding process ensures that every employee
completes an exit interview, which helps you collect valuable feedback from a wide range of
departing employees.
Use a template with relevant questions
Using a structured exit interview template with relevant questions helps lead interviews that are
efficient and focused and provide valuable insights. Your exit interview data analysis also becomes
faster and more productive as you can compare responses across themes, departments, and more.
Offer multiple channels for feedback
Everyone is different and has a different method of communication that they feel most comfortable
with. This is why offering departing employees different ways to share feedback is also important.
Analyze the exit interview data
The next step is to make sure that the data you collect is analyzed and does not go to waste.
Review the collected feedback so you can uncover patterns, recurring themes, and areas for
improvement within the organization.
Create an action plan
Once you’ve analyzed your data and discovered areas for improvement, the final step is to create a
plan to address the highlighted concerns. This will enable you to improve the work environment for
current and future employees.

Discipline: The behavior of an employee is at the root of all discipline in an organization. Every
manager wants this behavior to be in conformity with the required system which he has prescribed
in order to achieve the organizational goals.
However, not infrequently we find employees deviating from systems of behavior which they
cannot easily give up when they enter as members of an organization.
Causes of Indiscipline: It is very difficult to prepare an exhaustive list of the reasons which lead
employees to indiscipline. In fact, a number of social, economic, cultural and political reasons
contribute to indiscipline in an organization. Important among these causes are the followings
1. Ineffective leadership which cannot control, coordinate and motivate workers.
2. Low wages and poor working conditions.
3. Lack of promotional opportunities due to which people feel stagnated
4. Absence of any code of conduct to regulate behaviour on both sides.
5. Lack of timely redressal of workers’ grievances.
6. Unfair management practices.
7. Defective communication system.
8. Lack of workers’ education.
9. Uninteresting work.
10. Drunkenness and family problems.
Types of Discipline:
Discipline may be of two types positive and negative.
Positive discipline or ‘self-discipline’ is the best discipline. This refers to an organizational
atmosphere in which subordinates willingly abide by rules, which they consider fair.
The techniques followed by the management to achieve this type of discipline include positive
motivational activities such as praise, participation and incentive pay.
Negative or punitive discipline is one in which management has to exert pressure or hold out
threat by imposing penalties on wrongdoers. When this pressure becomes increasingly severe each
time a man is disciplined, it is called “progressive” or “corrective” discipline.
Arguments Against Negative Discipline or Punishment: Many people argue that punishment
should be avoided as a means of trying to Influence Behaviour. Their objections are as follows
(a) For punishment to be at all effective, there must be continued monitoring or surveillance,
which is a very wasteful use of high priced managerial time.
(b) Punishment never really extinguishes or eliminates undesirable response tendencies, but only
temporarily suppresses them. These tendencies reappear with full force when the threat of
punishment is removed
c) Punishment has undesirable side effects: The fear associated with the punishing agent may lead
the punished person to avoid his very presence; this, in turn, makes it more difficult for the
manager to play the desired role of coach, teacher, or counsellor. Alternatively, the reaction to
punishment may be more extreme, resulting in generalized inhibition and rigidity or stereotyped
behaviour in the punished person.
Essentials of a Good Disciplinary System: While punitive discipline or punishment may sometimes
be ineffective in changing behaviour or may produce unwanted by-products, there is nevertheless
considerable evidence that punishment can be an effective tool under certain conditions. These are
as under
1. Knowledge of Rules: The employee must be informed clearly about what constitutes good
behaviour and the rewards that may emanate from it. All instructions should be clear and
understandable. It is common sense that an employee will obey an instruction more readily
if he understands it.
2. Prompt Action All violations and misconducts-big and smallshould be promptly enquired
into. For example, a supervisor is most unwise to wait until lunch break before rebuking a
worker for arriving late. Beat the iron when it is hot.
3. Fair Action Promptness of disciplinary action at the cost of its fairness is not proper. An
action in order to be fair must possess the following characteristics : No difference in size of

the indiscipline, individual and be affective at all times.

4. Well Defined Procedure: The procedure to be followed to reach to a penalty decision

should be carefully laid down.
 5. Constructive Handling of Disciplinary Action: Disciplinary action should be handled in a
constructive manner. It should be carried out by the immediate line supervisor. This
employee should be told not only the reasons for the action taken against him but also how
he can avoid such penalties in future. Disciplinary action should be taken in private.
Procedure for Taking Disciplinary Action: The Standing Orders of an organization provides the
basis for the procedure of the same. They should be strictly followed for the punishment.
These may be held invalid if there is any deviation from the laid down procedures. Whether or not
there are Standing Orders the procedure for taking disciplinary action against workers should be
based on the following principles of natural justice
(a) The worker charged should be given an opportunity to present witnesses of his own choice
on whom he relies;
(b) The worker should be given the right to cross examine management’s evidence;
(c) The evidence of the management should be taken in worker’s presence;
(d) No material should be used against the worker without giving him an opportunity to
explain;
(e) The enquiry against the worker should be fair and conducted by an impartial person; and
(f) The punishment awarded should not be out of proportion to the misconduct committed.
Following should be the steps for taking disciplinary action:
1. Preliminary Investigation The first and primary step should be to hold a preliminary
investigation in order to find out whether a prima facie case of misconduct exists.
2. Issue of a Charge-sheet: On the prima facie case of misconduct being established the
management should proceed to issue a charge-sheet to the worker.
Charge-sheet is not a punishment in itself. It is merely notice of a charge that the worker is
responsible for some misconduct and that the management wants to know what he has to say
about it.
3. Suspension Pending Enquiry: if Needed If the nature of misconduct is grave and if it is in the
interest of discipline and security in the establishment, the management may suspend a worker
even before the charge-sheet is issued or an order of suspension may be given to the worker along
with the charge-sheet.
4. Notice of Enquiry: On receipt of reply to the charge-sheet, three situations may arise
(i) The worker may admit the charge in an unqualified manner.
(ii) The worker may not admit the charge and the charge merits only minor penalty.
(iii) The worker may not admit the charge and the charge merits major penalty.
5. Conduct of Enquiry: This step should deal with three points
 deciding as to who should be the enquiry officer;
 deciding as how to proceed;
 deciding about the order of examining witnesses.
Standing orders may provide as to who should hold the enquiry. Otherwise, an assistant manager
or labour welfare officer or company’s lawyer or some outsider may be nominated. It should be
remembered that for the purpose of enquiry, the enquiry officer is a judge.
6. Recording of Findings by the Enquiry Officer: At the conclusion of the enquiry proceedings the
enquiry officer should decide as to whether the charges made are valid or not along with the
reasons for his findings.
7. Awarding Punishment: This is the task of management. The punishment should be awarded on
the basis of findings of the enquiry, past record of the employee and gravity of misconduct.
8. Communication of Punishment: The punishment awarded to the accused should be
communicated to him expeditiously. The letter communicating the punishment should contain
 reference to the letter of charges issued to the employee;
 reference to the enquiry;
 reference to the findings of the enquiry;
 decision whether to punish or not;
date from which the punishment is to be effective.
____________________________________________________________________________

"Trade Union" means any combination, whether temporary or permanent, formed primarily for
the purpose of regulating the relations between workmen and employers or between workmen
and workmen, or between employers and employers, or for imposing restrictive conditions on the
conduct of any trade or business.
Trade unions are formed to protect and promote the interests of their members. Their primary
function is to protect the interests of workers against discrimination and unfair labor practices.
Trade union is an association either of employees or employers or of independent workers.
It is a relatively permanent formation of workers. It is not a temporary or casual combination of
workers.
Functions of Trade unions:
(i) Militant Functions (Activist or Revolutionary)
(a) To achieve higher wages and better working conditions
(b) To raise the status of workers as a part of industry
(c) To protect labors against victimization and injustice
(ii) Fraternal Functions (Brother Relationship)
• To take up welfare measures for improving the morale of workers
• To generate self confidence among workers
• To encourage sincerity and discipline among workers
• To provide opportunities for promotion and growth
• To protect women workers against discrimination

Importance Of Trade Unions:

Trade unions help in accelerated pace (speed) of economic development in many ways as follows:
• by helping in the recruitment and selection of workers.
• by inculcating discipline among the workforce
• by enabling settlement of industrial disputes in a rational manner
• by helping social adjustments. Workers have to adjust themselves to the new working conditions,
the new rules and policies. Workers coming from different backgrounds may become disorganized,
unsatisfied and frustrated. Unions help them in such adjustment.

Social responsibilities of trade unions include:

• promoting and maintaining national integration by reducing the number of industrial disputes
• incorporating a sense of corporate social responsibility in workers
• achieving industrial peace.
Causes of Industrial Disputes The causes of industrial disputes can be broadly classified into two
categories:
• economic causes: The economic causes will include issues relating to compensation like wages,
bonus, allowances, and conditions for work, working hours, leave and holidays without pay, unjust
layoffs and retrenchments.
• non-economic causes: The non economic factors will include victimization of workers, ill
treatment by staff members, sympathetic strikes, political factors, indiscipline etc.

Objectives of Trade Union:

 Wages or salaries: To negotiate for fair and competitive compensation for members.
 Working conditions: To improve and maintain safe and healthy work environments.
 Discipline: To ensure fair and consistent disciplinary procedures are followed.
 Personnel policies: To influence and shape company policies related to employment.
 Welfare: To provide benefits and support to members, such as healthcare and retirement
plans.
 Employee-employer relation: To foster positive and productive relationships between
workers and management.
 Negotiating machinery: To establish and utilize effective mechanisms for collective
bargaining.
 Safeguarding organizational health and interest of the industry: To protect the long-term
viability of the workplace and the industry as a whole.

____________________________________________________________________________
WORKERS PARTICIPATION IN MANAGEMENT
The concept participative management and workers participation in management are used
interchangeably. The concept of workers’ participation in management is considered as a
mechanism where workers have a say in the decision making process of an enterprise.
The concept of workers’ participation in management crystalizes the concept of Industrial
Democracy and indicates an attempt on the part of an employer to build his employees in to a
team which work towards the achievement of common objective.
OBJECTIVES OF WORKERS’ PARTICIPATION IN MANAGEMENT: The main objectives of workers
participation in management include:
1. To promote increased productivity for the advantage of the organisation, workers and
society at large.
2. To provide a better understanding to employees about their role and place in the process of
attainment of organisational goal.
3. To satisfy workers social and esteem needs.
4. To strengthen labour management cooperation and thus maintain industrial peace.
5. To build most dynamic Human Resource.
6. To build the nation through entrepreneurship and economic development.
7. An instrument for improving efficiency of the company.
Forms of Workers’ Participation in management:
The forms of workers’ participation in management vary from industry to industry and from
country to country. For example, Labour management consultation and cooperation,
Joint consultation and Model of Participation (UK), Union Management Cooperation (USA), Co-
determination Schemes (West Germany).
Forms of workers’ participation in Management are:
1. Works Committee (ID act 1949 given provision of WC where employees 100 or more in a
company)
2. Joint Management Councils (Second 5 years plan recommended the setup of JMC with both
management and employee representatives)
3. Joint Councils (is for entire Unit)
4. Shop Councils (Joint council will be established in an industrial unit employing 500 or more)
5. Unit Councils. (unit councils are for each unit of an organisation)
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Empowerment is the process of giving employees in the organisation the power, authority,
responsibility, resources, freedom to take decisions and solve work related problems.
The empowered employees become “self directed” and “self controlled”. Empowerment focuses
on employees to make use of their full potential.
Actions for empowering employees:
To empower employees the organisation must initiate certain actions which may be :
1. Delegation of authority
2. Participative decision making
3. Encourage self management
4. Job enrichment
5. Creating self managed work teams.
6. Creating job that provide intrinsic feedback.
7. Installation of upward performance appraisal.
8. Lessening of formalities
9. Creative supportive culture.
10. Encouraging goal setting
11. Educating and training employees.