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HUMAN RESOURCE
MANAGEMENT
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HUMAN RESOURCE
MANAGEMENT
CONCEPTS AND PRACTICES
SOLVED QUESTION PAPERS

For the University of Delhi
As per the syllabus of semester IV, B.Com. course
Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.
Licensees of Pearson Education in South Asia
No part of this eBook may be used or reproduced in any manner whatsoever without the publisher’s
prior written consent.
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reserves the right to remove any material in this eBook at any time.
ISBN 9789332500327
eISBN 9789332517820
Head Office: A-8(A), Sector 62, Knowledge Boulevard, 7th Floor, NOIDA 201 309, India
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Syllabus
B.Com. Semester Course
University of Delhi
Paper No. – CH 4.4: Semester – IV
HUMAN RESOURCE MANAGEMENT
Duration: 3 hours Maximum Marks: 100

Lectures: 75
UNIT – I
Human resource management: relevance and spectrum; HRD: concept and evolution; organization
of HR department; role, status and competencies of HR manager; HR policies; an overview of
government policies since 1991 affecting human resources. [10 lectures]
UNIT – II
Acquisition of human resource: human resource planning—quantitative and qualitative dimensions;
job analysis—job description and job specification; recruitment—concept and sources; selection—
concept and process; test and interview; placement induction. [15 lectures]
UNIT – III
Training and development: concept and importance; identifying training and development
needs; designing training programmes; role-specific and competency-based training; evaluating
training effectiveness; training process outsourcing; management development systems; career
development. [10 lectures]
UNIT – IV
Performance appraisal system: nature and objectives; techniques of performance appraisal; potential
appraisal and employee counselling; job changes—transfers and promotions. [15 lectures]
UNIT – V
Compensation: concept, policies and administration; job evaluation; methods of wage payments
and incentive plans; fringe benefits; performance linked compensation. [10 lectures]
UNIT – VI
Maintenance: employee health and safety; employee welfare; social security; grievance handling
and redressal. [10 lectures]
UNIT – VII
Emerging horizons in human resource management: human resource information system;
downsizing; VRS; empowerment, workforce diversity. [5 lectures]
Contents
Question Paper No. 1
Model Question Paper 1
2007 47
2008 66
2009 74
2010 84
2011 88
2012 92
Model Question Paper
Q.1 (a) Give a suitable definition of HRM to discuss its nature and scope. Why is it considered to
be one of the most significant business functions of modern day organization?
A.1 (a) The successful management of an enterprise mainly depends on three factors, namely,
(i) efficient utilization of resources in terms of men, money, material and machinery;
(ii) projecting an image of fairness of management policies in the mind of employees;
and
(iii) maintaining cordial relationship between management and employees—infusing a
sense of belonging to each other.
Efficient utilization of resources depends a great deal on the efficiency of people operat-
ing and handling the resources, and the utilization of knowledge, capability, skills and
potentialities in them.
The concept of human resource management (HRM) has variously been described to
include personnel administration, labour management, industrial relations and employee
relations; its functionaries were called by such designations as personnel manager, employee
relations manager, industrial relations officer, welfare officer, labour officer and the like. The
function is noted to be concerned with (i) employees and (ii) covered all levels of personnel
in the organization, namely, workers, operatives, supervisors and managers.
The function helps the employees to develop their potentialities and capabilities so that
they can derive the greatest satisfaction from work.
The function, being an operative area of management, is noted to be in existence in
business, corporate, government and non-profit organization.
HRM as a system is subject to all the factors an organization is subject to, that is,
technology, competition, market conditions, etc. Managing people is the heart and essence of
being a manager. It is not a prerogative of only a personnel/human resource manager, but for
reasons of specialization, there arises the need for personnel/human resource organization.
Definitions of HRM
Scott and Clothier have defined the human resource function as ‘that branch of management
which is responsible on a staff basis for concentrating on those aspects of relationship of
management to employees, and employee to employee which concerns their development as
individual and also in group. The objective is to achieve maximum individual development,
desirable working relationship between employers and employees, employees and employees,
and effective moulding of human resources as contrasted to physical resources’.
In India, the National Institute of Personnel Management has defined the same as ‘that
part of management concerned with people at work and their relationship within the orga-
nization. It seeks to bring men and women who make up an enterprise, enabling each to
make their own best contribution to its success both as an individual and as a member of a
working group’.
2 Solved Question Papers
HRM Philosophy and Perspective

In any business enterprise, particularly manufacturing in nature, the production man is
incharge of it, the marketing manager understands the market and the finance director takes
care of the accounting and investment part of the activity. However, the HRM profession-
als must know the ABC of all these functions. They should know how to knit together the
activities of these departments having HR implications. It is this area where arises the need
to integrate human resources and business concerns. This is the area where HRM can play a
meaningful role. An industry or company should have a strong philosophy on HRM. It should
centre on the following maxims:
K HR is the most important of all resources.
K Capital and technology will yield only limited results without well-motivated, competent
and disciplined employees.
K People have intrinsic capacity and urge to develop.
K People are to be treated with respect and dignity.
K An atmosphere of mutual trust and faith in the company is essential for high level of
motivation and morale.
K Understanding of behavioural process and developing them are more rewarding than focus-
ing on only technological process.
To put the discussed philosophy into action, it should be borne in mind that unlike other
managers who deal with material things, the HR professional have concerned with a unique
‘resource’ namely the human resource which has two distinct aspects; one is the HR as an
individual, and the other as a collective organized way.
Features of Human Resource Management
K It is concerned with employees both as individuals and as a group in attaining their
objectives.
K It addresses the issue of developing HR, i.e., knowledge, capability, skills and potentialities.
K HRM covers all levels and categories of employees.
K It is considered to be a continuous and never ending process aiming at organizational
and individual’s goal. Organizational goals may include growth, survival, profitability,
productivity, innovation and excellence. Individual employee goal would include job sat-
isfaction, job security, attractive fringe benefits, pride, status, recognition and opportunity
for development.
K HRM is a responsibility of all line managers, and a function of advisory nature in an
organization.
K An HR professional needs to be proficient at developing talent and creating the infrastruc-
ture to build a high performing workforce.
In the present scenario, and in view of increasing competitiveness and turbulent changes, the
business organizations’ greatest challenge is that of building the organizational capability in
order to respond quickly and effectively to the demands of market place. Business manag-
ers would need to identify the specific areas where organizational capability is required, to
define the choices in each area and to determine managerial actions that will build the orga-
nizational capability in a desired and defined time frame. This would create ‘a peoples edge’.
In this context, the role of HRM function would be completely indistinguishable from the
main stream of business. Unless the HRM function is seen to be making a real added value
contribution to the organization, it would have no justification for existence. HRM’s major
Solved Question Papers 3
concern at the enterprise level is to ensure the cooperation of the employees belonging to var-
ious levels, namely, senior, middle, junior, support staff and workmen, who cannot be taken
for granted. Similarly, external pressure experienced by the organizations due to changes in
political, economical, social and changes in the industrial relations has to be addressed by the
HR manager. Thus, the organizations need to be geared up to respond better to the internal
and external pressures and achieve a desirable rate of growth with reasonable profits to sat-
isfy various interest groups.
Nature and Scope

(i) achieve an effective utilization of human resources;
(ii) establish and maintain an organizational structure;
(iii) maintain working relationships among members of the organization;
(iv) administer the compensation system to remunerate the employees and create high
moral and better human relations inside the organization by developing a culture that
retains the employees in the organization;
(v) secure an integration of the individuals and groups with the organization by reconcil-
ing their goals and
(vi) ensure maximum development of the individuals and groups with the organization by
providing opportunities for their development through training and other facilities.
Functions
(i) Manpower planning
(ii) Acquisition of human resources
(iii) Recruitment
(iv) Selection
(v) Placement
(vi) Induction
(vii) Training and development
(viii) Wages/salary administration
(a) Job evaluation
(b) Performance appraisal
(c) Incentives
(d) Employees benefit programmes and services (fringes)
(ix) Personnel forms and records, and
(x) Personnel audit and research.
OR
Q.1 (b) Why is HRM considered to be important for the success of modern day organizations?
Briefly state the functions of HRM.
A.1 (b) The answer to this question should be read along with the previous question’s answer.
Functions of HRM
1. Manpower Planning
Main activity: Anticipating vacancies.
Objective: To anticipate and provide future openings.
Activities:
(i) Identifying corporate growth in terms of competition, future plans and technological
and environmental changes.
(ii) Estimating future vacancies.
(iii) Estimating additional future positions.
(iv) Anticipating death, dismissal, retirement and resignation.
(v) Anticipating future promotion.
(vi) Anticipating future transfers.
2. Organizing the Manpower Sources
Main activity: Organizational planning.
Objective: Determine the organization structure and manpower needed to effectively meet
the enterprises objectives.
Activities:
(i) Analysing organization structure.
(ii) Forecasting manpower requirements.
(iii) Analysing and identifying positions in the enterprise.
3. Recruitment, Selection and Induction
Objective: Seek and attract qualifying applicants and analyse their qualifications for deter-
mining their suitably to their organization.
Activities:
(i) Preparing job analysis.
(ii) Preparing job description.
(iii) Arriving at man specification.
(iv) Analysing the potential sources to fill vacancies.
(v) Attracting potential employee.
(vi) Weeding out undesirable candidates through preliminary screening.
(vii) Interviewing the applicants.
(viii) Testing the applicants, wherever necessary.
(ix) Checking their references.
(x) Arranging for medical examination.
(xi) Evaluating the applicants for final selection.
(xii) Orienting the employees to their jobs.
4. Career Planning, Training and Development
Objective: Ensure that employees are provided with appropriate training and development
facilities to enable them to perform their job effectively.
Activities:
(i) Identifying suitable career path for the employees.
(ii) Ascertaining training needs of employees to make them more competent for the job.
(iii) Providing facilities for their future development in the light of expected roles.
(iv) Planning and preparing training programmes.
(v) Providing training staff and faculty resources.
(vi) Conducting the training programmes.
(vii) Evaluating the training results.
5. Wages/Salary Administration (Compensating Employees)
Objective: Suitably compensate the employees, appraise their performance and motivate
them for it.
Activities:
(i) Conducting wage/salary surveys.
(ii) Developing performance standards.
(iii) Conducting job evaluation.
(iv) Evaluating employees qualification and performance.
(v) Promoting/transferring employees.
(vi) Conduct performance evaluation.
(vii) Conduct performance evaluation interviews.
(viii) Analyse performance evaluation results.
6. Employee Counselling
Objective: Help employees solve their personal and job-related problems.
Activities:
(i) Selecting and training counsellor.
(ii) Arranging counselling interviews.
(iii) Assessing the extent of help required and provided.
7. Employees’ Benefit and Services
Objective: To ascertain facilities and benefits required and provided.
Activities:
(i) Establish the need for the facilities.
(ii) Developing and administering facilities.
(iii) Preventing/eliminating hazards (particularly in case of safety rules).
(iv) Developing and administering security regulations.
(v) Organizing fire fighting services.
(vi) Providing guard and watchman services.
(vii) Meeting provisions of law.
(viii) Evolving schemes over and above legal provisions.
8. Personal Audit and Research
Objective: Identify that the conduct of activities are producing as what expected.
Activities:
(i) Analyse personnel activities.
(ii) Analyse personnel problems.
(iii) Recommending improved practices.
Q.2 (a) Explain the objectives of HRM. Is it the responsibility of HR department only?
A.2 (a) Objectives of HRM/Personnel as a Function
(i)Achieve an effective utilization of human resources.
(ii)Establish and maintain an organizational structure.
(iii)Maintain working relationships among members of the organization.
(iv) Administer the compensation system to remunerate the employees and create high
moral and better human relations inside the organization by developing a culture that
retains the employees in the organization.
(v) Secure an integration of the individuals and groups with the organization by reconcil-
ing their goals.
(vi) Ensure maximum development of the individuals and groups with the organization by
providing opportunities for their development through training and other facilities.
Responsibilities of HR Department
(i) An HR manager/department should become well acquainted with all aspects of the
organization he or she works for.
(ii) He or she should promote pragmatic human resource utilization within his or her own
organization, rather than take a rigorous moralistic approach when dealing with execu-
tives and workers. He or she should emphasize the importance of achieving return on
investment through effectively organizing the creative skills and productive capacity of
individuals.
(iii) He or she should be sensitive to the changes in environment within and outside the
organization in the industry.
(iv) HR professionals should constantly discover new mechanism and sub-systems that
will facilitate development of the individuals to respond better to the changes taking
place within and outside the organization.
(v) To be aware of the future plans of the organization, and be able to integrate it with HR
development needs accordingly.
(vi) To be informed and sensitive to issues, difficulties and challenges faced by the line
management, and help them to resolve and use them as development opportunities.
(vii) To review the existing system of performance appraisal, training, training feedback,
career planning and development, and such other practices and make changes to make
these more meaningful to ever changing circumstances.
(viii) To be able to provide a strong infrastructure and HR system for smooth functioning of
the above activities.
In addition to developmental role, HRM professionals are also required to perform admin-
istrative role. This may include manpower planning, recruitment and selection, transfer, job
rotation, potential appraisal, promotions etc.—monitoring of these activities may consume a
large part of their time, but as functional heads, they should be able to derive a judicious bal-
ance between the developmental and administrative responsibilities.
HR managers thus partly assume the conscience role (reminding the management of their
moral and ethical obligations towards employees) and partly the counsellor role (encour-
aging employees to meet frequently for consultation), the mediator role (trying to settle
dispute between labour and management), the spokesman role (acting as the spokesperson
between employees and management) and the problem solver’s role (in respect of issues
involving HR management) and lastly, the change agent role, i.e., acting as a change agent
in respect of introducing and implementing the major institutional changes.
OR
Q.2 (b) ‘Personnel policies must cover all areas of HRM’. What are these areas? Explain.
A.2 (b) HR policy provides guidelines for a wide variety of employment relations in the organi-
zation. These guidelines identify the organization’s intentions in matters of recruitment,
selection, promotion, development, compensation, motivation and otherwise leading
and directing employees in the organization. HR policies serve as a roadmap for the
manager.
HR policies are also defined as that body of principles and rules of conduct which govern
the enterprise in its relationship with employees. Such policy statement provides guidelines
for a wide variety of employment relationship in the organization. These constitute guides
to action and serves as a roadmap for management in decision making. It represents the HR
philosophy of the management, which in turn reflects the fundamental beliefs, ideals and
views held by management with respect to the treatment of individuals at work. The policy is
subject to change as organizational and human values changes.
The purpose and significance of HR policy hardly needs any elaboration. Every organiza-
tion needs policies to ensure consistency in action and equity in its relation with employees.
Policies serve the purpose of achieving organizational goals in an effective manner. HR
policies constitute the basis for sound HR management practices. Moreover, policy is the
yardstick by which accomplishment of programmes can be measured.
Policy is also regarded as ‘setting governing regulations or norms’. It is the basis of control.
The emphasis in it is on the regulatory aspect. Policy as a guide to managerial control works
in a cyclical fashion as follows:
Operation
and action
Review of
Policy action
against policy
Feedback
Policy as a Cycle of Managerial Control
Appraisal of HR programmes as regards recruitment, selection, training and development,

compensation, collective bargaining and other human resource activities must rely largely on
policy as a measuring stick.
The conceptualization of HR policy as an aid to management requires formulation of
overall and subsidiary policies, that is, organization-wide policies such as general company
policies; administrative policies for top executive; operational policies for the guidance of
low-level managers who execute plans and programmes and subsidiary policies relating
to the overall policies. A written declaration of such policies is considered to be of great
importance in promoting uniformity and consistency in management approach.
Essentials of HR Policy Statement

It is noted earlier that HR policies facilitate in achieving the organizational objectives and
also ensure a consistent treatment of employees, minimizing thereby the scope of favou-
ritism and discrimination. This ensures efficient utilization of human resources within an
enterprise. The National Industrial Conference Board, USA, has defined an HR policy as a
‘written statement of an organizational goal and intent concerning matters that affect people
in the organization’. According to this view, policies are stated in broad and long range terms
that express or stem from the philosophy or believe of the organizations’ top authority. The
essentials of a human resource policy statement could be listed as follows:
(i) HR policy must be an expression of belief or intent and reflect the philosophy of top
management. It should be stated in clear and understandable manner leaving no scope
for any ambiguity. The policy statement should ensure an alignment of HR objective
with the corporate objectives.
(ii) It must have long-range implications and also meet the requirements of today and
tomorrow.
(iii) It should be developed with an active participation of top management.
(iv) The development of policy should be steered by a committee of senior executive headed
by the chief executive.
(v) The primary function of the HR executive is to serve in a ‘staff ’ capacity, feeding in
ideas and pushing the project along. Due care should be given to its (policy) formulation.
(vi) The HR policy must be approved by the highest authority in the organization, i.e., the
Board of Directors.
(vii) The policy statement should cover all the functional area of human resource management.
(viii) It must be in writing otherwise; it is not likely to be taken seriously. Writing ensures
uniformity of application, provides something concrete to base on, and appeal if there
is any disagreement as to what the policy is. It also serves as a valuable means of
instructing new employees and supervisors. The written policy statement should contain
three basic parts, namely, objective, procedure and definite assignments of specific
responsibility to individuals.
The following personnel/HR matters are known to be included in the agenda of the
committee:
(i) Selection and training
(ii) Labour relations
(iii) Incentives
(iv) Work periods, vacations and hours
(v) Wages and salary
(vi) Appraisals
(vii) Promotions and transfers
(viii) Grievances and employees discipline and
(ix) Others—suggestions, transportations, etc.
Role of the HR Department in Policy Formulation
The role of HR manager in an organization depends very much upon the status and recogni-
tion accorded by the top management to HR as a function, and his or her own personality.
The HR department may be said to assume the following role in policy formulation,
namely:
K Initiating policies to be considered by line management—an HR professional who moves
in this direction and think in these terms will earn the respect and confidence of his or her
management associates;
K Encouraging line executives to adopt courses of action that are policy-wise sound;
K Assisting line executives to interpret HR policies in accordance with the intent of highest
management, as questions are raised; and
K Assisting line management to secure uniform application of policies throughout the
organization.
Q.3 (a) State briefly the important elements in the human resource planning process.
A.3 (a) Human Resource Planning—Meaning
Human resource planning is defined as a process which includes forecasting, developing and
controlling, by which an organization ensures that it has the right number of people and the
right kind of people at the right place at the right time doing work for which they are eco-
nomically most useful. Its meaning, when applied to corporate enterprises, is not materially
different from manpower planning. A systematic programme of recruitment, selection and
placement at the enterprise level begins with manpower planning. Without manpower, plans
estimates of HR needs are reduced to near guess work. Robins defined HR planning in the
corporate enterprises as ‘the process by which an organization ensures that it has the right
number and right kind of people, at the right place, at the right time, capable of effectively
and efficiently completing those tasks that will aid the organization in achieving its overall
objectives’.
The sine qua non of manpower planning is
(i) the precise and detailed knowledge of what resources the organization actually has at
its disposal;
(ii) the state of resources in terms of skills, knowledge, morale and motivation; and
(iii) the efficiency with which and conditions within which that resource is being utilized.
In an integrated system of manpower planning, the organization sets its goal or objectives,
determines its needs for employees, matches the needs against its current inventory of people
and determines its requirements. Employees to fill these needs are then acquired, developed
or contracted for.
HR Planning is said to consist of three clear steps:
K Forecasting future people needs (demand forecasting).
K Forecasting the future availability of people (supply forecasting).
K Preparing plans to match supply to demand.
Qualitative Dimension
Qualitative aspect of HR, on the other hand, is affected by such factors like:
K Education and training;
K Health and nutrition; and
K Equality of opportunity.
Quantitative and qualitative dimensions of HR only regulate the supply of such resources. Its
utilization, which results in the demand for the same, depends crucially on the functioning and
flexibility of labour markets. The primary constituents of the labour markets are the employ-
ers and the employees. The structure of labour market in the macro analysis is determined by
internal and external economic environment; technological progress and absorption; degree
of labour mobility—sectoral, spatial and occupational; and wage structure with reference to
productivity differentials. Hence, labour market analysis should be the principal instrument
of HR planning, as it helps identify skill shortages and match the labour supply with demand.
For effective HR planning, labour market information should be comprehensive, updated at
regular intervals and should throw light on the following:
K Workforce
K Unemployment
K Underemployment
K Manpower requirements by occupation, education and experience
K Wages and earning structure
K Job search plan
K Work environment and industrial relation
K Inventory of different education/skill categories
HR Planning at the Enterprise Level

The macro concept of HR planning can easily be applied to micro-corporate levels. At this
level, it not only includes predicting the demand for people (employees) in view of the com-
panies’ requirements but also developing and controlling them to cope up the changes in
technology, market conditions and competitiveness. The activities here include:
(a) forecasting future workforce requirements;
(b) making an inventory of the existing manpower resources;
(c) matching quantitatively and qualitatively the right number of people with the right job at
the right time and at the right place; and
(d) preparing a programme of employees’ recruitment, selection, training and develop-
ment, their utilization, promotions and transfers, and preparing a plan of rewarding them
suitably.
OR
Q.3 (b) How is job analysis different from job description? Explain the steps involved in job
analysis.
A.3 (b) The first important step involved in recruitment is ‘job study’ or ‘job analysis’. For
procurement purposes, a job is defined as a collection or aggregation of tasks, duties and
responsibilities regarded as a reasonable assignment to an individual employee. A job
analysis is an intensive direct method of obtaining the pertinent facts about the job. It
refers to the process of examining a job to identify its components and circumstances in
which it is performed. The purpose is to gather, analyse and utilize information about
jobs.
Job Analysis/Job Study
The information is extremely valuable with respect to decisions relating to organizational
planning and design, recruitment and selection of people, their training appraisal and devel-
opment and other HR activities. Job analysis is sometimes called as job study suggesting the
care with which tasks, processes, responsibilities and personal requirements are investigated.
Currently, the expression tasks analysis is also used for the purpose. We, however, intend
to use these expressions interchangeably. The British approach to task analysis empha-
sizes on specific activities which the job holder has to perform; whereas, the American
approach to analysis emphasizes on the competencies needed to perform the activities. Both
the approaches seem to be complementing each other. Task analysis can be defined as the
process of identifying the tasks of a particular job in a particular organizational context by
analysing activities, establishing performance criteria, determining required competencies
and analysing any discrepancies uncovered by this process. The task/job analysis involves
the following steps:
1. The contextual analysis (know the mission, orientation and goals of the organization of
which job is a part);
2. Activity analysis (develop a clear understanding of the activities to be performed. The
information regarding activities can be collected partly through observation, and partly
through interviews, log books, questionnaires and diaries, detailing notes that a job incum-
bent keeps about work-related activities);
3. Task delineation (after activity analysis—group the activities into tasks and name them.
This process, known as task delineation, involves subjective decision making and should
be taken only by people who know and understand the job);
4. Competency analysis (it helps in identifying the competencies in terms of knowledge,
skills, abilities, orientation and experience that are necessary for the tasks to be performed);
5. Performance analysis is to evaluate the impact of a job—how effectively it is being done
or has been done. This step consists of assessing how well the job incumbent has per-
formed the tasks for which he or she is responsible; and
6. Discrepancy analysis—through such an analysis, discrepancies are identified which may
exist between activities reported by the job incumbent, and those observed or expected,
between the importance of a tasks and the time spent in completing it, between needed
competencies and existing competencies, and so on. These gaps may indicate the need for
remedial measure, e.g., redefining the role, need for training, counselling etc.
Utility of Job/Task Analysis

The activity of job analysis is noted to serve several purposes in HR management. It is useful
not only to the organization but to the individual employees too.
1. In recruitment and selection, task analysis especially competency analysis helps the orga-
nization to place people in jobs in which they can be more effective—matching role/job
with the people.
2. Job analysis helps in work planning in the following respects:
K Setting individual tasks,
K Helping the job incumbent to decide priorities of task,
K Minimizing overlapping between jobs, and
K Job enrichment.
3. In performance appraisal, the job analysis helps in identifying the activities to be performed
against which appraisal has to be done.
4. Analysing job help in performance of the tasks, and its evaluation by the supervisor.
5. In potential appraisal, the exercise of tasks analysis helps in preparing a system of the
competency analysis and actual potential appraisal work.
6. In respect of employee development, the task analysis provides a feedback on strength and
weakness, performance counselling, and training needs of employees.
7. In team building activity through tasks analysis, better understanding is noted to be devel-
oped amongst employees building linkages and mutuality between jobs.
Job Description
Information provided by job analysis is written in the form of a job description, which is a
systematic summary of information gained from notes taken and recorded in the process of job
analysis. It describes the work performed or to be performed, the responsibilities involved, the
skill or training required, conditions under which job is done or is to be done, relationship with
other jobs, and the personal requirements of the job. A complete job description should contain
three categories of information namely, job mission and location; the work performed and the
context in which the action takes place. A model job description should contain following:
K Job title
K Reporting to
K Employees reporting to him
K Overall responsibilities, and
K Main task
Q.4 (a) Explain the recruitment process. Why is it important for an organization to do an effective
job recruitment?
A.4 (a) Once the manpower need has been determined and job vacancies created and approved,
the need for filling the vacancies arises. A systematic programme of recruitment, selec-
tion and placement begins. The acquisition of human resources is the first operative
function of HR management. It is also considered as the bread and butter activity of HR
professionals. Recruitment may be defined simply as the ‘task of hiring labour to fill cur-
rent or future job vacancies’. All organizations need resources to function; resources in
the form of employees, i.e., men, money, machinery and materials etc. The employees are
the human resources of the organization and crucial to its functioning. A systematic
process of hiring employees calls for the following steps:
1. Analysing the job, i.e., screening facts about the job, study of the job itself and the qualities
needed to perform it;
2. Developing sources of supply and attracting applicants for the job;
3. Assessing the candidates to see how far each one measures upto the expectations of the
job. This is done with the help of application blank, interviews, tests, investigating refer-
ences, physical examination, etc. And then comparing what each candidate has to offer
against the specifications of the job. The selection of the candidate best suited to fill the
position may be carried out either by one individual or by a panel; the essential element in
selection is the assessment of each candidate against previously set criteria. In this light,
selection may be defined as the ‘process by which candidates for employment are divided
into two classes—those who are to be offered employment, and others. The process might
be called as the process of elimination. Thus, selection frequently is described as a nega-
tive process in contrast with the positive programmes of recruitment’.
4. Placement and follow up—placement and follow up aims at ensuring whether the individual
who have been selected is placed suitably on the job, and does the job well. The step has to do
with his or her orientation to the organization, its climate and culture. It is a check on the pre-
vious three steps, and the only way by which selection in future can be made more effectively.
Recruitment Process
Recruitment is that part of hiring process which matches applicants for jobs with the necessary
abilities and attitudes required for the task. The acquisition process cannot be put into opera-
tion until suitable candidates are attracted. To do this effectively requires knowledge of
available sources of supply and how these may be tapped as occasion demands. The term
‘recruitment’ refers to the ‘process of attracting good personnel to the organization’. The pro-
cess discovers sources to obtain manpower and to employ effective measures for contacting
those employees, which will be forming an efficient workforce. The recruitment process
involves five different elements:
(a) A recruitment policy
(b) A recruiting organization
(c) A forecast of manpower requirements
(d) Development of manpower sources
(e) Techniques for utilizing sources
It is an HR management function in compassing the discovery of potential applicants to fill
the vacancies.
Attracting the Right Type of Candidate
No amount of interviewing or testing can ever produce high-calibre employees from indif-
ferent candidates. The job can be filled satisfactorily only if a candidate who meets the job
specification/man specification has been prompted to apply. It is essential, therefore, to
attract candidates in a systematic and well-informed way; this presupposes that the job has
already been defined clearly, that the attributes needed for successful performance have been
specified correctly and that valid criteria for assessing these attributes has been established.
Job specification which emerges from the initial stage of analysing the job has practical
relevance at each stage of acquisition of human resource, for instance:
(a) To attract candidates, the job advertisements should be a distillation of the job specifica-
tion, written in a style which will attract suitable readers, and deter the unsuitable once (at
recruiting stage);
(b) In assessing candidates, the job specification serves as the yardstick against which the
recruiter judges the relevance and adequacy of the candidates’ attributes (at the selection
stage); and
(c) In placement, the job description forms the basis of the candidates’ placements, serves as
a guide to his or her induction and training and indicates the criteria against which his or
her subsequent performance be assessed.
Thus, the first practical step in the recruitment programme is to analyse the job and prepare
the job specification and from this to draw up the main specification.
OR
Q.4 (b) Distinguish between recruitment and selection. Explain the steps followed in the selec-
tion process.
A.4 (b) Recruitment is that part of hiring process which matches applicants for jobs with the
necessary abilities and attitudes required for the task. The acquisition process cannot be
put into operation until suitable candidates are attracted. To do this effectively requires
knowledge of available sources of supply and how these may be tapped as occasion
demands. The term recruitment refers to the ‘process of attracting good personnel to the
organization’. The process discovers sources to obtain manpower and to employ effective
measures for contacting those employees, which will be forming an efficient workforce.
The recruitment process involves five different elements:
(a) A recruitment policy
(b) A recruiting organization
(c) A forecast of manpower requirements

(d) Development of manpower sources
(e) Techniques for utilizing sources
It is an HR management function in compassing the discovery of potential applicants to fill
the vacancies.
Selecting or Assessing the Candidate
Assessment of candidates implies scrutiny of candidates to see how for each one measures
upto the demand of the job, and then a comparison of what each candidate has to offer against
the specification of the job, and the manpower needed to fill it, that is, matching the candi-
dates with the requirements of the job. Selection as opposed to recruitment thus means the
assessment of candidates and the choice of the candidate most suitable for the job. The selec-
tion procedure seeks to match the requirements of job with the attributes of the candidates.
The more detailed the job description, the easier it is to identify the best applicant. A selection
procedure should therefore involve a sequence of activities including assessment techniques,
analysing education, work experience, and other attributes and matching the candidates to the
job requirements for the purpose of ascertaining whether or not candidates possess the quali-
fication called for by a specific job. All the necessary competencies required by the job should
be listed. The significance of using a proper selection procedure is reflected in five factors.
Utility
1. Reduction of labour turnover and the consequent wastage;
2. High efficiency of performance;
3. Saving which results from paying employees according to their ability and avoiding pay-
ment for incompetence;
4. Economy resulting from the reduction of special training courses for large number of new
workers—reduction in training cost; and
5. Intangible advantage that invariably accrue from a working force which is stable and con-
tent because it is well placed.
Selection procedures of companies may differ widely. Some companies are content with a
cursory personal interview and a simple physical examination, while others employ series of
tests, interviews and appraisals.
Why this is so is a question of framing proper selection strategy for personnel procurement
and is considered later in the chapter. The order of arrangement of activities in the selection
procedure also differs—some companies, e.g., arrange physical examination early in the pro-
cedure, whereas, other companies have it towards the end of the procedure. Although there
are numerous ways of handling selection, a model selection procedure should include the
following:
Model Selection Procedure
K Preliminary interview;
K Application blank;
K Testing;
K Checking of references;
K Physical examination;
K Detailed interview by companies representatives—employment interview;
K Job offer; and

K Filling out necessary employment records.
Q.5 (a) In what ways employment tests are important? Explain some employment tests
commonly used in industry.
A.5 (a) Testing

It is also known as selection tests. A test implies comparison with a standard; when the job
specification and resulting man specification indicate the necessity of determining whether
the applicant has certain aptitudes and attainments, the need for testing arises. Selection
tests are also done to further screen the candidates in order to supplement the information
provided in the application blank. A selection (or employment) test is an instrument designed
to discover and measure qualities and abilities of job applicants relevant to performing job.
A standard employment test is one which is (a) valid, i.e., predicts success on the job with
a high degree of accuracy—test of reliability; and (b) reliable, i.e., if given to the same group
of persons on two successive occasions, it would rank them in approximately the same order
both times—test of reliability.
Testing is only a part of the hiring process. Test results provide some information that can
be used in judging the suitability of the candidate, but they do not provide a total picture of
how well the person will perform on the job. Passing the test does not ensure success on the
job, for there are other factors which matter. In other words, testing implies that those who
have passed the tests are only qualified for further screening, and those who have failed are
not to be considered. However, by combining results of the tests with educational background,
work history, presentation in the interview, physical examination and references checked, the
interviewer is in a position to give a composite judgement as to the likelihood of success or
otherwise of any given applicant.
The failure of tests is often due to the defective administration of tests including lack of
planning, ambiguous instructions, scoring errors, inadequate interpretation, etc. Hence, the
importance of testing by qualified professionals. Large companies can develop their own
tests, but medium and smaller organizations normally depend on the use of the published or
borrowed tests. In either case, it is desirable to test the test. Proper development and use of
tests demand a reasonable background, knowledge of statistical techniques used to prepare
norms and to check on the validity of tests.
A number of tests are available for measuring different attributes of candidates for the
job. Tests to be given to the candidates vary with the kind of positions to be filled in and the
categories of personnel to be selected. Following types of tests are usually given:
K Knowledge or skill tests;
K Performance tests;
K Intelligence tests;
K Aptitude tests;
K Clerical tests;
K Interest tests; and
K Personality/group discussion tests.
K Knowledge or skill tests: It is also known as proficiency and trade test. A standard letter
may be dictated to stenographic applicant; the tool maker may be provided with raw mate-
rials and a blue print and the auto mechanic directed to replace a piston. Such performance
tests, when applied to mechanical tests, are known as ‘trade test’. Such a test eliminates
those with low skill but tells nothing about the applicant’s ability to acquire the skills.
These tests are also known as achievement, occupational or work sample tests. They mea-
sure the actual knowledge and proficiency to perform the job. The performance test used to
select managerial personnel is known as assessment centre, in which candidates participate
in a variety of exercises and situations. Some of the exercise involves group interaction,
and others are performed individually. Each exercise taps a number of critical managerial
dimensions, such as leadership, decision making skills and communication ability.
K Intelligence tests: The term ‘intelligence test’ is used very loosely. Intelligence tests are
also called cognitive ability or mental ability test. Such tests try to measure the level of
intelligence of a job candidate. Intelligence test is often considered synonymous with the
broader term ‘aptitude test’. Most intelligence tests include such items as general infor-
mation, arithmetic reasoning and reasoning by analogy, space perception and vocabulary.
Clerical tests cover somewhat the same general area but with problems expressed in cleri-
cal terms. The basic idea behind intelligence test is that if the organization is able to get
people with higher intelligence, its training and learning efforts will be successful because
intelligent employees learn faster than others.
K Aptitude tests: They measure an individual’s potential to learn job-related skills. These
tests indicate whether a job applicant has the ability to learn a given job quickly and effi-
ciently. Aptitude tests are also helpful in assessing the growth potential of the job applicants.
K Clerical tests: Clerical operations include those filled in by persons who are usually
referred to as office employees. There are many different kinds of job in this group. Hence,
no single test or group test could be appropriate for all clerical jobs. The clerical activ-
ities include stenography, typing (including computer typing), indexing, coding, filing,
records and accounts keeping, inventory and storekeeping work, checking, tabulating etc.
Sometimes, office machines are used as aids in this work. When this is done, some degree
of mechanical skill is desired. Clerical ability test helps in the selection of clerical person-
nel by giving information of five different kinds, namely, the
(i) General mental ability—the capacity to use verbal and non-verbal concepts; to grasp the
meaning of words and other symbols;
(ii) Basic educational skills—the ability to add and multiply;
(iii) Ability to observe words and numbers accurately—to see quickly and correctly what is on
the paper and make appropriate discriminating response;
(iv) Mechanical ability of hand fingers; and
(v) Occupational proficiency—the ability to do the required work as a result of training.
K Interest tests: They are also known as vocational interest tests. This attempts to measure
the likes and dislikes of candidates about jobs. The response is built into an interest profile
that may help predict a candidate’s satisfaction in a particular job. Occasional interest test
generally measure candidate’s interest in outdoor activities, clerical jobs, administrative
duties, multi-skill assignments etc. Interest tests are administered on the assumption that
certain people perform jobs well, if they find the job activities stimulating their interests.
K Personality/group discussion tests: The term ‘personality’ or ‘group discussion test’ is
used loosely and includes tests of social traits, extroversion and introversion dominance
or submissiveness, temperament and neuroticism. They provide clue about the candidates
to be investigated fully in the interviews. It throws light on how a man or woman will
behave with his or her colleagues and that is about all. For instance, an undergraduate
seen at his or her university may seem alert, with wide interest, hardworking and intel-
ligent, and may show some signs that he or she is used to taking authority. In a group
discussion, he or she may also show that he or she can be intolerant and aggressive—traits
which would not have been elicited through interviews only; so, evidence from group
discussion is considered along with that provided by other tests in the final assessment.
Group selection procedure is nothing but group discussion method. It is a method of gaining
insight into personality factor by collecting a group of candidates and observing their behav-
iour. Group tests are given to determine leadership quality. Such a test normally is given for
supervisory and managerial jobs.
OR
Q.5 (b) Discuss the importance of training in the fast-changing environment. How can training
needs of employees in an organization be identified?
A.5 (b) Even after selecting the most suitable candidates to the organization, today’s competitive
environment requires management to continuously develop and upgrade the skills, abilities
and performance of employees. Training and development make employees more useful and
creative in their current jobs and prepares them to shoulder new responsibilities. It equips the
organization in facing new challenges, apart from taking the advantages of new methods and
technologies that emerge.
Training and Development as an HR Activity

HR development (HRD) function is primarily concerned with training and development. The
activity is so important that sometimes the HRD is equated with it, though the starting point
of HRD in an enterprise needs not always be the training and development. The potentiality
of people in a working organization is said to be unlimited. They are believed to be capable of
much more than they are normally called upon to do and can learn much more than is formally
thought possible. The objective of any organization in relation to its markets, return on capital,
productive capacity and fluidity of capital (cash flow) etc. is achieved essentially with the help
of employees. They possess an untapped intellectual reservoir that can serve as an organiza-
tional creativity pool and resources, if managed. Such a management calls for training and
development of employees. Generally speaking, the existing system of imparting education is
not designed to teach specific job skills for different positions in a particular company or orga-
nization. Even those who have had technical or professional or formal training must receive
some initial training in the form of orientation of policies, practices and the specific ways of
employing organization. Traditionally, training and development were not viewed as an activ-
ity that could create value and successfully deal with competitive advantage. Organizations
used to employ specialists whose job was merely to instruct and teach people how to work
more efficiently on the job at minimum cost. Training and development were not regarded as
an important activity of HRD function. It did not aim at imparting the requisite knowledge,
developing necessary skills and bringing about the desired attitudinal (behavioural) change
amongst the employees with the specific purpose of ensuring functional effectiveness.
Organizational priorities have changed in the recent years as the focus has moved from
piecemeal training activities to more systematic HRD. Many businesses have reoriented
themselves away from training individual employees towards becoming ‘learning organi-
zations’ with the emphasis on continuous learning. Thus, learning organizations are those,
where people continually expand their capacity to create the results they truly desire, where
new and expansive patterns of thinking are nurtured, where corrective aspiration is set free
and where people are continually learning to see the whole together. The focus has shifted
from training and development to learning and development.
The objective of any training programme should be to bring change in the following:
K Knowledge (it helps the trainees to know the policies, procedures and rules of the job he
or she is doing).
K Skill (training helps to increase technical knowledge and skill in doing the job).
K Attitude (it changes his or her attitude and behaviour towards job, his or her co-workers
and supervisors).
Currently, training is also defined as learning experience. It involves changing skills, knowl-
edge, attitudes or behaviour. This may mean changing what employees know, how they work
or their attitudes towards their jobs, co-workers, managers and the organization.
The main highlights of training and development include the following:
(i) Training and development represent learning experiences: Training and development
focus on learning the ways and means of performing organizational jobs. Employees
learn new habits, refined skills and useful knowledge during the training and development
programmes.
(ii) Training and development are planned activities: Training and development represent a
process of learning a sequence of programmed behaviour. A lot of money, time and effort
go into planning of training and development activities in the organization. Planning for
training and development involves identification of training needs, use of training methods,
duration of training programmes and so on. Need for planned training and development
activities has further increased due to the fast emerging of new methods and technologies
of work performance.
(iii) Training and development provide skills and knowledge to perform present and future
jobs: Training imparts and develops specific skills for a particular job. Development, on
the other hand, encompasses all processes that lead to the development of employees so
that they may assume demands, problems and challenges of higher order of assignment.
Training and development, as such, may be seen as constituting a continuum in which
training is on the lower end and development on the higher end of the spectrum.
Benefits of Training
Training is beneficial not only to the organization but also the employees. From the point of
view of an organization, the benefits of training are as follows:
1. Reduces Learning Time to Reach Acceptable Levels
Systematic training programme helps to reduce learning time in order to reach the accept-
able level of performing the job. Thus, the employee does not waste time in learning the
job by trial or error or by observing others.
2. Increase in Productivity
Training increases the skills of an employee to do a particular job. This leads to increase
in productivity in terms of both quality and quantity of output.
3. Reduced Supervision
Proper training reduces the responsibility of supervisor to supervise the subordinate
because the trained employee knows the way to do the job.
4. Economic Handling of Machines and Materials

A trained employee handles the machine and materials in an economical manner resulting
in reduction in wastage and cost of production. Learning of safety measures also reduces
the rate of accidents.
5. Standardizing Procedures
Adequate training helps the employer to standardize procedures of doing the work.
Standardization leads to high level of performance rule rather than the exception.
6. Increased Employee Morale
Training reduces the rate of absenteeism and labour turnover which in turn increases the
morale of employees.
7. Loyalty of Employee
Training helps in bringing a change in the attitude of the employee to support organiza-
tional activities and get greater co-operation and loyalty of human resources.
8. Fulfil Manpower Requirement
Continuous training helps in meeting future manpower requirement from internal
resources.
From the point of view of employees, the benefits of training are as follows:
1. Eliminates Fear of New Skills
Training helps the employee to acquire new skills and knowledge and improve his or her
career and personal growth.
2. Increases Safety
Trained employees learn to handle machines and materials safely, thereby becoming less
prone to accidents.
3. Higher Remuneration
Due to training, the productivity of employees increases leading to higher wages and
bonus.
4. Promotion
Training helps employees in sharpening their skills and providing opportunity for promo-
tion and growth.
5. Confidence
Training helps the employee to be confident at performing the job and have higher job
satisfaction. This creates a feeling of security and increase the morale.
Thus, the benefits of training and development are stated to lie in reduced learning time to
reach acceptable performance on the present job, attitude formation, aid in solving opera-
tional problems, fulfilling manpower needs and benefitting employees to increased job
satisfaction and recognition, and aid in discouraging fear in attempting new tasks. It provides
a good climate for learning, growth and co-ordination. It makes the organization a better
place to work and live.
Training and Development Needs

In view of the substantial emphasis placed on training and development, it is quite natural to
presume that companies must have developed extensive methods to identify training needs.
The rational way of deciding what kind of training should be undertaken is to make an analy-
sis of the entire organization, i.e., of the people, jobs, technologies and so on, and to identify
needs and the positions where training and development is required. The first step is that of
‘Need Assessment and Analysis’.
The concept of ‘Need’ typically refers to a discrepancy or gap between what an organi-
zation expects to happen and what actually occurs. The focus is on correcting substandard
performance. ‘The Need Assessment and Analysis’ process identifies gaps between employ-
ees’ existing skills and skills required for effective current job performance, discrepancy
between current skills and the skills needed to perform the job successfully in the future.
It also identifies the conditions under which the human resource development activity will
occur. Thus, Need Assessment and Analysis forms the foundation of any training programme.
The main purpose of Need Assessment and Analysis is to perform a systematic exploration of
the ways things are and the way they should be. This difference is called the Performance Gap.
Methods of determining needs may include:
(i) analysis of the activity,
(ii) analysis of the problems,
(iii) analysis of behaviour,
(iv) analysis of the organization,
(v) appraisal of performance,
(vi) brain storming,
(vii) buzzing,
(viii) card sort (writing potential training needs on cards),
(ix) comparison,
(x) conference,
(xi) consultant,
(xii) counselling,
(xiii) incident pattern,
(xiv) informal talks,
(xv) interviews, observation,
(xvi) research,
(xvii) self-analysis,
(xviii) surveys,
(xix) tests,
(xx) questionnaires, and
(xxi) work-shop.
Q.6 (a) How would you identify the training needs of operative employees? Briefly discuss the
steps in designing a training programme.
A.6 (a) The answer to this question should be read along with the previous question’s answer.
The company’s training and development policy represents perspective of the top manage-
ment towards training and development and is expressed in the form of rules and procedures
that govern or influence the standard and scope of training in an organization. Training and
development policies highlight an organization’s approach to this function, provide guide-
lines for design and execution, and provide information regarding different programmes
of training for its employees. The training and development policy helps to communicate
the top management’s intent regarding the career development and gives the employees the
opportunity to better his or her prospects through training and development. Training and
development policies provide guidance on the level of training needed, the amount of budget
to be allocated on the training and development programmes, scope and aim of it, allocation
of responsibilities of training, time and place of training, remuneration for trainees during the
training period, etc.
Though training and development is primarily the responsibility of the HR department,
a suitable policy should provide answers to the following questions: What is intended to be
accomplished through training and development; Who is responsible for the function; Should
it be formal or informal; What are the priorities; Types of training required; Where and when
should the be training provided; Whether outside agencies be associated with training etc.
Empirical survey result suggest that the ‘objectives of training and development policy could
be to make the company into a learning organization, to ensure value addition through training to
the overall business process, institutionalize learning opportunities that supplement work expe-
rience, integrate organizational and individual development needs, enable employees to keep
abreast with the latest knowledge and skills and enable them to undertake current and future
responsibilities in a more efficient manner, provide linkage between the different functionaries
of training activities and provide linkages of training activity with overall HR function’.
An important visible trend is that, some organizations have a policy of outsourcing a part of
their training requirements due to either inadequate internal resources or excessive workload.
A study conducted in 1998 indicated that extent of outsourcing training has been increasing.
The study conducted on training trends in India in 2003 indicated that, in 88 per cent cases,
outsourcing of training related activity is need based, while 12 per cent indicated that train-
ing is fully outsourced in their organizations. Organization size is an important factor for the
outsourcing of training. Organizations with less than 1000 employees are more dependent on
external providers for meeting their training requirements.
The most common areas of outsourcing the training are customer service, information
technology, management skills, communication skills and development programmes.
Designing and Delivery of Training and Development Programmes
The training and development programmes should be developed in such a way that the process
of continuous learning is in-built in the programme structures, and learners continue to learn
even after the programme is over. This can be possible through developing a mechanism for
reinforcement by the learner’s superior, post training follow-up and helping learners develop
a plan of action for implementing at the place of work. This process may help an organization
to become a learning organization.
Training design and delivering of the programme is one of the significant steps in the
process of training and development. It is a plan that should contain all information neces-
sary for management to make decisions for implementing training programmes. Training
design is defined as a set of events that affect trainees so that learning is facilitated. Thus,
a training programme design refers to the organization and coordination of the programme.
It gives details of training analysis, costs and administrative information, suggested training
programme and its duration, and training evaluation.
Designing is followed by delivery of the training programmes. Organizations found that
the delivery methods of training and development are rapidly changing. In a survey conducted
by ASTD on National HRD Executives in 1997, increased pressure for just-in-time delivery,
a shift in delivery from training professionals to line managers, team leaders and techni-
cal workers, and increased interest in facilitating learning via. informal network, are trends
that emerged. The study conducted on Training Trends in Indian Industry in 2003 stated
that instructor-led training continue to be most commonly used delivery method of training.
This includes use of overhead transparencies, case studies, self-assessment exercises, simu-
lations and management films as training device. About 20 per cent of the respondents use
web-based training, computerized self-study, CD-ROMs and videos indicating a slow, yet
gradual shift towards technology-based learning. According to a study conducted on Training
Trends in India in 2006, strategic linkage of training, application of technology in training,
systematic evaluation of training, need assessment and rapid changes in training delivery
have emerged as the top five training trends in India. Training programmes are also noted to
contain a set of learning activities consisting of a mix of role-playing exercises, brain storm-
ing, case-studies and the like. The internet and intranet are changing the face of training and
development delivering technology.
Training and Development Programmes
The nature of training programmes varies with the requirement of the job and the level of
employees concerned. It is noted that training and development requirements are different for
managers, middle-level managers and senior managers. The managers at the factory level are
given training in technical jobs, skills in executing management policy, ability to make deci-
sions on the basis of general company policy, skills in training employees in their specific
jobs and fundamental man-management skills such as ability to give orders properly, maintain
discipline, handle complaints etc. The middle-level managers are given training in the area
of leadership, skills, teamwork, communication and customer service. Senior managers are
development oriented. At the non-managerial level, non-managers are given training in skills
and abilities. They are also provided training in behavioural skills, such as ability to ensure and
secure cooperation, skill in organization and managerial ability to plan, delegate and control,
and skill in interpreting and applying management policy. The non-managers are given training
on communication, information technology, customer service and process improvement. It is
also noted that the senior managers are given training in the areas like leadership, strategic man-
agement, finance and management skills. Executive training is an essential part of executive
development programmes. The objective of executive training and development programme is
to develop critical, technical and professional skills in engineering, finance, public relations and
other fields; and to develop them in analysing, formulating and disseminating company policy
on human relations, organizational and engagement problems. The specific areas where senior
managers are trained are management skills, leadership and strategic management. Hence, it
is found that training and development programmes are made both for highest level and lowest
level of employees. This reflects the top management’s belief that organizations cannot move
forward unless all levels of employees are oriented to the future. This shows the existence of
commitment of the top management towards development of human resources.
OR
Q.6 (b) What are the benefits of training to (i) employers and (ii) employees? What criteria would
you use to evaluate the effectiveness of training programme?
A.6 (b) For benefits see the answer to Q.5 (b).
Evaluation of Training and Development Programmes
The objective of evaluating any training programme is to ascertain whether or not the train-
ing objectives are being achieved, if training is being implemented in the most effective and
economical manner, and if not, what steps to be initiated to make the programme effective.
Whereas, the top managements are noted to have given enough attention in identifying
and analysing training needs, and adopting different approaches to employee training and
development, very little attention is devoted to evaluate the effectiveness of the training and
development programmes.
Objectives
The evaluation is required for certain purposes like
K Whether the training programme under consideration is accomplishing its objectives;
K Identifying the strength and weaknesses in the training and development process;
K Cost-benefit analysis of the programme;
K Deciding who should participate in future programmes; and
K Determining the appropriateness of the programme.
In many cases, the evaluation of training and development programme has taken the form
of course evaluation at the end of the programme. A programme of evaluation should focus
attention on three main areas while considering the evaluation of any training programme.
These should include (1) the items to be evaluated; (2) the methods of evaluation; and (3)
the responsibility for evaluation. The items to be evaluated include job analysis and its study,
training plan and its design, its course content and objectives, and the performance of those
who have participated in it. The methods of evaluation may involve interviewing the partici-
pants, conducting oral or written tests, or observing them, and comparing the performance
with the requirements of the job. The responsibility could be shared by the training instructor,
supervisor or the one entrusted with the task individually or jointly.
Rarely are the efforts made to analyse the information generated from the evaluation
efforts, and act upon. Major difficulties faced by the companies evaluating training and
developments programmes lie in generating the evaluation data. Evaluation is possible only
when there is an agreement on why the evaluation is required, and how the data shall be
generated and used. The training and development managers are reluctant to evaluate their
own efforts, and contend that training and development results cannot be measured or that
since it is not possible to calculate return on investment, it is a futile effort to evaluate train-
ing and development programmes. Some others justifies the contention by stating that there
is no need for evaluating training and development programme because the CEO does not
require such an evaluation. Hence, it shows that top management has not paid much attention
towards the evaluation of training and development programme. Since training and develop-
ment activity involves significant expenditure, its evaluation has become necessary to justify
such expenditure. Without evaluation, it is going to be a difficult task.
A variety of methods are available to assess the extent to which training and development
programmes improve learning, affect behaviour on the job and impact the bottom-line per-
formance of an organization. Since training and development is seen as a part of investment
in human resources, the evaluation data needs to be generated and integrated for higher-level
decision making. However, quantitative measures should not over shadow the quality and
effectiveness of training and development programmes. The credibility of training and devel-
opment function would be lost very quickly, if the quality of training is compromised.
The evaluation technique depends upon the type of the training programme, profile of the
organization and the purpose of training. The method of evaluation varies from programme to
programme. Evaluation process must adopt approaches that are relevant and practical. These
evaluation models mainly come from the western context. The organizations are mainly using
CIRO or Kirkpatrick model for training evaluation both of which are proven as efficient
and the best models of evaluating training programmes. Kirkpatrick has proposed four lev-
els of evaluation namely, reaction (level 1), learning (level 2), job behaviour (level 3) and
result (level 4). Philips has added the fifth level of evaluation, i.e., Return on Investment.
Kirkpatrick approach has been the standard framework for systematic evaluation of training
and development programmes.
The different parameters that can be used to evaluate the effectiveness of the training and
development programmes are establishing the cost of training and development, return on
investment or converting the training and development into a profit centre.
Q.7 (a) Explain briefly the behaviourally anchored rating scales as a method of performance
appraisal.
A.7 (a) Modern appraisal methods assess two categories of employees’ performance attributes,
namely, behaviours and results. As explained earlier, trait appraisals involve subjective
judgement about employee characteristics related to performance. Behavioural appraisal,
while still subjective (i) focusses more on observable aspects of performance, and (ii)
rate prescribed behaviours that can help ensure all parties understand what the ratings are
really measuring. The result appraisals tend to be more objective and focussed on goal
achievement. Based on behaviours and results, several techniques of performance
appraisal have been developed and are widely practised by the organizations. Some of
them are discussed as follows:
Behaviourally Anchored Rating Scales

The behaviourally anchored rating scales (BARS) method of performance appraisal focuses
on specific prescribed job-related performance behaviours of an employee, rather than his
or her general descriptions or traits. Where the job cannot be precisely measured, attempt
is made to relate the job with the behavioural traits helping in its performance. The typical
BARS include seven or nine performance behaviours, each measured by a seven or nine point
scale. For each performance behaviour, some standards statements are provided that reflect
varying levels of performance. These are then put on the scales in BARS. The rater can then
presumably make a precise judgment as to where the employee fits on the continuum of a
poor to outstanding performance. The following illustrates an example of BARS for evaluat-
ing quality.
The process of developing a BARS, which is rather complex, consists of the following
steps:
(a) Performance measures (dimension) for effective job performance are identified and clus-
tered into a small set of key performance dimensions for a given job. These are identified
usually by superiors, jobholders and HR department.
(b) Those behavioural dimensions, which are essential/critical for effective job performance,
are identified.
(c) The critical behaviours/incidents identified are reclassified to form the definition of job
dimension.
(d) The critical behaviours are assigned numerical scale values with each point demonstrat-
ing the perceived level of performance.
(e) The result of arranging various scales for different dimensions of the job (known as
behavioural anchors) produces a series of vertical scales (one for each dimension)
anchored (measured) by the final incidents. This scale is used for performance appraisal.
Procedurally, the behaviourally based scales involve the following:

K Indentifying both effective and ineffective job behaviour.
K Clustering behaviours into performance dimensions.
K Relating various aspects of the job with the behaviour best describing it.
K Developing the final anchored scale by taking reference to average effectiveness, and the
standard deviation criterion for determining which incidents to be included in final anchor.
OR
Q.7 (b) Describe the various steps in the process of managerial performance appraisal.
A.7 (b) It is the systematic evaluation of an employees’ job performance (in terms of the require-
ments of the job and potential for development). Originally, a device to provide guidance
to management in selecting employees for promotion or salary increases, performance
appraisals are now used as a training and coaching device to help employees at all levels to
improve their performance. The system of appraisal earlier did not generate confidence
amongst employees. In most cases, the employees did not know that he or she is being
appraised and how by their superiors. The companies did not have the practice of informing
the employees the results of such appraisal. It was in confidential reports/records, which
were maintained for the purpose. Such practices were found to be causing resentment
amongst employees towards the system of appraisal being maintained in the organization.
Performance in the organizational context is a function of determining job criteria and select-
ing those which will be able to perform the required organizational task; motivating and
developing employees for improving their job skills and preparing them for higher respon-
sibilities. Hence, the process of performance appraisal involves obtaining, recording and
analysing information about the relative worth of an employee. The focus of performance
appraisal is as much on the measuring and improving actual performance, as on the future
potential of the employee. This activity is performed annually by a supervisor for his or
her subordinate designed to help employees understand their roles, objectives, expectations
and performance success. Performance appraisal can be used for developmental as well as
administrative purpose. It is a powerful tool to calibrate, refine and enhance the capabilities
of the employee. The developmental purpose of performance appraisal provides feedback for
identifying the employee’s strengths and weaknesses, improving performance and planning
for training and development needs of the future. The emphasis is on improving employees’
on-the-job behaviour. The administrative purposes include decisions regarding promotions,
transfers, demotions or layoff. It also provides inputs to other HR activities such as compen-
sation programmes, recruitment and selection, HR planning, career planning and the like.
From the survey of performance appraisal practices conducted by the Indian researchers in
corporate sector enterprises, it came to be known that the purpose of performance appraisal
was variously described and could be put into three categories, namely,
(i) Determine salary increments;
(ii) Facilitate organizational planning;
(iii) Placement or suitability in
(a) promotion,
(b) transfer,
(c) demotion or termination, and
(iv) Training and development purposes.
Performance appraisal data is also noted to be useful in recruitment and selection (placing
employees on the job which fits them well), fixing responsibility (knowing that performance
is to be formally evaluated periodically will keep both employee and supervisor ‘on their
jobs’. A fair evaluation system serves as a reminder to employee that they are being held
accountable for their actions on the job and individual effectiveness). A properly constructed
and maintained appraisal system can contribute to employee effectiveness by providing feed-
back about specific strengths and weaknesses, documenting the fairness of administrative
personnel decisions, providing information to guide employee training and development, and
placement programme and enhancing feeling of responsibility on the job. Since organiza-
tional effectiveness is strongly influenced by individual effectiveness, it is obvious that a good
performance appraisal system can improve the over-all effectiveness of the organization.
The crucial aspects of formal evaluation programme are concerned with the following:
(i) Who shall be the evaluator(s);
(ii) What shall be evaluated (the criteria problems);
(iii) Who shall be evaluated; and
(iv) What techniques shall be used to assess the performance according to the selected criteria.
Designation of the person responsible for performance appraisal differed with the cat-
egory and level of employees. It is assumed that supervisors have the greatest opportunity
to observe the subordinates and hence are in better position to interpret and analyse the
subordinates’ performance in the light of objectives. Evaluation may also be done by a rating
committee.
The basis for evaluating employees can be such factors as the quality of work, quantity of
work, how the employees get along with others, personal traits such as attitude, appear-
ance, initiative and loyalty, and the like. These criteria are normally chosen for performance
evaluation process; much depends on the objectives in view. In order to make the appraisal
objective, following components could form a part of its process:
(i) Identifying the key performance areas (KPAs);
(ii) Setting of goals or objectives (under each KPAs);
(iii) Identifying behavioural dimensions that are critical for performance;
(iv) Periodic review of performance on objectives and behavioural dimensions;
(v) Analysing performance by identifying, facilitating and inhabiting factors in performance.
An important aspect of formal system of performance appraisal is the decision regard-
ing whose performance should be evaluated. The answer is obvious—employees. When we
say employees—it means individual as well as team performance appraisal should not be
too frequent either. It should encourage supervisors and peers to help, counsel and evaluate
employees informally, as often as they have the time to do so, and as close to crucial instances
as possible. Studies on the timings of evaluation indicate that lower levels of employees are
typically evaluated thrice a year and higher levels once every year.
Though a number of performance appraisal techniques are available, each organization
chooses the one that is more appropriate to its structure and the needs. Some traditional
methods noted in different organizations are ranking methods, graphic rating scale method,
critical incidents methods, checklist methods, essay method, field review method, work stan-
dard approach, assessment centres and management by objectives. Each of these has its own
combination of strengths and weaknesses, and none is able to achieve all the purposes for
which performance appraisal system neither is undertaken nor is any one technique able to
evade all of the pit falls; the best anyone can hope to do is to match an appropriate appraisal
method to a particular performance appraisal goal.
Q.8 (a) Define promotion. What are the advantages and disadvantages of seniority and merit as
basis of employee promotion?
A.8 (a) The key application of the data generated through performance appraisals are used for
transfers and promotions. Currently, it is also used for career and succession planning,
identification of training needs, role clarity and employee relations, and building high
moral and motivation. No organization can rely on outside recruitment to fill all its require-
ments. It is true that certain jobs are similar in many organizations, but most jobs require
specialized knowledge that can be obtained only from with the organization. Thus internal
promotions with promotional ladders are needed.
Promotion
It refers to the transfer of an employee to a job that pays more money or one that enjoins
some preferred status. To be transferred from an hourly rate to a salary grade may also be
considered a promotion in some cases, even though there is no direct monetary benefit.
Salaried employees frequently enjoy certain privileges not generally accorded to the hourly
paid workers.
(i) Promotion is recognition of a job well done by an employee;
(ii) Promotion is a device to retain and reward an employee;
(iii) Promotion is to increase individual and organizational effectiveness;
(iv) Promotion is to promote a sense of job satisfaction in the employees; and
(v) Promotion is to build loyalty, morale and a sense of belongingness in the employee.
Promotion Policy
It provides guidelines to promotions in an organization. Such a policy states formally the
organizations broad objectives and intentions in respect of its manpower and individual
career plans. A preliminary question that a policy considers is the extent to which it will
emphasize inside as against outside recruitment, i.e., a statement on the ratio of internal pro-
motions to external recruitment at each level, the method and procedure of selection and the
qualification desired. The second exercise is to identify the network of related jobs, and the
promotional channels of each job. Such an exercise helps in succession planning. Many orga-
nizations declare the intention of recruitment from within. Promotion from within is widely
accepted and a long established policy in many organizations, large and small alike. Even
when such a policy has not been formally stated, practice often indicates its general accep-
tance. Rules of promotions are normally found to be incorporated in collective agreements
too in some organizations, while in others it is noted to be in standing orders. The formal
system of promotion is characterized by
(i) A policy statement;
(ii) Identification of promotion channels;
(iii) Selection and appraisal;
(iv) Training and development;
(v) Communication; and
(vi) Maintain a record in this regard.
Other elements of promotion policy should spell out managements intention in respect of
‘policy of promotion from within’; establishing ‘lines of progression’, or ‘ladders of promo-
tion’ from within the organization. It is known as ‘career planning or succession planning’.
Provisions are made by management for training as a means of preparing employees for
promotion to higher posts.
Promotion Decisions
The decision regarding promotion is in many ways like the selection decision. The manager/
supervisor tries to match the best person with the right job; but the promotion decision is
different from the selection decision in that it is based on actual performance data, whereas
selection decision is based on tests and interview results. In case of promotion decisions,
management has the opportunities of securing the necessary performance data; examine how
the person has performed in a job, rather than having to predict how he or she might perform
on the job, based on test scores, reactions to interview or reference letter. Promotion decision
is also different in that it is open to greater informal or outside pressure. Some candidates for
promotion are known to have tried successfully to influence decision makers through inter-
personal relations or contacts. Besides, decision makers often have also their bias about some
candidates. Promotion based on objective performance data can only minimize the bias. The
total number of promotions possible is influence broadly by the number of different wage or
salary grades in existence that is the pay structure.
Bases of Promotion
Several criteria have been traditionally in use for promotions. Formally, two of them are the
most important; merit and seniority. Informally, personality traits of the candidates and the
nature and intensity of their inter-personal relations may also affect the promotional decision.
Seniority refers to the relative length of service of employees. Usually length of service is
computed on the basis of the current continuous employment. Seniority is given very heavy
weight age in government jobs. In private industry, legal provision exists for its consider-
ation. Changing seniority rating of workman because of trade union activity, or refusing to
promote workman to higher posts on account of trade union activities or giving unmerited
promotions to workers, with a view to creating discontentment amongst workers is consid-
ered to be (unfair labour practices as per 5th schedule of the industrial disputes Act). In India,
therefore, promotion is not only a matter of rational HR policy but is subject to legal disputes
and court awards. Merit refers to the employees’ performance on the job in terms of require-
ments of the job. Inter personal relations refers to interaction between individuals on personal
and social grounds resulting in maintenance of personal equation. Seniority is an important
consideration in many promotion decisions. This is also a required basis of promotion in
many unions and organizations; labour unions argue that experience leads to expertise. It is
also true that seniority is a good criterion because it rewards loyalty to the company, and it is
objectively verifiable.
The management often prefer merit alone, on the ground that aged incompetence would
get all superior jobs, if seniority was the sole criterion. The truth lies in between these posi-
tion. The decision to promote is a decision to choose a candidate with adequate ability which
often increases with experience, but it must also provide for due recognition of merit to
motivate junior employees.
Thus, every organization must decide on the relative weights to be given to merit and
seniority in making promotion decision. There is needed to strike a balance between these
two considerations. Most collective bargaining agreements provide for changes in employees
status to be based on seniority. In a large number of enterprises, however, ability is also rec-
ognized as a determining factor, especially in promotions and layoffs; and the employer has
some power to recognize ability, if he or she can prove that an employee entitled to promotion
on the ground of seniority is not otherwise qualified, whereas junior employee is. When merit
and seniority are about equal, inter-personal influences become the basis for promotional
decision, even in rationalized formal system.
An integral part of the management development process is said to be the consideration
of merit. Hence, advancement within the organization should not be by seniority alone, but
merit cum seniority. Merit is often measured on the narrow basis of performance against
physical targets, but with advancement in career, assessment of merit must be related to a
number of other factors such as once ability to work with others; adaptability to change, cre-
ativity; ability to face crisis and find solutions to difficult problem; ability to take unpleasant
decisions and face the consequences; ability to separate personal life from organizational
activities, and yet to use both as complementary supports; ability to sense, respond to and
communicate with different, and sometimes conflicting interest groups; and above all to do
all this and more without compromising integrity of the person or the organization. Such a
culture for management takes a long time to build up—and it is the preservation of this cul-
ture that enables the organization to undertake change with stability.
OR
Q.8 (b) Explain various types of transfers. How could you effectively administer a transfer
programme?
A.8 (b) Transfers
Transfer involves job changes and refers to the movement of an employee from one job to
another. It may involve a promotion or demotion, or no change at all in the job status, other than
moving merely from one job to another. It is a change in assignment, in which the employee
moves to another job at approximately the same level of responsibility, demanding the same
skill and at about the same level of pay. Transfer may be distinguished from promotion and
demotion, which imply an ascending or descending job change, respectively, in the hierarchy
of positions. An individual may on his or her own request a transfer seeking his or her own
preference and benefits or organizations may initiate such transfers as a requirement for more
effective operations, or sometimes as a solution to human relations problem.
Need
The need for transfer generally arises due to the following reasons:
K The employee has progressed as for as he or she can in his or her present job, and is capable
of handling a different job;
K Reduction in the volume of work in a department along with some other departments need
for additional hand;
K The employee has little interest in his or her present job and seeks a change. He or she may
or may not have had an interest in his or her job in the past. With the passage of time, a
workers interest frequently changes;
K Some workers lack the experience that would prepare them for better positions. Transfer to
various other jobs of the company might provide that experience.
People may be transferred either because of the needs of the organization or at their own
request. Quite often management make remedial transfers because an individual is not
performing satisfactorily on his or her present assignment, and his or her qualifications
are that, management feel he or she would be more suitable on a different job. Sometimes,
employees request a transfer because they do not like their present work situation or because
they feel that opportunity for advancement is better in some other job/department.
While analysing transfer requests and actual transfers, a systematic classification is desir-
able. The following has been found to be useful:
(a) Transfers in the interest of the organization
(i) Temporary
K arising from the temporary absenteeism;
K shifts in workloads;
K vacations;
(ii) Permanent
K shifts in workload;
K vacancies requiring the special skill or ability of the transferred employee.
(b) Transfer for the convenience of the employee

(i) Temporary
K arising from ill health or accident;
K family situation;
K to take care of private affairs;
(ii) Permanent
K arising from ill health or accident;
K outside interests—to attend school or similar activities;
K family considerations, e.g., a man whose wife has died may have to be with his
children, and may thus be unable to work in the second or third shift;
K because of transportation; and
K to learn particular skill.
Transfer Policy
In the above-mentioned context, the significance of a transfer policy causing a job change
can hardly be denied. The absence of a well-formulated transfer policy undoubtedly will
cause a state of uncertainty and resentment amongst the employees. Unjustified transfers
are covered by (unfair labour practices in the Indian context). The Industrial Disputes Act
(5th schedule) specifically considers transferring a workman malafide under the guise of
management policy, as unfair labour practice. Showing favouritism or partiality to work-
ers regardless of merit in respect of transfer is also a part of unfair labour practice. The
Industrial Disputes Act also makes provisions of compensation to employees who have been
in continuous service for not less than one year in an undertaking before transfer, in case
the ownership or management of an undertaking is transferred, whether by agreement or by
operation of law. In cases where the workers union exits, there may be increase in the number
of grievances, leading to deterioration in industrial relations, conflict and industrial disputes.
To avoid these, it is imperative to evolve a transfer policy ensuring consistency in action on
the part of organization. A transfer policy should consist of the following:
K A clear delineation of the conditions and circumstances under which an employee can be
transferred.
K The transferability of both jobs and individuals need to be examined in terms of job
descriptions, inter-departmental divisions and plans, and between streams of specializa-
tion either on the job or individual background and training.
K A clear-cut policy guideline on the basis of transfer—seniority and merit.

K Should transfer be linked with promotion?
K The pay scales and the exact wages and perquisites that a transferee would receive in the
transferred job.
The HR department has a monitoring role in respect of transfers. It should facilitate line
personnel to redeploy manpower depending on the exigencies of work situations or helping
employees on compassionate ground within the framework of transfer policy.
Q.9 (a) Distinguish between performance appraisal and potential appraisal. Critically examine
360-degree approach to performance appraisal.
A.9 (a) Performance appraisal is the systematic evaluation of an employees’ job performance (in
terms of the requirements of the job and potential for development). Originally a device
to provide guidance to management in selecting employees for promotion or salary
increases, performance appraisals are now used as a training and coaching device to help
employees at all levels to improve their performance.
Performance in the organizational context is a function of determining job criteria and
selecting those which will be able to perform the required organizational task; motivating
and developing employees for improving their job skills, and preparing them for higher
responsibilities. Hence, the process of performance appraisal involves obtaining, recording
and analysing information about the relative worth of an employee. The focus of perfor-
mance appraisal is as much on the measuring and improving actual performance, as on
the future potential of the employee. This activity is performed annually by a supervisor
for his or her subordinate designed to help employees understand their roles, objectives,
expectations and performance success. Performance appraisal can be used for developmen-
tal as well as administrative purpose. It is a powerful tool to calibrate, refine and enhance
the capabilities of the employee. The developmental purpose of performance appraisal
provides feedback for identifying the employee’s strengths and weaknesses, improving per-
formance and planning for training and development needs of the future. The emphasis is
on improving employees’ on-the-job behaviour. The administrative purposes include deci-
sions regarding promotions, transfers, demotions or layoff. It also provides inputs to other
HR activities such as compensation programmes, recruitment and selection, HR planning,
career planning and the like.
A Few Definitions of Performance Appraisal

Performance appraisal is ‘the systematic evaluation of the individual with respect to his per-
formance on the job and his potential for development.’
Dale S. Beach
Performance appraisal is ‘the process of evaluating the employee’s performance on the job in
terms of requirements of the job.’
W.D. Scott, R.C. Clothier and W.R. Spriegel
Performance appraisal is ‘the process of defining expectations for the employee performance;
measuring, evaluating and recording employee performance relative to those expectations;
and providing feedback to the employees.’
Allan M. Mohrman, Jr., Susan M. Resnick-West and Edward E. Lawler
Performance appraisal is ‘the process of evaluating the performance and qualifications of

the employees in terms of the requirements of the job for which he is employed, for the pur-
poses of administration including placement, promotion, financial rewards, and other actions
which require differential treatment among the members of a group as distinguished from
actions affecting all members equally.’
C. Heyel
Effective performance appraisal system serves the following purpose:
(i) Helping the employees to overcome their weaknesses and improve upon strengths;
(ii) Generating adequate feedback from the supervisors, and improving upon in the required
direction;
(iii) Contributing to the growth and development of employees through realizing required
goals;
(iv) Helping the organization in identifying training and development needs in employees,
and motivating them; and
(v) Generate relevant and required information about the employees.
Potential Appraisal
Whether the evaluation is based on actual or potential performance, depends upon the pur-
pose in view. If the main purpose is the improvement in performance, and wage and salary
adjustments, the emphasis should be on actual performance. If on the other hand, the main
purpose is that of evaluating promotablity, there has to be different emphasis which will
assess the potential performance on the specific job. The latter is like a selection decision in
which past performance on the job must be extrapolated to possible future performance on
different one.
When the employees’ performance is evaluated, the criteria used is focus on the past. From
a performance management viewpoint, the problem is that the past cannot be changed. Unless
a further step is taken, the evaluation data become merely historical document. Therefore,
some attention must be given to the future, and the behaviour and outcomes that are needed
to not only develop the employee, but also achieves the organizations goal. This involves an
assessment of the employees’ potential.
Purpose and the Requirements
The purpose of potential appraisal is to predict whether an employee is capable of taking
on more demanding work, and the speed at which he/she is capable of advancing. It is nec-
essary to—inform employees of their future prospects—enable the enterprise to prepare a
management succession plan—modify and update training and recruitment programmes
and—advice employees of what they must do to enhance their career prospects. In the poten-
tial appraisal process, attempt is made to match employees’ abilities and aspirations with
the organizations forecast of requirements for managerial staff. In this light, a responsibility
may be cast on the supervisors to provide specific instances of how the employee can fur-
ther his or her development and achieve specific goals. A consensus should be reached as
to the employees’ goals for the next evaluation period, the assistance and the resources to be
provided by the management. This aspect of employee appraisal should be the most positive
element in the entire process of employees’ development and help the employee focus on
behaviour that will produce positive results for all concern.
The objective, thus of potential appraisal system is to help the top management make
decisions regarding the suitable persons for a particular job by generating data about the
employees and their potential for performing different, and often, higher level roles. It also
helps in giving some pointers on how the organization can develop the managerial talent
by identifying developmental inputs required by promising employees. Performance review
serves a positive purpose in this direction. The potential appraisal is concerned with forecast-
ing the direction in which subordinates career can and should go, and the rate at which he/
she is expected to develop.
360-degree Feedback Appraisal

The term 360-degree appraisal, also known as multi-rater feedback/appraisal, multisource
feedback, full circle appraisal and group performance review, was coined in United States
in 1998. To overcome the drawback of higher subjectivity in traditional appraisal methods,
many enterprises started using ‘upward feedback method’ where in subordinates provide
feedback on their managers and supervisors. This idea was further modified to ‘peer feed-
back,’ where each team member informs how he or she perceives his or her colleague
performance. The 360-degree feedback appraisal method is an extension of ‘peer feed-
back’ concept; it incorporates upward, downward and lateral feedbacks. Through such a
feedback, efforts are made to eliminate subjectivity in evaluation, as many people rate an
employee on a fairly extensive list of attributes. Thus, the term 360 degree implies that
everyone around is involved in evaluating the performance. Unlike traditional methods,
only superiors do not evaluate the subordinates rather literally everyone around gives the
feedback.
Lepsiger has defined 360-degree feedback as ‘a process of collecting perception about a
person’s behaviour from the people, boss(es), colleagues, fellow members in the team, direct
reports, suppliers as well as internal and external customers’.
Today 360-degree feedback has become a popular appraisal method worldwide.
Q.9 (b) What is performance appraisal? How is it different from job evaluation? What are the
benefits of performance appraisal?
A.9 (b) For the first part of the question, refer to the previous question’s answer.
Job Evaluation
Job evaluation is the process of systematically analysing and assessing the various jobs to
ascertain their relative worth in an organization.
A systematic analysis and comparison defines an internal job hierarchy that ranks jobs in
terms of their relative importance to the organization. In general, jobs that are more important
to the organization command more worth and employees in those jobs receiving higher pay.
Internal worth reflects a job’s importance in terms of its contribution to the overall attainment
of organizational objectives.
Job evaluation is different from performance appraisal: Job evaluation should not be
confused with performance appraisal. In a job evaluation programme, jobs are ranked and
not jobholders, and it is generally used for establishing base/primary compensation for jobs,
whereas performance appraisal is used as a basis of sound personnel policies in relation to
promotions, offer rewards, transfers, etc. Table 1.1 lists the main points of distinction between
job evaluation and performance appraisal.
Table 1.1 Job Evaluation vs Performance Appraisal
Points of Job Evaluation Performance Appraisal

Distinction
1. Nature It makes a systematic analysis It makes a systematic analysis
and assessment of jobs in terms and assessment performance of
of such factors as responsibility, the jobholder.
qualification, experience and
working conditions required for
performance of jobs.
2. Purpose Its purpose is to rank jobs in Its purpose is to effect
order of importance and establish promotions/transfers, offer
satisfactory pay differentials rewards, assess training needs,
among them. and decide about layoffs.
3. Option and It is not compulsory and many It is compulsory and done for
coverage organizations do without it, where all categories of employees on a
it is done, it is mainly for lower- regular basis.
level jobs.
4. Responsibility Responsibility is generally These days, it is done collectively
entrusted to a committee, which by superiors, peers, employees
may have internal and/or external and even outsiders dealing with
experts on it. the organization like customers.
5. Timing Job evaluation takes place before Performance appraisal takes place
an individual is hired by the only after an individual has been
organization. hired and he or she has performed
on the job.
It is also different from job study and analysis, job description, and job specification.
Objectives of Job Evaluation
Some of the major objectives sought to be achieved through job evaluation include the
following:
1. To determine rational wage differentials among different jobs in the organization.
2. To bring new jobs to their proper hierarchical position in the organization.
3. To help to establish perceptions about internal equity among employees. Internal equity
implies that employees should feel that they are paid fairly compared to others in the same
organization, given the contributions that they and others make to the organization.
4. To establish a rational basis for incentives and bonus schemes.
5. To provide a framework for periodic review and revision of wage rates.
6. To provide a basis for wage negotiations with trade unions.
7. To enable management to keep the payroll cost under effective control.
Q.10 (a) ‘Compensation refers to both extrinsic rewards and intrinsic rewards’. Explain this state-
ment and state briefly the objectives that guide the design of compensation system in
organization.
A.10 (a) Meaning and Components

Compensation refers to the whole range of financial and non-financial incentives/rewards
received by an employee in return for his or her services/contribution to the organization.
Specifically, employee compensation is made up of the following components:
1. Base/primary compensation,
2. Incentive compensation,
3. Fringe benefits/supplementary compensation,
4. Non-financial benefits.
Base/Primary Compensation: It refers to the basic pay in the form of wages, salaries and
allowances. Wage represents hourly rate of pay, whereas salary refers to monthly rate of pay.
Wages may be based on the number of units produced or the time spent on the job, whereas
salary is always based on the time spent in the job. Wages/salaries differ from employee to
employee and depend upon the nature of job, type of industry, seniority and merit. Allowances
are paid to employees to compensate for expenditure, they have to incur in connection with
performance of the job or duties connected with employment. These also form part of base
compensation. Table 1.2 spells out the difference between wages and salaries.
Incentive Compensation: It refers to monetary compensation paid to employees for perfor-
mance results—based either on individual performance or on performance of the group as a
whole. It is paid in addition to wages and salaries and depends upon productivity, sales, profits
or cost-reduction efforts.
Fringe Benefits: Fringe benefits refer to those benefits and services that are extended
to employees in the form of medical care, subsidized food, and transportation, paid holi-
days, group insurance, retirement benefits and the like. These benefits are offered to retain
employees as well as attract promising job applicants in the organization. Fringe benefits
extended to managerial personnel are called perquisites or perks. In addition to benefits
and services extended to other employees, these may also include chauffeur-driven car,
furnished house, club membership and the like for managerial cadre employees. Perquisites
benefit the employees personally without costing them. These are associated with the office
of employment.
Non-monetary Benefits: These are benefits that provide psychological and emotional
satisfaction to employees relate to the content and context of job—e.g., challenging
job responsibility, recognition of merit, comfortable working conditions, job sharing,
flexible work schedules. Positive reinforcement, motivation and good behavioural treat-
ment extended by superior to subordinate also constitute the non-financial benefits to
employees.
The following table illustrates the various components of employee remuneration:
Components of Employee Remuneration
Table 1.2 Wages vs Salaries

Basis Wages Salaries
Basis of payment Paid per hour/day/week Paid on a monthly basis
Contract base Not based on a contract Based on a contract
Type of workers Paid to manual workers Paid to white-collar workers, such as
covered (i.e., blue-collar workers) office employees, supervisors, managers,
professional and technical staff
Type of work Manual/physical work Mental work
Objectives of Compensation System

It is common for organizations to establish specific objectives for compensation programme.
Formalized compensation goals serve as guidelines for managers to ensure that the com-
pensation system achieves its intended purpose. Some of the common objectives of a sound
compensation system include the following:
1. To Attract Qualified Personnel: Compensation needs to be high enough to attract com-
petent personnel. Pay scales must respond to demand and supply situations in the labour
market since employers compete for workers. Premium wages are sometimes needed to
attract employees who are already working for others. If fresh MBAs and brilliant engi-
neers, for example, flock around WIPRO, Infosys, Reliance and ANZ Grindlays, it is
mainly because these companies offer attractive remuneration packages.
2. To Retain Existing Competent Employees: Retaining competent employees for long is
often more difficult than attracting fresh ones, employees may quit if compensation levels
are not competitive. It is common knowledge that an employee feels satisfied or dissatis-
fied with his or her remuneration not so much by the total remuneration he or she receives,
but by comparing his or her benefits with those enjoyed by others. An employee sticks to
an organization when he or she is paid equitably. Therefore, the company’s compensation
structure must be equitable and consistent.
3. To Reward Desired Behaviour and Maintain Motivational Levels of Employees:
Employees get motivated to perform better when their past performance is rewarded
adequately. It is, therefore, necessary that a company’s compensation system rewards per-
formance, loyalty, experience and other organizationally desirable behaviours. This will
reinforce desired behaviour and act as an incentive for that behaviour to continue in the
future.
4. To Maintain Salary Equity Among Employees: Compensation system should strive for
internal and external equity. Internal equity requires that remuneration should be related
to the relative worth of the job so that similar jobs get similar pay in the organization.
External equity implies that remuneration for a job should be equal to remuneration for a
similar job in other organizations.
5. To Control Costs and Keep Compensation Budget Under Check: A rational compen-
sation system helps the organization in obtaining and retaining employees at a reasonable
cost. Without effective compensation management, employees could be over or under-paid.
This helps in keeping the labour and administrative costs under control and the company
can systematically go about payroll budgeting.
6. To Improve Union-management Relations: A rational compensation system always
finds favour with employees and their unions. This helps in smoothly conducting col-
lective bargaining and negations between management and unions. It reduces grievances
arising out of wage inequities.
7. To Improve Public and Professional Image of the Company: A suitable compensation
system sends a positive signal to the job market that helps in maintaining and improving
the progressive image of the organization in the industry. A rational administered compen-
sation system creates a good image with the government also as it ensures the employer’s
compliance of laws relating to wages and salaries, such as payment of Wages Act, 1936,
the Minimum Wages Act, 1948, and the Equal Remuneration Act, 1976.
8. Fix Wages and Salary Rates Conforming to Relevant Wage Laws, Wherever Applicable.
Features of a Good Compensation Policy
To be effective, the compensation policy of an organization must ensure the following:
1. It should be easily understood by all categories of employees in an organization, i.e., the
employees should be able to understand what they should be getting and why.
2. It should be such that the employees are able to easily calculate their total remuneration,
including the monetary value of various components. It has been noted that some of the
components are linked with other components and employees find it difficult to under-
stand this inter-relatedness and thus find it difficult to work out what they should be getting
in hand every month.
3. The earnings should be related to the efforts put in by the employees. Normally, it has
been seen that in the name of maintaining parity, all employees of a level or grade are paid
the same salary. This causes dissatisfaction among employees who are sincere and hard
working. Therefore, the compensation policy should be such that it reflects the reward for
hard-working employees.
4. The salary and incentive reward should be paid as soon as it becomes due. Employees pro-
vide organizational services in return for money and if the same is not paid on time, they
feel unhappy as they find themselves unable to meet their commitments like payment of
rent, clearing dues of milkman and grocer, etc.
5. Finally, the compensation policy should be such that it is stable and does not change very
frequently. Frequent changes tend to generate confusion, misunderstanding and unnec-
essary criticism. Further, employees will remain in a state of constant uncertainty not
knowing when any change will happen and what benefits or losses it would lead to.
OR
Q.10 (b) Describe the components of employee compensation. What is the role of personnel man-
ager in administering remuneration to employees?
A.10 (b) Meaning and Components
Compensation refers to the whole range of financial and non-financial incentives/rewards
received by an employee in return for his or her services/contribution to the organization.
Specifically, employee compensation is made up of the following components:
1. Base/primary compensation,
2. Incentive compensation,
3. Fringe benefits/supplementary compensation,

4. Non-financial benefits.
Base/Primary Compensation: It refers to the basic pay in the form of wages, salaries and
allowances. Wage represents hourly rate of pay, whereas salary refers to monthly rate of pay.
Wages may be based on the number of units produced or the time spent on the job, whereas
salary is always based on the time spent in the job. Wages/salaries differ from employee to
employee and depend upon the nature of job, type of industry, seniority and merit. Allowances
are paid to employees to compensate for expenditure, they have to incur in connection with
performance of the job or duties connected with employment. These also form part of base
compensation. Table 1.2 spells out the difference between wages and salaries.
Incentive Compensation: It refers to monetary compensation paid to employees for per-
formance results—based either on individual performance or on performance of the group
as a whole. It is paid in addition to wages and salaries and depends upon productivity, sales,
profits or cost-reduction efforts.
Fringe Benefits: Fringe benefits refer to those benefits and services that are extended to
employees in the form of medical care, subsidized food, transportation, paid holidays, group
insurance, retirement benefits and the like. These benefits are offered to retain employees
as well as attract promising job applicants in the organization. Fringe benefits extended
to managerial personnel are called perquisites, or perks. In addition to benefits and ser-
vices extended to other employees, these may also include chauffeur-driven car, furnished
house, club membership and the like for managerial cadre employees. Perquisites bene-
fit the employees personally without costing them. These are associated with the office of
employment.
Non-monetary Benefits: These benefits provide psychological and emotional satisfaction to
employees and relate to the content and context of job—e.g., challenging job responsibility,
recognition of merit, comfortable working conditions, job sharing, flexible work schedules.
Positive reinforcement, motivation and good behavioural treatment extended by superior to
subordinate also constitute the non-financial benefits to employees.
Role of Personnel Manager in Compensation Administration
It involves formulation and implementation of policies, practices and programmes relating to
wages, salaries, fringe benefits and incentive plans. The personnel manager has an important
role to play in this regard. He or she has to attract the employee, and at the same time retain
them. He or she has also to keep the cost of administering the compensation plans with in
control, for compensation management also aims at designing a cost-effective remuneration
structure that attract and retain competent employees. His or her role involves:
K Designing a fair and equitable remuneration structure
K Conducting wage and salary surveys
K Designing a suitable package of perquisites for employees
K Suitably rewarding the competency in terms of skill, abilities in employees
K Conforming to relevant rules, and laws in this regard
K Ensuring that compensation paid to employee conforms to the prevailing standard in the
industry
K Monitoring and regulating the cost of the compensation structure
The above would ensure attracting competent employees to the organization. It would also
help in stabilizing the labour force. The productivity in the organization would improve. The
employees’ relations with the management will be cordial.
Q.11 (a) Outline the principles of an appropriate compensation policy. Explain the process of
wage determination.
A.11 (a) Major Issues in Compensation Policy
Some of the major guiding philosophies that a company’s compensation policy must consider—
to attract, retain, and motivate competent employees—include the following:
1. Internal and External Equity: An organization’s compensation policy must achieve, as
far as possible, internal and external equity in its pay structure. Internal equity involves
the perceived fairness of pay differential among different jobs within the organization.
Employees should feel that the pay differentials among jobs are fair, given the correspond-
ing difference in job responsibilities. Internal equity should also ensure individual equity.
Individual equity considers employee perception of pay differentials among individuals
who hold similar jobs in the same organization. Seniority, for example, contributes to
differences in remuneration received by two individuals in the same cadre. An associate
professor in a college/university with more number of years in the service tends to receive
higher remuneration than his or her junior colleague who has become associate professor
just recently. External equity involves employees’ perception of the fairness of their remu-
neration relative to those outside the organization. What competitors pay for similar jobs
will have its impact on employee motivation, commitment and performance.
2. Balance Between Financial and Non-financial Rewards: Employee compensation is made
up of both financial as well as non-financial rewards. While designing its compensation sys-
tem, the organization should decide about the relative mix of the two. Financial rewards (like
pay raises) are more tangible and instantly admired than non-financial rewards (like granting
greater authority over work assignment) which satisfy emotional and psychological needs
of employees. In general, companies that emphasize on fast sales maximization, individual
achievement and responsibility, and have more unskilled workers in their workforce, accord
greater importance to financial rewards in their compensation plan. In contrast, companies
that believe in nurturing long-term customer relationships, team work, long-term employee
commitment, and have larger proportion of skilled and knowledge workers in their work-
force, place greater importance on non-financial rewards in their compensation plan.
3. Linking Pay with Work Performance or with Jobs’ Worth: While designing its compen-
sation policy, an organization has to decide thoughtfully whether employees’ pay should
be linked with their work performance or with the worth of the job. Both the systems find
favours with organizations, depending upon their work settings. Companies operating in
a competitive business environment tend to link compensation with employee’s work per-
formance. Linking pay with performance proves beneficial for the employee as well as
the organization. It ensures faster upward mobility of the employee in the organization,
and sets in motion a healthy competition among employees to achieve higher productivity,
profitability and growth for the organization. In contrast, traditional compensation systems
are job-linked. They link employee’s remuneration with the relative worth of the job in the
organization, and not how well the employee performs the job. Job-linked compensation
systems are found in organizations which operate in a more secure environment, where
technology is stable, jobs do not change frequently, employees prefer to move up through
the ranks over time, and jobs are fairly standardized. Job-linked compensation systems are
gradually giving way to more rewarding performance-linked compensation systems.
4. Desire to Lead or Just Meet Market Expectations: While designing the compensa-
tion plan, management has to decide whether it wants to lead the market or just wants
to be at par with others. Employees’ pay relative to alternative job opportunities directly
influences the firm’s ability to retain its existing employees and attract people from other
companies. In general, if the company is competing on quality, innovation, customization
with sophisticated technology, it has to follow the policy of leading the market by paying
higher pay scales. No doubt, higher pay increases cost for the company, it nonetheless
gives its employees the feeling of being a part of an elite organization. In contrast, compa-
nies that want to remain afloat in the market, follow the policy of paying just equal to the
average salary scales prevailing in the market.
5. Elitism versus Egalitarianism: Under the elitist pay system, an organization establishes
different remuneration for different categories of jobs. For example, in some companies
only the top-level executives are eligible for stock option (i.e., purchasing shares at fixed/
lower prices instead of market prices). In egalitarian pay system, on the other hand, most
of the employees are placed under the same remuneration plan. For example, when all
the employees of the organization—right from the top executives down to the lowest-
paid workers—become eligible for stock options, the plan will be termed as egalitarian.
Elitist remuneration systems are found mainly in older, well-established firms operating
in relatively stable markets with low or no competition. Egalitarian pay system provides
more flexibility to organizations to deploy employees in different areas without having to
change their pay levels. This reduces barriers between people who need to work together.
Egalitarian pay systems are found mainly in organizations working in competitive envi-
ronments where they are ready to undertake risks while trying to expand their market
share by continually investing in new technologies, ventures and products.
6. Pay Reviews: Periodic pay review is another important issue that needs consideration in
an organization’s compensation management policy as it ensures alignment of wages and
salaries with the price changes that have taken place over the years. In organized industrial
establishments, pay reviews generally take place once in three years through wage and sal-
ary agreements between management and employees’ unions. In government departments,
pay reviews generally occur in 10 years and are recommended by the pay commission set
up by the government.
7. Employee Participation: An important issue that confronts management is to decide
whether employees should be involved in working out the organization’s compensation
policy, in other words, whether the organization should go for centralized or decentralized
system of evolving its compensation policy. In a centralized system, pay decisions are con-
trolled by top executives and are taken at corporate headquarters. In a decentralized system,
employees are also involved in deciding about pay scales. A democratic and decentralized
system is definitely more acceptable to employees and meets with little resistance dur-
ing its implementation. Employee participation is an important, but difficult and complex,
aspect of any policy decision by compensation management. Employee participation is
unlikely to work well unless the organization has already established an overall philosophy
of participative management as well as a reasonable climate of organizational functioning.
If these elements are missing, centralized top-down approach might be more appropriate.
8. Social Concerns: Compensation policy cannot be conceived in isolation of community

concerns. These concerns are price stability, improving standards of living, generating
more employment, meeting demands of competitiveness to attract global business, social
equality and harmony, etc. Incorporating these concerns requires several trade-offs, with
emphasis on wages being linked with cost reduction or increase in productivity and qual-
ity. This means preferring merit-based pay and fair wages so that workers are motivated
and give their best.
9. Implementing Legal Provisions, as well as Wage Board and Tribunal Awards: The pro-
cess of developing a suitable compensation structure involves four closely related aspects
in a system of wage and salary administration. These are:
(i) conducting wage and salary survey,
(ii) undertaking the exercise of job evaluation,
(iii) appraising employees for their performance and also known as merit rating,
(iv) devising suitable incentives plans for employees.
In addition to above, the following factors must also be considered:
Factors Affecting Employees’ Remuneration

Employee remuneration and its structure is influenced by a variety of factors—some are
related to and exist within the organization (called internal factors) and others that exist out-
side the organization (called external factors).
Internal Factors
Among the internal factors that have an impact on employee remuneration are the company’s
business strategy, worth of a job, employee’s relative worth and the employer’s ability to pay.
Collective bargaining and the productivity levels are also internal to the organization.
1. Company’s Business Strategy: For a business pursuing an aggressive strategy to achieve
rapid growth, its remuneration levels will be higher than what competitors pay. A busi-
ness pursuing a defensive strategy, because of declining fortunes of the company, will
keep its remuneration levels at average or below average levels than the prevailing market
rates.
2. Job’s Worth: Organizations decide the worth of a job in two ways: formally, through a
system of job evaluation or informally, through the opinion of people familiar with the
job. Job evaluation helps in establishing rational and satisfactory wage differentials among
jobs. However, when the worth of a job is decided informally, pay rates may be influenced
heavily by the labour market conditions or, in case of unionized organizations, by collec-
tive bargaining. Informally determined remuneration rates are generally higher.
3. Employee’s Relative Worth: An employee’s worth is determined by the efficiency
with which he or she performs his or her job, his or her loyalty towards the organiza-
tion, and his or her seniority in the organization. Of these, performance is highly valued
in organizations. Superior performance always commands a higher pay. For determining
performance-based remuneration, organizations use an objective performance appraisal
system that differentiates among those employees who deserve higher pay and those who
do not. Managements prefer performance and loyalty to effect pay increases while unions
view sonority as the most objective criterion for pay increases.
4. Employer’s Ability to Pay: Remuneration payable to workers also depends upon the pay-
ing ability of the employer, which is a function of the financial condition and profitability
of the firm. Financially well-off and profitable organizations are always in a better posi-
tion to pay higher pay.
External Factors
The major external factors that influence employee remuneration include labour market
conditions, prevailing area wage rates, cost of living, collective bargaining capacity and gov-
ernment laws and regulations.
1. Labour Market Conditions: Labour market reflects the forces of supply and demand of
workers within an area. These forces help to decide the pay rates required to recruit and
retain competent employees. In general, higher wage rates will have to be paid when the
demand exceeds supply, and if labour is available in sufficient supply, wage rates tend to
be law.
2. Prevailing Area Wage Rates: A formal wage structure should provide rates that are in line
with those being paid by other employers for comparable jobs within an area. This serves
the important function of providing external equity between one’s own organization and
other organizations competing for labour in the surrounding labour market.
3. Cost of Living: Since wages and salaries represent the only means of livelihood to the
employees, it is obvious that they should be sufficiently high to meet the cost of living
and should be kept in tune with the increasing cost of living. Progressive employers are
always guided by this consideration in determining wage levels. It is a common experience
in industrial organizations that if employers do not show enough awareness and sensitiv-
ity towards the trends in cost of living, labour unions will bring this to the notice of the
employers and force them for a wage raise.
4. Collective Bargaining Capacity: Employee remuneration is also determined, to a consid-
erable extent, by the relative bargaining power of the employer and the labour unions. A
strong labour union is generally able to force the employer to pay higher wage rates. The
agreements negotiated by unions generally establish pay-rate patterns within the labour
market. As a result, wages are generally higher in areas where organized labour is strong.
5. Government Laws and Regulations: There are numerous labour laws, at the central and
state levels, that affect employee remuneration. Some of the central laws are the Payment
of Wages Act, 1936; the Minimum Wages Act, 1948; the Payment of Bonus Act, 1936; the
Minimum Wages Act, 1948; the Payment of Bonus Act, 1965; and Equal Remuneration
Act, 1976. In addition to labour laws, there are wage boards, tribunals and fair wages
committees which regulate wages payable to workers. The basic aim of all the legal enact-
ments and regulatory agencies is to protect the workers from the exploitation of powerful
employers and also to ensure payment of fair wages that would provide a decent standard
of living to them. For regulating remuneration to managerial personnel, provisions of the
Companies Act, 1956 are applied. Wage Board and Tribunal Awards also play a significant
role in influencing the compensation to be paid.
OR
Q.11 (b) What is the significance of non-financial incentives? Describe different types of non-
financial incentives.
A.11 (b) The answer to this question should be read along with the previous answers.
Non-financial Benefits: These benefits provide psychological and emotional satisfaction to
employees and relate to the content and context of job—for instance,
K challenging job responsibility,
K recognition of merit,
K comfortable working conditions,
K appreciating the job well done,
K job sharing,
K flexible work schedules,
K positive reinforcement,
K motivation, and
K good behavioural treatment extended by superior to subordinate also constitute the non-
financial benefits to employees.
Such benefits recognize the role and existence of employees in the organization. These extend
a humane treatment to the employees. Employees feel a part of the organization and these are
considered as important as the financial benefits.
Q.12 (a) Define social security. Explain its scope and importance in the Indian industry.
A.12 (a) The term ‘social security’ has been defined differently by authorities and, thus, there is
no commonly accepted definition of the term. There are mainly two streams of thought
on this issue, one represented by the ILO that limits the scope of social security to main-
tenance of once income against loss or diminution. This is described as protective form
of social security. Another view perceives social security in a broader sense, in this sense,
it is a set of policies and institutions designed to enable a person to attain and maintain a
decent standard of life. This is described as a preventive or promotional form of social
security.
Few Definitions
Social security is defined as the security that society furnishes through appropriate organiza-
tions against certain risks to which its members are exposed.
In the historical perspective, the term ‘social security’ was coined for the first time when
the United States Social Security Act, 1935, came in existence. Subsequently the term became
popular in other western nations of the world. In United States, the term is used to denote old
age survivors, invalidity and health insurance schemes that functions under the control of the
Federal Government. In England, the term includes social assistance as well as social insur-
ance scheme and is inclusive of National Insurance Scheme, industrial injury scheme and
social assistance scheme under which supplementary benefits are provided to the workers.
The ILO has defined the social security as ‘the surety that society furnishes, through
appropriate organization against certain risks to which the members are exposed. These
risks are essentially contingencies against which the individuals of small means and meagre
resources cannot effectively provide by their own ability or presight or even in private com-
bination with their fellow workers—these risks being sickness, maternity, invalidity, old age
and death. It is the characteristics of these contingencies that they imperil the ability of the
working class to support itself and its dependent in health and decency’.
According to Lax icon Universal encyclopaedia the term ‘social security’ has been
defined as ‘consisting of public programmes intended to protect workers and their families
from income losses associated with the old age, illness, unemployment or death. The term
sometimes is also used to include a broad system of support for all those who, for whatever
reasons unable to maintain themselves’.
The National Commission on Labour has defined the concept of social security as fol-
lows: ‘social security envisages that the members of a community shall be protected by
collective action against social risk causing undue hardship and deprivation to individuals
whose private resources can seldom be adequate to meet them ….’ The concept of social
security is based on ideas of human dignity and social justice. The underlying idea behind
social security measures is that a citizen who has contributed or is likely to contribute to his
or her countries welfare should be given protection against certain hazards.
The concept of social security thus is based on ideals of human dignity and socio-economic
justice. Underlying the concept is also the desire to give protection to its citizen to contribute
to a countries total welfare against certain hazards of life to which they are exposed either in
the working life or as a consequence of it.
Functions of Social Security
1. To provide protection and relief to members of the society against some contingencies that
exposes them to risk of social and economic security. The protection is provided to them
in the capacity of the members of the society who are related to and dependent upon each
other.
2. The social security schemes in a broader perspective provide psychological and socio-
logical security.
3. The social security schemes are implemented mainly through enactments—these are
enforced at the local, state and national level for the purposes of proving financial assis-
tance to persons in distress and having the need of assistance.
4. The concept of social security also includes social assistance and social insurance.
Several legislation provides social security to workers in India. The most important once
are as follows:
(i) The Employees State Insurance Act, 1948 (the ESI scheme under the Act aims at provid-
ing health care and cash benefits in case of sickness, maternity and employment injury).
(ii) The Maternity Benefit Act, 1961. The act applies to all factories, establishments, plantation,
mines and shops (the benefit under the provisions of the Act is in the form of periodical
payment in case of confinement, miscarriage or sickness arising out of pregnancy).
(iii) The Employees Provident Fund and Miscellaneous Provisions Act, 1952 (the legislation
provides for old age, invalidity and survivorship benefits to the workforce in the orga-
nized sector).
(iv) The Payment of Gratuity Act, 1972 (it provides for terminal benefit paid in lump sum
complementary to periodical pension payment. The act applies to factories, mines, oil
fields, plantations, ports and railway companies).
(v) The Workmen Compensation Act, 1923 (it provides for the losses due to accidents arising
out of or in the course of employment causing death or disability).
(vi) The Industrial Disputes Act, 1947, provides the statutory measures against layoff and
retrenchments (in the form of compensation).
OR
Q.12 (b) What is the significance of employee welfare? What types of welfare services can be
provided to employees?
A.12 (b) Employee Welfare

The need and importance of employees’ welfare is being increasingly appreciated throughout the
world. The concept of welfare is a dynamic one and has different connotations in different coun-
tries and at different times in the same country, according to the prevailing value system, social
institution, degree of industrialization and the general level of social and economic development.
Some describe employee welfare or labour welfare as ‘an attitude of mind’ while others
merely catalogue the schemes and measures which should be included in labour welfare.
There are some who emphasize the voluntary nature of measures and include the measures
that are undertaken by the employers beyond what is required by law. Some interpret labour/
employee welfare measures to mean only measures that are legally obligatory. According to
ILO, ‘workers’ welfare should be understood to mean such services, facilities and amenities
which may be established in or in the vicinity of undertakings to enable the persons employed
in them to perform their work in healthy and congenial surroundings, and provided with
amenities conducive to the good health and morale’.
Welfare work is the task to be done by the employer voluntarily for the intellectual, phys-
ical, moral and economic betterment of employees, over and above which is laid down by
law, or what is expected as a part of contractual benefits for which the employee may have
bargained. Thus, under this definition we may include housing, medical and educational
facilities, nutrition, facilities for rest and recreation, cooperative societies, day nurseries and
crèches, provision for sanitary, accommodation, holidays with pay, social insurance measures
undertaken voluntarily by the employers and would also include schemes like provident fund,
gratuity and pension etc. The term welfare is thus very flexible.
In India, which has embarked upon a vast programme of industrialization, the need for
labour welfare is all the more important because it creates a healthy atmosphere in the work
place, keeps the labour force stable and contended, helps in maintaining industrial peace,
thereby improving productive efficiency of the workers. It is in recognition of this need that
under successive five-year plans, and also in the industrial policy statements, welfare mea-
sures had been accorded a due place. The agencies responsible for administering welfare
measures are central government, state government, employers and their organizations, work-
ers’ organizations and statutory welfare funds. To supplement the efforts of the employees
and the state governments in providing welfare amenities to the workers, welfare funds have
been set up in coal, mica, iron ore, manganese ore, limestone and dolomite mines and in
Beedi industry. The principal activities financed out of the fund include general welfare such
as medical facilities, water supply, education and recreation, and housing. The funds have
been created by levy of the cess on production or consumption or export of the minerals and
in the case of beedi on the manufactured beedis.
Importance of Welfare Activities
The labour or employee welfare activities improve the working and service conditions of the
employees and promote efficiency.
K It fosters harmony and good relations with the employees’ union and leads to higher
productivity.
K The provision of welfare amenities reduces labour turnover and absenteeism.
K It helps the employer to get a stable workforce because the employees are satisfied and
more interested and involved in their work.
K The provision of various welfare measures will make the workers feel and realize that
they also have some stake in the undertaking in which they are engaged and, therefore,
any reckless action on their part, which may damage the interests of the undertaking, is
likely to have reaction upon their own interest. The development of such feeling helps to
minimize and further the chances of conflict between labour and management on flimsy
grounds. Thus, an all-round increase in production is possible.
The social advantages of welfare measures to workers are many and varied. It improves their
physique; medical and maternity and child welfare improve the health of workers and their
families, and bring down the rates of general mortality and infant mortality. Education facili-
ties increase their mental efficiency and economic productivity.
Types of Employee Welfare Amenities
Employee welfare can be divided in to two categories, namely, statutory and voluntary:
1. Statutory
Government has passed a number of legislations in order to set minimum standards of safety
and welfare of the employees at their workplace. Provisions have been made for the welfare
facilities such as washing, storing, first-aid appliances, hours of work, sanitation etc.
2. Voluntary
The employers voluntarily have provided welfare amenities to the employees besides the statutory
facilities. They are more concerned with the welfare of their employees. Organizations such as
Godrej, L&T provide adequate transport and similar other facilities to their employees. Facilities
for recreation, medical treatment, free meals or subsidized meals, schooling facilities for children,
sports and games are provided by many organizations. Organizations have given opportunities
to work with flexible working schedules. It helps to meet business commitments while at the
same time supporting one’s personal life needs. Organizations also provide mediclaim insurance
coverage of employees for expenses relating to hospitalization due to illness, disease and injury.
Harassment policies also made to protect harassment of any kind to employees.
The voluntary welfare facilities may also classified into those provided within and outside
the factory premises.
(a) Welfare and amenities within the factory premises
(b) Welfare and facilities outside the factory premises
Welfare and amenities within the factory premises include: (a) provision for latrine and
urinals (b) washing and bathing (c) crèches (d) rest shelters and canteens (e) arrangement
of drinking water (f) arrangement for prevention of fatigue (g) administrative arrangement
within the plant to look after welfare (h) uniforms and protective clothing (i) shift allowance.
Welfare and amenities outside the factory premises include: (a) maternity benefit (b)
social insurance (c) benevolent fund (d) medical facilities (e) education facilities (f) housing
facilities (g) recreational facilities (h) holiday/leave and travel facilities (i) workers’ coopera-
tives (j) other programme for the welfare of women, youth and children and (k) transport to
and from the place of work.
Statutory Provisions for Employee Welfare
The provisions relating to employees’ welfare are discussed from Section 42 to 49 of the
Factories Act. Besides the Factories Act, measures are provided in Plantation Labour Act,
1951; Mines Act, 1952; Merchant Shipping Act, 1958; Motor Transport Act, 1961 and The
Dock Workers (Regulation of Employment) Act, 1948.
2007
Q.1 (a) (i) Why is HR planning more common among large organizations than among small
ones? What are the limitations of HR planning?
A.1 (a) (i) Refer to the answer of Q.3 (a) in the model question paper.
Limitations of Human Resource Planning
The main limitations of the exercise of HR planning relate to
(i) Its inaccuracy. As the exercise involves forecasting the demand, and the supply of human
resources, it cannot be accurate.
(ii) The exercise is always resisted by employees. The organized body of workers feel that it
would lead to unemployment. It may also result in increasing the work load.
(iii) The context of absenteeism, labour turnover and technological changes, serving as con-
straints, the exercise is termed as the one operating in uncertainties.
(iv) The absence of appropriate and reliable information; the HR planning does not lead to
correct result.
(v) The time and expense some time does not justify the exercise.
(vi) The exercise that does not get the top management support.
Q.1 (a) (ii) Examine the role of human resource manager in developing human resource to gain
a competitive edge for the organization in the competitive market.
A.1 (a) (ii) Refer to the answer of Q.1 (a) and (b) in the model question paper.
OR
Q.1 (b) (i) ‘Empowerment of employees has become more significant in light of companies
growing today at a fast pace’ Do you agree?
A.1 (b) (i) Employees’ Empowerment
Employees’ empowerment is the process of sharing power with employees, thereby, enhancing
their confidence in their ability to perform their jobs and their belief that they are influential
contributors to the organization.
It has been observed that imparting power to employees enhances their feeling of self-
efficiency and a sense of ‘owning’ a job. Empowered employees exude increased confidence
while performing their jobs.
It is the feeling of ‘ownership and control’ over their jobs which motivates employees to
maximize their contribution in making the organization successful. In an age of increasing
individualism, empowerment is what young job aspirants look for in organizations.
Dimensions of Empowerment
Employees’ empowerment is represented by the following four dimensions:
(i) Self-determination: Empowered employees have a sense of self-determination in that
they feel they have freedom, independence and discretion over their work activities.
They have choice in regard to the tasks, methods and pace of their work.
(ii) Meaningfulness: Empowered employees perceive meaning in their work. They care
about their work and believe that whatever they do is important. Their job fits their
values.
(iii) Competence: Empowered employees are confident about their abilities to skilfully
perform their jobs. They show tremendous capacity to grow in the face of emerging
challenges.
(iv) Feeling of Impact: Empowered employees view themselves as active participants in the
organization and believe that they have influence over important strategic, administra-
tive and operating decisions of the organization.
Characteristics of Empowered Organizations
Organizations with high level of empowerment typically have the following characteristics:
1. They emphasize delegation, decentralization and diffusion of power.
2. They set broad guidelines to leave ample space for employees to work out their decision-
making parameters.
3. They prefer a flat organization structure with few levels of management. A tall organization
structure with many ‘command and control’ levels unnecessarily introduces bureaucratic
hurdles in empowering employees.
4. They invest a lot of time and effort in hiring new recruits to make sure that they are able to
handle workplace freedom properly.
5. They emphasize such employee-related core values as: high levels of quality performance,
work-related accountability and maximum job satisfaction.
6. They use such instruments and mechanisms as: self-directed teams, quality circle pro-
grammes, objective performance evaluation and fair reward system.
Benefits of Empowerment
Empowering proves beneficial to the employees as well as the organization. How this hap-
pens is explained here.
Empowered organizations are characterized by:
(i) decentralization and diffusion of power,
(ii) employees who workout their decision-making parameters,
(iii) few levels of organizational hiring, and emphasis on core values, e.g., high level of
quality, performance, etc.
Dimensions of Empowerment
(i) Self-determination,
(ii) Meaningfulness,
(iii) Competence and
(iv) Feeling of impactness.
Benefits for Employees

1. Enhances Self-confidence: Empowerment removes the feeling of powerlessness among
employees and enhances their self-confidence as they get more control and decision-
making authority with regard to the tasks, methods and pace of work.
2. Increases Motivation for Task Accomplishment: While everyone joins an organization
with the intention of doing a good job, there are many who have an innate desire to excel in
what they do. For such employees and others too, empowerment can act as a great motiva-
tor for task accomplishment.
When such employees are empowered, they do not simply complete the task but excel
in it, even attempting to set a new benchmark. They treat each assignment as a challenge,
which prompts them to figure out creative use of their abilities.
3. Allows Quick Action: Empowerment equips employees with information, knowledge
and power to control factors that affect job performance. Such an environment allows the
employees to see problems, solutions and opportunities for quickly taking action on mat-
ters for which they are empowered to act.
4. Personal Growth and Development: Empowerment provides a work environment that
fosters opportunities for employees’ personal growth and development and a greater sense
of achievement.
Benefits for the Organization
1. Ensures Optimum Utilization of Employees: Empowerment inculcates a heightened
feeling of responsibility towards the job which motivates the employees to put in their best
efforts in performing their job responsibilities.
2. Improves Organizational Performance: Empowerment encourages employees to
become proactive in problem solving, accepting challenges and continuously searching
innovative methods of work performance. All this enhances organizational efficiency and
improves organizational performance.
3. Creates a Team of Loyal Employees: More than monetary rewards, it is the feeling of
‘owning and controlling’ the job that motivates employees and provides them job satisfac-
tion. Motivated and satisfied employees always remain loyal to their organization and do
not think in terms of quitting the job and joining another only for a few more rupees.
Barriers to Empowerment
Following are some of the factors that may act as barriers to empowering employees:
1. Incongruent Organization Culture: Empowerment succeeds when the culture of the
organization is open and receptive to change. An organization’s culture is largely created
through the philosophies of senior managers and their leadership traits and behaviours. If
the philosophy of the senior management is authoritarian in nature, it will impede empow-
erment of employees.
In such a scenario, authority tends to centralize at the top and employees do not get
involved in decision making at lower levels. Unless this type of organizational culture is
changed, empowerment will be neither possible nor effective.
2. Rigid Control Systems: Many organizations design control systems on the premise
that ‘people cannot be relied upon even for minor matters’. Such control systems reduce
employees to nothing but cogs-in-the-wheel. This leads to creation of a monotonous work
environment in which employees with initiative are forced to stifle their leadership quali-
ties, curb emergence of creative ideas and to conform to the diktats of the organization.
Empowerment cannot be ushered in or become effective unless such rigid systems are
done away with.
3. Inadequate Delegation of Authority: In many organizations, superiors hesitate to delegate
authority to their subordinates for a variety of reasons. They include superiors’ love for
authority, lack of confidence in the abilities of subordinates, fear of exposure, criticism for
the faulty working of subordinates, etc. This results in the concentration of authority in the
hands of a few individuals at the top, thereby depriving lower-level employees of the much
needed authority. Unless this situation is changed, employees will not feel empowered.
Q.1 (b) (ii) State the competencies required of HR manager to perform his or her functions suc-
cessfully.
A.1 (b) (ii) Competencies of HR Manager
To overcome allegations commonly levied against personnel and HR professionals, the latter
must learn and develop new roles and concepts to create an image of being remunerative, and
the one contributing to business profits in the eyes of top management. Only then will they
develop the power base required to operate in the organization. The personnel people need
to have a corporate perspective, which they lack. The traditional and stereotype roles obvi-
ously do not provide HR professionals to demonstrate the initiative they possess in handling
problems involving human resources that today organization faces. Rather HR professionals
frequently are made escape goat when things go wrong particularly in employees’ relations.
The new and evolving role expects human resource professionals to be diagnostician, coun-
sellor, planner/controller, policy formulator, innovator and project planner. Let us not forget,
the most critical group that makes the HR work is the HR staff. The latter includes all those
who work in the HR department. If they do not have a knowledge base, HR is not going to
work. HR professionals are the main facilitator of human resources in an organization. They
need to be capable in facilitating the HR function; they should have five critical competen-
cies to make HR succeed. These include the following:
(i)Knowledge of the business in which they are facilitating HR and strategic thinking,
(ii)Functional knowledge of HR,
(iii)Leadership and change management qualities,
(iv) Attitudes needed to initiate, facilitate change and execute various HR interventions, and
lastly,
(v) Personal credibility and learning attitudes.
Professional Competencies
1. Knowledge of the Business
The HR professionals must have a complete picture of the business in terms of its products,
services, industry, competition, internal capabilities and external threats. It would imply
that HR professionals understand the financial, the technological and strategic capabilities
of the organization.
2. Develop Expertise from Within

Often line management professionals state that HR department do not have expertise and
therefore need to demonstrate the unique expertise that is expected from the HR profes-
sionals from within the organization.
3. Anticipate Change and Respond Proactively
An HR professional needs to learn to shift from a reactive orientation to a proactive orien-
tation. This is a critical area – given the fact that the environment is so dynamic, and one
has to maintain the competitive advantage.
4. Be Data Based
HR professional fails often because of their inability to quantify behavioural aspects.
Nevertheless there is enough knowledge available today which helps HR practices to be
assessed and quantified in terms of business requirements. Managers today are using
quantitative techniques as well as computer-based processing systems to analyse, support
and present their stand point.
5. Self Success
One difficulty in HR departments is that few outsiders fully understand what they contrib-
ute to business success. In fact a large number of HR professionals are modest in openly
acknowledging their own contribution. It is therefore appropriate to share their success by
communication appropriately.
6. Remain Closer to Customer
HR department have customers at all levels of the organization. The practice of HR’s doing
(management by walking around MBWA) is relevant to get a feel of what the organiza-
tional requirements are as well as to provide a service at the level it is required. This would
greatly elevate the concern that HR professionals are inward bound and cannot see reality
as it exists outside.
7. HR’s Practices to Build Competitive Advantages
The questions HR professionals should constantly ask is: how well HR practices affect the
competitiveness of our business? If presented and viewed positively, the HR group can be
used as an influenced liver going process.
Personal Competencies
In addition to professional competencies required, the HR professionals also need to develop
personnel competencies. Such competencies are individual to person (skill based). These are:
(a) Thinking strategically (requiring HR professional to focus on strategic issues rather
than on operational ones only)
(b) Develop credibility (it may come by offering professional and personnel services)
(c) Be candid: Candidness is a personal virtue which enables HR professionals to be involved
in key business decisions. Being candid and yet maintain confidentiality will win respect
for HR managers. The examples of candidness includes giving an opinion and provid-
ing inputs in staffing matter, appraisals, counselling, reward programmes, environmental
assessments etc.
(d) Be a leader (leadership requires a personal vision about what one needs to see accom-
plished; a vision going beyond daily events, and painting a futuristic feature): Networking
with professionals outside the organization will help build skills of leadership based on
expertise and competence.
(e) Be politically agile: This is a personal skill. HR professional need to develop it. What is
implied is knowing the way ‘ropes hang’ in organizations and learning to climb without
hesitation. It also includes holding coalition and networks to support HR programmes
and policies.
Q.2 (a) (i) Define job evaluation and briefly discuss the analytical method of job evaluation.
A.2 (a) (i) Refer to the answer of Q.9 (b) in the model question paper.
Q.2 (a) (ii) Explain the various types of transfers. How would you effectively administer a trans-
fer programme?
A.2 (a) (ii) Refer to the answer of Q.8 (b) in the model question paper.
OR
Q.2 (b) (i) What are the different methods of performance appraisal? Which of these would you
recommend for appraising managerial executives in India?
A.2 (b) (i) Refer to the answer of Q.9 (a) in the model question paper.
Methods of Appraisal
1. Ranking Methods
A number of methods are used to rank employees for appraisal purposes. These include
simple ranking, paired comparison or forced distribution:
(i) Simple ranking method: Under simple ranking system of performance appraisal,
subordinates are rated on an overall basis with reference to their job performance. All
employees are judged on the same factors, and ranks are given on the basis of each
employee’s level of efficiency in relation to others in the group. In this way, the best is
placed first in the rank, and poorest occupies the last rank. This is just like preparing
ranks of various examinees in an examination.
(ii) Paired comparison method: Under the paired-comparison method, each member is
compared with all others in the work group, but comparison is made with only one
member at a time. Thus, in a group of four persons (A, B, C and D), the rater will
have to make six comparisons—namely, A and B, A and C, A and D, B and C, B
and D, and C and D. The number of times each member is preferred over another is
recorded. These numbers determine the ranks of members. Obviously, the number of
rank orders would be N (N−1)/2, where N denotes the number of members in a group.
(iii) Forced distribution method: It is a method to evaluate employee performance
according to a pre determined distribution scale. Generally, the rater has to place
his or her employees into five grade levels. One end of the scale represents best job
performance, whereas the other end represents poorest job performance. The rater is
asked to allocate approximately 10 per cent of employees to the best end of the scale,
20 per cent in the next category, 40 per cent in the middle category, 20 per cent in the
bracket next to low and 10 per cent in the low brackets.
Evaluation of Ranking Methods: The biggest merit of ranking format is their low cost,
little time and effort, and simplicity. Moreover, by forcing ratters to specify their best and worst
performers, employment decisions, such as pay raises and promotions, become much easier to
make. However, ranking formats are plagued with several weaknesses; because the rating stan-
dards for judging performance are vague or non-existent, the accuracy and fairness of the ratings
can be seriously questioned. Moreover, ranking methods do not specify what an employee must
do to receive a good rating and, thus, they fail to adequately direct or monitor employee behav-
iour. Finally, rank order can be misinterpreted, leading to morale and motivational problems. For
example, an employee may be ranked the lowest in his or her group, but may be a member of
an outstanding group and performing at a very acceptable level. In another group, the lowest-
ranked employee may indeed be performing at a sub-standard level. Organizations using ranking
formats cannot compare the performance of employees from different departments fairly.
2. Graphic Rating Scale Method

Graphic rating scale, also known as linear rating scale, is probably the most widely used
performance appraisal tool. There are many versions of graphic rating scales, but all
concentrate on specific employee behaviours or characteristics as they relate to work per-
formance. In this technique, a printed appraisal form is used for each employee (appraisee).
This form contains a number of employee qualities and characteristics to be evaluated by the
appraiser. The typical qualities are—quality and quantity of work, cooperativeness, analyti-
cal ability, decisiveness, initiative, emotional stability and so forth. The list of factors may
be expanded or contracted keeping in view the company requirement for the different cat-
egories of employees and their job requirements. Rating for each factors may be done on the
basis of numbers (1, 2, 3, 4, 5, etc.) or descriptions (excellent, very good, average, poor, etc.)
The central idea behind this score/scale-rating is to provide the appraiser with a continuum
representing varying degrees of a particular quality or characteristic being appraised. The
assigned values for each trait are then totalled. The total of the points (numbers or descrip-
tions) obtained by an employee on all the rating factors constitutes the rating score of that
employee. In this manner, rating scores are obtained for all employees under appraisal. Table
1.3 shows sample items that might be included on a graphic rating scale evaluation form.
Table 1.3 Graphic Rating Scale Evaluation Form

Factors Score-rating
Unsatisfactory Fair Good Superior Exceptional
Quality
Accuracy appearance
Acceptance of output
Quantity
Volume of output and
contribution
Job knowledge
Technical knowledge
of job and related work
(Continued )
(Continued )
Required supervision
Need for advice,
direction or correction
Attendance
Regularity,
dependability and
promptness
Ability for teamwork
Cooperative attitude
and good relations
with co-workers
Evaluation of Graphic Rating Scale Technique: Many organizations use graphic rating
scales because they are practical and cost little to develop. As traits are defined in advance
there is less ambiguity in this technique of evaluation. However, graphic rating scales do pre-
sent a number of problems. This method poses a heavy burden on the ratter who must report
the performance of the subordinates on scales involving number of degrees (4–5) on a num-
ber of factors. Moreover, it is difficult to decide about relative weight age of different factors.
Determining the worth of an employee on the basis of total score is also questionable. A very
high rating on attendance, for example, does not in any way compensate for a low rating on
job knowledge.
3. Critical Incidents Methods
With the critical incidents appraisal method, the superior keeps, for each subordinate, a
running record of uncommonly good or undesirable examples (or ‘incidents’) of that per-
son’s work-related behaviour. The example of an uncommonly good incident could be an
employee’s staying late to correct machine malfunctioning that were causing high number of
rejection in output—correcting problem related completion of special projects in time. The
example of an uncommonly undesirable incident could be an employee’s failure to follow
safety procedures thereby causing heavy damage to machinery. Such incidents are recorded
systematically under different categories duly provided in a specifically designed notebook.
Immediate recording of these incidents seems to be most appreciable; otherwise the superior
may forge them. At the end of the rating period, these recorded critical incidents are used in
the evaluation of the employee’s performance.
Evaluation of Critical Incident Technique: The biggest positive feature of this tech-
nique is that it measures behaviours which are critical to the effective performance of the
job. Using critical incidents facilitate the feedback process by providing the employee with
concrete examples of actual behaviours which should be continued, modified or eliminated.
If the proper maintenance of the record of critical incidents is effected, it provides real clue or
judging the fit between the employee and his or her job. Although critical incidents technique
appears to overcome many of the subjectivity problems associated with other appraisal sys-
tems, it has serious limitations too. Some workers knowing that their superior is documenting
their behaviours become anxious and hostile. Others tend to hide those behaviours which they
feel will adversely affect their reviews. In either case, the end results are distorted performance
reviews. At times, negative incidents are more noticeable than positive ones. Besides, it has
been observed that most of the time, the employees have neither positive nor negative inci-
dents. If the critical incident does not happen, it will be difficult to rate an employee.
4. Checklist Methods
The checklist method requires the evaluator to review a list of several behaviours, traits or
job characteristics and to indicate which statements best exemplify employee performance.
If the rater believes strongly that the employee possesses a particular listed trait, he or she
checks the item; otherwise, the item is left blank. A score is developed by tallying the positive
checks. The following are illustrative checklist statements:
K Does the employee cooperate with co-workers? ———
K Does the employee keep workstation neat and clean? ———
K Does the employee follow instructions? ———
K Does the employee shirk responsibility? ———
K Does he or she reach workplace on time? ———
In a basic checklist approach, all items are considered to be of equal value.
Evaluation of Checklist Methods: The biggest advantage of using checklists lies in their
simplicity and feedback benefits. Generally, evaluators are required to make simple yes/no or
true/false responses on checklists, consequently, time is used economically, and a greater num-
ber of items can be included on the checklists. These features provide employees with a large
amount of relevant performance feedback. Checklist methods, however, are not problem free.
Because, it is important that items in the list be relevant to the job, it may be necessary to develop
different lists for different job categories. The process of weighting, in the weighted check-
list method, is difficult and requires professional assistance. Likewise, in the forced checklist
method, creating equally attractive and unattractive items requires professional assistance. The
result is an exceptionally time-consuming and expensive rating procedure. Supervisors often
are not sure what the items measure, and they have difficulty in interpreting the results. This
hinders the developmental counselling aspects of the appraisal process.
5. Essay Method
In its simplest form, the rater writes a free-form essay describing the subordinate’s perfor-
mance in a number of broad categories. Some categories that can be included in these forms
are job knowledge and potential of the employee; employee’s understanding of the company’
programmes, policies, objectives, etc.; employee’s promotability; overall appraisal of the
employee’s performance; employee’s relations with co-workers and superiors and so forth.
The assumptions behind the usage of essay technique is that an honest and informed state-
ment from someone who knows an employee well is fully as valid as more formal and more
complicated methods. Sometimes, however, essay appraisals supplement other appraisal
methods rather than substituting for them.
Evaluation of Essay Method: This approach gives the appraiser flexibility by not requir-
ing attention to a specific set of factors. The essay provides a good deal of information about
the employee, which provides a useful feedback to the employee for further improvement in
job performance. On the other hand, because of the method’s open-endedness, it is difficult
to compare essay appraisals made by different supervisors. The method is also dependent on
the writing skills of the supervisor, and is a time-consuming procedure. It is also not free from
subjectivity. The employees who are more loyal to the supervisors may be evaluated more
favourably than other employees. The essay technique is best used in small organizations or
small works units, where the purpose is to develop the employees’ skills and behaviour.
6. Field Review Method

In the field review method, an employee is not appraised by his or her direct superior but
by a trained, skilled representative of the HR department. The HR representative appraises
the employee on the basis of his or her records of job-related traits such as level of output,
absenteeism, etc. The HR representatives also conduct interview(s) of the employee to ascer-
tain more job-related information. Finally, the HR representative seeks specific information
about the employee’s direct performance from the employee’s direct supervisor. Based on this
information, the HR representative prepares a report. Finally, the HR representative meets the
employee’s supervisor for finalising the employee’s appraisal report. In this meeting between
the HR representative and employee’s direct supervisor, attempt is made to identify areas of
disagreement about the employee’s work-related behaviour and performance standards used
for performance appraisal. The final appraisal report is used by the organization to take deci-
sions about the employee’s pay raises, promotion or transfer.
Evaluation of Field Review Method: Since an expert handles the appraisal process, in
consultation with the employee’s supervisor, the ratings are more reliable. However, the use
of HR experts makes the process tedious and expensive.
7. Work Standard Technique
In this technique instead of asking employees to set their own performance goals, enterprises
establish work and staffing targets for employees. These are aimed at improving productivity.
When realistically used, appraisal can be made more objective and accurate. To be effect-
ive, the standards must be fair and visible. Hence, a good deal of time is spent in observing
employees on the job, simplifying and improving the job, where possible, and attempting to
arrive at realistic output standards. The use of this technique make performance interviews
less threatening than the use of personal and more subjective standards alone. The serious
limitation in this technique appears to be a problem of comparability. If people are evaluated
on different standards, how can the rating be brought together for comparisons purposes,
when decisions have to be made on promotions or on salary increases. For these purposes
some form of ranking are necessary.
Self Appraisal and Peer Group Evaluation: Appraisal is said to be more effective if it is
conducted either by the appraisee or by a colleague of equal rank without any authority to
impose sanctions. It analyses issues more critically when subordinates fear the career conse-
quences of admitting mistakes. In the self appraisal, the subordinates are concerned with their
own action/performance, how and what do they feel about their performance, the adequacy or
otherwise of training they have received and the perceptions of key objectives and future aspi-
rations. They identify their own strengths and failures. Inherent in such an identification are
suggestions which the organization might use utilizing employees’ talents, skills and acquired
experiences—an exercise noted to be difficult by the employees. The main problem with
the self appraisal is that many people are quiet incapable of analysing themselves. It might
require skilled and detailed guidance by someone already competent in appraisal technique.
The virtue of this technique lies in the fact that the employees are compelled to think carefully
about the adequacy of their contribution, about barriers preventing improved performance
and about their relationship with higher levels of authority.
Developmental Appraisal Methods
Modern appraisal methods assess two categories of employees’ performance attributes,
namely, behaviours and results. As explained earlier, trait appraisals involve subjective
judgement about employee characteristics related to performance. Behavioural appraisal,
while still subjective (i) focusses more on observable aspects of performance, and (ii) rates
prescribed behaviours that can help ensure all parties understand what the ratings are really
measuring. The result appraisals tend to be more objective and focussed on goal achieve-
ment. Based on behaviours and results, several techniques of performance appraisal
have been developed and are widely practised by the organizations. Some of them are
discussed here:
Behaviourally Anchored Rating Scales
The behaviourally anchored rating scales (BARS) method of performance appraisal focusses
on specific prescribed job-related performance behaviours of an employee, rather than his
or her general descriptions or traits. Where the job cannot be precisely measured, attempt
is made to relate the job with the behavioural traits helping in its performance. The typical
BARS include seven or nine performance behaviours, each measured by a seven or nine point
scale. For each performance behaviour, some standards statements are provided that reflect
varying levels of performance. These are then put on the scales in BARS. The rater can then
presumably make a precise judgement as to where the employee fits on the continuum of a
poor to outstanding performance.
The process of developing a BARS, which is rather complex, consists of the following
steps:
(a) Performance measures (dimension) for effective job performance are identified and clus-
tered into a small set of key performance dimensions for a given job. These are identified
usually by superiors, jobholders and HR department.
(b) Those behavioural dimensions, which are essential/critical for effective job performance,
are identified.
(c) The critical behaviours/incidents identified are reclassified to form the definition of job
dimension.
(d) The critical behaviours are assigned numerical scale values with each point demonstrat-
ing the perceived level of performance.
(e) The result of arranging various scales for different dimensions of the job (known as behav-
ioural anchors) produces a series of vertical scales (one for each dimension) anchored
(measured) by the final incidents. This scale is used for performance appraisal.
Procedurally, the behaviourally based scales involve:
(a) Identifying both effective and ineffective job behaviour.
(b) Clustering behaviours into performance dimensions.
(c) Relating various aspects of the job with the behaviour best describing it.
(d) Developing the final anchored scale by taking reference to average effectiveness, and
the standard deviation criterion for determining which incidents to be included in final
anchor.
Management by Objectives
Management by objectives (MBO) is a comprehensive management approach which is
adopted for performance appraisal as well as for organizational development. When MBO
is used for performance appraisal, its primary focus is on developing a set of objectives that
are clear, specific and reachable. These objectives are then used as performance criteria for
evaluating the performance of individuals. Generally, the MBO process is as follows:
(a) The subordinate and supervisor jointly determine the goals to be accomplished; level of
performance necessary for the subordinates to satisfactorily achieve the goals. This is
taken into account during appraisals.
(b) During the appraisal period, the supervisor and the employee update and alter goals as
necessary due to changes in the business and the environment.
(c) Both supervisor and subordinate decide if goal were made by the employee and discuss
if not, why not. The cause of deviation is taken into consideration such as strike, market
changes or labour dispute.
(d) The new goals and performance objectives are determined by the supervisor and the sub-
ordinates for the next period based on performance levels.
(e) 360-degree feedback appraisal.
(f) The term 360-degree appraisal, also known as multi-rater feedback/appraisal, multisource
feedback, full circle appraisal and group performance review, was coined in the United
States in 1998. To overcome the drawback of higher subjectivity in traditional appraisal
methods, many enterprises started using ‘upward feedback method’ where in subordinates
provide feedback on their managers and supervisors. This idea was further modified to
‘peer feedback’, where each team member informs how he or she perceives his or her col-
league performance. The 360-degree feedback appraisal method is an extension of ‘peer
feedback’ concept; it incorporates upwards, downwards and lateral feedbacks. Through
such a feedback, efforts are made to eliminate subjectivity in evaluation, as many people
rate an employee on a fairly extensive list of attributes. Thus, the term 360 degree implies
that everyone around is involved in evaluating the performance. Unlike traditional meth-
ods, only superiors do not evaluate the subordinates rather literally everyone around gives
the feedback.
Q.2 (b) (ii) Is promotion an effective tool for building employee morale? Describe the elements
in an effective promotion programme.
A.2 (b) (ii) Refer to the answer of Q.8 (a) in the model question paper.
Q.3 (a) ‘Interview is the least valid and reliable method of selection, yet it is most widely used’.
Comment.
A.3 (a) Refer to the answer of Q.5 in model question paper.
OR
Q.3 (b) Trace out the role of job analysis in human resource management system. How will you
proceed for gathering data for job analysis?
A.3 (b) Refer to the answer of Q.3 (b) in the model question paper.
Q.4 (a) Why is executive development necessary? Discuss any two methods of developing
executives.
A.4 (a) Management Development
Management development is one of the complex areas in human resource management. There
is a growing realization that an effective management team is as important for the survival
and growth of an organization as any other tangible asset in the balance sheet; investment in
management development pays off as well as investment in capital equipment.
Management development is a systematic process of training and growth by which indi-
viduals gain and apply knowledge, skill and insight and develop attitude to manage work
organization effectively. The process begins with recognition of the need for development and
establishing policy guidelines.
The essential ingredients of any management development process are as follows:
(a) Analysis of organizational and individual needs
(b) Appraisal of present management talent
(c) Management manpower inventory
(d) Planning of individual development programmes
(e) Establishment of training and development programmes
(f) Evaluation of training and development programmes
A proper organizational climate is required for management development programmes. Such
a climate refers to the environment in which the management directs the development and
growth of employees, particularly, the managerial level, by training, counselling, delegation
and communication. The climate also refers the manner in which things are managed, the way
people are treated, the extent of delegation, encouraging new ideas, initiative and enterprise
and the efforts adopted for projecting the image of company’s goals, policies and philosophy.
Principles of Management Development

The management development programme should be based on the following principles:
1. The principle of individual difference should be considered while designing the training
programme.
2. Provision of incentive to motivate the trainee.
3. Provision of applying the content of training on the job.
4. Active participation of the trainer and trainee in the training and development programme.
5. Feedback about the progress in the training and development programme so that steps can
be taken to remove the weaknesses.
Thus, management or executive development includes all those activities and programmes
which have substantial influence on changing the capacity of the individual to perform his
or her present assignment better and in so doing are likely to increase his or her potential for
future management assignment.
Management development is a continuous process of training and growth which brings
behavioural changes amongst managers. It should not be treated as a one shot affair. Managers
develop themselves by participating in formal training courses organized by the organization
and also through their actual job experience in the organization. Organization acts as a facilitator
for development but what is more important is the urge of the employee to develop himself
or herself. Thus, self development is an important principle of the management development.
Objectives of Management Development
1. To bring the current performance of managerial personnel up to the highest attainable lev-
els and to develop whatever potential they may have for growing into positions of higher
responsibilities.
2. To ensure availability of qualified managerial manpower as required to meet the current
and future needs.
3. To ensure managerial capabilities.
4. To aid in encouraging and achieving self development and self confidence.
5. To provide opportunity to managers to update their knowledge and skill.
The objectives of management development may vary with the levels of management in
organization. Thus for the top management to cause an improvement in the thought processes
and analytical ability, broaden the outlook, understand the economic, technical and institu-
tional forces, and acquire knowledge of human relations, could be the objectives. For middle
level management, it could be establishing a clear picture of functional responsibilities,
awareness of the management problems, knowledge of motivation, and human relations, and
developing leadership. At the executive level, it could be knowledge of business functions
and operations, improve methods and procedure, activities performed in the organization,
human relations and ability to analyse ones’ own function and relate with other functions in
the organization.
Methods of Management Development (Executive Development)
All techniques of employee training can also be considered to be management develop-
ment methods. As some employees are managers and all managers are employees, methods
of training and development have several common elements. A few training methods and
programmes mentioned earlier are frequently used as aids to management development.
Some of the techniques of management development are planned progression, job rotation,
creation of an assistant-to position, understudy, coaching-counselling, committees and jun-
ior boards of management (composed of middle-level managers), syndicate (setting up a
team of matured persons with functional representation to facilitate exchange of ideas and
experiences), case discussion, role playing, sensitivity training, business games, in-basket
exercises and transactional analysis. The methods are on-the-job and off-the-job, which are
as follows:
On-the-job Method Off-the-job Method

Coaching Role playing
Understudy Sensitivity training
Multiple management Simulation techniques
Committee assignment Business games
In basket
Case study
Transitional analysis
Conference training
Classification of Development Method According to Purpose

Different methods are used to develop various types of managerial skills and knowledge. This
is shown in the table below:
Purpose Method
Decision-making skill Case study
Business sames
Inter-personal competencies Self development
and teamwork
Job knowledge Sensitivity training
Role playing
General knowledge Transactional analysis
Organizational knowledge On-the-job experience
Coaching
Under study
Conference
Lecture cum discussion
Special courses
Specific readings
Job rotation
Multiple management
Discussion on Any Two Methods

1. Role Playing
Role playing technique is used for developing interpersonal and leadership skills. Under this
method, an artificial conflict situation is created between people. Two or more trainees in a
group are given the role to play. The role player or the trainee is given the conflict situation,
e.g., a salesman is asked to make a presentation to the distributor or two trainees are asked to
play the role of supervisor whereby he or she has to discuss the grievance with the subordi-
nate. This method is suitable in the area of human relation and sales.
Advantages
K Role playing helps the trainee in becoming aware of the problems and perspective of others
with whom they deal.
K Experimental form of learning.
K Helps in improving inter-personal competence of the executive.
Disadvantages
K Importance given to the role played rather than solving problems.
2. Sensitivity Training
Sensitivity training was originally developed by Kurt Lewin. Sensitivity training is also
called laboratory training, T group or Group Dynamic Training. The sensitivity training tech-
nique works on the basic assumption that changes in behaviour cannot come by knowledge
alone, and hence practice in human relation creates an atmosphere for change in attitudes and
approaches. This is achieved by focussing during the session on aspects such as the ability to
listen to others, ability to communicate, ability to diagnose human problems correctly, learn-
ing to give and receive constructive feedback and understanding the complexities of group
dynamics. The sensitivity training is informal and unstructured, say, in a group of 10 to 12
members, where the participants get no guidance or instructions on how to proceed. Thus,
sensitivity training purports to develop awareness and sentiments to one’s own and other’s
behaviour pattern. The learning is on an emotional level rather than intellectual level. The
organizations which practice sensitivity training feel that this method increases managerial
sensitivity and trust, and enhances respect for contribution of others.
Objectives of Sensitivity Training
The objectives of sensitivity training is to help people to:
K have understanding of others.
K to gain insight into the group process.
K to develop specific behavioural skills.
K to make participants learn how to work more effectively as a group or a team member, and
how to perform leadership roles.
In case of sensitivity training or T group, the trainer explains the technique of training to
participants and informs them that the purpose of the training is to increase their aware-
ness about themselves and others and to know each other’s feelings and reactions in a group
setting. The trainer only guides the discussions. He or she does not lead the discussions.
The participants of the T group discuss what they should talk. The participants criticize the
behaviour of each other openly and frankly. The trainer facilitates the process of feedback so
that the participant may know what others think about him or her. The examples of sensitiv-
ity training institutes in India are: ‘Aastha’, ‘Sumedhas’ formed in 1996, Indian Society for
Applied Behavioural Science (ISABS) formed in 1971.
The advantages of sensitivity training are as follows:
K Increase insight of one’s own behaviour and how others perceive it.
K Focus on exploring nature of inter-personal relationships.
K Helps in accepting criticism.
Criticism
K Laboratory testing is conducted in controlled situation which may not have any bearing on
actual business life.
K Leads to psychological reaction due to frank and free criticism.
K Expensive.
K Involves small number of trainees at one time.
OR
Q.4 (b) (i) What is carrier development? Explain the stages in carrier development.
A.4 (b) (i) Career Planning and Development
Meaning and Concept
The term ‘career’ means advancement in terms of achievements, higher assignments/posi-
tions in activities one is pursuing. Career reflects individual and organizational definition of
what is worthwhile set of activities to pursue throughout a life time. In a sense, one speaks of
two aspects of a career:
(a) A career as is reflected in a set of job description and organizational norms, and the rights
and duties of a given position in an organization. The head of production, for instance, is
expected to perform certain tasks; he or she carries certain set of responsibilities and is
held accountable for certain areas of organizational performance.
(b) A career as reflected in a set of needs and motives, which the individual tries to fulfil
through his or her work and rewards he or she obtains for that work – money, pres-
tige, organizational membership, challenging work, freedom and other satisfaction. The
reward he or she seeks can be thought of as his or her job values what he or she is looking
for in a job. These values in turn also reflect an underlying pattern of needs that the indi-
vidual is trying to fulfil. Thus, as head of production, he or she may seek to exercise his
or her basic need for influencing and controlling a number of people and resources or he
or she may be trying to meet the challenge of successfully building something, or getting
something accomplished that is a proof of his or her competence.
Organization which wants to retain the best of employees develops careers for them. They can
create rewarding and meaningful career for their employees, giving them a sense of satisfac-
tion of knowing the direction of their work. Career planning is more effective if the employee
himself or herself is interested in a career and his or her superior is willing and able to counsel
him or her well. Career planning, thus, is a shared responsibility. Development of individuals
is possible only when they are able to recognize that in developing themselves to meet the
organizational needs, their needs are also being met; where career planning is not a shared
responsibility but only a responsibility of the organization, it means that there is no career
planning, though there may be organizational planning for human resources.
A career can be developed by an individual within one organization or several. Considering
career planning as a process within the organization, career planning is that part of person-
nel administration which aims at developing paths through which employees may progress
in the organization over time. Careers paths are not designed for each individual within the
organizational set-up and task requirements. Various career paths are designed, and individu-
als with the support of the organization have the choice to develop themselves as they wish
depending upon their needs, ability, interest etc.
The combination of needs and desires act as career anchors which creates a drive to take
up a career. These drives are based upon his or her technical and managerial competence
besides his or her desire for risk taking innovation and autonomy.
Career Planning
Career Planning is a systematic process by which one selects career goals and the path of
these goals. From the point of view of an organization career planning helps the employee to
plan his or her career keeping in consideration his or her own capabilities and the needs of the
organization. From the point of view of an employee, in career planning the employee decides
his or her career goals and chalks out the path to attain his or her goal. Career planning may
also involve counselling individual employees on their possible career paths. The purpose is
to help employees to develop them by giving them some idea of the direction in which he or
she ought to be heading.
Career planning is a continuous process of developing human resources. The main objective of
career planning is to have co-ordination between the individual and organizational needs. Career
planning helps to provide avenues for employee to grow to a higher level of responsibilities.
Objectives of Career Planning
K Right person at the right job at the right time.
K Attract and retain employees by developing their career.
K Increase motivation and morale of employee.
K Reduce labour turnover and absenteeism.
K Develop employee for taking up higher responsibilities by mapping their careers.
K Increase productivity and organizational development.
Process of Career Planning

The steps involved in career planning are as follows:
K Preparing manpower inventory
K Identifying employees’ career needs
K Identifying employees’ career opportunities
K Matching employees’ career needs with career opportunities
K Formulation and implementation of training and development programme
K Periodic review of career plans
Q.4 (b) (ii) ‘With changing organization structures, role-specific training is the need of the hour’.
Do you agree? Why
A.4 (b) (ii) Role-specific, Skill-based Training
In order to enable the managerial personnel, in particular, to perform their roles associated
with the process of management, and also in dealing with the employees, they need to pos-
sess and exhibit a range of skills. Such skills enable them to plan, control, organize, lead
and finally to take decisions. Skills are attributes and role based. These would include the
following:
K Planning skills (being able to think ahead, ability to state organizational objectives, choose
strategies and arrive at performance standards);
K Organizing skills( ability to organize various jobs, select, train and induct people in the
job, ability to draw working links and change it to suit technology or environment in the
organization);
K Leading skills (understanding the values, personality, perception and attitudes of
employees);
K Controlling skills (actions and decision making to ensure that actual results are consistent
with desired results) and
K Decision-making skills (ability to identify and define problems, develop alternatives,
selecting decisions to solve the problems and implementing it).
The skills required would vary with the levels of management personnel. Three types
of skills are normally required by all managers. These are the technical, the human and the
conceptual skills.
Briefly stating, the top-level manager uses the conceptual skill to deal with the environ-
mental demands of his or her organization. The limited physical and financial resources
available to him or her make him or her effectively use his or her technical skills. The capa-
bilities and demands of the persons with whom he or she deals make it essential that he or she
possesses the human skills.
These skill-based training requires people to be trained in roles specific to performance
of the jobs. For instance managerial skills, enabling the top management people to build the
organization, require them to assume and perform the identity creating role, enabling role,
synergizing role, the balancing role, linkage building role and the like. The need for training
in these may arise. Similarly, the training programmes can be designed to suit the role need of
middle management, and the first line supervisors to suit the roles they have to assume while
performing the jobs. This may also hold true for operatives. The nature and types of training
programmes would vary. So also would methodology.
Q.5 (a) (i) Write a short note on variable performance linked pay package.
A.5 (a) (i) Refer to the answer of Q.5 (d) in 2008 question paper.
Q.5 (a) (ii) Describe different kinds of welfare activities usually undertaken by big industrialists
for the benefits of its work force.
OR
Q.5 (b) (i) ‘The concept of social security is essential related to high ideas of human dignity and
social justice’. Comment. Also discuss the scope of social security in India.
Q.5 (b) (ii) What is the significance of non-financial incentives? Describe the different type of
non-financial incentives.
A.5 (b) (ii) Refer to the answer of Q.11 (b) in the model question paper.
2008
Q.1 (a) (i) Discuss the role of HRM in building core competence and creating competitive
advantage.
A.1 (a) (i) Refer to the answer to Q.1 and Q.2 in the model question paper.
Q.1 (a) (ii) Explain various kinds of welfare activities which are usually undertaken by big
employers for the benefits of employees.
A.1 (a) (ii) Refer to the answer to Q.12 (b) in the model question paper.
OR
Q.1 (b) (i) ‘Personnel policies must cover all areas of HRM’. What are the areas? Explain.
A.1 (b) (i) Refer to the answer to Q.2 (b) in the model question paper.
Q.1 (b) (ii) What is the contribution of favourable working conditions in maintaining good health
of employees? Explain.
A.1 (b) (ii) Maintaining and retaining the employees with the organization has traditionally been
one of the responsibilities of human resource (HR) professionals. In view of increasing
competitiveness and change over tendency by the employees, this has become more
important currently. It is seen that all the jobs have the potential to alienate the job holders
and make them either indifferent or hostile both to the jobs and to the management who
are seen as responsible for retaining the employees. Retaining the employees with the
organization largely concerns with preventing or removing the alienation. It raises certain
basic issues concerning the health, safety, welfare and grievances of the employees.
Healthy and safe employees are likely to be more productive than those who are affected
by unhealthy or unsafe working environment. It is even considered as legal obligation.
Organizations lose money because of employees’ illness, accidents and injuries on the
job. As a part of HR management, it is the duty of HR professionals to provide employees
with working environment that are safe and healthy, to assure and evolve a procedure
through which their grievances are heard properly. The current chapter deals with these
issues.
Employees’ Health and Safety
Organizations today are more concerned with the health of the employees. Health is the general
state of well-being. It not only includes physical well-being but also includes emotional and
mental well-being. The organizations currently pay a lot of attention to not only the physical
health but also the mental health of employees. Mental health can be defined as the state
where the employee is well adapted, has the accurate perception of reality and can reasonably
and successfully adjust to the stresses and frustrations of work life. Emotional disturbance can
be caused by employees’ interaction with their work situation or relationship of their personal
environment with the job or by both. The organizations try to create a healthy climate by
paying attention to the needs of the employees.
Physical well-being is taken care by providing for physical comforts in the form of proper
lighting, ventilation, humidity, temperature and noise-free environment. If these comforts
are not provided, the efficiency of the employees will decrease. Large enterprises are noted
to maintain their own arrangements for health services which include treating accidents and
medical emergencies at work, performing physical examinations at the time of selection of
employees, evaluating and advising management on health hazards, supervising physical
fitness and mental health programmes.
Employers, employees’ unions and HR department all equally are interested in maintaining
employees’ health, because efficiency is possible only from healthy employees. The benefits
accruing from healthy employees are stated to lie in:
K Reduction in absenteeism
K Reduction in occupational diseases
K Reduced spoilage
K Increase in morale
K Increase in productivity
K Increased efficiency
K Better concentration at work
K The improved quality of work
At the same time, there are certain health hazards and occupational diseases which arise due
to the adverse physical conditions and environment in which employee has to work over a
number of years. The responsibility of ensuring good health in India lies on the employers
and on the government. The government has made provisions relating to health of employees
in the Factories Act.
Steps Taken by Employers/HR Departments for the Health of Their Employees
1. Employers are concerned about occupational diseases that are job-induced and occur in the
workplace during the course of normal working. Examples of such hazards are exposure to
inhalation of harmful gases, skin diseases etc. Efforts are made to protect such employees
by paying attention to lighting, temperature and regulating atmospheric conditions. Steps
are also taken to control gases and dust fumes. Provisions made in law and implemented by
the employers with regard to physical well-being and efficiency include cleanliness, light-
ing, temperature control and ventilation, freedom from noise and dust along with seating
arrangement of employees.
2. Employers are providing health services and have programmes to encourage employees to
improve their health habits; they realize that there is a close relationship between health
of an employee and performance of the job. Such health services may include establishing
Allopathic Dispensaries, Family Welfare Centre, Maternity and Child Welfare Centre,
Treatment of T.B. patients, X-Ray Facilities, Treatment of Cancer, Leprosy, and Mental
Cases, Family Counseling Services and the like.
3. Employers are giving physical fitness facility under the guidance of a licensed trainer to
the employees besides yoga, nutrition lessons etc.
4. Employers are paying special attention to the problem of substance abuse. In case of
substance abuse, the employee continuously consumes alcohol and drugs which result into
unaccepted behaviour. The performance of alcoholic and drug-addicted employees is poor
and the rate of accidents is high. Employers are taking steps to promote an environment
free from the effects of alcohol and drugs.
5. Employers are aware of stress faced by employees that comes from physical, emotional
and mental activity. Some reasons of stresses are stated to lie in high pressure of work,
poor control of how the job is being performed on day-to-day basis, or low reward, and
no recognition of the work that is being done efficiently, disagreement with managers or
employees, poor working conditions etc. Employers have developed stress management
programmes to teach employees how to reduce job-related stress. Besides this, HR depart-
ments along with the employers and line managers have taken steps to redesign the job,
improve working conditions and clarify the work roles of employees and other actions to
reduce stress on the job.
Q.2 (a) (i) What is human resource planning? How is it carried at various levels in an organiza-
tion?
A.2 (a) (i) Refer to the answer to Q.3 (a) in the model question paper.
Q.2 (a) (ii) Briefly explain different tests used in the selection of employees.
A.2 (a) (ii) Refer to the answer to Q.5 (a) in the model question paper.
OR
Q.2 (b) (i) Explain any four external sources of recruitment.
A.2 (b) (i)
Four External Sources of Recruitment
1. Advertising in newspapers and journals: This is noted to be a popular source for
recruiting skilled, supervisory and managerial cadre personnel. Managerial positions
are filled up through open advertisement in most of the companies. Clearly, higher the
category of employees, greater is the use of advertising to invite external candidates
for recruitment. Before advertising the job, an analysis of the job is a must. If the
right type of person is not prompted to apply, no amount of interviewing or testing
can ever lead to proper recruitment. Interviewing and assessment of candidates serve
to eliminate unsuitable candidates. These cannot be expected to improve the quality
of candidates. While preparing a job advertisement, one must keep in view the type
of candidates who will best fulfil the job requirements and the features of the work,
which will be attractive to persons who have the required qualifications and experi-
ence. The media of advertising have to be chosen in that light and should differ with
the position advertised. For certain categories of positions, it may be necessary to
indicate the size and nature of the company and the prospect which goes with the job.
The job description must be reflected in the advertisement. The image of the company
as an employer (apart from its product image) directly influences the quality of the
personnel it attracts. While the salary offered is an important factor for job seekers, it
is not necessarily the main consideration. This is particularly so with technical person-
nel. The facilities for research and opportunities to develop their talent and make their
mark in a chosen field are very important to them. This is where the image of the com-
pany helps. That is why some companies mention, in the advertisement, the company’s
technical achievements and plans for development, as well as working conditions and
facilities available.
2. Employment exchanges: Employment exchanges have been set up by the government

for bringing together the job seekers and employers who are looking for employees.
This is one of the non-traditional sources of recruiting workers in India. Employment
exchanges’ primary function is that of registration of work seekers and their place-
ment against demand notified by employers. The enactment of Employment Exchanges
(compulsory notification of vacancies) Act, 1959, was aimed at rationalizing the system
of recruitment and meeting the requirements of employers from a pool of registered
candidates. Under the act, notification of vacancies is compulsory for all the establish-
ments in the public sector. In the private sector, vacancies need to be notified only by
such establishments as are notified by the appropriate government. The notification of
vacancies has to be done to the concerned employment exchange before the vacancies
are filled. But compulsory notification of vacancies cannot be deemed to impose upon
any obligation upon the employer to recruit persons through the employment exchange
merely because that vacancy has been notified. For workers and non-supervisory
personnel, this is noted to be the most preferred and for managerial personnel, the least
popular source of recruitment.
3. Internet (e-recruitment): Revolution in the field of telecommunications has added a
very importance source of recruitment through internet. Major companies currently use
their websites to list jobs and attract candidates for recruitment. In addition to their own
sites, companies use other popular sites where they frequently list the jobs. This source
of recruitment provides the advantage of speed to employers and applicants alike. A job
can be listed on one day and resumes may begin reaching the organization overnight by
e-mail.
4. Educational/professional/technical institutions: Recruitment of managerial, executive
and supervisory personnel (technical and professional) is widely attempted through
notifications and interviews in the professional, management and technical institutes like
the IITs, IIMs, universities and other technical and management institutes. This has been
popularly termed as ‘campus recruitment/campus placements’. For technical staff and
similar other categories, employers may enter into an arrangement with the industrial train-
ing institutes of the Directorate General of Employment and Training, under which the ITIs
will supply trainees in accordance with the specifications of the employing organizations.
Professional, technical and educational institutions also run formal or informal placement
services to match those offering their services with those looking for them.
Campus recruitment has relatively been a less popular source for public enterprises in India.
The institutes of management, the institutes of technology and other premier institutions pro-
vide some of the best material for recruitment at junior management level. However, it is seen
that much of the good resources turnout by these organizations are not attracted to the public
sector, where the need is greater. The reason for this is stated to be the better remuneration that
is offered by the private sector.
Q.2 (b) (ii) Explain workload and workforce analysis for the purpose of human resource planning.
A.2 (b) (ii) Refer to the answer to Q.3 (a) in the model question paper.
Q.3 (a) (i) Distinguish between training and development. Why is training important for employees?
A.3 (a) (i) Refer to the answer to Q.5 (b) and Q.6 (a) and (b) in the model question paper.
OR
Q.3 (b) (i) Explain the various techniques of on-the-job training.
A.3 (b) (i) Job Training/In-plant Training
Job training or in-plant training is given to a worker so that he or she becomes proficient in
handling machines, equipment, materials, process of production, instruction to be followed and
methods to be used. Job training helps the worker to perform the job efficiently by learning
new techniques, skill and knowledge.
Apprenticeship training: Apprenticeship training, one of the oldest forms of on-the-job
training, is frequently used to train employees in some skilled crafts, trades and technical areas.
Commonly found in industries such as metalworking, carpentry, plumbing, printing, etc.,
apprentices are trainees who spend a considerable period of time working with experienced
master craftsperson who act as instructors. The training period varies according to the craft.
For example, the apprenticeship training period for toolmakers may be a few years, and for
machinists a few months. Most apprenticeship programmes begin with a classroom training
that focusses on theory and on auxiliary skills needed to perform the job. Trainees then go on
the job. Initially, trainees are allowed to perform only limited tasks, and as they gain experience
and expertise they are allowed and encouraged to perform all of the job-related tasks of a skilled
craftsperson. The governments of various countries have passed laws which make it obligatory
on certain categories of employers to provide apprenticeship training to employees. In India,
the Apprenticeship Act, 1961, makes it obligatory on the part of all employers in the specified
industries to place apprentices in the designated trades in terms of clearly spelt out standards.
Coaching and Counselling
The line supervisor not only teaches job knowledge and skills to sub-ordinates he or she
also councils them very often. The emphasis in coaching is on learning by doing. Coaching
and counselling are similar in many respects. When a supervisor is interacting with a sub-
ordinate, it is often difficult to clearly define whether he or she is performing a coaching or
counselling role. Theoretically, these concepts may differ but pragmatically it is not possible
to totally separate these training techniques.
Under Study
The line supervisor is assigned an understudy or assistant, and in addition to his or her regular
duties is expected to give training to his or her understudy. An understudy is prepared to per-
form the work or fill the position of another. He or she is a trainee who at a future time shall
assume the duties and responsibilities of the position currently held by his or her immediate
supervisor. The understudy is an off shoot of manpower and succession planning which ensures
that a fully qualified person will be available to take over a manager’s job whenever a line
supervisor leaves his or her position due to promotion, transfer, retirement and so forth.
Position Rotation
Also known as job rotation, it involves transfer of trainees from job to job and sometimes
from plant to plant on a co-ordinated, planned basis for learning purposes. Job rotation is
intended to give the trainee a broad perspective of the organizational activities. Diversified,
instead of specialized skills and knowledge is emphasized. In Indian industries, job rotation
is used to develop all round workers. It helps the trainee to know inter-relationships between
different jobs and general background of different jobs.
Q.3 (b) (ii) ‘While developing training content role, specific training is the thought of the day’.
Comment and explain two methods of management development.
A.3 (b) (ii) Refer to the answer of Q.4 (a) in 2007 question paper.
Q.4 (a) (i) Explain the concept and benefits of potential appraisal.
Q.4 (a) (ii) Differentiate between transfer and promotion. Explain various types of transfers.
A.4 (a) (ii) Refer to the answer of Q.8 (a) and (b) in the model question paper.
OR
Q.4 (b) (i) Why is employee counselling required? State the types of counselling.
A.4 (b) (i) Employee Counselling
Employee counselling is a vital part of performance review and potential appraisal, if these
are to achieve their basic purpose of helping employees to improve and develop. Unless
carefully and sensitively handled, employees may become more dissatisfied after counsel-
ling than before. The counselling is described as the help provided by the supervisor to the
subordinates in analysing their performance and other behaviours on the job, in order to
improve their performance. Counselling is also used sometimes in the sense of coaching and
reviewing one’s performance. Such a review identifies not only the potential for development
but also identifies training needs for further improvements.
The objectives of the counselling could be stated as follows:
K Helping employees to realize their potential;
K Helping employees to understand their strength and weaknesses;
K Providing employees an opportunity to acquire more insight into his or her behaviour, and
analyse the dynamics of such behaviour;
K Helping employees to have better understanding of the environment;
K Increasing personal and inter-personal effectiveness through effective feedback;
K Encouraging employees to set goals for further improvement; and
K Providing employees an atmosphere for sharing and discussing their tension, conflicts,
concerns and problems.
In an organizational setup, the trusting relationship with the supervisors are known as dyadic
relationship but the dyad need not always be the subordinates supervisor. He or she may be
his or her mentor with whom the subordinates has developed a trusting relationship which
nurture, support and guide him or her. The concept of mentoring relates to emotional sup-
port and guidance usually given by a senior person to a younger one known as protégé. Both
counselling and mentoring involve help and support by a senior person to a younger one. The
three basic ingredients of the process are
K Communication,
K Empowering, and
K Helping.
Communication involves receiving messages (listening), giving messages (responding) and
giving feedback. The counsellor or the mentor does all these. The process of empowering
enables the other person to exercise more autonomy, providing positive reinforcement so
that desirable behaviour is further strengthened and creating conditions in which a person is
able to learn from the behaviour of the mentor. Helping primarily involves identification of
developmental needs of the person being counselled so that he or she may be able to develop
and increase his or her effectiveness.
Process of Counselling
Counselling basically is to help the employee grow and develop in the organization.
An effective counsellor is one who helps employees to make them aware of their strength and
weaknesses and to improve upon them. Through mutuality, he or she helps the employees to
develop, providing them the proper emotional climate. Mutuality involves working together
with the employees and developing future plans of action for their growth in the organization.
Counselling requires certain interpersonal skills which can be acquired easily if a person is
genuinely interested in developing his or her subordinates; such skills are important at the
time of potential appraisal and performance review.
The counselling process has three important phases:
(i) Rapport building,
(ii) Exploration, and
(iii) Action planning.
Rapport building is essential for any effective counselling outcome. In this phase a good
counsellor attempts to establish a climate of acceptance, warmth, support, openness and mutu-
ality. He or she does this by listening to employees’ problems and feeling, by communicating
his or her understanding to employees and by expressing genuineness of interest in him or her.
In the exploration phase, besides accepting the employees, listening to him and establishing a
climate of openness, the counsellor attempts to understand and help the employee understand
his or her own situation, strengths, weaknesses, problems and needs. Counselling skills lie
in this. In the action planning stage, the counsellor and the employee jointly workout or plan
specific action steps for the development of the employee.
Q.4 (b) (ii) Describe the working of any two performance appraisal methods.
A.4 (b) (ii) Refer to the answer of Q.7 (a) and (b) of model question paper and also the
answer of Q.2 (b) (i) in 2007 question paper.
Q.5 Write short notes on any two of the following:
Q.5 (a) Social Security Schemes in India.
A.5 (a) Refer to the answer of Q.12 (a) in the model question paper.
Q.5 (b) Health Measures in Industries.
A.5 (b) Refer to the answer of Q.12 (b) in the model question paper.
Q.5 (c) Job Evaluation
A.5 (c) Refer to the answer of Q.9 (b) in the model question paper.
Q.5 (d) Performance-linked compensation.
A.5 (d) Performance-linked Compensation
Performance-linked compensation involves rewarding employees on the basis of their per-
formance or contribution towards organization’s overall functioning, either in their individual
capacity or as a part of the group.
A performance-linked compensation system shifts focus from compensation models based

on job worth and employee skills. A performance-linked compensation plan cannot be tailor-
made and is decided on the basis of a multitude of factors, like nature of business, nature of
technology, attitude of unions and HR strategies of the organization. It has the potentiality
to reduce labour costs while sustaining motivation of employees and competitiveness of the
organization.
Not yet used in a big way in Indian organizations, performance-linked pay plans are
quite popular in countries of North America, Europe and East Asia. For instance, in a
survey of 210 large firms in Tokyo, Japan, 24 per cent awarded pay increases on the basis
of performance (vide article titled ‘Corporate Restructuring Sweeps Japan’, published in
Focus Japan, issue dated 23 March 1996).
There are quite a few performance-linked compensation plans, but the discussion gener-
ally focuses on the more commonly known ones. These include the following:
1. Individual-based performance-linked plans, such as piece rate, merit pay and commission;
2. Team-based performance-linked plans, such as gain-sharing and bonus;
3. Enterprise-based performance-linked plans, such as profit-sharing and employee stock
option plans (ESOPs).
2009
Q.1 (a) (i) Why is human resource management considered to be important for the success of
modern day organizations? Briefly explain the functions of HRM.
A.1 (a) (i) Refer to the answers of Q.1 and Q.2 in the model question paper.
Q.1 (a) (ii) How is job analysis different from job description? Explain the steps that are involved
in job analysis.
OR
Q.1 (b) (i) What is human resource planning (HRP)? Explain the steps that are involved in the
HRP process.
Q.1 (b) (ii) What special competencies are required to become a successful human resource
manager?
A.1 (b) (ii) Refer to the answer of Q.1 (b) (ii) in 2007 question paper.
Q.2 (a) (i) Distinguish between recruitment and selection. Explain the steps followed in the
selection process.
Q.2 (a) (ii) Distinguish between training and development. How will you determine the training
needs of a manufacturing company?
A.2 (a) (ii) Refer to the answers of Q.5 and Q.6 in the model question paper.
OR
Q.2 (b) (i) What are the objectives of conducting selection interviews? What steps should be
taken in the interview process?
Q.2 (b) (ii) What are the benefits of training to (i) employers and (ii) employees? What criteria
would you use to evaluate the effectiveness.
Evaluation of Training Programmes
The objective of evaluating any training programme is to ascertain whether or not the train-
ing objectives are being achieved, if training is being implemented in the most effective and
economical manner, and if not, what steps to be initiated to make the programme effective.
Whereas, the top managements are noted to have given enough attention in identifying
and analysing training needs, and adopting different approaches to employee training and
development, very little attention is devoted to evaluate the effectiveness of the training
Objectives
The evaluation is required for certain purposes such as:
K Whether the training programme under consideration is accomplishing its objectives;
K Identifying the strengths and weaknesses in the training and development process;
K Cost-benefit analysis of the programme;
K Deciding who should participate in future programmes; and
K Determining the appropriateness of the programme.
In many cases, the evaluation of training and development programme has taken the form
of course evaluation at the end of the programme. A programme of evaluation should focus
attention on three main areas while considering the evaluation of any training programme.
These should include (i) the items to be evaluated; (ii) the methods of evaluation; and (iii) the
responsibility for evaluation. The items to be evaluated include the job analysis and its study,
training plan and its design, its course content, and objectives, and the performance of those
who have participated in it. The methods of evaluation may involve interviewing the partici-
pants, conducting oral or written tests, or observing them, and comparing the performance
with the requirements of the job. The responsibility could be shared by the training instructor,
supervisor or the one entrusted with the task individually or jointly.
A variety of methods are available to assess the extent to which training and develop-
ment programmes improve learning, affect behaviour on the job and impact the bottom
line performance of an organization. Since training and development is seen as a part of
investment in human resources, the evaluation of data needs to be generated and integrated
for higher-level decision making. However, quantitative measures should not overshadow
the quality and effectiveness of training and development programmes. The credibility of
training and development function would be lost very quickly, if the quality of training is
compromised.
The evaluation technique depends upon the type of the training programme, profile of the
organization and the purpose of training. The method of evaluation varies from programme
to programme. Evaluation process must adopt approaches that are relevant and practical.
These evaluation models mainly come from the western context. The organizations are
mainly using CIRO or Kirkpatrick model for training evaluation both of which are proven as
efficient and the best models of evaluating training programmes. Kirkpatrick has proposed
four levels of evaluation, namely, reaction (level 1), learning (level 2), job behaviour (level 3)
and result (level 4). Philips has added the fifth level of evaluation, i.e., return on investment.
Kirkpatrick approach has been the standard framework for systematic evaluation of training
The different parameters that can be used to evaluate the effectiveness of the training and
development programmes are establishing the cost of training and development, return on
investment or converting the training and development into a profit centre.
Q.3 (a) (i) Distinguish between performance appraisal and potential appraisal. Critically
examine 360 degree approach to performance appraisal.
Q.3 (a) (ii) What does the concept of ‘compensation’ imply? What factors should be considered
while determining the financial compensation of employees of a company?
A.3 (a) (ii) Refer to the answer of Q.10 and Q.11 in the model question paper.
OR
Q.3 (b) (i) What is ‘executive development’? Why it is important? Explain any three techniques
of executive development.
A.3 (b) (i) Refer to the answer of Q.4 (a) in 2007 question paper.
Q.3 (b) (ii) Define job evaluation. Discuss its advantages and limitations.
Q.4 (a) (i) Differentiate between:
(1) Employees’ health and employees’ safety.
(2) Downsizing and VRS.
A.4 (a) (i) (1) Refer to the answer of Q.1 (b) (ii) in 2008 question paper.
A.4 (a) (i) (2) Downsizing
Downsizing means reducing the strength of employees through planned elimination of
positions and jobs. Because of global competition most of the companies want to reduce
costs and be competitive. The first causality is the number of workers employed, and
since 1992, many Indian companies have resorted to downsizing by introducing VRS.
It is spreading fast, and has affected many enterprises in different sectors. Nationalized
banks have introduced VRS for their staff, and so far about 99,000 employees have taken
the advantage of such schemes (National Commission of Labour, 2002). In many cases
VRS was also noted to be under duress. Elements of indirect compulsion, pressure tactics,
compelling employees to resign by seeking to terminate them, and in some cases, physical
torture and threats of violence against them or dependents were also responsible for VRS.
Downsizing is also given such names as restructuring and rightsizing. Irrespective of the
name used, it usually means reducing the size of the organization’s permanent full-time staff.
Organizations resort to downsizing to solve the problem of surplus staff and, thereby, improve
their financial position, work efficiency and competitiveness.
Reasons for Downsizing
Organizations may go for downsizing for a variety of reasons; some of the major ones include
the following:
1. To Solve the Problem of Initial Over-staffing: Due to faulty HR planning or to fulfil
social commitment, some organizations may employ more employees as against their actual
requirement. Most government departments and public sector enterprises of Government
of India face the problem of over-staffing. This is because the government has the social
responsibility to reduce unemployment in the country.
2. To Deal with the Adverse Consequences of Economic Recession: Recently, many
organizations, under the pressure of global economic recession, downsized their
organizations by laying-off or retrenching employees. For example, Tata Motors laid-off
6,000 temporary workers to tide over economic recession. Citigroup, an American
financial company, axed 52,000 jobs globally, and its Indian arm, Citi India, laid-off 37
employees, including senior executives.
3. To Take Advantage of Technological Advancements: In the present times, rapid devel-
opments are taking place on the technology front. Automation, computers and Internet
have changed the way business operations are carried out. Due to this, the man-machine
ratio has undergone a drastic change. Today, an organization requires less manpower to
perform the same amount of work, if not more. Thus, technological developments made
downsizing of organizations somewhat inevitable.
4. To Concentrate on Core Activities and Outsourcing Non-core Activities: To be
successful in today’s competitive environment, most organizations prefer to concentrate
on activities in which they have core competence, and outsource non-core activities. As a
result, people employed in non-core activities become surplus, thereby necessitating the
need to downsize the organization.
Positive Consequences (Advantages) of Downsizing
Downsizing is advantageous to an organization due to the following positive consequences:
1. It ensures a proper balance between the staffing requirement of an organization and the
availability of its workforce.
2. It cuts labour costs, which the organization was so far incurring in maintaining its surplus
staff.
3. It improves the profitability (bottom-line) of an organization, which is a direct result of
reduction in labour costs.
4. It improves the competitive ability of an organization. This becomes possible by
restructuring the organization by abolishing multiple levels of management and making
it ‘flatter’, which is quick to respond to the needs of the customers.
Adverse Consequences (Pitfalls) of Downsizing
From a human resource standpoint, downsizing is detrimental to the interests of both the
employees and the employer. Some of the negative consequences of downsizing are stated as
follows:
1. It hurts morale and productivity by leaving ‘surviving’ employees over-burdened and
demoralized.
2. It damages the reputation of the organization. For those who intend to join the organization,
an act of downsizing can destroy the image of the organization as a ‘lifetime’ employer.
3. It causes additional financial burden to the company in terms of hefty separation pay,
accrued earned and medical leave payment, pension benefits and administrative costs.
Voluntary Retirement Scheme
Voluntary Retirement Scheme (VRS) refers to a scheme of option given by the organization
to its employees to retire before superannuation (i.e., before the actual date of retirement) in
exchange of additional severance payment and benefits.
VRS is based on mutual agreement between the employer and his or her employees, under
which an employee agrees to voluntarily separate from the organization on payment of agreed
compensation by the employer. VRS is also known as ‘Early Retirement Buyout’ (because
the organization buys the retirement of an employee before superannuation by paying for it)
and ‘Golden Handshake’ (because both the employer and the employee happily bid a final
good-bye to each other).
VRS is not new to the Indian corporate sector and has been practised in the past by many
organizations, including public sector enterprises. However, the scale was not large enough
to attract attention. Bharat Heavy Electricals Limited (BHEL), a public sector enterprise,
launched VRS in 1988. The response from its nation-wide workforce, however, was luke-
warm. VRS came back into limelight post 1991s when economic liberalization was ushered
in India. This time, many organizations actively sought a congenial solution to the problem of
over-staffing, something that was eating into their profits without adding anything to it. VRS
provided them with the solution to deal with it and become more competitive in a liberalized
market.
Reasons for VRS

VRS is offered by an employer and accepted by the employees for a variety of reasons. Some
of the major reasons for offering VRS are listed as follows:
Employers’ Reasons for Offering VRS
1. To get rid of surplus staff without resorting to termination of jobs.
2. To get rid of inefficient staff causing constant decline in productivity.
3. To get rid of older staff that is unable to cope up with constantly increasing new job
responsibilities and technological changes.
4. To reduce payroll costs. VRS appeals to employers because they can reduce payroll costs
significantly over time. Although the organization faces some upfront costs (i.e., additional
severance and benefit payments), it does not incur as many continuing payroll.
Employees’ Reasons for Accepting VRS
1. Employee’s Personal Financial Position: Since a hefty compensation is paid upfront
by the employer, the employee feels tempted to seek early retirement. The compensation
amount so received can be utilized by the employee for meeting family members’ needs,
say, to set up business, and so forth.
2. Employee’s Physical Health: Failing health condition may compel an employee to opt for
VRS and utilize the compensation amount on health improvement and leading a healthy
life thereafter.
3. Extent of Job Satisfaction: No or low level of work satisfaction is a potent driving factor
for employees to quit their jobs and take advantage of VRS.
4. Possibility of Future Lay-offs: Employees anticipating complete or partial downturn in
company’s business may think it wise to seek early retirement with immediate financial
gain under VRS.
5. Inability to Meet Work Responsibilities: If an employee finds himself or herself inad-
equate to perform the duties and demands of his or her current job, he or she may decide
to leave the organization and take advantage of VRS.
6. Better Alternative Job Opportunities: An employee having a better alternative employ-

ment opportunity may find the time opportune to quit the present job and enter into the
alternative field of work.
Q.4 (a) (ii) Define social security and explain its significance in the context of Indian conditions.
A.4 (a) (ii) Refer to the answer of Q.12 (a) in the model question paper.
OR
Q.4 (b) (i) What is the contribution of good working conditions in maintaining health of the
workers? Explain any five provisions made in the Factories Act, 1948, for the health
of workers.
A.4 (b) (i) Refer to the answer of Q.1 (b) (ii) in 2008 question paper.
Q.4 (b) (ii) ‘Empowerment of employees has become more significant in the light of companies
growing today at a fast pace’. Do you agree? Give reasons.
A.4 (b) (ii) Refer to the answer of Q.1 (b) (i) in 2007 question paper.
Q.5 Write explanatory notes on any two of the following:
Q.5 (a) Career development
A.5 (a) Refer to the answer of Q.4 (b) (i) in 2007 question paper.
Q.5 (b) Training process outsourcing
A.5 (b) Refer to the answer of Q.4 (b) (i) in 2008 question paper.
Q.5 (c) Employee counselling
A.5 (c) Refer to the answer of Q.4 (b) (i) in 2008 question paper.
Q.5 (d) Human resource information system
A.5 (d) Human Resource Information System
Every organization maintains a record of basic information about its employees to keep track
of their personal data, qualifications, work experience, and skills and abilities. Such a record
for non-managerial employees is called skills inventory, and that for managerial employees is
known as management inventory. Maintenance of employees’ records can be done manually
or mechanically with the help of information technology, in which case it is currently known
as human resource information system (HRIS). An HRIS combines all the information that
organizations typically keep for its employees in one system.
Personnel Forms and Records—Traditional System of Information Collection and

Maintenance
HRIS in the era of ‘personnel’ was mainly in the form of personnel forms and records.
Personnel records refer to the informational documents maintained by the personnel depart-
ment, which facilitates administration of various personnel activities of an organization as
a whole. The records are maintained in the form of letters, memoranda, forms, reports and
manuals.
Personnel Records
Personnel records maintenance may be treated as a sub-system of management information
system (MIS). It is defined as ‘An information system making use of available resources to
provide managers, at all levels and in all functions, with the information from all relevant
sources, necessary to enable them to make timely and effective decision for planning, directing
and controlling the activities, for which they are responsible’. This requires raw data to be
collected, processed and converted into meaningful and precise information to be made
available to the management in a systematic way. Earlier MIS emphasized more on production,
sales and financial activities than personnel and human resource because the latter was con-
sidered a service department, and not so significant—it was not thought possible to evaluate
the relevant human resource data in terms of normal turnover or profit margin concept.
Information regarding employees’ requirements, their performance, training needs, morale
and other behavioural variables was not maintained in personnel records and communicated
through the MIS for the purposes of planning, directing and controlling the personnel activities.
Later on the utility of such information was realized, and it was considered essential that
proper records should be raised and preserved in respect of every person employed in the
company not only to comply with statutory requirements, but also in the interest of the employer,
as well as the employees. For this reason, it is imperative that whoever is responsible for main-
taining personnel records is informed at once of those engaged in or leaving the company, and
of any change in status, transfers and other relevant personal information. Generally, it was the
responsibility of the personnel records section (which was sometimes known as ‘Establishment’
section) in the personnel/human resource department to maintain records. The personnel records
section was made responsible for processing payroll of each employee, designing personnel
forms, maintaining and publishing statistical manpower reports and policy manual, developing
tabulated personnel roster, informing individual departmental heads of the payroll status of
employees reporting to them and responding to all the enquiries about employees.
Traditional Methods of Keeping Records
It is noted that data for personnel records was gathered through various personnel forms. There
is a wide variety of forms in use, but most of the information required for record purposes is
obtained through application blank, merit-rating form and training records form. In some orga-
nizations, these records were kept separately from other documents, while in others employees’
records are kept in filing folder or in a large envelope containing all the papers including reports
on test performance, interview check shoots, reference reports and application forms. A file is
used to receive and preserve all periodic appraisal reports, authorizations for pay increase and
recommendations for promotions. Large organizations maintained a manual to expedite the
work of record management explaining how the records are grouped; what methods are used for
indexing and filing for each group, location, coding structure, procedure for recording data and
procedure for transferring the files to storage; and the period for retaining each record. Forms of
different colours were used for prompt identification. Since vast information was required to be
included in records, few organizations, in order to reduce paper work and stationery, designed
personnel record cards wherein all the information concerning employees were stored. It is
noted that the system of HRIS was influenced by such factors as follows:
K the size of the organization;
K category of employees;
K nature and content of information required; and
K the top management’s perspective towards human resource activities.
The personnel records and forms in use to collect information included job analysis forms,
personnel requisition form, medical examination form, change of status form, performance
form, absentee report form, accident report form, termination of employment form, grievance
submission form and the like.
Legal Requirements
Many personnel records and forms were required to be maintained as per the requirements of
law, e.g., accident report (Form no. 16) and accident book (Form no. 15) with particulars of
accidents required under employees’ state insurance (general) regulation, 1950. Contribution
card for employees in Form 2 was required under the regulation 13. Employees provident
fund scheme, 1952, also required maintenance of contribution card for employees in Form 3
or 3-A. Register of child workers, adult workers and notice of accidents, and certain diseases
required under the Factories Act, 1948, Form of Memorandum of Settlement as per Industrial
Disputes Central Rules, 1957 and Report of Fatal Accidents to be submitted by employer
in the Form EE1 as required under the Workmen’s Compensation Rules, 1924, are some
of the instances of information required to be maintained under the provisions of various
labour-legislation.
Non-statutory records are also maintained for use by the personnel department, e.g., pro-
motion lists, record of training needs, attendance, absenteeism and the like. These records
helped to analyse the human resource function, identify where the personnel problems existed
so that the HR department could initiate personnel research to help employers to solve the
problems. Broadly, the records contained information regarding basic identification data,
qualification and skill data, personal history data and in-plant history data.
In the public sector enterprises, as a part of the integrated reporting system, information
pertaining to personnel are required to be maintained/submitted in the prescribed format,
e.g., report no.5(man power, showing its break-up, man power recruited and training under-
taken). Similarly, management ratios are maintained in report nos. 8, 10 and 11 in accordance
with the guidelines of Bureau of Public Enterprises.
HRIS as HR Activity
HRIS: Concept
A Human Resource Information System (HRIS) is a computerized, integrated system used to
acquire, store, maintain, analyse, retrieve and distribute information concerning an organization’s
human resources. It is an integration of human resource management and information system.
The generation, transmission and utilization of information are emphasized. The activities
of informatics, statistics, office automation, data processing, MIS, decision support system
(DSS), computer applications and its networking are emphasized. Effective management
of HR function is increasingly becoming a source of strategic advantage for organizations.
The increasing role of information technology in HR to meet challenges is leading to improved
benefits. As a result of the growing need for more and more human resource information by
the decision makers, organizations are noted to have computerized their records system in the
recent years and named it ‘human resource information system’.
HRIS is defined as a technology-based system which is used to acquire, store, manipulate,
analyse and retrieve pertinent information regarding an organization’s human resources.
HRIS is noted to be the integration between activities of human resource function and infor-
mation system. It merges HR as a function, and in particular, basic HR activities and HR
processes with information technology.
Electronic HR
HRIS is also called as electronic HR (e-HR). It refers to the broad access to centralized
database of human resources information accessible and delivered through web in most
work places as the strength of web-enabled data capture and management reporting lies in
its ability to provide targeted information to those who need it. It includes a variety of new
technologies that help link multiple systems, tools and databases both inside and outside the
organizations. One of the major effects of web technologies in HR and the dramatic impact
this growth has been the way the employees now receive information through integrated self-
service applications. People and processes linked with integrated HR data and tools enable
employees and managers to conduct transactions through the portal any time, and anywhere.
Thus, HRIS is an integration of HR processes and employee related information through
an electronic enterprise portal—enabling, and empowering the HR function to discharge its
activities effectively.
The objective of information technology and HR is to implement world-class HR pro-
cesses and systems, provide HR data in an accurate and timely manner, speed-up HR
decision-making process and to reduce HR operational costs, while upgrading performance
and service.
Utility of HRIS
Human resource information is a strategic requirement in cases of mergers and amalgamation
of organizations. Personnel records also ensured useful checks on the procedures adopted,
while implementing the personnel policies and programmes. Accurate, comprehensive and
up-to-date records and statistics are essential for effective working of any organization.
Without basic facts and figures concerning employees in the organizations, it would have
been impossible to plan realistic recruitment, revise selection methods, develop training
schedules, forecast manpower requirements, update wage/salary structure or reduce the inci-
dence of accidents and sickness. Comprehensive records must be maintained also for the
purpose of modifying or revising company’s personnel policy. Four specific reasons can be
given for maintaining the human resource information system:
(a) The first is to ensure that various categories of employees in the organization can be eas-
ily identified and essential information about them is available for reference. Information
providing details of pre-employment history, career within the organization, details of
age, health, training and record of performance are essential for the enterprise.
(b) The second is to provide information for analysis, so that one may get an overall picture
of human resource department from time to time. As a source of statistical information
regarding the labour force employed, including data as regards labour turnover, absen-
teeism, age and sex distribution, and wages and salaries, personnel records are highly
useful.
(c) Third, records provide a permanent source of information as regards promotion, transfers,
dismissal and change of wage rates, involving one or more employees.
(d) Last, records providing information ensure useful checks on the procedure adopted, while
implementing human resource policies and programmes.
The main benefits derived from mechanising the HRIS are as follows: higher speed retrieval
and processing of data; reduction in duplication of efforts leading to reduced costs; ease
of classifying and reclassifying data; better analysis leading to more meaningful decision
making; improved quality of reports; fast response to answer queries; higher accuracy of
information/reports generated; better work culture and establishing more transparent,

streamlined and systematic procedures in the system. Thus, it can be a potent weapon for
lowering administration costs, increasing productivity, speeding up response times and
improving decision making and customer service.
In smaller organizations, HR people shoulder HRIS responsibility in addition to other
responsibilities; whereas in large organizations this responsibility is shared jointly by HR
manager and IT manager.
2010
Q.1 (a) (i) Explain the objectives of human resource management. Is it the responsibility of
human resource department only?
Q.1 (a) (ii) What is human resource planning? What are its benefits?
OR
Q.1 (b) (i) In what ways employment tests are important? Explain any three types of
employment tests commonly used in industries.
Q.1 (b) (ii) What role do human resource managers have to play in modern industries to achieve
corporate objectives effectively?
A.1 (b) (ii) Refer to the answer of Q.1 and Q.2 in the model question paper.
Q.2 (a) (i) Compare and contrast the concepts and utility of job descriptions and job
specification.
OR
Q.2 (b) (i) What is performance appraisal? Explain management by objectives (MBO) as a
technique of performance appraisal.
A.2 (b) (i) Refer to the answer of Q.7 in the model question paper.
Q.2 (b) (ii) What is executive development? Describe any three techniques of executive
development.
Q.3 (a) (i) What does the concept of ‘compensation’ imply? What factors should be considered
while determining the financial compensation of employees of a company?
A.3 (a) (i) Refer to the answer of Q.10 (a) and (b) in the model question paper.
Factors Affecting Employees’ Remuneration
Employee remuneration and its structure are influenced by a variety of factors—some are
related to and exist within the organization (called internal factors) and others that exist out-
side the organization (called external factors).
Internal Factors
Among the internal factors that have an impact on employee remuneration are the company’s
business strategy, worth of a job, employee’s relative worth and the employer’s ability to pay.
Collective bargaining and the productivity levels are also internal to the organization.
1. Company’s Business Strategy: For a business pursuing an aggressive strategy to achieve
rapid growth, its remuneration levels will be higher than what competitors pay. A business
pursuing a defensive strategy, because of declining fortunes of the company, will keep its
remuneration levels at average or below average levels than the prevailing market rates.
2. Job’s Worth: Organizations decide the worth of a job in two ways—formally, through
a system of job evaluation or informally, through the opinion of people familiar with
the job. Job evaluation helps in establishing rational and satisfactory wage differentials
among jobs. However, when the worth of a job is decided informally, pay rates may be
influenced heavily by the labour market conditions or, in case of unionized organizations,
by collective bargaining. Informally determined remuneration rates are generally higher.
3. Employee’s Relative Worth: An employee’s worth is determined by the efficiency
with which he or she performs his or her job, his or her loyalty towards the organiza-
tion and his or her seniority in the organization. Of these, performance is highly valued
in organizations. Superior performance always commands a higher pay. For determining
performance-based remuneration, organizations use an objective performance appraisal
system that differentiates between those employees who deserve higher pay and those
who do not. Managements prefer performance and loyalty to affect pay increases, whereas
unions view seniority as the most objective criterion for pay increases.
4. Employer’s Ability to Pay: Remuneration payable to workers also depends upon the paying
ability of the employer, which is a function of the financial condition and profitability of the firm.
Financially well-off and profitable organizations are always in a better position to pay higher.
External Factors
The major external factors that influence employee remuneration include labour market
conditions, prevailing area wage rates, cost of living, collective bargaining capacity, and
government laws and regulations.
1. Labour Market Conditions: Labour market reflects the forces of supply and demand of
workers within an area. These forces help to decide the pay rates required to recruit and retain
competent employees. In general, higher wage rates will have to be paid when the demand
exceeds supply, and if labour is available in sufficient supply, wage rates tend to be low.
2. Prevailing Area Wage Rates: A formal wage structure should provide rates that are in line
with those being paid by other employers for comparable jobs within an area. This serves
an important function of providing external equity between one’s own organization and
other organizations competing for labour in the surrounding labour market.
3. Cost of Living: Since wages and salaries represent the only means of livelihood to the
employees, it is obvious that they should be sufficiently high to meet the cost of living and
should be kept in tune with the increasing cost of living. Progressive employers are always
guided by this consideration in determining wage levels. It is a common experience in
industrial organizations that if employers do not show enough awareness and sensitivity
towards the trends in cost of living, labour unions will bring this to the notice of the
employers and force them for a wage raise.
4. Collective Bargaining Capacity: Employee remuneration is also determined, to a con-

siderable extent, by the relative bargaining power of the employer and the labour unions.
A strong labour union is generally able to force the employer to pay higher wage rates. The
agreements negotiated by unions generally establish pay-rate patterns within the labour
market. As a result, wages are generally higher in areas where organized labour is strong.
5. Government Laws and Regulations: There are numerous labour laws, at the Central
and State levels, that affect employee remuneration. Some of the Central laws are the
Payment of Wages Act, 1936; the Minimum Wages Act, 1948; the Payment of Bonus
Act, 1936; the Minimum Wages Act, 1948; the Payment of Bonus Act, 1965; and Equal
Remuneration Act, 1976. In addition to labour laws, there are Wage Boards, Tribunals and
Fair Wages Committees which regulate wages payable to workers. The basic aim of all the
legal enactments and regulatory agencies is to protect the workers from the exploitation
of powerful employers and also to ensure payment of fair wages that would provide a
decent standard of living to them. For regulating remuneration to managerial personnel,
provisions of the Companies Act, 1956, are applied. Wage Board and Tribunal Awards also
play a significant role in influencing the compensation to be paid.
Q.3 (a) (ii) What do you understand by transfer? Briefly explain the characteristics of a good
transfer policy.
Characteristics of a Good Transfer Policy
K A clear delineation of the conditions and circumstances under which an employee can be
transferred.
K The transferability of both jobs and individuals needs to be examined in terms of job
descriptions, inter-departmental divisions and plans, and between streams of specialization
either on the job or on the individual background and training.
K A clear-cut policy guideline on the basis of transfer—seniority and merit.
K Should transfer be linked with promotion, it should be examined carefully.
K The pay scales and the exact wages and perquisites that a transferee would receive in the
transferred job.
The HR department has a monitoring role in respect of transfers. It should facilitate line
personnel to redeploy manpower depending on the exigencies of work situations or helping
employees on compassionate ground within the framework of transfer policy.
OR
Q.3 (b) (i) What is the significance of employee welfare? What types of welfare services can be
provided to employees?
A.3 (b) (i) Refer to the answer of Q.12 (b) in the model question paper.
Q.3 (b) (ii) ‘The need for employee counselling in industry arises due to the problems of conflict,
frustration and stress’. Elucidate this statement.
Q.4 (a) (i) What is job evaluation? Explain the advantages and disadvantages of job evaluation.
Q.4 (a) (ii) What do you understand by promotion? Discuss the merits and demerits of merit as
the basis of promotion.
OR
Q.4 (b) (i) Why is employee empowerment important? What are the common barriers to
employee empowerment in business organizations?
A.4 (b) (i) Refer to the answer of Q.1 (b) (i) in 2007 question paper.
Q.4 (b) (ii) What is career development? Briefly explain the various stages in career development.
Q.5 Write explanatory notes on any two of the following:
Q.5 (a) Sources of recruitment
A.5 (a) Sources of recruitment can be broadly divided into two categories, namely:
1. Internal sources, and
2. External sources
Internal sources consist of:
(a) recommendations from friends or existing/retired employees of the organization, and
(b) promoting and transferring present employees—internal promotion.
External sources consist of the labour market which can be tapped by the way of job
advertisements in newspapers and journals; employment exchanges; notifying vacancies to
educational, professional and technical institutions.
The Internet currently has become another very potential external source of recruitment.
Recommendations of employee unions may also be included in this category.
Q.5 (b) Designing training programmes
A.5 (b) Refer to the answer of Q.6 (a) in the model question paper.
Q.5 (c) Employee health and safety
A.5 (c) Refer to the answer of Q.1 (b) (ii) (Or) in 2008 question paper.
Q.5 (d) Workforce diversity
A.5 (d) Refer to the answer of 2009 question paper.
2011
Q.1 (a) (i) Distinguish between human resource management and human resource development.
What competencies are required to be a successful human resource manager?
A.1 (a) (i) Refer to the answer of Q.1 in the model question paper and 2007 question paper,
the description of human resource development is as follows.
Human Resource Development
The human potential and the need for conscious attempt to develop it were acknowledged
more rapidly at this stage. Hence, efforts were made to devise and implement methods for
developing human resources. In 1970, Leonard Nadler in his classic book Developing Human
Resources coined the term ‘Human Resource Development’, in short, HRD. Human resource
development in the organizational context is defined as ‘a process by which the employees
of an organization are helped in a continuous planned way to acquire or sharpen capabilities
required to perform various functions associated with their expected future role, develop
their general capabilities as individuals and discover and exploit their own inner potential for
their own and organizational purposes, and develop an organizational culture in which their
superior-subordinate relationship, teamwork and collaboration among sub-units are strong
and contribute to the professional wellbeing, motivation and pride of employees’. This defini-
tion of human resource development is limited to the organizational context. In the context of
a State or Nation it would differ.
‘Human Resource Development’ is also defined as ‘development of people by providing
the right environment where each individual may grow to his fullest potential. HRD involves
ways to better adjust the individual to his job and environment, the greatest involvement of an
employee in various aspects of work, and the greatest concern for enhancing the capabilities
of individuals’. Three emphases are involved in the concept of human resource development.
First, persons in an organization are regarded as a valuable resource: implying that there is a
need to invest time and effort in their development. Second, there is ‘human’ resource which
means that they have their own special characteristics and these cannot be treated like mate-
rial resources. This focuses on the need to humanise organizational lives. Third, HR does not
merely focus on employees as individuals, but also on the other human units and processes
in the organization.
Q.1 (a) (ii) Distinguish between job analysis and job description. What steps are involved in the
preparation of job analysis?
OR
Q.1 (b) (i) Explain the role of tests and interview in the process of employee selection.
Q.1 (b) (ii) In what ways is human resource management significant for the success of an
organization?
A.1 (b) (ii) Refer to the answer of Q.1 (a) and (b) in the model question paper.
Q.2 (a) (i) What is training? What are its benefits for (1) employees and (2) employers?
Q.2 (a) (ii) Is recruitment the same thing as selection? Give reasons. Describe any four sources
of recruitment of managerial employees.
OR
Q.2 (b) (i) What is management development? Describe any four techniques of management
development.
A.2 (b) (i) Refer to the answer of Q.4 (a) in 2007 question paper.
Q.2 (b) (ii) What steps should be taken by an enterprise to design an appropriate training
programme for its employees?
A.2 (b) (ii) Refer to the answer of Q.6 (a) in the model question paper.
Q.3 (a) (i) What is the difference between transfer and promotion? Is transfer only a tool of
punishment? Give reasons.
A.3 (a) (i) Refer to the answer of Q.8 in the model question paper.
Q.3 (a) (ii) Clarify the meaning of the terms ‘wages’ and ‘salary’. What is the utility of adopting
performance-linked compensation in a business enterprise?
A.3 (a) (ii) Refer to the answer of Q.10 in model question paper and 2009 question paper.
OR
Q.3 (b) (i) What is performance appraisal? How is it different from job evaluation? What are the
benefits of performance appraisal?
Q.3 (b) (ii) What do you understand by fringe benefits? What types of fringe benefits can a com-
pany provide for its employees?
A.3 (b) (ii) Refer to the answer of Q.10 in the model question paper, 2008 question paper
and 2009 question paper.
Q.4 (a) (i) Distinguish between employee’s health and safety. Explain any four provisions made
in the Factories Act, 1948, for the health of workers.
A.4 (a) (i) Refer to the answer of Q.12 in the model question paper and 2009 question paper.
OR
Q.4 (b) (i) Why is employee welfare important? Explain various kinds of welfare activities that
are usually undertaken by employers for the benefit of workers.
Q.4 (b) (ii) What is human resource information system? What are its objectives?
A.4 (b) (ii) Refer to the answer of Q.5 (d) in 2009 question paper.
Q.5 Write notes on any three of the following
Q.5 (a) Human resource policies
A.5 (a) Refer to the answer of Q.2 in the model question paper.
Q.5 (b) Voluntary retirement scheme
A.5 (b) Refer to the answer of Q.4 (a) (i) (2) in 2009 question paper.
Q.5 (c) Employee counselling
A.5 (c) Refer to the answer of Q.4 (b) (i) in 2008 question paper.
Q.5 (d) Employee empowerment
A.5 (d) Refer to the answer of 2008 and 2009 question papers.
Q.5 (e) Induction process
A.5 (e) Placement and Induction
The final step in the hiring process is inducting new employees into the new surroundings
and placing them on the job. The term ‘induction’ means installation or initiation. The new
recruit is installed into a position or job, and initiated into the team that makes up the work-
force of the organization. Induction may be regarded as a positive step, as distinguished from
the negative weeding out of unsuitable candidates during selection. Placement means the
assignment of specific job to individuals, and their adoption or assimilation in the working
team. In fact, induction is the process by which effective placement is accomplished.
The induction process normally includes discussion of HR policies, if any, work policies of
the organization, job conditions and acquaintance with the people that the new employee will
work with. The applicant is informed about his or her duties on the job, the person to whom
he or she will report, the starting wages and salary, promotional opportunities in future, hours
of work, fringe benefits, etc. He or she should be given a copy of the employee handbook, if
there is one. Finally, he or she should be introduced to his or her fellow employees who will
sponsor him or her during the first few days or weeks of employment. Thus, this stage of hir-
ing process takes into account two major aspects of employment, namely, (a) acquainting the
new employee with surroundings, and the rules and regulations, and (b) indoctrinating him
or her with the philosophy of the company and its reasons for existence.
Induction of a new employee into the work place as an aspect of human resource man-
agement has not received adequate attention in India. Whereas in some large size corporate
enterprises, both in public and private sector, induction programmes is in vogue, the same
cannot be said to hold true in general.
Orientation
The term ‘orientation’ is very often used to signify the induction. No difference is however
proposed here between induction and orientation, for practically, both mean one and the same
thing. Sociologists call the orientation a process of socialization consisting of learning new
attitudes, norms and behaviour patterns. Just as a person, entering a new country must learn
a new language and a different set of ways of doing thing, so a new employee must learn how
to behave and how to get things done in a new organization. It is the process of introducing
new employees and marks the beginning of the process by which employees are integrated
into the organization. The process communicates the basic organizational philosophy, policy,
rules and procedures. Irrespective of the position that a new employee takes in his or her work
place, it should be recognised that he or she begins a new life and needs to know the organiza-
tion, its objectives, functioning, goods manufactured or services rendered and the like. This
is to make him or her successful on the job. In order to be an asset to the organization, new
employee needs to know the organization, its policies and procedure.
In the Indian context, this becomes indispensible particularly, where workers come to
industry from rural or semi-urban areas. To quote extracts from ILO’s resolution—‘in order
to facilitate and expedite the integration of the newly recruited employee in the enterprise and
the group with which he is to work; management should adopt a well thought out induction
programme. Induction procedure is intended to give the new comer all information he needs
about management, work and philosophy in the new enterprise. Furthermore, they should
create an atmosphere which will help the new comer to become quickly familiar with his new
surroundings and to feel at home’.
The information given to newly recruited employees should include matters such as condi-
tions of work, rules of conduct, health and safety regulations, opportunities for training and
advancement, workers rights and obligations, leisure facilities, welfare service and benefit
schemes, the structure and the activities of the undertakings, its products and the role of the
particular job that new comer is too occupy within the enterprise.
The utility in adopting orientation programme is stated to be in
1. Reducing turnover and grievances;
2. Saving supervisors’ and workers’ time by creating a sense of belonging; and
3. Developing favourable attitude towards the company and facilitating job effectiveness.
Researches in western countries have shown that:
‘The first few days on the job were anxious and disturbing ones’
‘New employees’ initiation practices by peers intensify anxiety’
‘Anxiety interferes with the training process’ and
‘Turnover of newly hired employees was caused primarily by anxiety’
The newcomers are noted to be reluctant to discuss problems with their superiors and
employee induction aims at minimizing such problems. Through induction programmes, an
attempt is made to ‘install’ a new employee so that he or she is sufficiently acquainted with
the company to adapt himself or herself, feel comfortable and learn the job. Such a process
need not be mechanical; it should rather demonstrate the importance of a sensitive awareness
of management to employees’ anxieties, uncertainties and needs.
Induction programmes in the enterprises are found to vary from brief informal introduc-
tion/discussion with the supervisors to elaborate orientation programmes run jointly by the
line and human resource department. Probably the most important person involves in the
orientation process is the supervisor of the new employee. The managerial and the middle
level personnel, on joining, may be given detailed induction for one month or so. Senior
management staff is exposed to 15 days induction programme, while unskilled workers may
be given a day’s induction. The practice would differ from organization to organization from
a very brief informal introduction to quite lengthy formal induction programme.
2012
Q.1 (a) Globalization and liberalization have added new dimensions to human resource
management. Discuss and explain the importance of HRM function.
A.1 (a) Refer to the answer of Q.1 and Q.2 in the model question paper.
OR
Q.1 (b) Human resource planning is more common in larger organizations than in smaller
organizations. Do you agree? How is it carried out at various levels?
A.1 (b) Refer to the answer of Q.3 (a) in the model question paper.
Q.2 (a) What do you understand by job analysis? What is its importance in the management of
human resources?
A.2 (a) Refer to the answer of Q.3 (b) in the model question paper.
OR
Q.2 (b) What is performance appraisal process? Why is MBO considered to be a better method
of performance appraisal? What are the limitations of this method?
A.2 (b) Refer to the answer of Q.7 (a) and (b) in the model question paper.
Q.3 (a) Discuss the significance of training to the employees. Why is on the job training preferred
over off the job training.
A.3 (a) Refer to the answer of Q.5 (b) in the model question paper and answer of Q.3 in
2008 question paper and answer to Q.2 in 2009 question paper for methods of
training.
OR
Q.3 (b) Man power supply can come from many sources. Discuss the advantages and disadvan-
tages of any three sources.
A.3 (b) Refer to the answer of Q.2 (b) (i) in 2008 question paper.
Q.4 Counselling of staff results in reducing conflict, frustration and stress. Do you agree? What
are other methods of reducing stress at work?
A.4 Refer to the answer of Q.4 (b) (i) in 2008 question paper.
Q.5 (a) Define job evaluation. Discuss the advantages and limitations of job evaluation as a basis
of fixing and revising wages and salaries.
A.5 (a) Refer to the answer of Q.9 (b) in the model question paper.
OR
Q.5 (b) Write explanatory notes on any two of the following:
Q.5 (b) (i) Orientation programme
A.5 (b) (i) Refer to the answer of Q.5 (e) in 2011 question paper.
Q.5 (b) (ii) Executive development
Q.5 (b) (iii) VRS
A.5 (b) (iii) Refer to the answer of Q.4 (a) (i) (2) in 2009 question paper.
Q.5 (b) (iv) Interview board
A.5 (b) (iv) Refer to the answer of Q.5 (a) in model question paper.
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HUMAN RESOURCE

SOLVED QUESTION PAPERS

Duration: 3 hours Maximum Marks: 100

HRM Philosophy and Perspective

Nature and Scope

Policy as a Cycle of Managerial Control

Appraisal of HR programmes as regards recruitment, selection, training and development,

Essentials of HR Policy Statement

HR Planning at the Enterprise Level

Utility of Job/Task Analysis

(c) A forecast of manpower requirements

K Job offer; and

A.5 (a) Testing

Training and Development as an HR Activity

4. Economic Handling of Machines and Materials

Training and Development Needs

Behaviourally Anchored Rating Scales

Procedurally, the behaviourally based scales involve the following:

(b) Transfer for the convenience of the employee

K A clear-cut policy guideline on the basis of transfer—seniority and merit.

A Few Definitions of Performance Appraisal

Performance appraisal is ‘the process of evaluating the performance and qualifications of

360-degree Feedback Appraisal

Table 1.1 Job Evaluation vs Performance Appraisal

Points of Job Evaluation Performance Appraisal

A.10 (a) Meaning and Components

Components of Employee Remuneration

Table 1.2 Wages vs Salaries

Objectives of Compensation System

3. Fringe benefits/supplementary compensation,

8. Social Concerns: Compensation policy cannot be conceived in isolation of community

Factors Affecting Employees’ Remuneration

A.12 (b) Employee Welfare

Benefits for Employees

2. Develop Expertise from Within

2. Graphic Rating Scale Method

Table 1.3 Graphic Rating Scale Evaluation Form

6. Field Review Method

Principles of Management Development

Objectives of Management Development

On-the-job Method Off-the-job Method

Classification of Development Method According to Purpose

Discussion on Any Two Methods

Process of Career Planning

2. Employment exchanges: Employment exchanges have been set up by the government

A performance-linked compensation system shifts focus from compensation models based

Reasons for VRS

6. Better Alternative Job Opportunities: An employee having a better alternative employ-

Personnel Forms and Records—Traditional System of Information Collection and

information/reports generated; better work culture and establishing more transparent,

4. Collective Bargaining Capacity: Employee remuneration is also determined, to a con-

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