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Master of Business Administration

Definition: Brech: HRM is that part of management which is primarily concerned with the human rconstituents
of an organization.
Flippo: HRM is concerned with the procurement, development, compensation, integration and maintenance of
Human Resources in an organization towards accomplishment of organization goals. Therefore, HRM is the
planning, organizing, directing and controlling of the performance of those operative functions.
Definition of National Institute of P.M (NIPM): is that part of management which is primarily concerned with
human relationships in an organization.
Some basic concepts: (Scope).

HRM involves managing people at all levels in organizations

Both as individuals and groups
Both formal and informal relationships
Developing people
Not only controlling them
Certainly not manipulating them
Handling human beings is perhaps the most difficult job calling for special training.
Handling people is continuous in nature. What the organization has done to the people yesterday will affect the
performance and relationships today and tomorrow.
HRM aims at obtaining willing co-operation of the people.
Subject is bound by many conventions, codes and ethics
Very strictly bound by laws.
The subject calls for intellectual approach and emotional approach.

Importance of HRM -- Some general points

It is admitted universally that the human factor is the most vital and complex to handle. Therefore, proper
study of the subject is necessary.
People are rational and reasonable but not always. Only a professionally qualified person will be able to
tackle both the situations.
Understanding people is a rare science and art. Therefore an organized study is a must.
People are individually different in their abilities, ambitions, background, etc.
People behave differently as individuals and as groups.
The human element has negative potential also means if they are not treated well they can damage the
On the other hand if they are treated well they can give performance which is far more than proportionate to the
inputs given to them. This concept is known as Output more than proportionate to the input. Only human
beings are capable of this.

Importance of HRM to the organization

There has to be a specialized department to deal with human functions. Otherwise the remaining departments
will pull the human functions in different directions
Only a full scale Human Resources department can make proper policies and implement them also
Bridge between management and workers
Spokesman of the organization to the outside world
The liaison function with all agencies like district administration, public, judicial authorities, police, etc.
particularly with the government.
Handling people who carry sensitive information is a very specialized job. Otherwise the organization would
The HR Dept. is the custodian of many secrets and confidential information about people and the orgn.
The HR Dept. is also a great co-coordinator many aspects of day today Orgnl/ matters

Qualities (Competencies )of a Human Resources Manager

Basic Intelligence
All the qualities of a regular manager (plan, coordinate, control, delegate)
Sound professional knowledge on operative functions and practical skills to implement them
Basic desire and happiness to deal with people
Basic honesty of purpose
Good interpersonal skills ability to build bridges, co-ordinate and liaise.
Ability to handle sensitive information and emotions
Analytical and yet sympathetic
Empathy (ability to understand others points of view)
Pleasing manners and approachable personality
Problem solving attitude
He should be fair and appear to be fair.

Obstacles or Impediments for Human Resources Management

Generally there is a belief amongst many technical executives that Human Resources management is a common
sense subject and any body can handle that. If the recognition for the specialized skills and attitudes of HRM is
low, then the effectiveness of Human Resources management comes down.
Feudal approach of some organizations not professional approach
Too much of regulations from government and too many laws
Problems of the unions
Multi unions and rival unions within the same organization
External leadership for unions
Political affiliations of unions
Absence of a national level regulatory body for Human Resources managers. NIPM is only an affiliatory body.
Many organizations do not strictly follow the qualification and experience requirements while recruiting HR
The work force is heterogeneous divided by regions, language, etc.
Emotional type of reactions
Non-development of one industry one union culture.

Functions of Human Resources Management (Use the 2 charts I have given ; and see page 284 of Allen)

Managerial functions like planning, organizing, controlling, etc.

Operative functions specialized functions of HRM like recruitment, selection, performance appraisal, etc.

NIPM classification


Human Resources function (matters of individuals, policy matters, factual problems)

industrial relations (matters of group represented by union, collective problems, emotional problems)
welfare (township, schooling, canteens, hospitals, transport, perquisites and all advances and allowances)
general administration (discipline, handling of grievances, public relations, coordination with state legal
and police authorities, estate protection, etc.)
5) Maintenance of records
6) Audits and research
7) Human resource development.

Detailed list of Operative functions

Human Resources policies, objectives and laying down rules and regulations

Manpower planning
1) preparation of job analysis, job description and job specification
2) plan for wastage and shift requirements
3) plan for recruitment lead time
4) balance it against plant requirements
5) divide the total manpower required into various grades and pay scales provide for career planning

Recruitment, selection and placement: This is the actual job of procuring people and placing them in position.
Familiarizing them with the organization is also to be done.

Performance appraisal
1) lay down proper norms for evaluation
2) introduce proper policies
3) proper formats
4) safe keep of appraisal records

Wage and salary administration/compensation administration

1) fix pay scales according to the job requirements
2) make sure they are comparable with similar organizations.
3) Have a policy on overtime and incentives
4) Have a plan for periodical wage revisions

Training and development

1) plan for workers and officers separately as per requirements
2) formulate new packages for training based on specific requirements
3) have plans for training the efficient people as well as the inefficient people

Promotion and transfers: Policies should be framed to encourage the individual and also to benefit the
1) merit should be recognized without letting down people who have served long
2) while transferring the individuals problems should not be overlooked.

1) To establish an efficient mechanism
2) To detect deviations in performance or behavior and deal with them effectively.

1) There should be a healthy system under which a workman who is genuinely affected can approach the
management and set it right
Industrial relations to provide healthy relationship between management and workers

Welfare administration
General administration
Relationship with neighbouring community
Termination management refers to termination of employer, employee relationships on account of death,
resignation, dismissal etc. Here the Human Resources function will have to effect settlement of accounts also
Safety administration to constantly review working conditions, rest pauses, safety practices, sickness patterns
and make proper schemes.

Implementation of social security implementing of schemes like P.F., Gratuity, pension, etc.

Legal administration to handle legal matters initiated by the company and against the company

Public relations

Roles of HR Manager

The record keeper

Policy maker
Public face
Facility manager
Crises manager
Holder of information
Leveler of emotions


A policy is a guideline for action.

According to Calhoon, Human Resources policies constitute guide to action. Their genesis (origin) lies in
organisational values, beliefs and philosophy.
Bombrick Policies are the statements of the organisations overall purposes and plans of action in various areas
like Human Resources, finance, marketing, etc.

Uses of Policy (objectives)

They set out clear ideas about how to proceed in a given situation
They provide guidelines for planning and execution of day to day activities
They are the vital link between the mission and objectives on the one hand and the practical realities on the
other hand
They help the management to maintain consistencies and uniformity
They channelize the efforts of the people towards the goals of the organization
They set up standards or norms for measuring performance

Types of Policies (Objectives)

General Company policies or overall policies Vs Specific policies

External and internal policies (External policy regulates relationship between the company and the outside
Vertical and horizontal policies (superior subordinate relationship and relationship between two
department at the same level)
Oral and written policies (superiority of written policy discuss)
Formal and informal policy
Central and local policy (head office directives and unit level working)

Principles or guidelines for framing policies

Policies should correspond to the general objectives and philosophy of the management
They should be within the legal framework of the country particularly labour laws.
It should help growth of the organization as well as the individuals
Policies should be stable but should not become rigid. It should provide for flexibility in genuine cases
The policy should be relevant both in the short term and long term
They should be reasonable, acceptable and ethically (morally) sound
They should be dynamic and should adapt to change
It should correspond well with the policies of other functional areas within the organization.

Is Human Resources management a profession?

McFarland has defined profession as follows:

Existence of an organized body of knowledge

Formal methods of training and transferring knowledge
Professional association
Well defined codes for conduct
Emphasis in ethical standards

Since HRM is meeting all the requirements it is certainly a profession.

Whether Human Resources Managers are born or made? Many Human Resources traits like emotional stability,
coordination abilities, willingness to work with people are in -born. It is quite difficult to impart these faculties by
formalized training. Therefore, there are many aspects of HRM where inborn qualities are very helpful.
On the other hand the modern world has grown so complex that a person cannot discharge his duties effectively only
on the strength of his personal intuitions. A lot of formal qualification, training and exposure are certainly necessary
to function effectively as a Human Resources manager (or as any other manager). Not all the people who have
personal attributes are able to become Human Resources managers. Either they do not have professional

qualification or they may not have experience and exposure or merely they may not get the opportunity at all. Thus
it is incorrect to say Human Resources Managers cannot be made. The above factors are certainly important.
A HR manager with fine inborn qualities will be greatly benefited by the addition of experience, opportunities,
professional association, training, etc. At the same time mere training cannot transfer a skill to any one who does
not have basic aptitude. Therefore, HRMs are both born and made.


Human resources Planning is an important function of HRM. It rests on three pillars job analysis, job description
and job specification.
Jucius, refers to Job Analysis as process of gathering information about the operations, duties etc. about a job and
the organizational aspects of a job.
Job Description: Flippo: The immediate product of job analysis is job description.
What is collected in Job Analysis?

Job identification job title, code name, alternate titles, etc.

Operations involved what a typical worker does, the tasks of involved
How the job is actually performed? -- Time and motion study, sequence of movements for the material or the
Significant characteristics of the job location, physical setting, special hazards and discomforts
Materials used both solid and liquid substances
Machinery/tools/equipment used
Physical and mental attributes required
The content of responsibility
Requirement to work in shifts
Details of supervision

Job Description:
Generally, the purpose of compiling JA is to make JD. JD adds some features to job analysis like

organizational aspects where the job is located in the organization

relationship between the previous and next jobs. Example: How the material moves from previous job to this
job and to the next job
emphasis on reporting relationships and responsibility aspects

Difference between JA and JD:

JA is in work sheets form. JD is in summary form.
JA is the process of collecting information. JD is the process of writing it.

Maurice Cummins has summarised both JA and JD as a statement of the purpose, scope, duties and
responsibilities of a particular job.
Job specification:
Definition by Flippo It is a statement of minimum acceptable human qualities necessary for the proper
performance of the job. Thus it is referring to the characteristics of the job holder and not the job.

physical attributes like physique, strength, height, ability to keep awake at night
qualification, age and experience aspects
mental attributes like analytical ability, creativity, concentration etc.
language skills
basic perception abilities voice, vision, hearing etc.
emotional traits, like aggression, boldness
social characteristics like leadership abilities, interpersonal skills, communication, etc.

Methods of doing JA:

Questionnaire: It is simple and easy to handle. Normally suited for routine jobs. Normally handled by mail.
Check List: This also is filled by the incumbent (worker). It is easier for him to fill up check list than questionnaire.
But a lot of back ground work will have to be done by the job analyst.
Interview: Writing is done by the analyst but not the incumbent of the job. This reveals many factors which could
be missed in other techniques. Therefore, this is a good method to supplement all other methods.
Observation: The oldest method from the days of scientific management movement. Best suited for short cycle
operations with predictable activities. Here the job analyst stands near the operator and writes his observations.
Self recording diary: The worker himself writes the job analysis is partially structured some portions left
unstructured. The recording is done over a long period. Scrutinized by job analyst at a convenient place and time.
Participation technique: The job analyst does the work with his own hands along with the regular workmen and
Conference method: Here the supervisor also gets involved. All the analysis is done along with him.
Critical incident method: This is not a normal analysis. Here the focus is on exceptional factors. This is very useful
to analyse jobs which have lot of routine elements built around a few critical elements.
Uses or importance of JD, JA & JS:

Complete knowledge of the jobs

Relationship between various jobs
Good for detecting organizational ills like structural problems, reporting relationships, etc.
Basic document for recruitment, selection and placement
For promotion and transfers
For training and development
For systems and procedure improvements
They serve as measurements for assessing performance in all areas like production, quality, cost, etc.
Basic document for counselling
Helps in measuring job satisfaction and improving it
These documents lead to job evaluation which is the corner stone in wage salary administration

For health and safety aspects

For job redesign and reengineering.

Some minus points (Demerits):

It is a very time consuming and expensive job

When each job role is specified, the workers would like to stick to it. They would refuse to do even minor
variations. It is very difficult for the management to use a worker in more than one trade or skill
This reduces the worker to the level of machines by laying down very specific operations, movements, duties,
It becomes a legal document for the workers to argue in collective bargaining
These documents can be accurate only for the workmen jobs very defective if applied to managerial positions.


Dale S. Beach: HRP is a process of determining and assuring the organization that the organization will have
adequate number of qualified persons available at the right time, performing the jobs that meet the requirements of
the organization and providing satisfaction to individuals concerned.
Coleman: HRP is the process of determining the manpower requirements and the means of meeting these
requirements in order to carry out the integrated plan of the organization.
Dale Yoder: He emphasizes that HRP comprises of four aspects

determining the requirements

assured supply of proper people
their training and development
how well the organization utilizes them

Basic steps in HRP

Ascertain the objectives of HRP the HRP objectives should aim at both quantity and quality aspects -- The
objectives should aim at the satisfaction of the organization and of the individual. The objectives should cover
both short term and long term requirements and should form integral part of overall company objectives. The
objectives should also indicate a clear policy regarding compensation (salary) matters.

Assessing existing inventory: If it is a running organization, this step becomes important. The Human
Resources Manager should gather full data regarding the availability of existing people, skill-wise,
qualification-wise, designation-wise, age-wise, grade-wise, etc.

Demand forecast
The most important factor is JA & JD also work study, work sampling and workload measurements
Establish a base for manpower projections is it volume of production volume of expected sales, etc.
Productivity of the people
This sum total has to be balanced against machine availability
Provide cushions for the effects of learning curve (means people work slower in the beginning of a project
and pick up speed and expertise as they go along)
Provide for shifts/leave and absenteeism
Provide a percentage for manpower wastage like resignation, death etc.

Provide for controllable variables like machine capacity and be prepared for non controllable variables
(government policy)
Keep reserve for expansion and growth
Make trend projections or any other technique for unpredictable changes in manpower
Keep provisions for promotions and transfers
It is a continuous and dynamic job

Time horizon Any good organization must have a short term and long term plan. Short term means about
two years consider factors like machine capacity, changeover from a closing project to a new project etc.
Long term means five years and more consider factors like change in investments/capital, change in
technology, general economic prosperity of the country, change in market, etc.

Forecast of supply
Internal Supply Factors: Like promotions and transfers within the organization. They do not add to the
numbers also called quality additions.
External Supply Factors: (Quantity additions)

the population factors

present employment trends
availability of educational training institutions
vocational guidance institutions
availability of part time labour
competition from nearby industries
availability of infrastructure like roads, railway stations, airports, schools and houses
law and order
willingness of labour to move to different destinations
resistance to outside labour
law and role of government
social security measures (ESI, PF, etc.)

Actual Implementation
this is the physical process of bringing the people in. It involves stages like advertisements, recruitment,
selection, placement, etc.
this should be linked with compensation plans (salary)
the time lag between advertisement and actual positioning of candidates should be taken into account
wastage should also be restored

Periodical review and course correction

Performance appraisal
Merit rating Incentives
Improvement of workmens performance Through Training

Succession Planning:

Any good Human Resources department must compute the number of people who are going to leave the services in
the next few years. This information is tabulated skill wise, grade wise, etc.
Skill wise how many fitters, welders, etc.
Grade wise how many junior managers and senior executives

The Human Resources department must plan to fill up those vacancies which are going to fall vacant. The action
starts much before the wastage would take place. The new person (called replacement) should be positioned at least
a few months before the existing incumbent will go away, so that the work will continue smoothly.
Career Grooming or Executive Grooming:
This is particularly relevant for top positions. The Human Resources manager should identify a few very bright
officers who are good enough for the top positions in the organization. Such people are groomed in many ways take
over the top management in due course of time.

exposure to different projects run by the company

planned job rotations, to give knowledge in various functional areas
frequent interaction with the top management including attending the board meetings
project such officers to customers, suppliers and even collaborators
give them all possible training, including training abroad
identify them publicly at suitable meetings, occasions, etc. as the next generation management.

Executive grooming has 3 major objectives

to groom bright officers
to fill top key positions of the company from officers within
to safeguard bright officers from going away to competitors

Career Grooming or Executive Grooming

Wastage refer to reduction in number. There are known or predictable wastage such as superannuating or retirement
or termination at the end of contract period.
The Human Resources department must carefully study these figures for the past period and make trend projections
for the future. This will be helpful for succession planning.
Some other wastage are partially predictable like retirement on health grounds (medical terminations) and voluntary
retirements (a person is allowed to go with complete retirement benefits much before the age of 58 60).
Some other wastage like death and resignations, dismissals, jumping the bond are totally unpredictable. It will be
difficult to establish trend projections. However, a ratio could be built between predictable and unpredictable
wastage and to be applied in manpower calculations.
When a recruitment and selection takes place, a good Human Resources manager should recruit a few persons extra
to offset the effect of wastage.
Importance of Human resources planning:

Human resources Planning is a fundamental exercise. Slippages (mistakes) in HRP are costly and take long
time to rectify
HRP is required to make optimum use of manpower
To balance machine availability against MP
Plan for promotions and transfer
Plans for contingencies both expected and unexpected
The organization can focus on short term requirements and develop proper orientation for the long term
HRP is a good tool to evaluate MP matters. In general and pro-activity in particular

HRP ensure right man for the right job

The value of any Human Resources department depends on how well the HRP has been done
HRP is helpful in detecting many problems of the organization
HRP is helpful to the organization, to the industry and the country as a whole

Turn over: - Turn over is a part of Human resources planning. It refers to the rate at which employees are leaving
the organization. Its modern term is Attrition; this is calculated as a proportion of existing total strength or with
reference to the people who joined as new entrants. It is 2 ratios. One is = People left/people recruited in that batch.
Another ratio is = People left in a year / Total Strength of the organization.
Normally calculated with reference to a year or with reference to a selection lot. The higher the turn over rate, the
worse is the HR management. Turnover Ratio helps the management
1. To find out the success of any recruitment effort.
2. The soundness of wage and salary administration (Compensation)
3. To detect other organization problems
4. To find out in which trade maximum losses take place
5. For manpower planning in those areas


According to Dr. Bhagoliwal it is the process of attracting potential employees to the company. It is the process
of searching prospective employees and stimulating them to join the organization. It is also defined as a series of
steps taken to identify the job seeker and bringing him in contact with the company. It involves stages such as:
Stages in recruitment:

From HRP identify vacancies

Identify job details and specifications
Identify sources of recruitment or sources of possible manpower both internal and external sources
Notify in the press and such other avenues
Send application forms to interested candidates
Receive application forms, scrutinize them and make broad waste summaries of applicants.

Internal sources of recruitment: Promotions, transfers, job rotations. These do not add up to the total Human
Resources already available in the organization. But it has the advantage of motivating the existing employees,
improving their loyalty with the organization and as also the organization knows the candidate very well.
External sources: (a) Newspaper advertisement (b) Advertisement in Professional magazines (c) Employment
Exchanges (d) Campus recruitment (e) Other field trips (f) Competitors (g) Part time manpower (h) Contract

manpower (I) Unions (j) Recommendations by existing employees (k) Unsolicited applications or stray
recommendations or contacts (l) Professional placement agencies (m) Professional associations.
An employer should constantly evaluate the sources of his recruitment with regard to their effectiveness such as (1)
what is the yield - how many candidates it has successfully offered, in terms of quantity and quality (2) time lag how much time it takes to offer a good candidate (3) cost aspects.

Dale Yoder the process by which candidates for employment are divided into 2 categories - those who will be
offered employment and those who will not. Thus the selection process is a Negative process. Selection means
choosing a few out of the many candidates available. The candidates are subjected to a series of elimination
processes and the final ones are chosen; stages in selection

Scrutinizing the application

Calling the eligible candidates for test/interview
Constitution of Boards for test/interview
Administering the test
Administering the interview
Medical/Physical examination
Negotiating the salary aspects
Checking references
Issue of Appointment order

Steps in selection:

make a detailed scrutiny of eligible candidates

fix up suitable tests and interviews
fix proper tools and standards and experts for conducting test interviews
call the candidates
administer the tests in proper atmosphere
interpret the test results and screen
administer the interview and select elicit all clarification during interview
fix up compensation package
verify character and antecedents (previous employers reports)
medical examination
issue the appointment order

How to measure effectiveness of selection process:After the selection is over, find out whether you got the required no. of people. Over a period of years if the
organization has not got the required no. of people consistently, the audit should focus on further analysis like
mistakes in specification/notification, unsatisfactory salary, terms and conditions not clear etc., If the
organization has not got the right quality - further analyze the job specification, the quality of testing and
interviewing etc., another area of audit is the time lag between notification and actual position of the candidates.
The time lag should be a few weeks. Otherwise, the organization should analyze the causes and take action.
There are many areas in which each organization must develop its own standards and measures the
effectiveness of their manpower planning.

The process of actually fitting the appointed candidate to the job. The process of positioning the candidate in the
actual position. This is not a big issue if there are few vacancies only. But if the organization is large and many
vacancies have to be filled, the Human Resources department will have to place the candidates with due
consideration to many special factors such as (a) the candidates preference for the station in which to work (b)
Financial considerations like advance increments (c) Administrative aspects like independent charge, designation,
reporting relationship, etc.
Induction is the process by which a newly appointed candidate is accustomed or acclimatized with the professional
and social environment of the job. The organization (Department Head) receives the new employee on the first day
and brief him about the organization, his department, his work, the work practices, etc. He is then introduced to his
colleagues in the department. For a few days or weeks, he is not expected to work on the job but expected to
familiarize himself with the Company, his work, his future, his department and the culture and traditions of the
company. This program serves two purposes (a) the individual gets organized inputs about the company. He is not
asked to jump into work (b) If the correct first impressions are created, he becomes loyal to the organization.
Induction Programme
A systematic program organized by the employer for familiarizing a new entrant with a job with the
organisation and the connected social aspects.
Objectives of Induction Programme
1. To have a structured method / procedure for welcoming a newly joining individual and giving him a right
orientation about the organisation and his role in the organisation.
2. To help him get into technical, business, inter-personal and sociological background of the job.
3. To help synchronize his objectives and organisational objectives.
4. Not to allow to scope for a fresh appointed to get ideas from an existing disgruntled (dissatisfied) employee of the


There are Three Basic Stages - Probably 4 Stages.
1st Stage:

Introductory Orientation by the PRO or Training department.

2nd Stage:

Specific Orientation by immediate boss.

3rd Stage:

Further Orientation by Human Resources Department.

4th Stage:

Follow -up orientation if there is need.


According to Spriegel A Promotion is the movement of an employee to a job that pays more money or that enjoys
some preferred status. Pigors and Myers the advancement of an employee to a better job, in terms of more
responsibility, status and pay. If the promotion involves only higher responsibilities without higher pay, then it is
known as Dry Promotion. If he goes up the hierarchy it is known as Vertical Promotion. If he moves within
the same level it is horizontal promotion.

Please see text book for a detailed discussion on Promotion by Seniority Vs Merit
General rules regarding good promotion scheme:

The organization has to have a proper promotion policy and publicize it well
The policy should cater to different segments/areas of people like there should be a separate policy for
senior officers, junior officers, supervisors, highly skilled/unskilled workmen, etc.
Whether the promotion will be effected based on arising of clear vacancies like death or retirement of the
existing incumbent or promotions will be given without reference to vacancies
Whether the promotions will be awarded as and when vacancies arise or only once a year say, June of
every year. The latter idea is better and is convenient to operate
How much vacancies will be filled by open recruitment (outside candidates) and how much will go by
The organization has to decide whether it would recruit Human Resources at the lowest level and keep on
promoting them as and when they grow up. For example, many good organization recruit officers only at
junior levels and slowly promote them to senior levels. They do not recruit candidates at senior levels from
the open market, except under exceptional circumstances
What is the minimum time gap for promotion from one cadre to another? For example a company may
stipulate nobody will be eligible for promotion unless he completes 4 years in the existing grade (for
Zone of promotion - for one vacancy how many people will be considered. Some companies have a rule
that for one vacancy only 6 candidates will be called/considered
What is the line of promotion - for each trade/category of Human Resources? For example, it should be
made clear that a junior Human Resources officer may reach only Director of Human Resources position or
something less than that - throughout his career
The qualification/eligibility criteria should be made clear for each post and should be strictly adhered to
Legal position on Promotion - (a) No employee can claim promotion as a matter of right. He cant go to
court claiming Promotion. (b) But he can invoke legal remedy if he has been denied promotion by
violating the managements own promotion policy.

Probation: Whenever a person is selected from the open market, he is put on probation for a period of six months
or 1 year. This is recorded in the appointment order. During this period his performance is closely observed and he
is intimated and at the end of the probation period, he is issued with a letter of confirmation (if his performance is
Most companies have a policy of not insisting on notice period for relieving a probationer. That means, the
appointment could be terminated from either side without giving any notice or reason.
There are some companies which have a policy of keeping even promoted people on probation. If performance is
unsatisfactory, he is reverted to the earlier post.


Michael Jucius Transfer refers to changes in job in which pay, status and job conditions of the new job are
approximately same as the old.
Type of Transfers: (a) Production Transfers - as per requirements of the job (b) Replacement transfers - To fill in
wastages like superannuation or resignation of existing incumbents (c) Versatility transfers - To give the employee
greater experience and exposure by transferring him to different areas (d) Remedial transfers - Punishment transfers
(e) Human Resources transfers - Based on employees request
How to make a good transfer scheme:

The organization should have transfer policy applicable to various levels

The policies should be well publicized - and implemented without exceptions
Have special examination of employees difficulties if the transfer involves movement out of station
The criteria for transfer should be clear
The courts will generally not interfere with transfers as long as the conditions of the new job are same and
there is no victimization

There are many different ways in which the employer-employee relationship may get terminated. These are the
following ways:

Dismissal - for misconduct like theft, assault, etc. - this is done after proper enquiry
Super annuation - also called retirement - after reaching a certain age say 58 or 60
Medical termination - Due to reasons of illness, etc.
Completion of contract - If someone is taken for a contract period say 2 or 3 years, at the end of the
contract period his services get separated
Voluntary Retirement - Some organizations have this scheme - persons who have completed 20 years of
service and above 45 years of age for example may leave on voluntary retirement. They will be given
some extra lumpsum money over and above the usual benefits which is not taxable. This is the special
feature of this scheme.
Retrenchment - This is due to unforeseen circumstances - the employer suddenly finds he has more people
than necessary - so he retrenches the junior most people giving them months wages for every completed
year of service.
Lay off - due to power shortage, raw material shortage, accumulation of stocks, etc., the employer has a
temporary inability to provide employment to all. So he lays off some of the people
Discharge - The particular employees services are just no longer required


To give an employee, who is advanced in age and who has served for a long period - a chance for retiring
much ahead of his retirement date with good terminal benefits.

If the organisation wants to reduce manpower for business reasons or for weeding out inefficient employees
voluntary retirement scheme (VRS) is introduced.
It is also called golden hand shake scheme.