BACHELOR OF BUSINESS ADMINISTRATION

(B.B.A.)

PAPER 3.5

PRINCIPLES OF PERSONAL MANAGEMENT

 PAPER 3.5 PRINCIPLES OF PERSONNEL MANAGEMENT

Personnel Management Definition Objectives and Functions Role and Structure of Personnel
Function in Organizations Personnel Principles and Policies

Human Resources Planning Need for Planning HRP Process Job Analysis Job Description Job
Specification

The Selection Process Placement and Induction Training and Development Promotion Demotions
Transfers Separation

Performance Appraisal Objectives Methods

Wage and Salary Administration Factors Principles Compensation Plan Industrial Group
Incentives Bonus Fringe Benefits Job Evaluation System

Employee Maintenance and Integration Welfare and Safety Employee Discipline Principles of
Discipline Grievances Causes Principles of Grievances Handling.

LESSON 1
 PRINCIPLES OF PERSONNEL MANAGEMENT

INTRODUCTION
Personnel Management is the planning, organizing, directing and controlling of the procurement,
development, compensation, integration maintenance and separation of human resources to the end that
individual organizational and societal objectives are accomplished (Edwin Flippo)

This definition is a comprehensive one and covers both the management functions and the operative
functions. The purpose of all these functions is to assets in the accomplishment of basic objectives.

Personnel Management is the recruitment, selection, development, utilization of and accommodation to

human resources by organizations. The human resources of an organisation consist of all individuals
regardless of their role, who are engaged in any of the organisations activity (E.F.I. French)

This definition states that personnel management is planning, coordinating, and controlling of a network of
sub-processes and facilitating systems pertaining to the recruitment, selection, utilization, development of
an accommodation of human resources.

CONCEPT OF PERSONNEL MANAGEMENT

On the basis of the definitions given, a few basic facts and characteristics may be noted about Personnel
Management.

First, Personnel Management is concerned with managing people at work. Such people or personnel does
not simply refer to rank and file employees or unionized labour but also includes higher personnel and
non-unionized labour. In other words, it covers all the levels of personnels, including blue-collared
employees (craftsmen, foremen, operatives and labourers) and white-collared employees (professional,
technical and kindred workers, managers, officials and proprietors, clerical workers and sales workers).
The shape and form that personnel administrative activity takes, however, may differ greatly from company
to company and to be effective, it must be tailored to fit the individual needs of each organisation.

Second, it is concerned with employees, both as individuals as well as a group, the aim being to get better
results with their collaboration and active involvement in the organisations activities i.e. it is a function or
process or activity aiding and directing workmen and women in maximizing their personnel contribution.

Third, Personnel Management is concerned with helping the employees to develop their potentials and
capacities to the maximum possible extent, so that they may derive great satisfactions from their job. This
task takes into consideration four basic elements, namely, the capacities, interests opportunities and
personally of the employee.

Capacities referring to those abilities or attainments, inherited or acquired that a works has is capable of
and must to a certain degree at least exercise in his work.

Interests not only an individuals desires and ambitions, but also his instinctive impulsive tendencies,
vague yearnings, and ill-defined cravings that may or may not stir him to his fullest action in performing his
duties.

Opportunities not only opportunities for advancement, but opportunities to exercise his capacities and
satisfy his interests.
Personality the sum total of a workers reaction to his experiences and environment, personality is
manifest by an individuals reception by others. The workers personality has great influence upon his
opportunities.

Fourth, since recruitment, selection, development and utilization of, and accommodation to people are an
integral part of any organized effort, Personnel Management is inherent in all organizations. It is not
confined to industry alone, it is equally useful and effective in government departments, military
organizations, and non-profit institutions. It is a major part of the general management function and has
roots and branches extending throughout and beyond each organisation. Therefore, it is rightly the central
pervasive system of all organizations.

Fifth, Personnel Management is of a continuous nature. In the words of George R. Terry, It cannot be
turned on and off like water from a faucet, it cannot be practiced only one hour each day or one day a
week. Personnel Management requires a constant alertness and awareness of human relations and their
importance in everyday operations.

Finally, Personnel Management attempts at getting the wiling co-operations of the people for the
attainment of the desired goals for work cannot be effectively performed in isolation without the promotion
and development of an esprit de crops.

CHARACTERISTICS AND QUALITIES OF PERSONNEL MANAGER

Personnel is a delicate subject, and other it matters more to know who says something than to know
what he says. Unless the personnel manager has the active support of the top management, he will be
like a ship without a rudder. On the other hand, if he does not win the confidence of the employees and
their union, he will not be respected by the management. Moreover, he has to earn the esteem of his
colleagues especially those in the line who are more interested in immediate rather than long-term results.
He walks on a tight rope. Tact and imagination are his only guides.

To be successful in his job, a Personnel Manager must be a specialist in organisation theory and as such
be an effective adviser to top management in organizational matters as well as being able to organize his
own Department. Division in such a manner as to minimize frictions, promote goodwill and release the
latent energies of his own people and associates to be expended on their primary assignments.

The other important qualities that a Personnel Manager should possess are:

(1) a mind with a capacity for creative thinking, for analyzing situations and reasoning
objectively.
(2) he should know problem-solving techniques and have an ability to inspire, motivate and
direct employees.
(3) a devoted sense of vocation and faith in humanity
(4) capacity for leadership, a sense of social responsibility and a standard of social justice.
(5) personal integrity so that employees may repose confidence in him;
(6) capacity for persuasion, coupled with patience and tolerance,
(7) a friendly, approachable nature, which is tactful any sympathetic and a pleasing personality,
a well groomed appearance, sophisticated taste and habits, and capable of working with
and through other people.
 (8) initiative and decision making ability;
(9) mobility of facial expression (which encourages confidence, conveys interest, registers
sympathy and allays distruct), and finally
(10) an ability to generate trust among his colleagues and acceptability, recognition for himself
and his ideas of communication with readiness and fluency;
(11) a readiness to co-operate the sub-ordinates in times of difficulty and never to interfere or
thrust his advice on them,
(12) a promptitude in giving them the feedbacks in their handling of personnel matters whenever
necessary in the interest of functioning of the organisation and established personnel
policies of the company.

OBJECTIVES OF PERSONNEL MANAGEMENT

One of the principles of management is that all the work performed in an organisation should, in some way,
directly or indirectly, contribute to the objectives of that organisatoin. This means that the determination of
objectives, purposes or goals is of prime importance and is a pre-requisite to the solution of most
management problems. Objectives are pre-determined ends or goals at which individual or group activity in
an organisation is aimed.

(a) Primary Objectives, in the first instance, relate to the creation of and distribution of some goods or
services. The Personnel Department assists those who are engaged in production, in sales, in
distribution and in finance. The goal of personnel functions the creation of work force with the ability
and motivation to accomplish the basic organizational goals.
Secondly, they relate to the satisfaction of the personal objectives of the members of an
organisation through monetary and non-monetary devices. Monetary objectives include profits for
owners, salaries and other compensation for executives, wages and other compensation for
employees, rent for the landowners and interest for share / stock-holders. Non-monetary objectives
include prestige, recognition, security, status or some other psychic income.
Thirdly, they relate to the satisfactions of community and social objectives such as serving the
customers honestly, promoting a higher standard of living in the community, bringing comfort and
happiness to society, protecting women and children, and providing for aged personnel.

(b) The Secondary objectives aim at achieving the primary objectives economically, efficiently and
effectively.
The fulfillment of the primary objectives is contingent upon.
(1) The economic need for or usefulness of, the goods and services required by the community
society
(2) Conditions of employment for all the members of an organisation which provide for satisfaction
in relation to their needs, so that they may be motivated to work for the success of the
enterprise
(3) The effective utilization of people and materials in productive work
(4) The continuity of the enterprise
The integration of interests of employees and management are as follows:

Chart 1
Integration of Interests of Employees and Management

Employees Interests Managements Interests

1. Recognition as an individual 1. Lowest unit personnel cost

2. Opportunity for expression or 2. Maximum productivity of employees
development
3. Economic Security 3. Availability and stability of employees
4. Interest in work 4. Co-operation of employees
5. Safety healthy working conditions 5. Co-operation of employees
6. Acceptable hours of work and adequate 6. High organizational moral
wages
7. Fair and efficient leadership 7. Intelligent initiative of employees
 LESSON 2
NATURE OF PERSONNEL MANAGEMENT

1. BASED ON PRINCIPLES
Management of personnel is a difficult job, for the simple reason that human beings cannot easily
conform to any set of pattern of attitudes and behaviour. Each individual worker has his own attitudes,
beliers and temperamental make-up. The factors that would motivate him to be loyal and efficient can
only be a matter of speculation. Yet Personnel Management is based on certain well-defined principles
having been evolved after a great deal of research and experimentation.

2. A NEVER ENDING EXERCISE

Personnel Management as a function needs to be performed on a continuous basis. It involves the
delicate question of management of human relations, which have to be nurtured like a delicate plant
with a great deal of care and caution on a regular basis.

3. ESPIRIT DE CORPS
The object of Personnel Management is creation of team spirit among workers and managers. This can
be possible only when employees identify themselves completely with the objectives of the
undertaking, which on its part assures them maximum material and mental satisfaction from the work
performed by them.

4. OPTIMUM CONTRIBUTION
The success of Personnel Management lies in securing optimum contribution from employees towards
accomplishment of the organizational objectives. But optimum contribution from workers does not
mean that they should be exploited to put in hard work. It only means that every worker should be given
the work that suits his capability, interests, aptitude and experience, so that he is enabled to show his
best performance. Also, it means that every worker should be given adequate opportunities for
Personnel advancement.

OBJECTIVES OF PERSONNEL MANAGEMENT

The various objectives of Personnel Management may be summarized as below:
Objectives

Social Personnel Enterprise Union

1. Creation of 1. Adequate 1. Recruitment 1. Recognition of
employment remuneration integration & unions
opportunities maintenance of
competent and
loyal workers
2. Maximizing 2. Job security 2. Forecasting & 2. Formulation of
 productivity balancing the personnel policies
demand & supply in consultation with
of personnel unions
3. Affording maximum 3. Training & 3. Inculcating spirit of
material & material development self-discipline, co-
satisfaction to work operation
force.
4. Avoidance of 4. Job satisfaction
wastage effort
5. Promotion of 5. Opportunities for
healthy human advancement
relation
6. 6. Proper work
environment

1. SOCIAL OBJECTIVES
A business organisation is a part of the society in which it functions. Its Personnel Management
policies have to be in tune with the social objectives. First, it should aim at maximizing employment
opportunities. This assumes greater importance in the context of a country faced with the problem
of unemployment Secondly, the jobs to be created should be such that they secure maximum
material and mental satisfaction to be personnel performing them.

2. Personnel objectives
Good Personnel Management is concerned with providing maximum material and mental
satisfaction to each individual employee. Generally, this is accomplished by the provision of.
a) Adequate remuneration
b) Job security
c) Facilities for proper training & development
d) Increased job satisfaction
e) Opportunities for advancement and
f) Proper work environment

3. Enterprise objectives
Pursuit of social and individual objectives should be blended with the enterprise objectives.
Personnel Management should aim at recruiting and retaining competent, loyal and mentally well
adjusted team of workers. Also the various posts in the enterprise should be manned by highly
competent and contented workers. It should also seek to create a sense of belonging among the
employees so that when the occasion demands, they willingly sacrifice their individual interests for
the sake of group interests.
 4. UNION OBJECTIVES
Personnel Management in the modern times is invariably called upon to deal with labour unions.
This requires utmost tact and caution, particularly in matters concerned with recognition of
representative union, formulation of personnel policy in consultation with them, and creation of an
atmosphere where they are obliged to practice self-discipline and co-operate with the management.

CHARACTERISTICS OF A GOOD PERSONNEL POLICY

Every enterprise should relate its personnel policy to the economic, legal social and technological factors
present in the society in which it operates. This mean it has to keep on adjusting and adapting its
personnel policy to suit any change in these factors.
A good personnel policy should posses the following characteristics:
1. Protection of the interest of all parties-
It should take into account the interests of all parties associated with the enterprise, i.e. workers,
entrepreneurs, consumers, government and community.
2. Promotion of enterprise policies-
It should fit into the basic overall policies of the enterprise.

3. Precision and certainty-

It should be clear, to the point, and complete in every respect. It should not lead to varying and
confliction interpretations.

4. Flexibility
It should not be so rigid and inflexible their it cannot be adjusted and adapted to changes in economic,
legal social and technological factors.

5. Stability-
Even though the personnel policy has constantly to be adjusted and adapted to suit any changes in
economic, legal social and technological factors, it should be reasonably stable and permanent.

6. Responsiveness prevailing trends:

It should be capable of being adjusted to the prevailing norms and trends in society. For example, if the
current thinking is in favour of involving workers in the management process, the policy should not be
against it.

7. Integrative
It should take into account the differing capacities, capabilities, interests, desires, aspirations, beliefs
and temperamental make up of the people for whom it is intended.
8. Uniformly
It should be uniformly applicable to all members and all units of the enterprise.

9. Acceptability
It should enjoy acceptability among the people for whom it has been formulated.

10. Proper communication-

It should be properly communicated to all those for whom it is intended. Example of a Good Personnel
Policy-
1. To pay all employees adequately for services rendered.
2. To maintain responsible hours of work and safe working conditions
3. To provide continuous employment consistent with business conditions
4. To place employees in the kind of work best suited to their abilities.
5. To help each individual to progress in the companys services.
6. To aid employees in time of need.
7. To encourage thrift
8. To co-operate in social, athletic and other recreational activities.
9. To accord to each employee the right to discuss freely with executives any matter concerning his or
her welfare or the companys interest.
10. To carry on the daily work in a spirit of friendliness.
 LESSON 3
ORGANISATION OF THE PERSONNEL DEPARTMENT

The Personnel Department, where it exists as in case of large organizations, is generally headed by a
personnel manager. The activities are thereafter divided into division such as Employment, Training,
Employees services, Wage and Salary. Administration and Manpower Planning. Each of these
departments or division can then be sub-divided. For example, the Employment division can be divided in
to recruitment and selection. Similarly, Training can be sub-divided into training of non-supervisory and
supervisory staff. There can be either a separate department for Wage and Salary. Administration or it can
be combined with Labour Relations. Again, the Manpower planning activities can be divided into manpower
forecasting, organisation planning, managerial recruiting, management development, performance
evaluation and manpower research. Thus, there are may ways in which a departments work can be
organized, particularly that of personnel department.

ROLE OF PERSONNEL MANAGEMENT IN INDUSTRY

Oliver Sheldon once observed, No industry can be rendered efficient so long as the basic fact remain
unrecognized that it is principally human. It is not a mass of machines and technical processes but a body
of men. An industrial society is conspicuous by the complex nature of forces which influence the behaviour
of individuals and groups within and outside their workplace. The focus of Personnel Management for a
long time in the past has been management of industrial relations including employers relationship with
individual employees and the relationship between the management and organized unions. Indeed during
the last thirties and forties, the terms industrial relations and labour relations were popularly used with
reference to personnel functions due to the rise in collective bargaining and other related functions. Even
now, when industrial conflicts and disputes pose serious problems to management, the personnel
managers attach highest priority to the settlement of industrial disputes than anything else.

ROLE OF PERSONNEL MANAGER IN AN ORGANISATION

The role of personnel managers in practice lies in how they fit into the day to day functioning of the
organisation. A personnel manager is consulted for all activities and operations of the organisation. The
mores of society and values of daily life, diverse social groups etc. will have their organizational
counterpart. At times, these pressures may involve the envy and suspicion of various social or religious
groups. Economic instabilities fear or unemployment etc. complicate the field of Personnel Manager.
Ideally, the personnel manager should be a lobbyist directing managerial attention to human problem, just
as finance assesses costs marketing emphasizes customers personnel is people centred. Success
depends on the degree of perception and his realistic contribution to solve management problems. Those
in the personal department have status problems. Their jobs involve social work and record keeping
responsibility for handling miscellaneous peripheral activities and the fact that short sighted top
management offer transfer less than successful executive to safe personnel position all contribute to the
diminished status. Failure to recognize that effective management of human resources is a crucial factor
associated with growth is a big problem. The nature of personnel function is ambiguous and confusing. The
personnel man engages in high and low status activities. His role as adviser often seems inconsistent with
the role as an auditor and stabilizer. The personnel work is no doubt a specialty but it is the heart of every
managers jobs. The successful personnel man must gain confidence and respect of his colleges in other
departments. He should persuade them and make them understand that he is helping them to solve
problems to achieve their goal, to meet their objectives that he is using techniques that are useful and
valid, that he is not embarrassing them or showing off. Personnel man should never seek credit for
victories.

(A) POLICY INITIATION AND FORMULATION

Policy initiation and formulation is one of the important tasks of a personnel manager. It is with a view to
overcome problems of a recurring nature, or to prevent anticipated problems in the area of human resource
management that company policies are framed to communicate to employees the basic grouped rules
which the organisatoin functions and thus avoid discrimination, inconsistency adhocism and confusion over
rights and obligations. The personnel manager also helps management in the formulation of policies on
wage and salary administration, welfare activities, personnel records and statistics, good working
environment etc.
Personnel Department : Organisation Chart
Personal Manager
Active Area Personnel Manager

Functions Wage and Industrial Organisation Employee

Salary Relations Planning and Services
Employment
Administration Development

Recruitment Employee Communication Organisation Medical

Classification Planning Services

Selection Rate Collective Recreation

Determination Bargaining

Sub-Function Induction Merit Ratings Personal

and Major Services
Functional
Elements
Promotion Supplement Employee Manpower Safety
and Transfer Compensation Discipline Development

Separation Work Personnel Training Protection

Schedule Research and Security
Control

(B) ADVISORY ROLE

The advisory role of personnel manager is of crucial importance. The manages are generally confronted
with the variety of problems in then done day operations. The personnel manager can devise them to
resolve these problems satisfactorily. These problems may include grievance over distribution of anytime
work, annual increase in pay, transfer, promotion, disciplinary action. In all such matters, the personnel
manager can offer useful advise because he is familiar with personnel policy, labour agreement past
practice etc personnel advise also includes preparation and communication of bulletins preparation and
communication of bulletins, reports and procedural guidelines for the interpretation and implementation of
policies.
(C) PROBLEM SOLVER ROLE
The personnel manager can also help, line managers to know their defects and solve their
problems. As auditors, the personnel manager should be conscious of difficulties which each
manager faces in meeting the high standard set for his unit by top management. By helping them to
sort out their difficulties and by providing them with skills and expertise in coping with them, the
personnel manager can render invaluable assistance.
(D) MEDIATOR ROLE
The personnel manager often acts as mediator in the event of conflict between employees or
groups of employees, superior and subordinate management and employees, and thus maintains
industrial peace and harmony in the organisation.
(E) WELFARE ROLE
The personnel manager also acts as welfare officer in the organisation. As welfare officer, he deals
with this following aspects:
(1) Research in personnel and organizational problems.
(2) Managing employee services canteen, grain crops, transport, co-operative, crches etc.
(3) Group dynamics group counseling, motivation, leadership, communication etc.
(F) REPRESENTATIVE ROLE
The personnel manager is generally a spokesman for management or representative of the
company. It is because he has better understanding and overall picture of the companys
operations. Sometimes he also acts as workers representative to put forward their problems to
management, particularly in non-unionized organisation.
(G) DECISION MAKING ROLE
The personnel manager also plays an effective role in decision-making on issues related to human
resources. He formulates and designs objectives, policies and programmes of human resources
management.
(H) CONDUCT RESEARCH
The personnel manager undertakes personnel research in order to keep management constantly
informed about problems and issues so that better decisions can be made by management on
matters affecting personnel.

(I) DEVELOPING EFFECTIVE APPRAISAL SYSTEM

 The responsibility of personnel manager also includes development of an effective appraisal system
which may be used by management to provide a current inventory of manpower resources in the
organisation.
(J) MANAGEMENT AND TRAINING
The personnel manager is invariably required to conduct programme of management education
and training for the members of the organisation in order to develop their skill and competence
(K) EFFECTIVE COMMUNICATION
Personnel manager aids management in assuring effective communication throughout the
organisation. This develops cordial employs management relations.
Thus, the job of a personnel manager has become very challenging these days. It requires
specialized skills of dealing with people. The charge of personnel department is thus entrusted to
the person who possesses necessary skills and has qualities of integrity and personality.
QUALITIES OF PERSONNEL MANAGER
Personnel manager is an important member of management team in an organisation. But the personnel
managers job is a delicate one. In the present era of information technology, on account of increases in
size of business organisation, globalization of business activities, increase in degree of competition,
change in technical know-how, the task of personnel manager has become very tedious and complicated.
To handle the job smoothly, besides the knowledge of specialized area, a personnel managers expected to
posses the knowledge of philosophy, ethics, logic, mathematics, sociology, management and economics.
The knowledge of multiple disciplines mentioned above, can help, him to understand human nature and
conduct, morale and value judgement, principles governing the system optimizing choices among
completing uses of limited resources skilful leadership of organisatoin groups etc.
A successful personnel manger is broadly expected to possesses the following qualities:

(i) Sense of Vocation : The responsibilities of the personnel manager are so heavy that they cannot
he discharged without some sense of an inner urge. That is why, the possibilities of disappointment
are greater in a personnel job. The only safeguard against disappointment is the ability to draw
upon the springs of an unfailing idealism. The personnel manager must have faith in humanity and
also in the possibility of creating a finer social and industrial order.
(ii) Capacity of Leadership : The personnel manager has a dual role, to advise the management of
human problems and secondly, to exercise leadership in many matters effecting the workers. He
should be ready to face opposition and speak without fear from any level of management or any
group of workers. He should be in a position to convince others about his view point and to provide
leadership in the organisation.
(iii) Personnel Integrity : Personnel manager must be a man who can be trusted completely so that
member of the organisation may not hesitate to come to him with their worries, anxieties and
problems. Even fellow managers and directors should confide in him for their difficulties. The
personnel manager is concerned with human relations problems more than any body else in the
organisatoin, so he should be a man of great integrity.
(iv) Sense of Social Responsibility : An organisatoin is a part of society and it draws various factors
of production from society. It has social obligations to various groups like shareholders, customers,
workers, suppliers and the government. The personnel manager should have a sense of social
responsibility so as to help the organisatoin discharge its social obligations.
 (v) Spontaneity of Speech : Readiness and fluency of speaking combined with the necessary
vocabulary and their meaning are essential for a personnel manager. People are more at ease
before one who quickly phrases the words of welcome or introduction. Ability to express oneself
with precision avoids misunderstanding.
(vi) Facial Expression : Ability to give facial expression to sentiments and emotion is also important for
the personnel manager because it helps in dealing with personnel more effectively.
(vii)Courtesy and Social Awareness : The personnel manager is actually an human relation manager.
He has to speak to people of all grades and ranks, trade union leaders, workers representative in
committees, and members of the board of directors. For all these occasions he is better equipped if
he possesses a sense of courtesy and social awareness
(viii) Personnel Dignity : The personnel manager should be able to interact with people and yet
not be one of them. His job is bigger than himself and this fact must be a measure of his action,
rather than only code of etiquettes or standard.

FUTURE ROLE OF PERSONNEL MANAGERS

In view of the impending changes in the social, economic and technological environment of business and
industry at a fast pace, of future role of personnel managers would lie in their ability to accept the process
of change involving a readjustment in the exciting functions of the personnel department. Modernization of
plants and machinery and introduction of new technology will not only involve retraining of manpower but
also increasing stresses, strains and resistance to change, and to resolve the problems new approaches to
man management will have to be adopted. The personnel manager will thus have to be development
oriented and will need to be conversant with latest developments in the fields of industrial engineering,
social psychology and organizational behaviour. He will have to initiate meaningful personnel research in
the light of changing social, political and economic conditions, help managers to anticipate personnel
problems which may arise due to contemplated changes in manufacturing processes and personnel
policies, and be conscious of cost-effectiveness as regards the functions of the personnel department as
well as proposals that he may submit for consideration of top management.
 LESSON 4
PERSONNEL PLANNING

Personnel planning involves an accurate determination of the present and future manpower needs of the
enterprise and exploration of the sources to meet the same. Assessment of personnel requirements has
both numerical and qualitative dimensions, and it is intimately linked with the immediate and long-range
objectives and plans of he enterprise.
ELEMENTS OF PERSONNEL PLANNING
Personnel planning comprises-
(1) Assessment of the present manpower position
(2) Assessment of the direction in which the enterprise is headed i.e., its immediate and long range
objectives and plans.
(3) Consideration of the effects of these objectives and plans on the future demand and supply of
personnel, and
(4) Balancing of the demand and supply of personnel to avoid any excess or shortage of personnel.
1. PRESENT MANPOWER POSITION
An assessment of the present manpower position will call for
(a) An analysis of the employees currently working in the enterprise
(b) An evaluation of the jobs being done by them
This would involve collection of particulars such as names, age, educational qualification, training,
experience and specialized skills of the employees presently working in the enterprise. It would give an
idea of the human resources presently available to the enterprise on the basis of which it will be possible to
know whether it can profitably expand its activities, and also which of the employees are to be trained,
developed, promoted, or transferred to other jobs.
These particulars would also show whether there is over-staffing or under-staffing in the enterprise, as also
the number and time of replacements to be arranged upon retirement of the existing employees.
Analysis or evaluation of the jobs being performed by the present employees will highlight.
(a) The nature of work done by each worker
(b) The method employed by him to do it.
(c) The rationale of doing it as such
(d) The skills, education and training required to perform the work;
(e) How this particular job is related to other jobs and
(f) What physical and environmental conditions need to be created for proper performance of the job.
After careful analysis of each job, job descriptions may be written out. These will give precise details of
each job as also the qualities and qualifications required to do it well. Generally, a job description would
give the following details:
(a) Name or title of the job, and its location
(b) Nature of duties and operations to be performed
 (c) Authority, responsibilities and accountability
(d) Necessary qualifications i.e. educations, skills, training, temperamental make-up, experience,
physical standards etc.
(e) Criteria by which job-holders performance is to be measured and evaluated.
A job description may not always include the qualifications necessary for the job-holder where it does not,
these are separately indicated in a job specification.

2. DIRECTION IN WHICH THE ENTERPRISE IS HEADED

Assessment of the direction of the enterprise will call for a careful analysis of the objectives and plans of
the enterprise for the immediate and distant future From this, it will become easy to have to broad idea
about the number and kinds of personnel that would be needed to accomplish the long-term and short-term
enterprise objectives and plans.
As for the objectives and plans decided by an enterprise, these are in a large measure determined by the
demand for goods or services offered by the enterprise. If the demand for its goods and services shows a
rising trend, it may plan to earn larger profits in which case it will need a larger number of personnel to
enable it to do so. But it is not as if the necessary number and kinds of personnel can be made to order.

3. FUTURE PERSONNEL DEMAND AND SUPPLY

Having assessed the current personnel situation and the future direction of the enterprise in terms of sales
and income for casts, estimates of future personnel requirement can easily be made. Naturally, any such
estimate will have to be based on ones experience and judgement as moderated by a study of the past
and present trends.
However, it needs to be noted that such estimates cannot be absolutely flawless, for the simple reason that
it is impossible to find an exact substitute for any worker. Also, that a worker accustomed to working in one
department cannot be made to adjust himself overnight to working in another department. There is yet
another problem. Forecasting of personnel requirements involves an estimate not only of the number of
personnel required, but also their types.

SOURCES OF INTERNAL SUPPLY

The sources of personnel may be-
(a) New recruitments
(b) Inter-departmental transfers of existing personnel or
(c) Existing personnel reporting back for work after the expiry of their leave period
Of these, the number of personnel to be newly recruitment can be easily determined. This is because the
process of recruitment is initiated by the enterprise itself, and it is not difficult to know what number and
types of personnel would be needed to accomplish its objectives at least in the short run.
SOURCES OF EXTERNAL SUPPLY
The first source of external supply of personnel, are schools and colleges from which students pass out
every year. Housewives, seeking part-time or full time employment to supplement the family income also
expand the supply of personnel. Students looking for part-time jobs also contribute to this supply. Last, but
not least, are those who, though employed, search for better and more lucrative or part-time jobs.

4. BALANCING THE DEMAND AND SUPPLY OF PERSONNEL

While an enterprise may not be in a position to do anything about any increase or decrease in external
personnel supply, it can certainly benefit by anticipating it and relating it to its own future requirements of
personnel. For example, if it anticipated shortage of an adequate number and kinds of personnel, it can
take steps to recruit suitable persons whether to meet its current or future needs. Similarly, it may plant
inter-departmental transfers of its personnel if the right number and kinds of personnel are not readily
available.
Whether the forecast indicates shortage or surplus of personnel, the basic purpose of personnel planning
is to ensure that there is always a proper balance between the numbers, skills and quality of personnel
employed by it.
 LESSON 5
FUNCTIONS OF PERSONNEL MANAGEMENT

Functions of personnel management

The functions of Personnel Management are:
(1) Managerial functions; and
(2) Operative functions.

Chart 2
Functions of Personnel Management

Inputs Planning Organizing Directing Controlling Output

Human Determinati Development Stimulation Assurance Goods an
(Managemen on of short- of the and that service
t & men) and to long- organisation motivation of directed needed by
Economic range plans structure organisatoin action is organisatoin
(materials, to according to personnel taking place customers.
machinery accomplish pre- according to according to
and money) organisation determined pre pre-
Resources objectives plans determined determined
interacting plans plans
with
Environment
al changes

Feedback of significant deviations from planned performance

1. MANAGERIAL FUNCTIONS
Management is a multi-purpose organ which has three jobs, two of which are directly related to personnel
managing a business, Meaning Managers and managing workers and the work.

Management is, thus personnel administration. It is the developed of the people and not the direction of
things. Managing people is the heart and essence of being a manager. Thus, a Personnel Manager is a
manager and as such he must perform the basic functions of management. He exercises authority and
leadership owes other personnel. His functions involve POSDCORB, i.e. planning, organizing, staffing,
directing, co-ordinating, reporting and budgeting the work of those who are entrusted with the performance
of operative functions. In other words, managers procure, process and peddle, find and employ resources,
develop services and find markets for their output.
 (a) Planning is a pre-determined course of action. According to Allen, It is a trap laid to capture the
future. Terry is of the view that planning is the foundation of most successful actions of any
enterprise. Planning is the determination of the plans, strategies, programmes, policies,
procedures and standards needs to accomplish the designed organisation objectives. In fact,
planning today avoids crises tomorrow. Planning is a hard job, for it involves the ability to think, to
predict, to analyze and to come to decisions, to control the actions of the personnel and to cope
with a complex, dynamic fluid environment.
(b) Organizing : After a course of action has been determined, an organisation should be established to
carry it out. According to J.C. Massie, An organisatoin is a structure, a framework and a process by
which a cooperative group of human beings allocates its tasks among its members, identifies
relationships and integrates its activities towards common objectives. This is done by designing the
structure of relationships among jobs, personnel and physical factors. An organisation is the
wedding of authority and responsibility because, in its essentials, it consists of the assignment of
specific functions to designated persons or departments with authority to have them carried out,
and their accountability to management for the results obtained.
(c) Directing (motivating, actuating or commanding) the subordinates at any level is a basic function of
the managerial personnel. According to McGregor, many managers would agree that the
effectiveness of their organisatoin would be at least doubled if they could discover how to tap the
unrealized potential present in their human resources. Directing is involved with getting persons
together and asking them (either through command or motivation) to work willingly and effectively
for the achievement of designed goals. Directing deals not only with the dissemination of order
within an organisation units and departments, but also with the acceptance and execution of these
orders by the employee. The decisions are taken by the top management, but only after
consultation with the personnel department.
(d) Coordinating and controlling coordinating refers to balancing timing and integrating activities in an
organisation to that a unity of action in pursuit of a common purpose is achieved. In the other words
of Terry, coordination deals with the task of blending efforts in order to ensure a successful
attainment of an objective. Co-ordination the management of personnel takes places at all levels
from the top management through to the supervisor and those for whom he is responsible.

Controlling is the act of checking, regulating and verifying whether everything occurs in conformity with the
plan that has been adopted the instructions issued and the principles established. It is greatly concerned
with actions and remedial actions. It is not just score keeping. It is not just plotting the course and getting
location reports; but rather it is steering the ship. It is through control that actions and operations are
adjusted to pre-determined standards and its basis is information in the hands of the managers.
Though all the above functions are performed at all levels of management the amount of time devoted to
each function varies for each management level. The top management performs planning functions more
than does the supervisory management. On the other hand, supervisors at the third rung of the
management pyramid devote more of their time to directing and controlling production.
 Management Functions & Managerial Levels

Percentage of
100
Job

Managerial Type of
Work

Plant Managers
Supervisor Departmental
Unit President
Managers
Managers Supervisor
Tendents Vice Board of
Foreman President Directors

Operating Management Middle Management Top Management

2. Operative Functions
The operative functions of personnel management are concerned with the activities specifically
dealing with procuring, developing, compensating and maintaining an efficient work force. These
functions are also known as service functions.
(a) The Procurement Function is concerned with the obtaining of a proper kind and number of
personnel necessary to accomplish an organizations goals. It deals with specifically with such
subjects as the determination of man power requirements, their recruitment selection and
placement (comprising activities to screen and hire personnel, including application forms,
psychological tests, interviews, medical check-up, reference calling, induction, follow-up,
transfers, lay-offs, discharge and separation, etc.
(b) The Development function is concerned with the personnel development of employees by
increasing their skill through training so that job performance is properly achieved. Drafting and
directing training programmes for all levels of employees, arranging for their on-the-job, office
and vestibule-training, holding seminars and conferences, providing for educational and
vocational counselling and appraising employee potential and performance are undertaken
under this function.
(c) The Compensating function is concerned with securing adequate and equitable remuneration
to personnel for their contribution to the attainment of organizational objectives. Functions
related to wage surveys, establishment of job classifications, job descriptions and job analysis,
merit rating, the establishment of wage rates and wage structure, wage plans and policies,
wage systems incentives and profit-sharing plans, etc. fall under this category.
(d) Integration function After the employee has been procured, his skill and ability developed and
monetary compensation determined, the most important, yet difficult of the Personnel
Management is to bring about an integration of human resources with organisation, and to
cope with inevitable conflicts that ensure, Integration is concerned with the attempt to effect a
reasonable reconciliation of individual,. Societal and organisation interests.
 (e) The Maintenance function deals with sustaining and improving the conditions that have been
established. Specific problems of maintaining the physical conditions of employees (health and
safety measures) and employee service programmes are the responsibility of the personnel
department
HUMAN RESOURCE PLANNING
Meaning and definitions of manpower planning:
Manpower is the primary resource without which other resources like money, material, etc. cannot be put to
use. Even a fully automatic unit such as an unmanned satellite requires manpower to executive it and
make further improvement. That is why man learnt the use of manpower much before he learnt to use
other resources.
Manpower planning is an important aspect of personnel management. It may be defined as the strategy for
the acquisition, utilization, improvement and retention of human resources of an enterprise. Manpower
planning is basically the process by which it is determined how an organisation should more from its
current manpower position to its desired manpower position.
Thus, manpower planning is the process by which an organisation ensures that it has the right number and
kind of people at right places at the right time, capable of effectively and efficiently completing the tasks
that will help the organisatoin to achieve its overall objectives. Manpower planning translates the
organizations objectives and plans into number of workers needed to meet these objectives. In simple
words, manpower planning is a strategy for procurement, development and allocations and utilization of an
organizations human resources.

CHARACTERISTICS OF MANPOWER PLANNING:

Some of the major characteristics of manpower planning are listed as under:
- It is an ongoing process
- It includes the planning and development of human resources
- It is not just forecasting demand and supply of human resources
- It is not a matter concerned with individual career planning and development.
- It is not a matter concerned with individual career planning and development.
- It is not just a planning for changing organizational structure.

OBJECTIVES OF MANPOWER PLANNING

The major objectives of manpower planning in an organisation are to:-
1. Ensure optimum use of human resources currently employed.
2. Avoid unbalances in the distribution and allocation of manpower.
3. Assess or forecast future skill requirements of the organizations overall objectives
4. Provide control measure to ensure availability of necessary resources when required.
5. Control the cost aspect of human resources
6. Formulate transfer and succession policy
SIGNIFICANCE OF MANPOWER PLANNING:
The significance of systematic and comprehensive manpower planning has been recognized by all
organizations. Earlier, the management of small organizations had the common belief that they could
always obtain the personnel it required whenever it needed.
Some of the major of significance of manpower planning in an organisation are discussed below:
1. Manpower planning is vital because it helps in determining the personnel needs of the organisation.
2. It enable the organisation to cope with changes in competitive forces markets, technology, product
etc. all of which generate changes in job contents, skill, demands number and type of personnel.
3. It is an essential component of strategic planning.
4. It helps in selection and development of employees as it ensures that adequate number of persons
are selected well in advance and developed for anticipating openings. This also ensures a smooth
working of the organisation.
5. It enables the organisation to produce personnel with necessary qualifications, skill, knowledge,
work experience and aptitude for work.
6. It helps in finalizing managerial succession plan as a part of the replacement process by providing
enough opportunity for identifying and developing managers to move up the corporate leader.
7. Suitable manpower planning helps to ascertain and identify the areas of critical shortages of skilled
employees and enable management to avoid breakdown in production process or under utilization
of plant capacity by taking timely corrective action.
8. It also helps to identify the surplus manpower if any in the organisation.

LIMITATIONS OF MANPOWER PLANNING:

Although there the several benefits and uses of manpower planning, yet it is not free from limitations.
Generally manpower plans suffers from inaccuracy as it is difficult to prepare long range forecast
accurately changes in economic conditions, technology, marketing conditions and labour force conditions
tends to make long range forecasts unreliable. However, there is greater danger in not forecasting at all.
STEPS IN MANPOWER PLANNING:
Broadly speaking, manpower planning in an organisation consists of the following major steps:
1. Assessment of current manpower requirement
2. Forecast of future manpower requirement
3. Drawing up recruitment plan
4. Designing training and development plan.

MANPOWER INVENTORY
This involves taking an inventory of the personnel to compare what exist in stock and what can be
expected in stock at future dates. This would indicate the shortfall in terms of organizational expansion
requirements. The inventory must be supplemented by appraisal of existing performance and assessment
of future potential to indicate training and development plans required to make the existing supply suitable
for future needs. The management must also try to develop in advance the talented employees to occupy
managerial positions in the future. It cannot rely upon finding talented manpower just when it is needed.
Current skill must be properly analyzed to draw employment and development programmes.
FORECAST OF FUTURE MANPOWER REQUIREMENT
The second step in manpower planning is to forecast or assess the manpower requirement in terms of
(quantity and quality) anticipating the future plans and programmes of the company and translate there into
talent and skill requirements. Basically manpower forecast is concerned with anticipating the number of
replacements required due to resignation, retirement, dealt, dismissal, transfer and promotion. Determining
the company manpower requirement involves two projections for each functional area.
1) The incremental number of positions needed as a result of growth.
2) Number of vacancies created by retirement and ruminations.
The projection or forecast of manpower requirement may be made by executive judgement, part trend,
work steady and productivity. In practice these approaches should be used to supplement each other so
that the degree of accuracy of forecast may be increased. It would also be desirable to prepare forecasts
based on alternative assumptions so that if one assumption fails, another may be tried. Flexibility is
essential to meet sudden and unanticipated changes.
DRAWING UP RECRUITMENT PLAN
A realistic recruitment plan for manpower is drawn by comparing present manpower resources with the
future requirement of manpower and ascertaining additional requirement of manpower. Thus, it entails
anticipating manpower problems by projecting the present manpower resources into future and comparing
these with the forecast of requirement to determining their adequacy both quantitatively and qualitatively.
DESIGNING TRAINING AND DEVELOPMENT PLANS
Concurrently with the recruitment plan, manpower training and development plan is designed. This is
aimed at conditioning the manpower acquisition to the organizations exacting requirements. Manpower
becomes a resource only when appropriate knowledge, skill and attitude are provided to transform them
into appropriate productive work force. This transformation is possible through training and development.
This plan is not only necessary for existing manpower but also for the future acquisition of manpower in the
plan period to achieve the manpower plan targets.
QUANTITATIVE AND QUALITATIVE ASPECTS OF MANPOWER PLANNING
Manpower planning problem in an organisation can be discussed keeping view its:-
i) Quantitative and (ii) Qualitative aspects.
QUANTITATIVE ASPECTS OF MANPOWER PLANNING (DEMAND ASPECTS)
This is concerned with determination of the total number of employees required in an organisatoin. For
proper assessment, the planner must have thorough knowledge of the companys future production
and sales plans because the demand for human resource should be estimating manpower requirement
in terms of the number and characteristics of employees. management experts have suggested various
methods to assess the number of employees required in an organisation. Some of these methods are
discussed below:
(i) Work Load Analysis
This is concerned with the total volume of work which may be anticipated on the basis of budgeted
production, sales and distribution, administration, research etc.
 (ii) Work Force Analysis
This involves detailed analysis of the existing workforce, rate of absenteeism and vacancies likely to be
caused by transfer and promotion, retirement, resignation etc.

(iii) Management Judgement Approach

It has been observed that majority of Small Scale Units do not have sound data base for manpower
information and job analysis. Such organizations resort to management judgement approach to
determine manpower requirement. Under this method, personnel executives who are well acquainted
with the workload, efficiency and ability of employees, think about the future workload and capabilities
of employees and then decide on the number and types of employees to be recruited.

(iv) Statistical and Mathematical Techniques

The above of analysis provide only a rough approximation of the number of employees required. These
techniques are suitable only for short range demand forecast. Long range personnel forecasting is
more amenable to statistical and mathematical techniques. This has been particularly true in recent
years as new mathematical techniques have been developed and high speed computers may be
rapidly analyze large amount of personnel planning data. Some of the important statistical and
mathematical tools for forecasting are discussed as under:
(a) Ratio and Trend Analysis
(b) Linear Regression
(c) Econometric Models

SUPPLY ASPECTS
This is concerned with the estimate of supply of manpower given the analysis of current resources, and
future availability. Here the personnel planner must consider both the external supply (employees available
for higher position in the organizations geographic work force) and the internal supply (organizations
current employees). External supply of personnel is important for two reasons. First he normal attention of
employees through voluntary turnover, retirement illness, death and discharge may require that the
organisatoin look to employment agencies, colleges and universities and other sources to replenish lost
personnel. Second, organizational growth the diversification require the use of external sources to obtain
additional growth and diversification require the use of external sources to obtain additional numbers and
types of employees. Planner must be Cognizant of available sources of employees.

Some of the import methods which are used to anticipate manpower supply are discussed below:
1. Markoy Analysis
2. Simulation
3. Renewal Analysis
4. Goal Programming
QUALITATIVE ASPECT OF MANPOWER PLANNING
In assess the quality of manpower required in the organisation, various attributes have to be taken into
account such as, qualification, experience, aptitude etc. of the employees required by the enterprise.
This calls for job analysis and design. Job analysis refers to the detailed and systematic study of all
elements of a job. Like task included in it, duties abilities, responsibilities working conditions skill and
knowledge required to perform it, and its relation to other jobs. According by Milkworch & Bondery, job
analysis is a systematic process of collecting daily and making certain judgement about al of the
important information related to the nature of a specific job. Results of job analysis serve as input for
many location resource activities. In the opinion of David A Decenzo and Stephan P. Robons, job
analysis is a systematic exploration of the activities within a job. It is the basic technical procedure, one
that is used to define the duties and responsibilities and accountabilities of a job. This analysis involves
compiling a detailed description of tasks, determining the relationship of job and examining the
knowledge, qualification or employment standard, accountabilities and other incumbent requirements.
In short we can say that job analysis indicates what activities and accountabilities a job entails. There is
no mystery about job analysis it is just an accurate recording of the activities involved. Thus job
analysis collect information about specific tasks or what a person does (A group of tasks performed by
one person makes up a position. Identical position make a job and broadly similar jobs combine into an
occupation).
JOB ANALYSIS AND JOB EVALUATION
MEANING OF JOB
A job may be defined as a position or a group of positions that are similar as regards the kind and content
of work. For a particular job, there may be only one position in an enterprise as, for example, general
manager or production manager. As against this there may be a number of positions to perform the same
job as, for example, foreman, clerk, salesman etc.
Inevitably, there are a number of jobs in each enterprise. It is therefore necessary to compare them vis--
vis duties and responsibilities, conditions of work element of risk and hazard and abilities and skills
required. Only then identical jobs can be grouped together and commonly designated.
JOB ANALYSIS
Job analysis deals with determining the characteristics of each job. What are the duties and responsibility
involved in the job. What is the nature of work condition under which it is performed? What is the element
of risk or hazard involved in its performance? Lastly, what are the employment conditions such as
remuneration, working hours, opportunities for advancement, associated with it?
Basically, there are three aspects to job analysis. They are (a) identification of each job in terms of duties
and responsibility, (b) determination of the nature of work and work conditions, and (c) determination of the
requirements as to abilities and skills that are prescribed for the persons holding it.
PROCESS OF ANALYSIS
First of all necessary and relevant information is collected in regard to each job. Such information can be
collected from various sources viz.
(a) Questionnaires completed by job holders
(b) Diaries maintained by job holders
(c) Inter views with job-holders, and
(d) Personal observation
ADVANTAGES OF JOB ANALYSIS
Job analysis offers several advantages. For example:
1. RECRUITMENT AND SELECTION OF PERSONNEL
It helps in setting out job specification (abilities and skills relevant to each job) and it can serve as
the basis of recruitment.

2. TRAINING
It helps in devising suitable training programmes. To be able to do a job a man must posses certain
skills and abilities. Either he already possesses there or acquires them through conscious effort. But
in case it is neither, be can be made to acquire from training.

3. JOB EVALUATION
A job cannot be properly evaluated unless its content is known. For this it is necessary to carry out
job analysis to know the skills required to perform each job, hazards involved in performing it, and
the work conditions under which it is to be performed.

4. EVALUATION OF PERFORMANCE
Job analysis provides the basis of objectives appraisal and control of performance. It makes it
possible to know how far an employee has been successful in accomplishing the tasks set for him.

5. PROMOTIONS, TRANSFERS, ETC.

Based on job analysis effective policies may be formulated in regard to promotions and transfers.

6. EMPLOYMENT GUIDANCE
Job description, which is carried out on the basis of job analysis, helps the aspirants in ascertaining
the jobs for which they have the necessary qualifications.

7. LABOUR RELATIONS
Job analysis serves as the basis for resolving disquiets relating to standards of performance
expected of workers.

JOB DESCRIPTION
Job description underlines the characteristics of each job. It serves as the basis of selection, promotion
of transfer of employees
Job description is based on job analysis. It sets out the job to be performed, the duties and
responsibilities associated with it, abilities, skills and training needed to perform it, and the working
conditions under which it is to be performed needed to problem it, and the working conditions under
which it is to be performed.
Job Description From for Store Keeper
Duties and Responsibilities: 1. Supervise subordinates
2. Issue stores items against
departmental requisitions.
3. Maintain orders for fresh suppliers
when necessary
4. Stock taking
5. Maintain records of issues of stores
6. Local purchases
7. Return defective materials to suppliers
8. Keep store neat and tidy
9. Operate station wagon and private
carrier when required
10. Operate station wagon and private
carrier when required
Accountable to: Factory Manager
Authority to command: 5 Store clerks, 12 Labourers

Briefly, job description generally provides information in regard to the following:

1. Identification of job, i.e. job-title, and place where it is to be performed
2. Statement of duties and responsibilities
3. Breakdown of operation to be performed and nature of hazards involved. Under this, information as
regards the time and hours of work, and extent of speed and accuracy in performance, is given.
Also, a mention is made of hazards involved in performing the work, such as physical and mental
strain, exposure to heat, moisture, dust, fumes, etc.
4. A brief description of the materials, tools and equipment required for performing the job.
5. Remuneration, i.e., description of the rate of wages, and allowances and method of payment as
also other benefits such as bonus, provided fund, gratuity, pension, leave rules, insurance and so
on.
6. Nature of experience and training required
7. Opportunities for advancement
8. Age minimum and maximum
9. Physical specifications, such as height, weight, eye-sight, hearing etc.
10. Sex whether either sex preferred or restricted
11. Proficiency in regarding and writing different languages
 12. Special qualities, i.e. appearance, manners, initiative, leadership, mental alertness, emotional
adjustment, capacity to mix up with people and so on.
It is not necessary to give information relating to all these points in each job description.

JOB DESCRIPTION
Job specification, which deals with the requirements sought in the candidate for a given job, is often a part
of job description itself. But sometimes a may be carried out separately.

Completed Job Specification From for Store Keeper

Should Most Should
Education- Bachelors degree in any discipline
Bachelors degree in Commerce
Attainments- Store keeping experience in any industry
Previous store keeping experience for 3 years
in textile industry
Intelligence-
Good common sense. Arrange common sense
Special Aptitudes-
Clear hand writing, good at simple arithmetic
Neat and orders way of working

Interests Practical
Disposition-
Friendly, helped and co-operative
Tactful in handling staff.
Honest and sincere
Physical
Good health
Good eye sight
Average physical strength
Age-
Minimum 25 22
Maximum 45 50

Job specification is based on jobs analysis . The emphasis here is on the minimum acceptable . it helps in
selection and training of personnel and also in carrying evaluation.
JOB EVALUATION
Job evaluation measures the worth of a job in terms of money. Its object is to ensure that a man is paid
according to the job done by him.
For example, when we say that the principal of a college deserves to be paid more than a lecturer, or
that a pilot ought to receive a fatter pay pack than a bus driver, the basis of our statement is the broad
comparison we make in out mids between the requirements and hazards involved in each job. Only on
evaluation, this is done on a more scientific and rational basis.
Job evaluation seeks to gdfg the maximum and redfgd requirements of each job. Then, on the basis of
relative requirements, were rate for each job is fixed.

METHODS OF JOB EVALUATION

1. Ranking System : Under it, the jobs are ranked in the order of levels of responsibilities and duties
or their importance. Wage rates for each job are then determined accordingly.
Though very simple, this method can be reliable only where there is wide similarity between the
jobs evaluated. Either the jobs should belong to the same class (e.g. machine operators and their
assistants) or to the same department (e.g. senior or junior clerks)

2. Classification method: In the case of this method, first of all, grades are defined for requirements
that are common to various jobs. The, on the basis of comparison between requirements as
regards each, jobs are placed in appropriate grades.
In Government departments, For example, personnel are classified into class one, class two, class
three and class four. Each class contains a wide variety of jobs and yet on the basis of
requirements in the case of each job, there is hardly any difference between them.

3. Points system: Under this method, requirements relevant to each job are properly analyzed and
qualified. For the sake of precision, requirements as regards a job are sub-divided into degrees.
Then for each degree, certain points are assigned.
the total number of points given to a job, determine its relative position in the job structure, the
points being assigned keeping in mind the nature of the job. For factory and office jobs, for example
there are different systems of point assignment.
The requirements as regards nay job may include items such as education, training, experience,
physical characteristics, duties, responsibilities and so on. Each of these items may be further sub-
divided for assignment of points. Education, for example, may be sub-divided into research degree,
masters degree, graduation, high school and so on. Thus, if a job requires a masters degree for its
holder, it may be given 40 points, for a bechelors degree it may be given 35 points, and so on. The
same method may be repeated in regard to each of the requirements, and the total of the points
allocated to the job may then be compared with those given to other jobs to determine its position in
the structure.
 4. Factor comparison: It is based on the point system. The difference is that here first certain key
jobs are chosen and they are allocated points for each of the factors present in them.
Based on this, wage rates for each of the key jobs are fixed. The point allocated and the wage rates
determined for the key jobs serve as the basis of referenced for gradation of the other jobs.

ADVANTAGES OF JOB EVALUATION

1. Objectivity: It is based on job analysis and hence the reward for a job is directly related to the job
content. There is little scope for applying subjective standards in assessing the worth of a job.
2. Reliability: It provides well-defined and systematic methods of measurement. For this reason, it is
unquestioningly accepted by both workers and management.

DISADVANTAGES
1. Uniformity in pay
Because job evaluation seeks to determine the worth of a job rather than the person occupying it, it
brings about uniformity in wages of all employees belonging to a particular category. For this reason
workers, particularly those who are above average, may get not view it favourably.

2. Lack of complete accuracy

It is difficult to determine with complete accuracy the relative worth of the different factors involved
in nay job, particularly so if the factors are of a highly technical nature.
3. Unrealistic
Job evaluation is based on the assumption that wage rates can be related to the worth of a given
job. It conveniently ignores the fact that conditions in the labour market have a decisive influence it
the determination of wages rates.

4. Complicated
The methods followed for carrying out job evaluation may not be sufficiently understand by workers.
In the event, they may get suspicious about the employers motives.

LESSON 6
 RECRUITMENT AND SELECTION PROCESS

RECRUITMENT
Recruitment forms the first stage in the process which continues with selection and ceases with the
placement of the candidate. It is the next step in the procurement function, the first being the man power
planning. Recruitment makes it possible to acquire the number and types of people necessary to ensure
the continue operation of the organisation. Recruiting is the discovering of potential applications for actual
or anticipate organizational vacancies. In other words, it is a linking activity bringing together those with
jobs and those seeking jobs.
Recruitment has been regarded as the most important function of personnel administration, because
unless the right type of people are hired, even the best plans, organisation charts and control systems
would not be much good. Flippo views recruitment both as positive and negative activity. He says, It is a
process of searching for prospective employees and stimulating and encouraging them to supply for jobs to
increase the hiring ratio, i.e. the number of applicants for a job. Selection, on the other hand tends to be
negative because it rejects a good member of those who apply, leaving only the best to be hired.

FACTORS AFFECTING RECRUITMENT

All organizations, whether large of small, do engage in recruiting activity, though not to the same extent.
This differs with
(i) the size of the organisation.
(ii) The employment conditions in the community where the organisation is located.
(iii) The effects of past recruiting efforts which show the organisations ability to locate and keep good
performing people;
(iv) Working conditions and salary and benefit package offered by the organisation which may
influence turnover and necessitate future recruiting;
(v) The rate of growth of organisation
(vi) The level of seasonality of operations and future expansion and production programmes, and
(vii)Cultural, economic and legal, etc.

CONSTRAINTS LIMIT THE FREEDOM OF MANAGER TO RECRUIT

1. The image of the organisation
2. The unattractive job
3. Integral organizational policies
4. Union requirements can also restrict recruiting sources.
5. Governments influences
STEPS ON RECRUITMENT PROCESS

Personnel Human Recruiting Needed Selecting Place New

Resources Planning Personal Qualified Employees on Jobs
Personnel

Developing Sources Search for Potential Evaluating

of Potential Employees Recruiting
Employees effectiveness

Internal sources Personnel Research Upgrading on same

position

Transferring to new
Job Posting job

Promoting to higher
responsibilities

External sources Employee referrals Evaluating for selection

Advertising

Scouting
RECRUITMENT POLICY
A recruitment policy in its broadest sense, involves a commitment by the employer to such general
principles as:

(1) To find and employ the best qualified persons for each job:
(2) To retain the best and more promising of those hired.
(3) To offer promising opportunities for life-time working careers; and
(4) To provide programmes and facilities for personnel growth on the job.

According to Yoder, the recruitment policy is concerned with quantity and qualifications (viz, and Q1 and
Q2) of manpower It establishes brad guides lines for the staffing process. Generally, the following factors
are involved in a recruitment policy.
1. To carefully observe the letter and spirit of the relevant public policy on hiring and, on the whole,
employment relationship.
2. To provide individual employees with the maximum of employment security, avoiding frequent lay-
off or lost time;
3. To provide each employee with an open road and encouragement in the continuing development of
his talents and skills.
4. To assure each employee of the organisatoin interest in his personal goals and employment
objectives.
5. To assure employees of fairness in all employment relationships, including promotions and
transfers.
6. To avoid cliques which may develop when several members of the same household or community
are employed in the organisatoin.
7. To provide employment in jobs which are engineered to meet the qualifications of handicapped
workers and minority and
8. To encourage one or more strong, effective, responsible trade unions among the employees.

PREREQUISITES OF A GOOD RECRUITMENT POLICY

The recruitment policy of an organisation must satisfy the following conditions.:
(1) It should be in conformity with its general personnel policies:-
(2) It would be flexible enough to meet the changing needs of an organisation.
(3) It should be so designed as to ensure employment opportunities for its employees on a long term
basis so that the goals of the organisation should be achievable and it should develop the
potentialities of employees.
(4) It should match the qualities of employees with the requirements of the work for which they are
employed, and
(5) It should highlight the necessity of establishing job analysis
 The advantages of centralization of recruitment and selection are:
(1) It reduces the administrative cost associated with selection by consolidating all activity in a
single office
(2) It relieves line officers of the details, involved in hiring workers, which is common under a
decentralized plan.
(3) It tends to make the selection of workers scientific
(4) It makes possible the development of a centralized manpower poor in a company;
(5) It provides a wider opportunity for placing an applicant in several departments of the company.
(6) It tends to reduce favoritism as a basis for selection.

This centralized department is generally known as the Employee office, or the Recruitment sections. The
staff personnel is attached to it. This enables specialists to concentrate upon the recruitment function, and
soon they became very efficient in the use of various recruitment techniques.
This office should be properly equipped with furniture. Its waiting room should be roomy, clean and well
ventilated, it should have lighting facilities and drinking water and it should be comfortable. This room
should also have a table or a counter so that candidate may fill in their application blanks conveniently. It is
desirable that personnel records be filled in a room accessible to the interviewer

This office is concerned with the following functions

(1) Establishing employment standards
(2) Making mutual contact with prospective employees
(3) Conducting final interview
(4) Testing
(5) Conducting physical examination
(6) Filling out necessary forms and records keeping
(7) Introducing the employee to his superior, and
(8) Following up the employee

SOURCES OF RECRUITMENT
Before an organization activity begins recruiting applicants, it should consider the most likely source of the
type of employee it needs. Some companies try to develop new sources, while most only try to tackle the
existing sources they have. These sources accordingly, may be termed as internal and external.

INTERNAL SOURCES
Internal sources are the most obvious sources. These include personnel already on the payroll of an
organisation, i.e. its present working coffee. Whenever any vacancy occurs, somebody from within the
organisation is upgraded, transferred , promoted or sometimes demoted. Thus source also in includes
personnel where once on the pay-roll of the company but who plan to return or whom the company would
like to re-hire, such as those on leave of absence those who quit voluntarily, or those on production lay-
offs.

Merit : The use of an internal source has some merits.

(1) It improves the morale of employees, for they are assured of the fact that they would be preferred
over outsiders when vacancies occur.
(2) The employer is in a better position to evaluate those presently employed than outside candidates.
This is because of the company maintains a record of the progress, experience and service of its
employees.
(3) It promotes royalty among the employees, for it gives them a sense of job security and
opportunities for advancement.
(4) As the persons in the employment of the company are fully aware of, and well acquainted with its
policies and know its operating procedures, they require little training, and the chances are that they
would stay longer in the employment of the organisatoin than a new outsider would.
(5) They are tried people and can, therefore, the relied upon
(6) It is less costly than going outside to recruit

Demerits: However, this system suffers from certain defects as well:

(1) It often leads to inbreeding, and discourages new blood from entering an organisation.
(2) There are possibilities that internal sources may dry-up and it may be difficult to find the requisite
personnel from within an organisation.
(3) Since the learner does not know more than the lecturer, no innovations worth the name can be
made. Therefore, on jobs which require original thinking (such as advertising, style, designing and
basic research), this practice is not followed.
(4) As promotion is based on seniority, the danger is that really capable hands may not be chosen. The
like and dislikes of the management may also play an important role in the selection of personnel

EXTERNAL SOURCES
These sources lie outside the organisation. They usually include:
(1) New entrants to the labour force, i.e., young, mostly inexperienced potential employees, the college
students;
(2) The unemployed with a wide range of skills and abilities.
(3) Retired experienced persons such as machanics, machinists, welders, accountants.
(4) Others not in the labour force, such as married women and persons from minority groups.
Merits:
(i) External sources provide the requisite type of personnel for an organisation, having skill, training
and education upto the required standard
 (ii) Since persons are recruited from a large market, the best selection can be made without any
distinctions of caste, sex or colour,
(iii) In the long run, this source proves economical because potential employment do not need extra
entraining for their jobs.

Demerits: However, this system suffers from what is called brain drain, especially when experienced
persons are raided or hunted by sister concerns.

SELECTION
MEANING
Selection of candidates begins after completion of the recruitment process. In other words, only after an
adequate number of applications have been secured through different sources of recruitment internal and
/ or external that the process of selection begins.
Selection involves a careful screening and testing of candidate who have put in their applications for a job
in the enterprise. This is necessary for 2 reasons; first, many of the applicants may not really be suitable for
employment in the enterprise; secondly, even where all applicants are duly qualified and experienced the
enterprise may not have adequate number of vacancies to accommodate all of them.

SELECTION PROCEDURE
Obviously, there can be no standard procedure to select different kinds of personnel. Selection procedure
differs from job to job, and from enterprises the enterprise.
In some cases, the selection procedure may be simple. Only applicants may have to be sent to the
supervisor or foreman, under whom the vacancy exists for approval by him. But in the case of important
positions, the selection procedure may be very complicated and time consunning.
Broadly, the selection procedure consists of several stages, important among which are as follows:
1. Receipt and Scrutiny of Applications
2. Preliminary Interview
3. Filling in of Blank Application Form
4. Tests
5. Interviews
6. Checking of References
7. Preliminary and Final Selection
8. Medical Examination
9. Placement
 Stages in the Selection Procedure

Physically unfit for unfavorable general impression

Unfavorable Test Performance

Unfavorable Second Impression

Unfavorable Personnel Data

Unfavorable Previous History

Reception of Applicants

Preliminary Interview

Application Forms

Tests

Interview

Investigation of Previous
History
Warning
List

Preliminary Selection in
Personnel Dept.

Nature Final Selection by

Decision Foreman or Supervisor

Physically
Medical Test
Unfit
Decision
Placement
 RECEIPT AND SCRUTINY OF APPLICATIONS
Every person who applies for a job in an enterprise may not possess the necessary qualifications or
experience for it candidates with insufficient qualifications or experience should therefore be eliminated
from the list of those who have to be called for preliminary interview
If such weeding out is not done, all applicants including those not having the necessary qualifications and
experience would have to be called for the preliminary interview. That would only mean waste of time and
money for both the enterprise and the candidates.
However, propriety demands that the applicants whose applications are not to be considered be informed
about the reasons for the same.

1. PRELIMINARY INTERVIEW
The object of a preliminary interview is to see whether the applicant appears to be physically and mentally
suitable for the job. Questions put to a candidate during such an interview are of a general and definitive
nature, mostly dealing with his qualifications, experience, interests, age residence etc. some employees do
not even do this. They call the candidates only to seen and size them up. For this reason preliminary
interview of a candidate does not take much time.
Candidates who pass the preliminary interview are asked to fill up a blank application form especially
designed to elicit the requisite information about the candidate.

2. BLANK APPLICATIONS FORMS

There are different application forms for different jobs, for the simple reason that different qualifications and
skills are required for different jobs. But to serve the purpose for which it is meant an application forms
should conform to the following requirements.
1. Brevity
2. Relevance

ADVANTAGES
(1) Instant test device
(2) And to shy and slow candidates
(3) Aid to building confidence among candidates
(4) Basis to the main interview
(5) And to preparation of waiting list
3. TESTS
Tests serves as an important device in the process of selection. These are aimed at measuring such skills
and abilities in a worker which could help him in performing the job assigned to him based on his
competence Tests may be of two types, viz.,
(a) Proficiency tests; and
(b) Aptitude tests
Proficiency tests seek to measure the skills and abilities which the candidate already possesses at the time
of the tests. Trade tests or Achievement tests are examples of proficiency tests. They determine whether
the claims made by the candidate about his skills and abilities are borne out by his actual rest
performance.
Aptitude tests measure the skills and abilities which the candidate apparently has the potential to develop
later. In other words, these rests assess his potential for performing a certain job in future. The main aim
here is to see if he has the capacity and proper bent of mind to acquire the necessary abilities and skills to
handle his job well. Personality tests and interests tests are some of the examples of aptitude tests.

Kind of Tests

Proficiency Test Aptitude Tests

Trade or Dexterity Intelligence Personality, Movement Interest

Achievement Tests Character Tests Tests
Tests or Attitude
Tess

PROFICIENCY TESTS
1. Trade or Achievement Tests: They aim at measuring the knowledge and proficiency which have
already been achieved by a candidate in his field.
2. Dexterity Tests: The object of these tests is to see how quickly and efficiently a candidate uses his
hands and fingers to perform the assigned job.

APTITUDE TESTS
1. Intelligence Tests: They usually consists of a long list of questions to be answered and problems
to be solved within a specified time. The number of questions answered correctly within a specified
time indicates the candidates IQ (Intelligence Quotient)
2. Personality, Character or Attitude Tests : They measure the non-intellectual traits of a candidate
such as his ability to mix up with people, interact with them positively and to motivate his colleagues
and subordinates.
Questions to test a candidate on their count may be as follows: If you see a theif running away a ladys
purse, would you
(a) Chase the thief?
(b) Shout for help?
(c) Look the other way? or
(d) Advise the lady not to carry a purse in future?
 3. Movement Tests: They seek to measure the speed and precision of movement in a candidate.
4. Interest Tests: The object of these tests is to measure a candidates interest in a particular kind of
work. On the basis of an interest test, it becomes easy to assign to each person the job for which
he has the greatest liking so that he derives maximum job satisfaction and is able to contribute his
utmost to the enterprise.
Characteristics of a Good Test
1. Relevance
2. Consistency
3. Suitability
4. Standardization
Advantages
1. Assessment of suitability of candidates
2. Verification of facts
3. Objective assessment
4. Establishing of standards
Disadvantages
1. Unreliable
2. Liable to abuse
3. Unfair to some
4. Fear of exposure

5. Interviews
An interview is a formal consultation to evaluate the aptitude, training etc., of a prospective employee. It is
a face to face, observational and personal appraisal method to evaluate a candidate for a job. In any
interview, the interviewer is in a dominant position. For if both the interviewer and the interviewee have the
same status and role, it will be more of a meeting, rather than an interview.

In any selection process, there are two kinds of interviews- preliminary & final. Preliminary interview, as
already discussed, is in the nature of weeding out those candidates who, for reasons of ill-health, old age,
lack of required qualifications, training, or experience, are unsuitable for employment.

As for the final interview, it is generally held in two stages. First, an official of the personnel department
makes a through and comprehensive appraisal of the candidates those emerging successfully from this are
sent to the line (functional) department which had originally made the requisition for additional hands.
Where final interview is so divided in 2 stages, selection of a candidate is made after he has successfully
cleared the second stage.
KINDS OF INTERVIEW
1. Direct Interview
2. Indirect Interview
3. Patterned Interview
4. Stress Interview
5. Systematic, In-depth Interview
6. Board or Panel Interview
7. Group Interview

PROCEDURE FOR AN INTERVIEW

To make it effective, an interview should be properly planned and effectively conducted. Generally, the
following steps are followed to this end.

1. Review of background information: Before proceeding to interview a candidate, it is advisable to

collect and co-relate all relevant information about him as also about the job for which he is to be
interviewed.
2. Preparation of question plan: The next thing is to prepare a question plan, particularly if the
interviewer is not sufficiently experienced. As a question is put to the candidate and answered by
him, it should be cross-marked and then the next question should be taken up and so on.
3. Putting the candidate to ease : For most candidates, undergoing an interview means
considerable mental and emotional strain. But display of proper understanding and sympathy on
the part of the interviewer may considerably relieve such tension.
To this end, the interview should be strictly a privet affair where no one other than the interviewer
and the candidate should be present. Also, the candidate should be provided all necessary facilities
and comforts so as to put him at ease with himself. Moreover, the interviewer should patiently listen
to the answers given by the candidate and not pose himself as a superior being causing
interruptions every now and then, or raising his eye-brows or pouting his lips every time the
candidate falters or fumbles.
4. Drawing out the best in the candidate: Different candidates react differently to questions put to them
during an interview. It is, therefore, for the interviewer to decide how best to tackle each candidate
so that he is enable to give out the best in him.
5. Concluding the interview: After the interview is over and the candidate has left the room, the
interviewer should quickly glance through his notes and bring to mind his impressions about the
candidate so as to make a provisional assessment of his performance. Only after this the next
candidate should be called in.
6. CHECKING REFERENCES
A candidate is applying for a job in an enterprise is usually asked to provide some reference, e.g. names
of persons to whom inquires as to his educational background, skills experience, character or ability, could
be addressed. A letter of recommendation or statement of the qualifications and qualities of the candidate
given by someone familiar to him, is also called a reference.
 7. PRELIMINARY AND FINAL SELECTION
Up to the stage of checking of reference, the preliminary selection process is handled by staff executives.
From there onwards, the line management takes over. Because the requisition for additional employers is
made by line executives and because it is their responsibility to order and control performance of then
subordinates, it is only proper that they should also have the right to make the final selection of their
subordinates.
If the line managers concerned is a supervisor or a foreman, he may select an employee after assessing
his one the job performance. To this end, he may give the employee on the job test. If an
employees performance is not up to the mark, he may be kept as an apprentice or probationer for some
time. If he is found unsuitable for one job, he may be sent over to another and, if he is unfit there too, to yet
another. But normally no employees is rejected at this stage.

8. MEDICAL EXAMINATION
For the jobs that prescribe certain physical standards as to height, weight, eyesight, hearing, etc. a medical
check-up prior to the placement of the candidate becomes necessary. Selection in the armed forces or civil
services, for example, is subject to the candidate clearing his medical examination.

In the most of the private concerns too, candidates otherwise found suitable are required to face a medical
test.
But it needs to be remembered that medical examination is an aid to selecting employees who, besides
fulfilling the requirements as to abilities and skills, also posses necessary physical characteristics. In other
words, these should not be used to keep out certain individuals.

9. PLACEMENT AND ORIENTATION

Even when a person has been finally selected for a job, the curtain does not come down on the selection
process. The last act in the play still remains: that of placement of the person into his new job and of his
orientation to the organizational environment.

For this purpose, it is necessary to give the new man a copy of the rules policies and procedures to be
followed by him. Also, he should be provided with complete description of his job.
This is not all, the new employee should also be told about his authority and responsibility. Who shall be
his immediate and ultimate boss? Who are the people whom he can command? And so on.

Further, if the enterprise is big enough, the new employee could feel lost in the midst of his co-workers
most of whom may be strangers to him. Also, he may not know much about the enterprise or his superiors
and subordinates. Sometimes even location of work place, canteen, lavatory, or exit gate, may create
problems for him.
To overcome such problems faced by new employees, most enterprises have formal orientation
programmes. Under these, new employees are taken round the offices and plant, provided literature giving
the necessary information about the enterprise, and given lecturers of shown films to add to their
knowledge about the activities and schemes undertaken by the enterprise. In some enterprise, all this is
done informally, by attaching new employees to their senior colleagues for briefing on all such matters.

But whether this is done formally or informally, correct placement and orientation of a new employee helps
him in getting acquainted with the enterprise in a smooth manner.
 LESSON 7
TRAINING AND DEVELOPMENT
EMPLOYEE TRAINING
INTRODUCTION
Every organisation needs to have trained and experienced people to perform the activities that have to be
done. If the current or potential job occupant can meet this requirement, training is not important. But when
this is not the case, it is necessary to raise the skill levels and increase the versatility and adaptability of
employees.

THREE TERMS: TRAINING, DEVELOPMENT AND EDUCATION

Training
Training is a process of learning a sequence of programmed behaviour. It is application of knowledge. It
gives people an awareness of the rules, and procedures to guide their behaviour. It attempts to improve
their performance on the current job or prepare them for an intended job.

Development
Development is a related process. It covers not only those activities which improve job performance but
also those which bring about growth of the personality; help individuals in the progress towards maturity
and actualization of their potential capacities so that they become not only good employees but better men
and women. In organizational terms, it is intended to equip persons to earn promotion and hold greater
responsibility. Training a person for a bigger and higher job is development. And this may well include not
only imparting specific skills and knowledge but also including personality and mental attitudes. In this
sense, development is not much different from education.

Education
Education is the understanding and interpretation of knowledge. It does not provide definitive answers, but
rather it develops a logical and rational mind that can determine relationships among the pertinent
variables and thereby understand phenomena. Education must impart qualities of mind and character, and
understanding of basic principles and develop the capabilities of analysis, synthesis and objectivity.
Usually, education is outside the scope or an organizations functions. It involves a range of skills and
expertise which can be provided only by education institutions. An organisatoin can and does make use of
such institutions in order to support and supplement its internal training and development efforts.

DISTINCTION BETWEEN TRAINING AND DEVELOPMENT

Training is short-term process utilizing a systematic and organized procedure by which non-managerial
personnel learn technical knowledge and skills for a definite purpose.

Development is a long-term educational process utilizing a systematic and organized procedure by which
managerial personnel learn conceptual and theoretical knowledge for general purpose.
Training refers only to instruction in technical and mechanical operations, while development refers to
philosophical and theoretical educational concepts. Training is designed for non-managers, while
development involves managerial personnel. In the words of Campbell, training courses are typically
designed for a short-term stated set purpose, such as the operation of some piece(s) of machinery, while
development involves a broader education for long term purposes.

Training and development differ in four ways.

(a) What is learned,

(b) Who is learning;
(c) Why such learning takes place; and
(d) When learning occurs

The difference may be stated thus:

Learning Dimensions Training Development
Who? Non Managerial Personnel Managerial Personnel
What? Technical and Mechanical Theoretical Conceptual Ideas
Operations
Why? Specific Job Related Purpose General Knowledge
When? Short-term Long-term

BASIC PURPOSES OF TRAINING

1. To increase productivity
2. To improve quality
3. To help a company fulfill its personnel needs
4. To improve organizational climate
5. To improve health and safety
6. Obsolescence prevention
7. Personal Growth

It may be observed that the need for training arises from more than one reason.
1. An increased use of technology in production
2. Labour turnover arising from normal separations due to death or physical incapability, for accidents,
disease, super-annuation, voluntary retirement, promotion within the organisation and charge on
occupation or job.
3. Need for additional hands to cope with an increased production of goods and services
 4. Employment of inexperienced, new or badly labour requires detailed instruction for an effective
performance of a job.
5. Old employees need refresher training to enable them to keep abreast of the changing methods,
techniques and use of sophisticated tools and equipment.
6. Need for enabling employees to do work in a more effective way, to reduce learning time, reduce
supervision time, reduce waste and spoilage of raw material and produce quality goods and
develop their potential.
7. Need for reducing grievances and minimizing accident rates
8. Need for maintaining the validity and minimizing accident rates and raising the morale of its
employees

STEPS IN TRAINING PROGRAMMES

Training programmes are a costly affair, and a time consuming process. Therefore, they need to be drafted
very carefully. Usually in the organisatoin of training programmes, the following steps are considered
necessary.

1. Discovering or identifying the training needs

2. Getting ready for the job.
3. Preparation 0f the learner
4. Presentation of operations and knowledge
5. Performance try-out
6. Follow up and Evaluation of the programme

1. DISCOVERING OR IDENTIFYING TRAINING NEEDS

A training programme should be established only when it is felt that it would assist in the solution of specific
operational problems. The most important step in the first place is to make a thorough analysis of the entire
organisatoin, its operations and man power resources available in order to find out the touble spots where
training may be needed. It should, however, be noted that training is not a cure-all. For example, if the
efficiency of an employee is low, or he cannot get the job done, it may be due to faulty raw materials and
equipment or not getting their timely supplies or a defective engineering design or uncongenial work
environment or low wages or tax supervision. If that is the case these problems should be rectified.

2. GETTING READY FOR THE JOB

Under this step, it is to be decided who is to be trained the newcomer or the older employee, or the
supervisory staff, or all of them selected from different departments. The trainer has to be prepared for the
job for he is the key figure in the entire programme. This calls for a decision on.

These have been discussed, in detail, elsewhere in this chapter under the headings. Support material for
training. Training period, Training for different employees; and Training Methods.
 3. PREPARATION OF THE LEARNER
This step consists
(i) In putting the learner at ease (so that he does not feel nervous because of the fact he is on
a new job.)
(ii) In stating the importance and ingredients of the job, and its relationship to work flow
(iii) In explaining why he is being taught
(iv) In creating interest and encouraging questions, finding out what the learner already knows
about his job or other jobs
(v) In explaining the why of the whole job and relating it to some job the worker already
knows.
(vi) In placing the leaner as close to his normal working position as possible; and
(vii) In familiarizing with the equipment, materials, tools and trade terms.

4. PRESENTATION OF OPERATIONS AND KNOWLEDGE

This is the most important step in a training programme. The training should clearly tell, show, illustrate and
question in order to put over the new knowledge and operations. The learner should be told of the
sequence of the entire job, and why each step in its performance is necessary. Instructions should be given
clearly, completely and patiently, there should be an emphasis on key points and one point should be
explained at a time. For this purpose, the trainer should demonstrate or make use of audio visual aids
and should ask the trainee to repeat the operations. He should also be encouraged to ask questions in
order to indicate that he really knows and understands the job.

5. PERFORMANCE TRY OUT

Under this, the trainee is asked to go through the job several times slowly, explaining him each step.
Mistakes are corrected, and if necessary, some complicated steps are done for the trainee the first time.
Then the trainee is asked to do the job, gradually building up skill and speed. As soon as the trainee
demonstrates that he can do the job in a right way; he is put on his own, but not abonded.

The trainee is then tested and the effectiveness of the training programme evaluated. This is usually done
by;

a) Giving written or oral tests to trainees to ascertain how far they have learnt the techniques and
principles taught to them and the sources obtained by them.
b) Trainees on the job itself and administering performance them.
 c) Out individuals or a group reaction to the training programme while it is in progress and getting
them to fill up evaluation sheets
d) Arranging structured interviews with the participants or sending them questionnaires by mail.
e) Eliciting the opinion or judgement of the top management about the trainees performance.
f) Comparing the results obtained after the training with those secured before the training programme
in order to find out whether any material change his taken place in attitude, opinion, in the quality of
output, in the reduction in scrap, breakage and the supplies used and in overhead costs.
g) Study of profiles and charts of career development of the participants and related assignment
techniques.

Through one or a combination of these devices, the validity of training programmes may be ascertained. If
there are nay errors or weaknesses they should be corrected and instruction repeated, if necessary, till the
trainer knows that the trainee has learnt whatever has been imparted to him.

6. FOLLOW-UP
This step is undertaken with a view to testing the effectiveness of training efforts. This consists in:

a) Putting a trainee on his own

b) Checking frequently to be sure that he has followed instruction; and
c) Tapering off extra supervision and close follow up until he is qualified to work with supervision.

It is worth remembering that if the learner hasnt learnt, the teacher hasnt taught.

TRAINING METHODS/TECHNIQUES
The forms and types of employee training methods are inter-related. It is difficult, if not impossible, to say
which of the methods or combination of methods is more useful than the other. In fact, methods are
multifaceted in scope and dimension, and each is suitable for a particular situation. The best technique for
one situation may not be best for different groups or tasks. Care must be used in adapting the technique /
method to the learner and the job. An effective training technique generally fulfills these objectives,
provides motivation
On the Job to the traineeDemonstration
to improve job performance, develop a willingness to change, provide for
and
the trainees active participation in the learning
examples process, Apprenticeship
provide a knowledge of results about attempts to
improve and permit practice where appropriate. Chart 12.2 gives the technique mostly used for training of
employees.
Vestibule Stimulation Classroom
Methods
Chart 12.2
Lectures
Conference Classification of Training Methods

Case Study Other Training

Role Playing Method

Programmed
instruction Associations Audio Visual
Aids
ON-THE-JOB-TRAINING (OJT)
Virtually every employee, from the clerk to company president, gets some on the job training, when
he joints a firm. Then why William Traely calls it the most common, the most widely used and accepted,
and the most necessary method of training employees in the skills essential for acceptable for job
performance.

JOB INSTRUCTION TRAINING (JIT)

This method is very popular in the states for preparing supervisors to train operatives. The JIT method
requires skilled trainers, extensive job analysis, training schedules, and prior assignment of the trainees
job knowledge. This method is also known as training through step-by-step learning. It involves listing all
necessary steps in the job, each in proper sequence. These steps shows what is to be done. Along side
each step is also listed a corresponding key point which show how it is to be done and why.

CLASS ROOM OR OFF THE JOB METHODS

Classroom or off-the-job methods:
Off the job training simply means that training is not a part of everyday job activity. The actual location
may be in the company classrooms or in the places which are owned by the company or in universities or
associations which have no connection with the company.

These methods consist of:

1. Lectures
2. Conferences
3. Group Discussions
4. Case Studies
5. Role-playing
6. Programme Instruction
7. T-Group Training

1. LECTURES (OR CLASSROOM INSTRUCTION)

Lectures are regarded as one of the most simple ways of imparting knowledge to the trainees, especially
when facts, concepts or principles, attitudes, theories and problem-solving abilities are to be taught.
Lectures are formal organized talks by the training specialist, the formal superior or other individual specific
topics.

2. THE CONFERENCE METHOD

In this method, the participating individuals Confer to discuss points of common interest to each other. A
conference is basic to most participate group-centred methods of development. It is a formal meeting,
conducted in accordance with an organized plan in which the leader seeks to develop knowledge and
understanding by obtaining a considerable amount of oral participation of the trainees. It lays emphasis on
small group discussions, on organized subject matter, and on the active participation of the members
involved. Learning is facilitated by building up on the ideas contributed by the conferees.

3. SEMINAR OR TEAM DISCUSSION

This is an established method of training. A seminar is conducted in many ways.

EXECUTIVE DEVELOPMENT
All those persons who have authority over others are responsible for their activities and for the operation of
an enterprise are manages. In a business organisation, the co-ordination and direction of the efforts of
others is a major part of the management job. The manager has to deal not only with the staff but also with
others outside his own group, and has a decided influence on the organisatoin. In any organisatoin each
supervisor, foreman, executive is a manager in the area of his responsibility. Even the corporate chairman,
departmental head, personnel administrator, planner or coordinator is, in fact, a manager, although many of
them do not supervise others but are on the Board of Management. The titles of managers are not
standardized, but in a broad sense, all supervisors foreman executives and administrators are managers.
These terms are used interchangeably.

MANAGERIAL FUNCTIONS
Managerial functions consist of three key tasks viz.
1. The maintenance and operation of the organizational communication with a view to translating the
broad organizational goals into detailed working purposes and providing feedback on progress on
the problems of achievement.
2. The maintenance of the viability of an organisation.
3. The maintenance of faith in the superiority and desirability of achieving the organizational aims

For the discharge of these functions, it is essential and appropriate that men with certain qualities are
appointed. These qualities may be broadly identified as:
a) Domination by organizational personality, i.e. summer or personal predilections and desires while
executing organizational action.
b) Adherence to corporate morality and code of conduct in official actions under conditions of powerful
contrary images i.e. a high sense of responsibility.
c) Possession of general abilities such as persistence and determination, flexibility of mind and in
leadership.
d) Specialized knowledge and ability which are pertinent to a particular vocation or discipline.
CHARACTERISTICS OF MANAGERS
The management development process would be better understood if the main characteristics of
managers are noted. The successful manager in a large firm has the following characteristics.

(i) He moves rapidly form job to job. It now take 20 years on the average to president, during which
time there are seven geographical moves. 11 positional ones, and countless numbers of special
and project assignments. More than before, the successful managers career may include moving
from one company to another.
(ii) He is flexible, realistic and sensitive to the complexities of his work environment. Compared with
less successful managers, he is both challenged by, and comfortable in, situations filled with high
risks and ambiguity.
(iii) He earns his spurs by handling critical assignments, which are more important than routine work
done well.
(iv) Very often, he has a sponsor, someone from the higher management who is impressed by his
abilities, finds him useful to have around, and who looks after his interests. It helps if the sponsor is
himself moving up rapidly.
(v) He engages in anticipatory socialization at each stage be copies the values of those who are a
step above him.
(vi) He is not necessarily an organisation conformist. High level managers tend to be more, inner
directed and less other directed and less concerned with pleasing others than are those at lower
levels.

Executive or Management development activities are used inter-changeably. They are that part of the
enterprise function which aim at full development of managers at whatever level. Executive development is
a systematic process of training and growth by which managerial personnel gain and apply skill,
knowledge, attitude and insights to manage the work in their organizations effectively and efficiently. In
other words, Management development by which managerial personnel learn conceptual and theoretical
knowledge for general purposes. These purposes concern (i) productivity, (ii) quality, (iii) Human resources
planning, (iv) morale, (v) indirect compensation, (vi) health and safety, (vii) obsolescence prevention and
(viii) personnel growth.

PURPOSE AND OBJECTIVE OF MANAGEMENT DEVELOPMENT

Executive development is an attempt at improving an individuals managerial effectiveness through a
planned and deliberate process of learning. For an individual this means a change through a process of
planned learning. This should be the common and significant aim of development attempts from the point
of view of the trainer and the trainee in an organizational setting.

The change in the individual must take place in those crucial areas which can be considered as output
variables.

(i) Knowledge change

 (ii) Attitude change
(iii) Behaviour change
(iv) Performance change; and
(v) End-operational results (the last two changes being the result of the first three changes)

The success of development effort, to be marked as effective depends upon the following inputs:
(i) Trainees personal characteristics such as his intelligence and motivation to learn;
(ii) His actual learning efforts.

These two variables are influenced by (i) Formal Organisation, (ii) Leadership Climate, and (iii) Cultural
factors, such as attitudes and norms of the small group of which an individual is a member.

The organizational aims of management development are to secure the following valuable end-results

1. Improvement in technical performance

2. Improvement in supervision and leadership at each level
3. Improvement in inter-departments co-operation
4. Highlighting an individuals weakness.
5. Attracting good men,
6. Facilitating sound Promotion from within Policies and practices
7. Ensuring that the qualifications of key personnel become better known
8. Creating reserves in management ranks;
9. Making an organisation more flexible by an increased versatility of its members;
10. Improving organizational structure;
11. Stimulating junior executives to do better work
12. Keeping the company abreast of technical and economic conditions and
13. Broadening key men in the middle cadre.

In sum, management development aims at securing management improvement in the short-run.

The department of Industrial Administration and Business Management. Delhi University, Delhi is of the
view that management objectives should be.

(i) to create an understanding of the methods and problems of management.

(ii) to enable candidates to understand the problems of a business organisation in so far as they
arise out of its policies and system of control; and
 (iii) to indicate how to apply to practical problems the knowledge of the physical and social aspects
of business problems and management.

On the basis of the survey undertaken by M. N. Basavaraj the objectives of management development
are:
(i) to develop manages to perform better on their present assignments,
(ii) to prepare them for higher assignments;
(iii) to provide a steady source of competent persons at all levels to meet organizational needs;
(iv) to help them grow fast;
(v) to help them grow fast;
(vi) to prevent obsolescence of managers;
(vii) to replace elderly executives, who have risen from the ranks, by highly competent and
academically qualified professional and
(viii) to create conditions and a climate which contribute to the growth process.

EXECUTIVE DEVELOPMENT PROCESS

According to Dooher and Marquis, the stages involved in a management development programme are:
1) organizational planning to determine the companys present and future needs,
2) programme targeting to focus the companys efforts on the most pertinent areas;
3) ascertaining key positions requirements to stress the basic requirement of particular managerial
positions.
4) Managerial appraisal, to evaluate periodically the abilities and performance of individuals with a
view to identifying managers showing a promise of further development and meeting their training
needs;
5) Replacement of skills inventories to indicate persons qualified for managerial replacements;
6) Planning individual development programmes, to provide specific development programmes for
promising managers, and
7) Appraising existing programmes to ascertain areas of improvement to be incorporated in future
programmes.

Since the object of management development is to influence and modify the behaviour of the mangers in
operation, it is necessary that in framing a management development programme for specified managerial
group, the following points should be involved.

(i) Identify the pattern of behaviour at which the programme is aimed at which it seeks to
influence and modify
(ii) Identify the causes the impulse (internal and external) inter se horizontally up and down the
enterprise which blegad to give rise to the pattern of behaviour.
 (iii) Identify the nature of the exposure the impulses that must be introduced into the system
through the development programme which will touch the springs of motives and responses
modifying the behaviour in the desired direction.
(iv) The programme must take care to throw impulses into the system in a manner that
generates the urge to behaviour changes from within the trainee manager by the process of
evolving rather than an imposition from outside components or ingredients of management
development programme.

The essential components or steps of a comprehensive management development programme are

discussed below under the following heads:
(i) Looking at organizations objectives;
(ii) Ascertaining development needs;
(iii) Appraisal of present management talents;
(iv) Preparation of manpower inventory;
(v) Planning of individual development programming;
(vi) Establishment of training and development programmes;
(vii) Programme evaluation

Diagrammatically the model for developing executives may be shown as in the which follows:

Setting Establishing Determining Conducting

Development Parameters to Development Needs Development
Objectives Development including Who needs Programmes
Developing? What
needs Developing?

Appraising and Evaluating

Effectiveness of
Development activities

Model for Developing Executives

COURSES FOR MANAGEMENT DEVELOPMENT

Although foreman, department heads, plant mangers, and vice-presidents are all members of
management, the nature of their duties and responsibilities differ greatly. There are certain areas in which
development courses may be regarded as essential for all levels of management (such courses as on the
company, on management principles and techniques on economic, social and political environment, on
personal skills and human relations.)

However, certain areas are more appropriate for one level than another. For example: foreman are not
directly involved in the economic, social and political environment, of a corporation, but the executives are.
Further, in some areas, not only the content but also the depth of knowledge and skill varies with the
personnel involved.

Courses for members of the middle management contain elements of both top and lower level
management programmes. Middle level managers however, devote a considerable time to human relations
and personnel management principles because these re essential at all levels of management. They
should have a solid grounding in such management techniques as cost analysis and control data
processing. Production planning and control, data processing, production planning and control, wage and
salary administration, work study PERT / CPM, Value engineering etc.

Courses for first level supervisors concentrate upon the technical processes of the business, human
relations and personal skills for they are immediately practicable and are closely related to a supervisors
day-to-day job. According to Prof. Beach the subject matter of a course for management development may
comprise.

I. COMPANY OR ORGANISATION
(i) Objectives and philosophy
(ii) Policies, procedures and practices
(iii) Products and services
(iv) Organizational structure and organisation dynamics
(v) Plant facilities
(vi) Financial aspects (investment, planning and control, capital budgeting)
(vii) Labour management and non-management relations (industrial relations, human relations
and personnel administration)

II. MANAGEMENT TECHNIQUES AND PRINCIPLES

(i) Organisatoin principles
(ii) Financing, planning and management
(iii) Management and administrative principles and practices
(iv) Production planning and control
(v) Methods analysis, work assignment, work study, materials handling, value engineering
(vi) Cost analysis and control
(vii) Statistics, Management information system, computer applications
 (viii) Operations research and data processing
(ix) Marketing management, marketing research
(x) Decision making.

III. Man relations

(i) Understanding
(ii) Motivation
(iii) Group dynamics
(iv) Authority concepts
(v) Attitudes, training and development
(vi) Leadership
(vii) Introducing changes
(viii) Participation programmes
(ix) Supervisory responsibilities
(x) Selection methods and procedures
(xi) Job evaluation and performance appraisal
(xii) Communication
(xiii) Counselling and suggestion schemes
(xiv) Complaints and grievances
(xv) Discipline
(xvi) Labour economics
(xvii) Collective bargaining
(xviii) Industrial relations.

IV. TECHNICAL KNOWLEDGE AND SKILLS

(i) Adequate understanding or technology, products process

(ii) Linear programming
(iii) PERT / CPM
(iv) Computer technology
(v) Basic mathematics
(vi) Materials handling
(vii) Inventory control
 V. ECONOMIC, SOCIAL AND POLITICAL ENVIRONMENT
(i) Business
(ii) Economic system
(iii) Relations with the state
(iv) Community relations
(v) Social responsibilities of the corporations and business
(vi) Legal frame work of business
(vii) Political systems

VI. PERSONNEL SKILLS

(i) Speaking
(ii) Report writing
(iii) Conference leadership
(iv) Learning through listening
(v) Reading improvement

REVIEW QUESTIONS
1. Explain and distinguish between the concepts of Employee Training and Management or Executive
Development. Analyze the main ingredients of and guidelines for an appropriate training and
development policy in a modern industrial or business organisation.
2. Point out clearly the need importance and objectives of manpower / human resource development
with reference to Indian conditions
3. On what principles should be training / development programme be built? Why should it be
desirable to follow relevant principles of learning concept and theory in the operation of an
employee training executive development programme?
4. Outline the basic steps in the implementation of the training development programme in an
organisation. How would you evaluate the effectiveness of a training / development programmes.
5. Analyze the nature, types and scope of training and development programme in a modern
organisation.
 LESSON 8 & 9

PROMOTIONS, DEMOTIONS, TRANSFERS, SEPARATION, ABSENTEEISM AND TURN OVER

INTRODUCTION
Promotion, transfer and separation are activities though which an adjustment in the size of work force of an
enterprise can be made to cope with the changing situations. Such adjustments in workforce may be
needed to meet special situations, such as changes in the jurisdictions structure involving regrouping of
jobs, changes in the jurisdictions of the departments and relocation of individuals, jobs and departments,
fluctuation in volume of production and employment due to introduction of new or complete stoppage of old
products, services, processes, methods etc. The three functions promotion, transfer and separation
provide mobility to suit the requirement of the organisation. These function can be accomplished informally
or formally. Usually formal systems are adopted to secure operative consistency and efficiency.

PROMOTIONS
MEANING
Promotion is a term which covers a change and calls for greater responsibilities and usually
involves higher pay and better terms and conditions of service and therefore, a higher status or rank.
According a Scott and Clothier A promotion is the transfer of an employee to a job which pays more
money or one that carries some preferred status.
A promotion may be defined as an upward advancement of an employee in an organisation to another job,
which commands better pay / wages, better status prestige, and higher opportunities / challenges,
responsibility, and authority, better working environment, hours of work and facilities and a higher rank.

Promotion is a bit different from upgrading, which is concerned with minor promotions, promotions within
grade or horizontal promotions.

PURPOSE OF PROMOTIONS
A promotion is a vertical move in rank and responsibility. Involved in a promotion may be some measure of
skill, and responsibility e.g. it may be from a Machinist B grade to a Machinist A grade, or it may involve an
entirely different type of work, for example, from salesman to a sales mangers or from a fitter grade III to a
fitter II, or from a clerk to the post of a section in-charge. Promotions are usually given:
(i) To put the workers in a position where he will be of greater value to the company and where
he may derive increased personal satisfaction and income from his work;
(ii) To remove a workers form his job as an alternative to avoid the embarrassment or fixing or
demoting him.
(iii) To recognize on individuals performance and reward him for his work so that he may have
an incentive to forge ahead. Employees will have little motivation if better jobs are reserved
for outsiders.
(iv) To increase an employees organizational effectiveness;
 (v) To build up morale, loyalty and a sense of belonging on the part of the employees.
(vi) To promote job satisfaction among the employees and give them an opportunity for
unbroken, continuous service.
(vii) To provide a process of selective socialization. Employees whose personalities and skills
enable them to fit into an organizations human relations programme tend to stay on;
(viii) To attract suitable and competent workers for the organizations
(ix) To create among employees a feeling of contentment with their present conditions and
encourage them to succeed in the company.

TYPES OF PROMOTIONS
Promotions may be multiple chain promotions which provide for a systematic linking of each position to
several others. Such promotions indentify multi-promotional opportunities through clearly defined avenues
of approach to and exit from each position in the organisatoin.

In a up or out promotion, a person must either earn a promotion or seek employment else where. Many
universities and bother organizations follow the practice. Such promotions often lead to termination of
services.
Dry promotions are those which are given in lieu of increases in compensation i.e., when all
compensations is adjusted upward to keep pace with the cost of living we have dry promotions.

Promotions becomes a delicate problem not in the matter of selection of the right incumbent for the right
job, but it poses a constant challenge to executives at all levels and impels them to chalk out a well
through out programme by which the best and the most capable individuals may find an opportunity to go
up to the top. The procedure of promotion, therefore, starts right at the bottom from the shop floor and ends
with the managing director of a company.

The promotion policy should involve six elements as follows:

1. Promotion policy statement, which should consider whether vacancies are primarily to be filled up
from within an organisation or by recruitment from outside. Is only preferential treatment to be given
to direct recruits? Would it be sound to deny promotion to otherwise qualified personnel? Whether
an increase in pay is to be given? If so, when and how much? Usually, internal promotions are
preferred over external recruitment and increase is given at the time of promotion, otherwise
promotion is meaningless.
2. Establish a plan of jobs, i.e., decide on what basis promotions are to be given. Whether on
performance appraisal, or on the basis of confidential records, or job and post-bid system. Which
positions are to be filled up? Usually promotions are decided on the basis of performance
appraisals. Job-post and bid system i.e. posting of job vacancies indicating job titles, duties, pay
and qualifications on company notice boards is also utilized.
3. Trace transfer routes i.e., having some type of formal and systematic promotion channels. Ladders
giving paths of advancement, promotional charts, opportunity charts or fortune sheets clearly
 identified and recorded on paper. Dead-end jobs should be labeled and the path upward well
market.
4. Prepare employees for advancement, through the provision of some training either on the job in
professional / technical institutions or through job rotation, multiple management, under-study and
conferences.
5. Communicate the policy. The organisation should communicate its promotion policy either in the
form of a set of standing orders. To have a policy and not to communicate it to the employees will
only create suspicions and misgiving. However, for higher level personnel a precise formulation of
such a policy may not be effective
6. Detailed personnel and service records are kept ready on the basis of which promotions may be
made.

The following indices are available for judging whether candidates are suitable for promotion.

The margin of performance on his present job i.e., does he run it with case and with margin to spare or is
he barely able to manage his job?

Flexibility or versatility i.e., has he been successful on different types of jobs requiring different skills and
different abilities, or does he seem to be only in a restricted field?

Intelligence, i.e., how does he think? How has he learnt on work he has carried out?
Equipment, i.e., how compatible are his education, literacy, expression and personality with the critical
needs of the job?

Motivation i.e., what re his wants? What is important for him? When are his goals, his objectives in work
and life?

PROMOTION POLICY
The usual policy is to take merit into consideration. Sometimes length of service, education, training
courses completes, previous work history etc., are factors which are given weight while deciding on a work,
co0operation, merit, honesty, many informal influences are powerful determinants of a promotional policy.

SENIORITY VERSUS MERIT

Seniority relates to length of service in the company or in its various plants or in its departments or in a
particular position. Under straight plan-wise seniority in all jobs, promotions go to the oldest employee
provided that he is fit for the job. Occupational seniority may be within a department, within a division or in
the entire plant.
ARGUMENTS FOR AND AGAINST PROMOTION BY SENIORITY SYSTEMS
Promotion by seniority is preferred by trade unions and most employees because
a) The system is simple to understand and operate. All employees are assured that promotion will
come automatically when it is due.
b) It satisfied the personal aspirations of the employees for growth, builds morale and is conductive to
better labors management relations.
c) It leads to an optimum utilization of the existing workforce by training and development.
d) This system is much more economical than open market recruitment or recruitment by negotiation
with other belonging to another organisation.
e) The management will have a known man of good performance in a higher position than that take a
risk in bringing an unknown outsider.

But this system also suffers from certain drawbacks too such as:
a) The internal sources may be quite inadequate, and possibilities are that people who do not quite
come up to the requirements of higher jobs, may be promoted.
b) Since the working system and technology change very fast, it is necessary that new blood should
be infused with new and up-to-date knowledge and ideas, which the older persons in organisation
may be lacking.
c) The worth of an individual is not appreciated and given due recognition. This generates frustration
and may constrain a good employee to leave the organisation.
d) When there are wholesale promotions, promotion from within might cause disorganization and
upset the working of the organisation.

On the other hand, the system of promotion by merit enjoys these benefits
a) It brings rewards for meritorious work, extra competence, achievement and initiative.
b) It encourages an employee to work hard so that he may get an opportunity for advancement in the
organisation.
c) It leads to increased productivity, for individuals are satisfied that their merit and competence will be
properly appreciated and rewarded.

DEMOTION
Demotion has been defined as the assignment of an individual to a job of lower rank and pay usually
involving lower level of difficulty and responsibilities.

In other words, demotion refers to the lowering down of the status, salary and responsibilities of an
employee. It is used, as a punitive measure when there are serious breaches of duty on the part of an
employee when it is often a preliminary to a dismissal. When an employee is demoted his pride offers a
more sever jolt than it does when he is superseded by his junior.

CAUSES OF DEMOTION
Demotions may be caused by factors beyond on employees control.
(i) When departments are combined and jobs eliminated, employees are often required to
accept lower-level position until normalcy is restored. Such demotions are not black mark
against an employee
(ii) Inadequacy on the part of the employees in terms of jobs performance attitude and
capability as happens when an individual finds difficult to meet job requirement standards,
following his promotion and
(iii) When, because of a change in technology, methods and practices, old hands are unable to
adjust, or when employees, because of ill health or personal reasons, cannot do their job
properly.
(iv) Demotion is also used as a disciplinary measure

DEMOTION POLICY
Yoder, Heneman, Turnbull and Stone have suggested a fine-fold policy in regard to demotion practice.
(i) A clear and reasonable list of rules should be framed, violations of which would subject an
employee to demotion.
(ii) This information should be clearly communicated to employee.
(iii) There should be a competent investigation of any alleged violation
(iv) If violations are discovered, there should be a consistent and equitable application of the
penalty, preferably by the immediate supervisor.
(v) There should be a provision for review. (In a unionized case, this will be automatic via the
grievance procedure, in a non-unionized case the employer will need to make other
provision for review)

TRANSFER
Transfer are generally effected to build up a more satisfactory work team and to achieve the following
purposes.

a) To satisfy needs of an organisation

b) To meet and employees own request
c) To utilize properly the services of an employee
d) To increase the versatility of the employee
e) To adjust the workforce of one plant with that of another
 f) To replace the new employee by an employee who has been in the organisation for a sufficient long
time.
g) To help employees work according to their convenience so far as timings are concerned.
h) To penalize the employee transfers are also done.
i) Transfer for the maintenance of a tenure system.

Scott and other have classified transfers according to:

(i) The convenience of the company
a) Temporary transfers arising from temporary absenteeism, shifts in the work load, reception.
b) Permanent transfers arising out of shifts in the work load, vacancies which need the special
skill or ability of the transferred employee.
(ii) The convenience of the employee
a) Temporary transfers arising form the ill health of or in accident to an employee, for family
reasons or for taking care of some private affair.
b) Permanent transfers arising out of ill health or accident out of outside interest for example,
for the purpose, of attending it professional school or similar activities, out of family
consideration out of a desire to learn a particular skill.

TRANSFER POLICY
Every organisation should have a just and impartial transfer policy which should be known to each
employee. The responsibility for effecting transfers is usually entrusted to an executive with power to
prescribe the conditions under which request for transfers are to be approved.

For successful transfer policies, it is necessary to have a proper job description and job analysis. Care
should be taken to ensure that frequent or large scale transfers are avoided by laying down adequate
selection and placement procedures for the purpose.

A good transfer policy should:

(i) Specifically clarify the types of transfers and the conditions under which these will be made,
(ii) Locate the authority in some officer who may initiate and implement transfers,
(iii) Indicate whether transfers can be made only within a sub-unit or also between departments,
division / plants
(iv) Indicate the basis for transfer i.e. whether it will be based on seniority or on skill and
competence or any other factor.
(v) Decide the rate of pay to be given to the transferee
(vi) Intimate the fact of transfers to the person concerned well in advance
(vii) Be in writing and duly communicated to all concerned.
 (viii) Not be made frequent and not for the sake of transfer only.

PROCEDURE FOR TRANSFER

Intra departmental transfers or transfers within the same section of the same department are decided by
the foreman or plant manager, and these are effected without the issue of any transfer order to the
employee. He may be given oral instructions. The personnel manager, however, must be informed of such
transfers.

Inter departmental transfers or transfers from one department to another are decided by mutual
consultations among the departmental heads / plant managers when such transfers are of a permanent
nature or of long duration Written orders, signed by the personnel manager are issued to the employee.
Transfers from one place or unit to another place or unit, involving a considerable change in working
conditions and cost to the company, have to be made in writing, after giving due notice to the employees.
But, as far as possible, much transfers are generally discouraged.

SEPARATIONS
Separation means cessation of service of agreement with the organisation for one or other reasons. The
employee may be separated from the pay roll a company as a result of.
1. Resignation.
2. Discharge and dismissal;
3. Suspension and retrenchment; and
4. Lay-off.

ABSENTEEISM
Absenteeism has been variously defined by different authorities According to Wbsters Dictonary,
absenteeism is the practice or habit of being an absentee, and an absentee is one who habitually
stays away. According to the Labour Bereau, Simla, Absenteeims is the total man shifts lost because
of absences as a percentage of the total number of man shifts scheduled to work. In other words, it
signifies the absence of an employee form work when he is scheduled to be at work, it is unauthorized,
unexplained, avoidable, and willful absence from work. For calculating the rate of absenteeism, two
facts are taken into consideration the number of persons scheduled to work and the number actually
present. A worker who reports for any part of a shift is to be considered present. An employee is to be
considered scheduled to work when the employer has work available and the employee is aware of it,
and when the employer has no reason to expect, well in advance, that the employee will not be
available for work at the specialized time. Any employee will not be available for work at the specialized
time. Any employee may stay away from work it he has taken leave to which he is entitled or on the
ground of sickness or some accident, or without any previous sanction of leave. This absence may be
authorized or unauthorized, willful or caused by circumstances beyond ones control.

REVIEW QUESTIONS
1. State the objectives of promotion of employees
2. What are the causes of absenteeism?
3. What is Demotion? When it is preferred?
4. Write a note on Seniority Vs Merit.
 LESSON 10
PERFORMANCE APPRAISAL

DEFINITIONS : TERMS USES AND THEIR IMPLICATIONS

A Proper and systematic appraisal or evaluation of an employee in any organisation is not only necessary
at the time of his or her recruitment, selection and placement but it is useful, and also desirable, to make
an appraisal of the performance of such an employee on a continuing basis during his/her working life. The
fact of evaluation of personnel as a formal process or system in some form or another is inevitable and all
organizations make some efforts to determine whether individual members at various levels of the
organisation are contribution to the attainment of objectives.

In general, all managers or executives judge their subordinates and subjectives also form judgments of
their superiors, their co-workers or colleagues, their jobs and the company as a workplace. While some
judgments are only personal opinions, other evaluative judgments (referred to variously as merit-rating,
employee evaluation, judgments, personnel or performance appraisal, progress report, employee
appraisal, evaluation of personnel or performance appraisal) relate to the quality of work performance
and to the components of the work relationship between superior and subordinate. Evaluation of
employees is thus one of the universal practices of management that is usually applied to all categories of
employees, whether operatives, technical or managerial.

In a simple way, performance appraisal or merit-rating of an employee of the process of evaluating the
employee performance on the job in terms of the requirements of the job. Flippo defines performance
appraisal as a systematic periodic and so far as humanly possible, an impartial rating of an employees
excellence in matters pertaining to his present job and to his potentialities for a better job.
It is systematic in that it evaluates all performance in the same manner utilizing the same approach so that
the ratings obtained to separate personnel are comparable.

It is believed that the term employee evaluation or appraisal was first used during world war I when, at the
instance of Walter D. Scott, the U.S. Army adopted the man to man rating system for evaluating military
personnel.

Subsequently, the policy of giving grade wage increments to hourly paid workers in industrial
organizations on the basis of merit was introduced during 1920s. Such an yearly evaluation or appraisal
plan was known as merit rating programme.

Most of the employee evaluation or appraisal plans were of the rating scale type upto mid-fifites in which
heavy emphasis was laid upon personal traits. It was with the beginning of 1050s that attention was drawn
towards the performance appraisal of professional, technical and managerial personnel in various industrial
or business organisation.
Gradually, as a result of more study and research (experimentation), employee appraisal or performance
appraisal plans have undergone many changes. At present emphasis in employee or personal appraisal
plans for evaluating professional, technical and managerial employees is being widely placed on the
development of the individual and the older term merit-rating is restricted to a large extent to the
evaluation of hourly-paid employee quite often for developing the criteria for wage adjustments,
promotions, transfers etc.

PURPOSES / USES OR OBJECTIVES AND IMPORTANCE OF PERFORMANCE APPRAISAL

The basic purpose of performance appraisal is to ascertain whether the behaviour of an employee in an
organisation is so integrated with established role requirements that he may be considered a success or is
at so much variance with them that he may be considered a failure. Individual appraisal is done to
determine that action relating to reward or penalty that may be taken with regard to a person rank and
file employee or a manager, e.g., taking a decision for increasing or decreasing the persons pay or
emoluments or leaving it the same.

In addition, the employee performance appraisal or evaluation may also be used as a basis for a
placement decision involving promotion, demotion, transfer, retention in the same job or even separation.

Besides, performance appraisal data may also be used in decisions regarding training and development
policy and programmes both directly (through a feedback of the conclusions to the person evaluated) as
well as indirectly (as an indicator of the educational requirements of manpower / personnel in future).
In general, the objectives of performance appraisal may be stated to include;
(a) To identify areas for further training needs;
(b) To help determine promotions and transfers
(c) To reduce grievances; and
(d) To improve job performance.

According to Jucius, First and foremost is the objectives of determining more accurately which employees
should receive pay increase, who should be given transfers or promotions and which should be given
preferred status and privileges. Second, evaluations are very useful in counselling, i.e., in suggesting what
a person should do it improve performance and chances for advancement.

Third, when disputes arise over pay, promotions, etc., the availability of a series of ratings provides
management with information when conferring with the aggrieved.

Fourth, supervisor and executive who know that hey will be expected periodically to fill out rating forms
(and be prepared to justify their estimates) will tend to be more observant of their subordinates and hence
to become better day-to-day supervisors.
According to Douglas McGregor, Formal performance appraisal plans are designed to meet three needs,
one of the organisation and the other two of the individual, viz.

(i) They provide systematic judgement to back up salary increases, transfers, demotions or
termination.
(ii) They are means of telling a subordinate how he is doing and suggesting needed changes in his
behaviour, attitudes, skill or job knowledge. They let him know where he stands with the boss
and
(iii) They are used a base for coaching and counselling the individual by the superior. Although a
formal performance appraisal or evaluation plan need not encompass all the objectives referred
to above yet these are generally kept in view.

Performance appraisal is an important tool of personnel management. Since it reflects an evaluative

judgement of the traits, characteristics as well as the work-performance of the employees on their jobs.

Obviously, therefore, the utility or importance of employee evaluation or performance appraisal within an
organisatoin is really very grant from the point of view of employees both subordinates and superiors as
well as the organisation.

It facilitates the accomplishment of individual and group organizational objectives. Employees may earn
employment privileges by better performance through the use of some plan of evaluating their performance
known by various names such as merit rating, progress report, service appraisal, performance evaluation
etc.

Such appraisal or evaluation plans serve as a basis for conunselling employees about their strengths and
weaknesses or far improving their productive efficiency and for bettering supervisor / superior employee
relations by developing material confidence.

An important value of an appraisal plan lies in its informative nature, i.e. the ability to provide objective data
on job performance and role expectation.
The sharing of this data with the employee is likely to reduce superior subordinate friction and there is
reason to believe that such a plant has the potential to minimize may existing problems and thus to reduce
non-productive costs.

Periodic and accurate appraisal or evaluation establish such organisation climate or atmosphere in which
personal criticism, may be used constructively for self-managemnt or advancement without resentment.
They also help in improving the quality of supervision by constraining supervisors / superiors to be alert
and competent in their work and at the same time provide the supervisors with an effective tool far rating
their subordinates.
Hence evaluation of employees is applied formally or informally to all levels of personnel in various
organizations whether operative, technical, professional and managerial / executive.

IMPORTANT RULES / PREREQUISITES OR A GOOD APPRAISAL OR EVALUATION PLAN

It is important to remember that employee performance appraisals or ratings are mere significant tools of
effective personnel management and the accomplishment of the desired ends depends undoubtedly on the
proper and skillful use of such ratings.
Hence, it may be appropriate to suggest certain prerequisites (guiding principles or rules) which if followed
continuously, will enhance the utility or contributions of such evaluations.

These principles may be put as following:

1. A good appraisal or rating programme should encompass all levels and categories of employees;
2. Raters should be selected carefully and judiciously and should be provided with necessary training;
3. The raters should be thoroughly instructed in the purpose and values of the programme
4. All the factors and terms should be understood by the raters adequately
5. The sensitivity factor in evaluation / rating must necessarily be fully recognized by the raters and
the appraisal plan should give assurance to individuals being evaluated that no arbitrary decisions
will be reached.
6. Evaluation or rating should be viewed in its psychological, sociological as well as technical frame
work since individuals may easily react unfavorably even to a fair evaluation in case they have a
feeling that the appraisal plan or system them to a fall in status in the eyes of colleagues or co-
workers.
7. Every care must be taken to improve the accuracy of appraisals or evaluations. Obviously,
therefore, every appraisal programme must be both reliable and valid, i.e., the results of such
appraisal or evaluation should be replicable and the appraisal plan should measure those areas of
performance that are appropriate to the organizations needs.
8. An incentive should be built into an appraisal plan programme, i.e. a reward should follow
satisfactory performance, the rewards being scaled to various degrees of satisfactory performance;
and
9. An appraisal plan must be integrated into organisation,. i.e., there must be clear-cut relationships
between the appraisal plan and the organizations policies relating to training, promotion, transfer
etc.

MANAGEMENT APPRAISAL INDICATORS OF MANAGERS EFFECTIVENESS

Managers / executives perform activities that are peculiar to managerial occupations and thus of particular
concern in management appraisal. The job of managing is largely characterized by the attempt to elicit
high levels of productivity and a maximal contribution to organizational maintenance from others.
The manager is assigned much more than he can do alone and so he must get others to help in the
performance of his role. Appraisal or evaluation of managers is, therefore, consistency made in terms of
its effects on others, i.e., in terms of its supervisory aspects.
In other words, the effectiveness of managers is evaluated in such terms as whether be facilitates the work
efforts of his subordinates or whether he acts in a way which makes less effective than what he otherwise
would have been obviously.
Obviously, successful managing cannot be adjudged exclusively in terms of the managers behaviour
towards his subordinates, though it may be considered extremely important.
A manager or executive, particularly at the upper level, is often required to make decision having a direct
impact upon the organizations productivity and profit goals.

In such a situation, he is likely to be considered unsuccessful in case his decisions later prove to be
inaccurate resulting in any unnecessary wastage of company assets or reduction in the profits or
productivity or exposure of the company to any external threats to organizational maintenance etc. besides
appraisal or evaluation of managers in terms of their impact on internal stresses within the organisation or
company is also important.

The extent to which he is capable of reducing internal conflicts and dissensions or heading off labour
difficulties or unrest or handling union representative tactfully without provoking them etc. largely
determines his success or failure in managing.

APPRAISAL POLICY
The administration of effective appraisal plans or programmes requires some important policy decisions
relating to problems such as:
a) Coverage by the plans (i.e., who is to be covered by an appraisal plan)
b) Frequency and place of appraisals (i.e. the interval between different formal appraisals;
c) Responsibility for appraisal, and
d) The use of appraisal results

As regards the coverage by appraisal plans, most organisatoins endeavour to include all employees in
systematic performance appraisal methods but all these needs very among the mare employee groupings
(such as engineering clerical etc. and also at different levels in the organisatoin concerned, an organisatoin
or company may develop not one but several appraisal plans to suit varying groups at different levels.

In general, the different appraisal plans are basically consistent with one another in their underlying
approach and philosophy. A beginning in this respect at higher levels of an organisatoin is considered
better since lower levels of the organisation can respond better if they are not singled out by themselves for
an imposed plan.
As regards the frequency of appraisals, generally a maximum interval between formal appraisals is one
year, though in some cases a six-month period is adopted for the first few years of a plan after which the
time span may be extended.
Usually new employees are evaluated more frequently than the older ones. It is believed that performance
appraisal becomes perfunctory and unreliable without a periodic and systematic plan. Regarding the place
or location where an employee may be appraised or evaluated, it is desirable that appraisal should usually
be performed at the place of work or office of the supervisor (superior). However, informal appraisals may
take place anywhere on the job in work situations or off-the-job.

As regards the policy on the use of the appraisal results, it is necessary that organisatoins or companies
should make full the judicious use of the information supplied by appraisal / procedures / plan.

There are numerous ways in which managers may apply the results which include.
a) Developing the present performance capabilities of individuals;
b) Promptability of individuals;
c) Making salary adjustments
d) Assistance in making decisions on transfers or demotions, and
e) Making lay-off or termination decisions

APPROACHES TO PERFORMANCE APPRAISAL

In general we find three approaches to performance appraisal practices procedures that may be stated as
follows:

1. A casual, unsystematic and Haphazard Appraisal System which was frequent in the beginning and
which has subsequently given place to more formal appraisal method. It has been largely based on
seniority or quantitative standards of output for rank and file employees.
2. A traditional and Highly Systematic Measure of Evaluation or Rating which is concerned with the
basis of comparing employees personal characteristics or contributions or both;
3. A Behavioral Approach which is based on the behavioural value of fundamental trust in the
goodness capability and responsibility of human being. This approach lay emphasis upon providing
mutual goal setting and appraisal of progress made by both the appraisee (employees or those
being evaluated) as well as the appraiser (the raters or those who evaluate)

METHODS/ TECHNIQUES OF PERFORMANCE APPRAISAL AND STEPS IN AN APPRAISAL

PROGRAMME
In fact appraisal or evaluation of personnel is constanctly being done, though at an unconscious level.
Employees evaluate superiors and follow colleagues and supervisors evaluate their subordinates. Actually
what is required to generate a proper control is a formal procedure for evaluating personnel within the
organisation.
Obviously, appraisal thus occurs in an organisation whether a formal system of appraisal prevails therein or
not but the fact cannot be denied that systematic and periodic formal appraisals enhance the possibility of
fairness accuracy and completeness as well as they establish company wide consistency of practice.
As regards the formal appraisal systems, two basic types of such systems are used widely viz.
(a) Appraisal of personnel / employees according to their traits, arrivutes and general behaviour on the
job; and
(b) Appraisal of the results, work-performance and goal achievement of the employee / personnel. Both
of these involve a two-step process.
(i) Making the appraisal; and (ii) reviewing the results with the subordinate.

The former system (the trait approach) evolved first in management history resulting in the development of
various kinds of ranking systems and graphic rating scales. Results oriented appraisals are
comparatively of recent origin and have been rather used widely during a little over a decade or so.

However, the two approaches are not exclusively separate since a focus on the personal traits of the
employee necessitates the evaluation of the work performance of the individuals and focus on results.
Ultimately includes some assessment of personality characteristics and employee traits.

In fact it is not always possible to measure employee contributions as an individuals work is intermixed
with that of others. In such cases individual traits characteristics and behaviour instead of contributions
(results) may be used as the basis of appraisal / evaluation.

Before a detailed analysis of the methods / techniques and procedures of appraisal in the two approaches
mentioned above, some obvious reason for differences may be stated. The various methods differ because
of differences in
(a) Personal traits of employees
(b) Job requirements
(c) Employee groups
(d) Degree of precision attempted in appraisals; and
(e) Outlook or attitude of management

APPRAISAL BY TRAITS / CHARACTERISTICS

The important methods / techniques and procedures falling into the trait approach include the ranking
method, graphic rating scale method and forced choice method of rating.

As regards the Ranking plans the basic idea of ranking as put by Daltan E McFarland is to distribute the
individual being rate along an order of merit from best to the poorest or from most to lest, on one or more
characteristics Ranking is a simple method and it loosely corresponds to every day general appraisals or
evaluations.

The supervisors for two or more raters checks on each cared the name of the employee the supervisor
considers to be the better one. A calculation can be then be made showing which employee has received
the most checks down to the one who has received the least.

Welter Dill Scott. Who pioneered in introducing performance rating plans into industry before world war I,
also developed a variation of the ranking method known as Man to Man Comperison Scale which
greatly influence ratings in industry.

According to Micheal J. Jucius, such man to man or worker to worker system of rating may be
improved in two ways.
(i) Several factors such as initiative , co-operations and dependability may be used in rating worker
to worker and those factor ratings may then be arranged to establish an overall grade.
(ii) Instead of using actual employees as standards for best, above average and so forth, ideal
descriptions may be developed.

Over the years, there have been substantial changes in graphic rating scales viz, improvement in the
design of the instruments and administration of the system) with a view to enhance their validity and
reliability and thus in addition to continuous scales, discontinuous scales, reversed scales, numerical
weighting systems, etc. have been adopted.

In continuous rating scales, the degree of each trait are market off in equa units along each scale as
shown in Figure:

Initiative
0 5 10 15 20
Resistance Often Reluctant Sometimes Open minded
Hesitant
Co-operativeness
0 5 10 15 20
Obstructionist Difficult to handle Sometimes Co- Co-operative High Co-
operative operative
Leadership / Motivation
 0 5 10 15 20
Discourages Little Interest in Sometimes Effective Develops
Development Developing Ineffective Outstanding
Personnel Personal

Despite various variations, most of methods / techniques have the following six basic elements:
1. The superior and the subordinate jointly plan the subordinates tasks and responsibilities. They
focus on the key responsibilities and critical elements of job as indicated by expected results
2. The subordinate prepares in advance his targets and objectives for a six months or a one year
period. He goes over the plan with his superior, modifying it until hey can mutually agree on it.
3. Through mutual discussion they jointly clarify the supervisors supporting and evaluating role.
4. At the end stipulated time, the supervisor makes a performance evaluating of the subordinates work
arising the previously agreed upon targets as standards
5. Feedback interview in which the supervisor discusses the results and his evaluations with the
subordinate and a renewal or reformulation of the mutually agreed as upon targets for the following
period establishing a cyclical pattern.
6. The system deemphasizes traits and personal characteristics focusing on performance results.

Vagueness and ambiguity, e.g. it is difficult to measure precisely traits like initiative or ambition
particularly because different raters using these may easily have their varyig interpretations.

As observed by Fredrick Wicket and Daltan E McFarland (eds.) and Virgil K. Rowland. Even where criteria
are carefully and clearly defined, it is hard to communicate them to the appraising managers and managers
apply differential understandings of the criteria.

This loss of uniformity of application often gives rise to assertions of unfair appraisals. Further, distortions
may be introduced in appraisals by the raters consciously or unconsciously in the form of biases (where
appraisal make an unfairly high or unfairly low judgement based on prejudice emotion or subjective
opinion) and mistakes in appraising (that may occur due to haste carelessness, desire to avoid
antagonism of subordinates etc.)

PROBLEMS / ERRORS IN AND LIMITATIONS OF APPRAISALS

Since the forces working against objectivity in appraisals giving rise to many errors are difficult to
overcome, there exist various problems in making a fair and purposeful appraisal. Firstly, Managers /
Supervisors appraising their employees are human being and, therefore, have strong likes and dislikes of
individuals, especially those who are close associates.
Thus ratings may be influenced by personnel, emotional and other factors. Secondly, quite of ten appraiser
has practical needs or goals he hopes to achieve with the rating results, e.g., he may desire to advance an
individual whom he is coaching or sponsoring or he may desire to prevent an individual from advancing.
A number of mistakes re likely to occur in appraisals because of such reasons. Thirdly, resentment against
paper work on the part of appraisers may result in haste or carelessness causing errors in appraisals.

Fourthly, while some superiors or managers rating their subordinates are in the habit of rating everyone
high, others tend to rate every one low.
Lastly, central tendency is another error in rating that is widely found because of the failure of incapability
of the rater to discriminate between a superior and an inferior individual. Such appraisers often believe that
all their subordinates are almost equal in performing their tasks or assignments. Such raters can improve
their observational and analytical skills through training and experience.

In general, employee evaluation or performance appraisal suffers from certain limitations such as:
a) In many cases a tendency on the part of appraisers;
b) Often such appraisals become faulty on account of some personal bias or defect on the part of
appraiser;
c) An important limitation of such appraisals relates to the possibility of what is known as the halo
effect.

One type of halo effect exists where the individual to be rated has some previous good or bad
impressions upon the appraiser that shape his current judgments of the over-all performance.

Remembering his earlier good or bad impressions that appraiser assumes that the individuals current
performance is the same. Another type of halo effect may exist where the raters judgement is influenced
by the work-team or the informal group with which the appraisee associates.
If the work-team or group is not liked well by the appraiser, the rating of the individual may be faulty
differing from his actual performance.

d) It is formidable task to eliminate subjectivity (or the subjective element) from such appraisals while
making a judgement since such evaluations are fact opinions.

PERFORMANCE APPRAISALS IN INDIA

A formal and systematic employee evaluation / performance appraisal was introduced in the Associated
Cement Companies (ACC) Ltd. in 1952 with the introduction of an annual confidential report form. Initially
one form was used for varied type of employees, irrespective of their hierarchical position which was later
found as inappropriate. Subsequently, three types of annual confidential report forms were introduced to
cover three categories respectively viz. (a) Senior personnel, (b) Junior executives and supervisory
personnel and (c) lower supervisory and office staff. Figure shows the factors considered important in
rating different categories of employees.
 Factors Important in Rating Different Categories of Employees at A. C. C. Ltd.
Handling of Grievances
Relations with Men Cost
consciousness
Promptness of records
reports.
Quality or Accuracy of work.
Quantity of work
Use of Working Time
Initiative & Acceptance of
Responsibility
Ability in Making
Decisions Leadership
Understanding &
Conformity with
Policies Judgement

Understanding of and Ability to learn Employees Relations

conformity of Procedures

Co-operation with others Ability to work with others Delegation

Loyalty Safety on the job Ability to communicate

Decisions Conduct on the Job Ability to Run Meetings

Judgement Care and Use of Company Sociability

Property
Knowledge & Execution of Knowledge & Execution of
Responsibilities Responsibilities

Attitude to work Attitude to work Loyalty

initiative

The confidential reports have to be completed by persons exercising actual line authority over the rates. In
case of a senior executive, the initiating officer for preparing and completing the confidential report could
be the Division Head and the reviewing officer could be the Assistance Managing Director or Managing
Director. In some organisatoins e.g. at Sandoz (India) Ltd. personnel appraisals are made in respect of
managers for the management development plan and merit ratings is done in case of operatives.

QUESTIONS
1. What is meant by Merit-Rating or Performance Appraisal? Discuss its importance.
2. What purposes or objectives may be sought by merit-rating or performance appraisal systems in
modern organisatoins?
3. Outline the important prerequisites or rules of an effective appraisal plan or programme. What in
your opinion should be a good appraisal policy?
4. Describe briefly the various methods or techniques of merit-rating or performance appraisal. Offer
your comments on their relative usefulness.
5. State the main errors or problems in and limitations of personnel appraisals. How may these be
removed?
6. What are the principal difficulties or obstacles to an effective appraisal system? How can they be
overcome?
 LESSON 11 & 12
WAGE AND SALARY ADMINISTRATION

METHODS OF WAGE PAYMENT

There are two basic methods of wage payment. All workers may be paid on the basis of time that he
spends on his job, or he may be paid on the basis of quantity of output turned out by him.

The various methods of wage payment may be classified as follows:

Methods of Wage
Payment

Conventional Method Incentive Bonus Method

Time Price
Wage Wage

Personal Group
Incentive Incentive
Bonus Bonus
Schemes Schemes
Price Man Plan
Time Production
Scanlon Plan
Based Based
Incentive Incentive Lincoln Plan
Bonus Bonus
Schemes
Halsey Plan Schemes
Taylors
Rowan Plan Differential
Wage Plan
Emerson Plan
Merrick Plan
Bedeaux PPlan
Gantt Plan
The first method is known as Time wage or Time Rate system and the second as Piece wage or Piece
Rate system.

Wage systems currently in use are mostly either modifications or combination of time rate and price rate
methods of wage payment. Primarily principles of the two systems may also be found at the base of
various incentive schemes
CONVENTIONAL METHODS OF WAGE PAYMENT
1. TIME RATES
Time rates system is variously described as Day work system or Time Rate system of wage payment. An
important feature of this system is that wages are paid on the basis of the time spent by a worker on his
job, no account being taken of the quantity of work done by him.

Thus, it may be said that the employee gets paid for the time sold by him to his employer. The time that an
employee spends on his job may be measured in terms of hours, weeks, months, or years. However, when
we say time wages, what we generally mean in payment made at a rate on attendance per hour. On the
other hand, salaries denote payment at a rate on attendance per week or month.

The longer a worker remain on his job, the higher is the payment he receives. But as said earlier, the
quantity of work done by him is immaterial. The employer takes all the gains or losses arising from
variations in a workers output.

The formula for calculating wages under this system is as follows:

Total Earnings = Number of hours, days, etc., worked x Rate per hour, day, etc.

There is no hard and fast rule governing the determination of time rates or the units of time to which they
relate. For higher positions, not only the rates are high, but also the unit of time to which they relate is
longer. It is, or example, common to engage high officials like managers under annual contracts. Needless
to say, such persons are paid substantially higher rates. On the other hand, unskilled workers may be
engaged on daily basis and the rates of wages in their case may also be quite low.

EVALUATION : MERITS
1. Simplicity
Time rates are simple to understand and easy to operate. Since wages are linked to the unit of time spent
on a job, it is not necessary to keep records of output produced by individual workers. It only involves
determinations of standard hours of work and the rates at which different categories of workers are to be
paid.

2. Security
Wages under this system being linked to the spent on a job, workers are not required to rush to reach a
particular level of output. Whatever the quantity of output, they are assured of their wages.

3. Beneficial to beginners
For freshers, time guarantee a minimum remuneration even though, in the beginning, it may not be
possible for them to reach the required level of output.
 4. Aid to employee morale
Since workers are not required to produce a particular quantity in a given time, they are under no physical
or mental strain. They can devote a greater attention to the quality of goods produced by them.

5. Only alternative in certain cases

Time rates present the only alternative of wage payment in certain cases. For example:
(a) Where quality of work is more important than its quantity
(b) Where specialized skills are required to perform a job.
(c) Where delays and interruptions in work cannot be avoided
(d) Where the nature of job frequently changes
(e) Where the work is not standardized; and
(f) Where it is beyond the workers capacity or capability to increase the volume of output, there is not
other way except to follow time rates.

DEMERITS
1. Unscientific
Time rates place excessive emphasis on the workers time and turn a blind eye to his performance.
Because wages are not related to output, a certain amount of subjectivity and arbitrariness may be noticed
in their fixation.

2. Lack of incentive for better work

This is by far the biggest drawback of time rates. They offer an encouragement for better performance on
the part of workers. All workers whether competent or incompetent, dexterous or dullards are treated
alike in respect of wage payment. Those who are capable are not keen to show better results because
there is no incentive for them to do so.

To make matter worse, employers also tent do fix the minimum possible time rate for each category of
workers. They do so taking into account the rate deserved by the dullest among the workers, conveniently
forgetting that the same rate would also be applicable to the most competent and capable among them.
Thus, the employer who pays only the rate carried by the poorest man may get only the output he pays for,
even from his best men.

3. Difficult to determine labour costs

Because wages are not related to output, employers face the difficulty of controlling the labour costs. this is
because they are never sure of producing enough to cover all their costs, including the labour costs. For
proper planning and control of cost per unit of output a definite correlation between wages & quality of
output, must be established.

4. Lengthening of work process

Since workers are paid in relation to the time they spend on their jobs, they tend to unduly prolong the work
process so that they are assured of wages over a continue period of time. Thus, they deliberately resort to
go-slow tactics, thus causing delay in production and increase in overhead costs.

5. Adverse effect on quality

It is not that time rates affect the quantity of output alone. There being no incentive for workers to maintain
and improve the quality of their output, the enterprise has to put up with production of sub-standard goods.

6. Greater need for supervision

Because time rates offer no incentive to workers to improve or increase the quantity or quality of their
output, they cast greater responsibility on foreman to supervise their subordinates to ensure that they put in
their best efforts for the purpose. Inevitably, this adds to overhead cost of production.

2. PRICE RATES
Price rates system makes the quantity of work as the basis of wage payment. A fixed sum per unit of goods
is given to a worker irrespective of the time taken by him. The formula is:

Total Earnings = Units produced x Rate per unit

Thus, piece rates represent a payment of so much per unit produced. But these can be applied only in
case of jobs which are capable of being measured in physical terms and can be standardized.

(a) Piece rate with guaranteed day rate.

(b) Differential piece rates

EVALUATION : MERITS
1. Wages linked to output
An important characteristic of this system is that wages are paid in connection to the levels of output
achieved by workers. As such, it offers considerable inducement to workers to produce more.

2. Reward for merit

The main aim of this system is to increase the output by giving workers an incentive to produce more.
Thus, workers possessing merit, skills or talents have the opportunity to secure higher wages. In the
process, they are also enabled to contribute their utmost to maximizing the total output of the enterprise.

3. Certainty in planning and control

With wage rates linked to output, management is enables to plan and control production with greater
degree of certainty, production targets can be confidently set and successfully achieved.

4. No scope for go-slow tactics

Under the piece rate system, workers will hardly ever think of resorting to go-slow tactics. This because
doing so would damage their own interests. If the rate of out put declines so will the amount of wages
payable to them.

5. Little need for supervision

As workers are themselves quite keen to complete the jobs entrusted to them, the need for supervisions
greatly reduced. It results in a considerable saving on overhead costs.

6. Effective cost control

Besides increasing production without any proportion increase in overhead costs, piece rates are also
favoured because they simplify the measurement of labour costs. Management is thus enabled to forecast
as to that effect a given increase in output shall have on labour costs.

DEMERITS
1. Insecurity
Under this system, no minimum wage is guaranteed to workers. They are only paid in proportion to what
they produce. But it is not that a worker can always reach a certain level of output. There may be delays
and interruptions in his work. The resulting decline in output will mean a decline in wages also.
Thus, if delays and interruptions are due to ineptitude on the part of workers, the decline in their wages can
be perfectly justified. But what if these are due to factors beyond anybodys control? Strictly speaking,
under piece wage system workers will even then be paid lower wages.

2. Unsuitable for beginners or below average workers

Those who are new to their jobs or not competent enough to reach the desired levels of output, are put to
considerable disadvantage under the piece wage system. Try as they might, they will find it difficult to
produce enough to assure them a certain minimum wage. In any case, they cannot come anywhere near
those who are superior to them in terms of abilities and skills.

3. Decline in quality
Piece rate system of wage payment induces workers to produce as much as they can regardless of the
quality of the goods to be produced. Inevitably, this results in production of sub-standard goods unless, of
course a number of supervisors are employed to check the work in order to ensure that a minimum
standard of quality is maintained.

4. Unsuitable in certain case

Piece rate system of wage payment cannot be followed where the work is of a non-standardized or
diversified nature. Similarly, where workers cannot effectively control the volume of their output, or where
the performance of work demands specialized skills, or delays and interruptions are inherent in the
conditions of employment, this system of wage payment may not be very effective And, of course, where
quality of output is more important than its quality, piece rates may proves to be self-defeating.

5. Speeding up of workers
Because increase in earnings is directly in proportion to the increase in output, workers frequently resort to
over work thus overstraining themselves which adversely affects their health. In the event, the number of
accidents increases.

6. Excessive depreciation of machinery

In their zeal to produce more so as to be assured of increased earnings workers are not very particular
about proper handling of the machines and tools place at their disposal. Their carelessness in this respect
may result in higher depreciation of machinery and equipment.

7. Jealousy and dissatisfaction

Since no two workers can be exactly alike in their proficiency at work, under piece wage system there is
bound to be some difference in wages earned by them. This may cause jealousy and dissatisfaction
among those who are not able to earn as much as their more efficient and competent fellow-workers. This
may adversely affect their relations with one another.
Because piece wage system may produce disunity and lack of solidarity among workers, trade unions are
generally opposed to it.

8. Complicated mechanism
Piece rate system of wage payment tends to become quite complicated, particularly because it involves
proper maintenance of records as to output in the case of each individual worker. Particularly in enterprises
employing thousands of workers, it may be quite expensive and difficult to administer. Again, it
necessitates standardization of everything under the sum-products, working conditions, system of
measurements and control of performance by workers, machines tools and what not. This considerable
planning as also expenditure in terms of time and money, which many enterprises might not be able to
afford.
INCENTIVE BONUS PLANS
An incentive plan or method provides a system of wage payment which offers an inducement in the form of
a bonus to encourage workers to maintain high levels of output. From this view point, piece wage system
may be said to be the most effective plan. But an incentive is more in the nature of an expected reward for
better performance. Such better performance may be inform of exceeding he average output level in a
given time, achieving the average the average output level in a shorter duration, or working in a manner
that improves quality, or brings down costs.

KINDS OF INCENTIVE BONUS SCHEMES

As already said, incentive bonus schemes may be two types:
1. Personal or Individual Incentive Bonus Schemes and
2. Group Incentive Bonus Schemes

1. INDIVIDUAL INCENTIVE BONUS SCHEMES

Under these schemes, the individual worker is rewarded for his outstanding performance or for making
efficient use of capital and equipment. Accordingly, individual incentive bonus schemes may be further sub-
divided into (a) time-based incentive bonus schemes, or (b) production-based incentive bonus schemes.
Under time-based incentive bonus schemes, each piece of work is assigned a standard time, and the
workers bonus is based on the percentage of time saved. Under production based bonus schemes, on the
other hand, each worker is given a definite task and bonus is paid to him only if he completes the task
within the standard time.

(a) Time-base Individual Incentive Bonus Schemes

(i) Halsey Plan
It was first introduced by F. A. Halsey, a mechanical engineer in America, in 1891. It is a sample
combination of time and piece wage plan of wage payment.

Under this plan, bonus is paid on the basis of time saved. A standard time is set for each job, process or
operations. If a workers takes the standard time to do it, or event exceeds the standard limit, he is paid
normal wages calculated at the time rate. If he completes his job in less than the standard time, he is paid
a bonus equal to 50% of the value of time saved. Thus, this system seeks to divide the benefit of increased
productivity between employer and worker.

A workers bonus and total earning under this plan are calculated as follows:

Bonus - 50% (Time saved x Time Rate)

- 50% ( 1 Hour x Rs. 2)
 - 50% (Rs. 2.00)
- Rs. 1.00
Total Earnings - 6 Hours x Rs. 2.00 + Rs. 1.00
- Rs. 13.00

(ii) Rowan Plan

It is similar to Halsey plan. The only differences is in the method of calculation of bonus. Thus, under
Rowan plan, in addition to the ordinary time rate, the worker received a bonus of half the time-rate on time
saved. The amount of bonus is equal to the percentage of time saved to the standard time allowed as
multiplied by the time wages.

(iii) Emerson Plan

It marks a combination of a guaranteed fixed day wage and a differential piece rate. A certain output is
regarded as the standard for each worker. If the workers achieved just two-thirds of the standard output, he
is treated as a normal worker and is paid the guaranteed minimum wage but no bonus. As he crosses the
two-thirds mark, he becomes entitled to bonus which increases progressively as he approaches the
standard output.

The main features of this system may be summarized as follows:

(a) Minimum day wage is guaranteed to every worker
(b) The standard output fixed in the case of each category of worker is regard as the sign of 100%
efficiency.
(c) A worker becomes eligible for bonus only when his output exceeds two-thirds, or 66.7% of the
standard output.

(iv) Bedeauk Plan

It seeks to apply a uniform system of bonus payments to work of differing degrees of difficulty. For this
purpose, each type of work is thoroughly analyzed and, considering the strain involved in performing it, a
proportion of time is allowed for rest.

PRODUCTION BASED INCENTIVE BONUS SCHEMES

(i) Taylors Differential Wage Plan
It is one of the earliest of incentive wage plans. It was devised by Frederick W. Taylor as a part of the
scheme of scientific management. In essence, it is a piece rate method of wage payment where the rate of
payment increases as the worker speeds up his rate of working. In this respect, it is vitally different from
time-based incentive bonus schemes under which the rate falls the more quickly, the work is completed.
The Taylor system, therefore, offers an even greater incentive than straight piece rates to the really fast
workers.
The standard task is set after a careful time and motion study. There are two piece rated one for sub-
standard performance and the other for the standard or above standard performance.
The main features of this scheme are as follows:
a. Minimum daily wages are not guaranteed
b. Standard time is set for the completion of the standard task
c. There are two piece rates. If a worker performs the task within the standard time, he is paid at the
higher piece rate. If he exceeds the standard time limit, he receives the lower piece rate.
Let us take an example. Suppose, the standard output is fixed at 10 units a day, the two piece rates are (a)
Rs. 1.00 per unit for 10 units or more, and (b) 75 paise per unit for less than 10 units.

Thus, if a worker produces 10 units he will get Rs. 10.00 and if he produces 12 units, he will get Re. 12.00.
But incase he is able to produce only 8 units, the lower piece rate of 75 paise per unit will be applied to him
and he will he paid Rs. 6.00 only.

(ii) Merricks Multiple Piece Rate Plan

It is an improved version to Taylors differential wage plan. While it is less harsh on beginners or less
efficient workers, it is also generous towards the more efficient ones. Like Taylors plan, here also a
standard task is set for workers. The difference is in respect of the number of piece rates. In Taylors plan
there are two piece rates, here there are three.

(iii) Gantts Task System

This system of wage payment is named after H. L. Gantt an American who had first introduced it. Known
as the task bonus system, it offers, the worker a very large bonus if a specified piece of work is
accomplished within a certain time. But the task is very severe on usually double that which is expected of
an average worker. Another severe feature is that even if a worker fails to accomplish the task by a
negligible margin, he is not paid any bonus.

The man features of this system are:

a. It combines three in one i.e., time rate, differential piece rate and bonus.
b. It guarantees minimum daily wage
c. If the standard task is completed within the prescribed time, there is a bonus which is usually at a
very high rate.
d. The bonus is a fixed percentage of the time taken
e. If a workers accomplishes the standard task within the stipulated time he is paid a bonus which is
usually @ 20% of his time rate. In case his performance is better than the standard, he is paid at a
higher pieces rate on the whole of his output.
ESSENTIALS OF A GOOD INCENTIVE PLAN
1. SUITABLE CLIMATE
Success of an incentive plan will greatly depend on the kind of relations between management and
workers. In case the relations are happy and free from suspicions and tension, any incentive plan may
work miracles in the enterprise. On the contrary, if there is mutual distrust and animosity, workers may take
the introduction of a wage incentive plan as yet another attempt by management to force them to work
harder.

2. COMPLETE INFORMATION AS TO GOALS

Workers should be properly informed about why a particular incentive plan is being introduced for them. If
the plan emphases quality or quantity of production, works should be told about it in clear terms. If quantity
and quality of production are to be given equal weightge, this must be made sufficiently clear or else
workers may concentrate on increasing the quantity of output, being indifferent of the quality.

3. SIMPLICITY
The incentive scheme should be easy to understand and simple to operate. In case it is complicated,
workers would not trust it and the management may find it difficult to operate.

4. JUST AND EQUITABLE

The incentive scheme should take into account the skills and abilities of all workers for whom it is devised.
If it is unduly biased in favour of efficient and experienced workers, it will lack motivations for those who are
not so gifted. On the other hand, if it seeks to favour inexperience and inefficient workers, outstanding and
ambitious workers ay nto be suitably motivated by it.

5. FLEXIBLE
An incentive scheme should be flexible enough to be adjusted to the needs of any change in the situation.
Similarly, it should be possible to rectify any mistakes or shortcomings that may have been discovered
during its operations.

6. ATTRACTIVE
Incentive payments under the scheme should be adequate to attract the employees to be covered by it. If a
worker already earning Rs. 500 a month is to get an extra benefit under an incentive scheme to the time of
Rs. 100, he would be tempted to perform as required. But, if the extra benefit is not likely to exceed Rs. 25,
he might not deem it worth while to strain himself for such a petty gain.

7. ECONOMICAL
The cost of operating an incentive scheme should not be measured only to terms of additional payments to
workers. The expense incurred in carrying out job evaluation, work measurement, methods improvement,
additional supervision and control, should also be taken into account. Thus, there before launching an
incentive scheme, it should be ensured that the benefits accruing from it would fully cover the increase in
expenses.

8. CONDUCTIVE TO WORKERS HEALTH AND WELFARE

An incentive scheme should not aim at over straining workers. If it offers increasingly high benefits for extra
output, workers may be tempted to work harder than their capacity. While this may be disastrous it would
be better therefore to fix a ceiling on the maximum earnings by way of incentives.

9. Attainable standards
The standards set by an incentive scheme should be neither too difficult nor too easy to attain. If the
standard task is too tough, workers may prefer to have their pre-incentive earnings than over strain
themselves to perform an apparently unattainable task. On the other hand, if the task is too easy, it may
defeat the purpose for which the scheme is launched. In that case it would also involve a heavy burden by
way of additional payments to workers.

STEPS TO BE TAKEN BEFORE INTRODUCTION OF ANY INCENTIVE SCHEME

1. Reasonable levels of output
2. Work and methods study
3. Stability
4. Ready availability of inputs
5. Proper machinery to handle all grievances
6. Evaluation.

GROUP INCENTIVE BONUS SCHEMES

Under personal incentive bonus schemes, bonus is paid to a worker on the basis of his individual
performance, the amount of bonus payable to any worker being not affected by the performance of his co-
worker. Under group bonus scheme, however bonus is calculated on the collective production is dependent
on the collective effort of a group of workers as a whole. In enterprises engaged in mass production or
assembly type of work, for example radio, television, cotton textiles, etc. a team of workers is employed on
a number of diverse operations. The work done by a particular work is liked to that done by one or more of
his colleagues in the same or other departments. As such, it may not be possible to measure and evaluate
the performance of each individual worker. Under these circumstances, for the purpose of bonus payment,
workers in a group are considered as a composite unit and bonus to each workers is paid on the basis of
performance of his group.

SUITABILITY OF GROUP BONUS SCHEME

Group bonus scheme may be the only alternative in the following cases:
a) Where it is not possible to measure the performance of each individual worker.
 b) Where the number of workers constituting a group is not very large.
c) Where the workers constitution a group possess the same or equal skills and abilities.
d) Where the aim is to provide incentive to indirect workers and
e) Where the finished product is the result of collective efforts of a group

TYPES OF GROUP INCENTIVE SCHEMES

There are different types of group incentive schemes. Important among them are as follows:
1. Priest man Plan
2. Scanlon Plan
3. Productive Bargaining
4. Co-partnership
5. Profit-sharing

PROFIT SHARING
The aim of profit sharing is to give employees an incentive to increase their output as also to bring about
healthy and mutually beneficial employer-employee relationship.

CHARACTERISTICS OF PROFIT SHARING

The following are the main features of profit sharing:
1. Profits of the enterprise are shared between employers and workers on the basis of an agreement
between the two parties.
2. The payment arising form profit sharing is over and above the normal wages paid to workers.
3. The payment is made after ascertaining the net profits of the company. Thus it is not a part of the
cost of production or a charge on profits.
4. The payment is made only when the profits cross a certain level. Even so, it is generally paid every
year.
5. The payment is based on seniority and / or wage level of each individual employee.
6. The payment represents a reward for group effort and efficiency and ti is made to all grades of
employees.

EVALUATION
MERITS
1. Healthy employer employee relations
An important advantage of profit-sharing is that it promotes healthy employer-employee relations. The fact
that profits justly treated as at lease partly the result of employees hared work and efficiency are not
wholly and exclusively meant for the employer, has a healthy effect on employees. they are less inclined to
go on strike or resort to go-slow or work-to-rule tactics because they know that doing so would have and
adverse effect on the profitability of the enterprise with the result that their own share in it would also be
reduced.

Thus, instead of labour unrest and strife, there develops a community of interests to the mutual advantage
of both the employer and the employees.

2. Improvement in productivity
Because workers develop an interest in the increased profits of the enterprise, they accomplish their tasks
more efficiently and sincerely. They realize that low productivity or rise in production costs would mean
lower profits and therefore lower rates of bonus for them. For this reason, they spare no effort to increase
productivity and reduce costs of production.

3. Additional earnings for workers

Profit sharing results in additional earnings for workers because the payment under it is over and above the
normal wages payable to them. Thus, they are in a position to raise their living standards and experience a
sense of economic security.

4. Reduced labour turnover

Payment under a profit sharing plan is largely based on the length of services of each individual worker.
Thus, to be eligible for higher bonus, an employee has to stay in the enterprise for a sufficiently long
duration. A rolling stone gathers no moss and an employee who changes his employer every not and then
cannot earn much bonus.

Thus, it may be said that a profit-sharing plan encourages a workers to hold on to his present job, and
reduces labour turn over.

5. Less need for supervision

As workers develop a vested interest in the increased profitability of the concern, they do not need much
supervision to work hard and sincerely. Even without any supervision, they accomplish the assigned tasks
to the best of their abilities and skills. Thus, the enterprise is spared the need to employ supervisory staff.

Even otherwise, a profit sharing plan improves the quality of supervision because workers willingly extend
their co-opertion to any scheme that aims at increasing productivity and reducing production costs.

6. Equity and social justice

A profit sharing plan results in equitable distribution of profits among the shareholders and employees of
the enterprise. Just as increased profits lead to increased dividend for shareholders, they also result in
increased earnings for employees of the enterprise. Thus, owners and employees are put on an equal
footing. Moreover, equitable distribution of profits reduces the gap between the haves (owners) and have
nots (employees) which serves the cause of social justice.
]
7. Selection of better personnel
Operation of a profit-sharing plan acts as an inducement to qualified personnel to join the enterprise as
employee.

8. Promotion of team-spirit
Operation of a profit-sharing plan encourages workers in each department to work unitedly as a team, and
offer willing assistance in solving operating problems. They know that stoppage of work at any point, if not
attended to well in time, may adversely affect the profitability of the enterprise and thus reduce their share
in it.

Accordingly, it leads to a sprit of camaraderie and community of interests which results in an all-round
development of all those associated with the enterprise entrepreneurs, employees, consumers and the
community itself.

DEMERITS
1. Meaningless in case of losses
While it is true that under the payment of Bonus Act, an enterprise is required to distribute a minimum
bonus @ 8.33% even in case of inadequate or no profits, but it cannot be said to be the ultimate aim of
profit sharing because it basically seeks prosperity of both the workers as well as the owners of the
enterprise.

2. A drag on newly established concerns

Where an enterprise is new, it cannot correctly estimate its profits which, in any case, may not be large
enough to support any worthwhile profit sharing scheme.

3. Element of uncertainty
Payment under a profit-sharing plan cannot be taken for granted. Even when employees of a concern do
their best, they may get only the legally prescribed minimum benefit under this scheme, for the simple
reason that there may be little or no profits to be shared by them. Sometimes, this may be due to factors
beyond anybodys control, for example depression, unfavorable business conditions, uncertain demand for
goods and services produced by the enterprise, and so on. But often lack of profits may be because of
mismanagement of the enterprise and even in that case workers may have to go without additional
earnings for no fault of their own.
 4. Deliberate suppression of profits
An unscrupulous management may resort to evil practices such as manipulation of accounts to reduce
profits, so that workers are denied their share in them.

5. Inadequate incentive effect

Because payment under a profit sharing plan is made only once or twice in a year, it lacks the attraction
provided by weekly or monthly incentive payments. In case employees share in the profits is credited to
their provident fund or pension account, they even lose that little attraction.

6. Efficient and inefficient workers treated alike

A profit sharing plan does not made any distinction between efficient and inefficient workers. They are
treated alike. Consequently, efficiently workers are discouraged and demoralized.

7. Indifference of trade unions

Profit-sharing plans are generally not liked by trade-unions. Because in return of payment under such a
plan, the management generally expects the workers to be more loyal to it and keep away from trade
unions. For obvious reasons, trade unions oppose anti-labour approach which is directly aimed at
destroying labour unity and solidarity.

8. Opposition by employers
If trade unions regard profit-sharing as the employers strategy to trap workers into their fold, employers
regard it as an arrangement under which workers get an undeserved share in profits which should wholly
and rightly belong to the employers. Profits, so runs the employers argument, represent the wages of
management, interest on capital and a reward for undertaking the risk of production. if they are made to
sacrifice a part of their profits, where then would be an incentive to undertake risks?

QUESTIONS
1. What are the merits of Time Wage Payment?
2. Describe the difference between Time wage payment and Piece rate wage payment.
3. What are the various Group Incentive Schemes? Describe the merits of such schemes.
 LESSON 13
EMPLOYEE EFFICIENCY AND WELFARE
The factors which may be said to promote employee efficiency cannot precisely be described, though the
effect, lack of efficiency on the part of employees are soon perceived all around. In the chapter on
motivation, we have discussed that besides knowledge and ability to perform the job assigned to him, an
employee must also have effective motivational environment so as to be able to show maximum
performance. Our discussion on motivation centered round the various needs to satisfy which an individual
is prompted to act. The strength of each need level may also be different in the case of different individuals.
An any case, an individuals urge to act in the manner desired of him will depend on his expectancy as
regards satisfaction of a particular need felt by him and the availability in the environment of the factors that
would satisfy the need.

Expectancy may be defined as the perceived probability of satisfying a particular need based on past
experience, whether ones or that of others.

Availability may be defined as the perceived limitations of the environment. It points to the degree to which
a person considers a particulars goal to be within his reach so as to satisfy his need. The perception of
limitations is wholly subjective from the point of view of the individual concerned whether the goal is in fact
achievable or not being altogether immaterial for the purpose.

FACTORS THAT PROMOTE EMPLOYEE EFFICIENCY

1. Adequate monetary and non-monetary benefits
While it is true that human beings experience a variety of needs all of which continuously compete for
satisfaction, the physiological needs are generally upper most which are satisfied by means of adequate
wages paid in time. Provision of fringe benefits like pension and provident fund schemes,, insurance and
other social security measures seek to satisfy his safety needs which are not less strong in competing for
satisfaction once the physiological needs are satisfied.

2. Suitable tools and equipment

Provision of tools and equipment appropriate to the job assigned to the employee is also an important
factor in the promotion of efficiency on his part.

3. Proper work environment

This has to do with the working conditions of the employee which should be made as congenial as possible
through provision of proper lighting ventilation, sanitation, temperature etc.

4. Work hours
Employee should be given adequate rest pauses after they have continuously worked for a certain number
of hours, proper relaxation and recuperation is a must to sustain continued efficiency on the job.
 5. Effective leadership
Subordinates are as efficient as their supervisors. Under participative management where managers and
subordinates have a free and frank discussion as regards common goals, major areas of responsibility and
the results expected, productivity is bound to increase. Similarly, where management has high
expectations of the subordinates, the performance levels on the part of the subordinates are high and vice-
versa.

Side by side, management should frame stable and consistent policies and procedure as regards
selection, placement, remuneration and promotion such that the employees know what they may aspire for,
and the pre-requisites of the same.

6. Employee morale
Morale refers to the groups zest and enthusiasm for action. In conditions of satisfactory growth prospects
with abundant opportunities for need satisfaction, optimum utilization of individual capacity and high
productivity, the morale of the employees is high. In the absence of such conditions, morale tends to
decline resulting in increasing discontent, absenteeism, turnover etc. As Napoleon once put it. In war,
morale conditions make up three quarters of the game, the relative balance of manpower accounts for the
remaining quarter. The same is by and large true of employees of a business in their task of
accomplishing the organizational objectives.

ROLE OF MONEY AS MOTIVATOR

How far money will motivate an individual to engage in the desired behaviour pattern will depend on
whether the need, for the satisfaction of which he is engaging in the said behaviour pattern, is capable of
being satisfied by means of money.
However, while it is true that people have different mixture or strength of needs, money may in general be
said to be an important motivating agent, it being greatly instrumental in the satisfaction of the basic needs,
such as hunger, shelter, security from uncertainty etc. Also, while people whose hunger for money and
more money may be insatiable, a large majority of people view money as a means to satisfy their physical
and other needs, and they require only so much of it as may enable them to achieve this end. If such
people are only offered monetary incentives with a view to perform better it would, in course of time,
decrease their satisfaction from the performance of their jobs, money being only an extrinsic reward meant
only for the satisfaction of lower order needs. To sustain continued satisfaction from jobs in their case,
such people have to be provided with increased responsibility through job enlargement, greater
participation in decision-making, a sense of achievement through recognition by means of promotion etc.

EMPLOYEE WELFARE
Employee welfare is a wide term. It may mean many things to many persons, its interpretation being
different from country to country and region to region, depending on the social customs, the degree of
industrialization, and the educational development of the worker. But essentially, it covers all those
activities that aim at intellectual, physical, moral and economic betterment of workers.
But the point to note here is that employee welfare refers to activities which are over and above those laid
down by the law of the land or which are part of the service contract between an employer and his
employees.

AIMS OF EMPLOYEE WELFARE

Mainly, employee welfare activities seek to achieve the following objectives:
1. To overcome the sense of monotony and frustration among employees.
2. To provide assistance in solving personal and family problems of employees
3. To offer facilities for health improvement
4. To provide opportunities for development of individual talents
5. To offer opening for self-expression and advancement
6. To create conditions where employees are enabled to develop a broader vision of life and matters.

KINDS OF EMPLOYEE WELFARE MEASURES

Employee welfare may take various forms, important among them being as follows:

(a) Housing
(b) Transport
(c) Educational medical benefits
(d) Rest and recreation
(e) Co-operative societies
(f) Day nurseries and creches
(g) Paid holidays and sick leave
(h) Social insurance schemes
(i) Provident fund and gratuity schemes
(j) Pension
(k) Legal and financial advice
(l) Club memberships and magazine subscriptions
(m) Sponsorship of sports and athletic terms and summer camps
(n) Scholarships

Some of the important benefits are discussed below:

RETIREMENT BENEFITS
An important aim of retirement benefits such as provident fund, superannuation fund, gratuity etc. is to
ensure a minimum living standard for employees after they have retired from service. Under provident fund
and superannuation fund schemes both employer and the employee contribute a certain amount to the
employees provident fund account. The amount standing to the credit of this account becomes payable to
the employee in the event of his death, retirement, or termination.

WORKMENS COMPENSATION
Under this, for death, and permanent or total disability resulting from job-related activities, the worker or his
dependants are paid compensation as per the Workmens Compensation Act. The entire amount of such
compensation is borne by the employer.

REST PAUSES
These are provided for employer working in officer or factories, and doing jobs that require great physical
and mental exertion, much repetition or heavy concentration. Thus, whether by the name of a lunch or tea
break, its object is to provide an employee some pleasant diversion from his job.

PAID HOLIDAYS
Certain days in the year may be provide as paid holidays. In our country, for example, Independence Day,
Gandhi Jayanti, Republic Day and of many important religious festivals are declared as paid holidays for
workers.

PRIVILEGE OR EARNED LEAVE

After an employee has worked in the enterprise for a specified period of time, he may usually be entitled to
a paid vacation. In India, most employers allow a days privilege or earned leave for every 11 days work put
in by the employee.
The object of the leave is to provide the employee an opportunity to take time off from his routine duties
and to refresh and recuperate himself.

SICK LEAVE
It again is a case of the employer paying for days on which an employee does not report for work on
account of illness.
Like privilege or earned leave, sick leave is also calculated on the basis of so many days every year. Sick
leave due to an employee is allowed to be accumulated up to a certain limit.

LEAVE OF ABSENCE
Employees may be allowed leave of absence when they are deputed to attend seminars, conference, or
educational or professional courses.
PENSION
It again is an example of provision of social security to workers to cover their financial needs after
retirement. Under it, a former employee or his dependants are paid a certain fixed amount every month or
every year. But to be eligible for the benefit, an employee should have put in a certain number of years of
service with his employer.

GROUP INSURANCE
Under it a large number of employees are jointly provided benefits of insurance life, health and accident.
Often employers bear the full cost of providing the benefit.

GAMES AND RECREATION

Employers may sponsor athletic teams or arrange picnics and group dinners for employees and members
of their families.

Needless to say, such events are meant to bring together employees and their families at one place so that
they may develop affinity with one another and a sense of belonging to the enterprise.

LEGAL AND FINANCIAL AID

Employers may arrange for free guidance to employees on legal and financial matters. Such guidance
should not be in regard to job-related problems alone. It may also be extended to cover personal and
family problems of the employees.

CO-OPERATIVE SOCIETIES
Employers may encourage formation of various kinds of co-operative societies to serve the financial and
material needs of their employees.

Thus, co-operative societies may be established to accept deposits from employees, offer them loans on
easy terms and provide their daily necessities at concessional rates.

HOUSING
In areas where housing is scarce or only available at exorbitant rates, the employers may provided
subsidized or free housing to their employees.
OTHER BENEFITS
The employer may provide all manner of other benefits to his employees, for example, free membership of
clubs and associations, free trip to and from the place of work, free education to children of employees,
free medical and, free sight seeing tours, or free tickets for plays tournaments etc.

BENEFITS OF EMPLOYEE WELFARE ACTIVITIES

1. Reduction in labour turn over
If an enterprise operates various welfare schemes, it will rarely have to face the problem of labour turnover.
Its employees would prefer to stick to their jobs and will not be easily lured by jobs outsider.

2. Reduction in absenteeism
The employees may also not remain absent from their work for long. Even when absence from work
because absolutely necessary, they will exert to make its duration as short as possible. As a result, there
will be fewer interruption or delays in the performance of work.

3. Sense of belonging
Welfare activities tend to develop cohesiveness among employees and promote a sense of belonging and
loyalty to the enterprise.

4. Reduction in labour disputes

Welfare activities seek to provide a healthy diversionary outlet to employees from the repetitiveness and
unchallenging nature of their jobs. This brings about a reduction in the number of disputes between
workers and management.

5. Immunity from evils of industrialization

With employees constantly engaged in one or the other welfare programmes operated for them, they will
have less time to fall prey to social evils like drinking, Grambling and prostitution.

6. Balanced developed of employees

Welfare activities enable employees to grow into socially useful citizens. They develop a community of
interests and learn to line with the shortcomings of their fellow-workers.

REVIEW QUESTIONS
1. What factors go to determine an employees efficiency?
2. What is the meaning of employee welfare? Describe its aims
3. Discuss the benefits that might be extended to employees to promote their welfare?
4. Enumerate the benefits of employee welfare?
 LESSON 14
EMPLOYEE SAFETY
Since the beginning of the present century, employee safety and health problems at work have been
engaging attention of the psychologists, sociologists and industrial engineers. Psychologists are concerned
with the theoretical considerations of accident causation and the research into accident control, through
proper selection, training and education of the employee, and the social and psychological factors that
influence the individuals behaviour in general Engineers and safety officers usually render necessary
practical advise on certain aspects of safety in industry. They look upon prevention of accidents basically
as an engineering problem to be tackled through designing of mechanical safety devices. In fact, accident
prevention and safety are inter-related and therefore, require a multi-dimensional approach. Its importance
has increased because of large-scale industrialization in which human beings are subject to mechanical,
chemical electrical and radiation hazards. Besides, modern industry is characterized by complicated
mechanisms intricate job requirements, and just moving production lines. One of the important
consequences of all this is increased dangers to human life, through accidents.

INDUSTRIAL ACCIDENTS AND INDUSTRIAL INJURY

The life of industrial workers is full of risks and hazards. Every year lakhs of employees are injured in
factories, mines, railways, profits and docks, leading to acute ailments or permanent handicaps. The
injuries may be caused as a result of any unsafe activity, or act on their part or chance occurrences (like
walking past a plate-glass window just as someone hits a ball through it) or as a result of some unsafe
work conditions or unsafe acts of employees themselves, or defective plant or shop lay out, inadequate
ventilation, unsafe and insufficient lighting arrangements, or insufficient space for movement inside the
plant or shop etc.

NATURE OF ACCIDENTS
The nature of and accident may vary from industry to industry. An employee may fall from a height while
engaged on a particular assignment or he may be caught in a machine while working on it, or he may fall
against the machine, or parts of a machine having a horizontal protruding motion may strike against him, or
explosives used carelessly may explode, and injure an employee. Such accidents may result in
disablement or death.

Disablement whether partial or total may take the form of a loss of ability to work or to move. Such
incapacity may be partial or total. Both types of disablement may be temporary or permanent. A temporary
partial disablement reduces the earning capacity of an individual in the employment in which he was
engaged when he sustained an injury at the time of the accident, while a permanent partial disablement is
that which reduces his ability to earn an income from any employment which he was capable of
undertaking at the time the accident occurred. He is entitled to compensation only to the extent to which
the ability to earn is reduced or impaired.

Total disablement, on the other hand, is a disablement, whether temporary or permanent, which
incapacitates a workman and makes it impossible for him to engage in any work which he was capable of
performing at the time of the accident which resulted in that disablement. In these circumstances, he is
entitled to full compensation.
CAUSES OF ACCIDENTS
Accidents are usually the result of a combination of factors, each one of which may vary from situation to
situation. This combination may be of unsafe acts and equipments, of people, factors and conditions. It has
been rightly said that the accident does not have a single cause but a multiplicity of causes, which are
often closely related.

According to safety experts there are three basic causes / factors that contribute to accidents in
organisatoins. Chance occurrences, unsafe conditions and unsafe acts on the part of employee.

1. UNSAFE CONDITIONS (WORK-RELATED CAUSES)

These, of one sort of another, are the basic and biggest cause of accidents. Such causes are associated
with defective plants, equipment, tool, materials, building etc. These can be termed technical causes
They arise when there are improper or inadequate safety guards on machines when machines break-
down when improper personal protection equipment is installed, when mechanical or construction
designs are defective and unsafe and when control devices which have been installed to make the
operation of machines safe and accidents free are lacking or defective, or when there is an absence of
proper maintenance and supervision of these devices. Thus unsafe conditions include.
1. Improperly guarded equipment
2. Defective equipment
3. Hazardous arrangement or procedure in, and or around machines or equipments
4. Unsafe storage, congestion, over loading
5. Inadequate safety devices
6. Wrong and faulty lay out, and bad location
7. Improper illumination glare, insufficient light
8. Improper ventilation insufficient air charge, impure air source
9. Poor house-keeping

The other work related causes of accident are:

(a) The job itself some jobs are inherently more dangerous than others, such as the job of man in
comparison the that of the foreman. Similarly, work during the night shift. This is due partly to
fatigue and partly to the fact that night is the period when one requires rest.
(b) Work schedules accidents increase late in the day. They do not usually occur during the early
hours of the work day. They are more frequent during the night shift. This is due partly to fatigue
and partly to the fact that night is the period when one requires rest.
(c) Psychological climate of the work place, also effects the accidents rate. Psychological, mental and
emotional imbalances are at the root of several accidents. Emotionally disturbed and mentally pre-
occupied persons meet with more accidents than a normal person.
 2. UNSAFE ACTS
These acts may be the result of lack of knowledge or skill on the part of the employee, certain bodily
defects and wrong attitudes. These acts include act like:

1. Operating without authority

2. Failing to secure equipment or warning other employees of possible danger
3. Failing to use safe attire or personal protective equipment
4. Throwing materials on the floor carelessly
5. Operating or working at unsafe speeds, either too fast or too low.
6. Making safety devices in operative by removing adjusting, disconnecting them
7. Using unsafe equipment, or using equipment insafety
8. Using unsafe procedures in loading placing missing, combining.
9. Taking unsafe position under suspended loads
10. Lifting improperly
11. Cleaning, adjusting, oiling repairing etc. moving a dangerous equipment
12. Distracting abusing, starting, quarrelling, day-dreaming, horseplay.

3. OTHER CAUSES
These cause arise out of unsafe situational and climate conditions and variations such as bad working
conditions, rough & slippery floors, executives glare, heat, humidity, dust and fume - laden atmosphere,
very long hours of work unsatisfactory behaviour of domineering supervisors, excessive noise and
carelessness in the handling of such inflammable materials such as gasoline solvents, oil and grease,
explosive etc.

1. Young, untrained and new workers generally sustain injuries more frequently than older, trained and
experienced employee.
2. Those addicted to alcoholism and drugs, and those who suffer from boredom and fatigue or indulge
in exhibitionism, generally account for a higher rate of accidents.
3. The way the management motives employees affects the rate and frequency of accidents. The
tensions which aggressive and negative supervisors generate among the employees also tend to
increase this rate and frequency.
4. Unmarried employees generally have more accidents than married employees.
5. Accidents are more frequent during the night shift
6. Women employees have a better safety record than on their male counterparts.
7. Workers who work under stress, or who feel their jobs are threatened or insecure, seem to have
more accidents than who do not.
ACCIDENT COSTS
Accidents are enormously costly, cause loss directly or indirectly and the losses are both visible and
invisible. The latter are immeasurable and cannot be valued in monetary terms.

Whenever an industrial accident occurs, it give rise to pain for the victim and his family and retards
industrial productivity which, in turn, affects the economy of a country. It results in financial loss for the
employee and the employer and their payments by the latter in the shape of compensation.

The various losses which a management suffers because of the time lost due to accidents are.

1. Directs costs, that is the wages of employees; six to ten times the wages because of the loss of
goods and services, compensation and the cost of medical aid; the cost incurred on training a new
worker loss due to waste of raw materials, and loss of production and quality arising out of the
experience and lack of skill of the new employee.
2. Indirect costs, which include the following:
a. The cost which the government has to incur because it has to maintain a large number of
factory inspectors to check accidents, because the cost of all these is received by imposing
higher takes on the people.
b. The cost to the employee of the time he has been without work because of his accident.
c. The cost of the lost time because other employees stop work out of curiosity, out of sympathy,
with the injured employee, or because they have to assist the injured worker.
d. The cost of time lost by a foreman, a supervisor or other executive while assisting the injured
employee, investigating the cause of the accident, arranging for his replacement, selecting and
training a new employee, preparing the accident report, and attending hearings conducted by
government of other officials.
e. The cost incurred on the machine or tools that might have been damaged and / or the cost of
the spoilage of material when the accident occurred.
f. The loss of profit on the production which the injured employee would have been responsible
for, including the loss incurred because the machine on which he was working was idle.
g. The cost incurred on account of the wages paid to an employee during the period in which he
was idle following his injury and even after his returns to work, when his productions would be
worth much less than it was before be sustained the injury.
h. The loss following the excitement among or the weakened morale of the other employees
following the occurrence of the accident and the consequent lower production throughout the
plant, and
i. Overhead costs the expense incurred on light, heat, rent and such other items, which continue
to be used while the injured employee is a non-producer.
It is obvious, then, an accident causes a lot of suffering and loss to the employees, the employer, the
government, and even to society. It is particularly hard on the employees family, specially when he is the
only bread-winner. Every accident lowers the morale of his fellow-workers. They become pessimistic and
increasingly aware of the hazardous nature of their work, as a result of which they do not, or cannot, put
their best efforts to achieve optimum production. accidents, therefore, increase the over-all cost of
production, and adversely affect productivity and morale.

ACCIDENT MEASUREMENT
Two main statistical ratios have been used to gather accident information the frequency rate and the
severity rate:
The frequency rate is the number of time lost accidents (or injuries which have disabled an employee)
per 1,00,000 man hours worked. The severity rate, on the other hand, is the total number of days charged
or lost because of accidents per 1,000,000 man hours worked.

The National Security Council of the United States has given the following formulate for the computation for
these rates.

Accident Frequency Rate Number or disabling injuries x 1,000,000

Total number of man hours worked
Severity Rate Number of man days lost x 1,000,000

Total number of man hours worked.

ACCIDENT REPORTS AND RECORDS

Proper reports and records of accidents have to be maintained by an organisatoin in the prescribed
manner, and complete information about an accident and the circumstances attending the death or
disablement of a worker or any other serious injury to him to be submitted to the government.

If a case
Page no. 137

Accident records should be maintained in detail and should contain the following items:

a) The total number of employees in the unit who are exposed to different types of accidents.
b) The severity of the accident whether it resulted in a broken bone, a deep cut and the time that
was lost as a result of it;
 c) The kind of work or occupation in which the employee was engaged.
d) The date, time and day, and the shift during which the accident occurred.
e) The total number of years during which the employee was engaged on that particular job when the
accident occurred.
f) Personal data, including the age and health of the injured employee; and
g) The immediate cause of the accident whether it was the result of a malfunctioning of a machine, or
whether the employee failed to use the safety devices provided for the purpose of preventing
accidents, etc.

SAFETY WHOSE RESPONSIBILITY

Safety is primarily the responsibility of the management. This responsibility should rest on the shoulders of
all cadres of management, such as Plant Manager, Production Manager. Chief Engineer, Personnel
Manager Maintenance Engineer, individual foreman, safety officer or Director.

Every organisatoin should formulate and implement a safety policy. The procedure to be adopted naturally
depends upon the size of a company, the number of plants it operates, the nature of the industry in which it
is engaged, the production technology it uses, and the attitude of the top management. After it has spelt
out its safety policy, a company should establish a safety programme, the primary goals of which should be
to reduce the number of hazardous factors which are likely to cause accidents and to develop safe working
habits among its employees.
The specific techniques and procedure which are used to accomplish these objectives are:

Line Staff

President Top Executive

General Manager Production Safety Director

Engineer
Superintendent Superintendent

General Supervisor General Supervisor

Supervisor Supervisor

Worker Supervisor

Worker
 Type of Safety Organisation

Safety Committee

Central Safety Committee

Executive Comptroller
Maintenance Superintendent

Departmental Safety Departmental Safety Departmental Safety

Committee Committee Committee
2 Supervisors 2 Supervisors 2 Supervisors
2 Workers 2 Workers 2 Workers

SAFETY ORGANISATION
A safety director and a safety committee be set up by an organisation. The safety organisation works as
shown in the above figure
The following facts should be given due consideration in any safety organisation programme.
a. Safety programmes must have top management approval, sanction and support.
b. Responsibility for safety must test with the supervisory personnel
c. Safety must be given equally important consideration with that of other factors of production
d. Provision must be made for prompt action in the elimination of mechanical and personal hazards.
e. A definite safety programme must be developed to educate all employees in safety and to secure
their active co-operation in the effort to eliminate accidents.
f. Safety must be included in all phases of planning, purchasing supervision and operation.

ACCIDENT PREVENTION
There are several ways by which accidents can be prevented. The National Safety Council, U. S. A. that
accident prevention depends on the three Es engineering, education and enforcement the job should be
engineered for safety employees should be educated in safe procedures, and safety rules should be
properly enforced.

In actual practice, accident prevention boils down to two basis activities, reducing unsafe conditions and
reducing unsafe acts. Reducing unsafe conditions is the primary duty of safety engineers, who should
remove or reduce physical hazards. Table 29.2 gives a check-list for reducing unsafe conditions.

Table 29.2
Check-list of Mechanical or Physical Accident Causing Conditions

1. General House Keeping

1. Adequate and wide aisles no materials protruding into aisles
2. Parts and tools stored safely after use not left in hazardous position that could cause them to fall.
3. Even and solid flooring no defective floors or ramps that could cause falling or tripping accidents
4. Waste cans and sand pails safety located and properly used. Material piled in safe manner not
too high or too close to sprinkler heads.
5. Floors clean and dry
6. Fire fighting equipment unobstructed
7. Workers benches placed orderly
8. Aisles kept clear and properly marked no air lines or electric cords across aisles.

2. Material Handling Equipments and Conveyances

On all conveyances, electric or hand, check to see that the following items are all in sound working.
1. Brakes properly adjusted
2. Warning device in place and working
3. Warning device in place and working
4. Wheels securely in place, properly inflated
5. Fuel and oil enough and right kind
6. No loose parts
7. Cables, books chins not worn or otherwise defective,
8. Suspended chains or books conspicuous
9. Safety loaded properly stored
 3. Ladders, Scaffold, Benches, Stairways etc.
The following items of major interest to be checked
1. Safety feed on straight ladders
2. Guard rails or hand rails
3. Treads, not slippery, not-splintered, cracked or rickety
4. Properly stored
5. Extension ladders ropes in good condition

4. Power Tools (Stationary)

1. Point of operation fuarded.
2. Guards in proper adjustment
3. Gears, belts, shafting counter weights guarded
4. Foot pedals guarded
5. Adequate lighting
6. Properly guarded
7. Tools or material rests properly adjusted
8. Adequate work space around machines
9. Control switch easily accessible
10. Safety glasses worn
11. Gloves worn by persons handling rough or sharp materials
12. No gloves of lose clothing worn by persons operating machines

5. Hand tools and Miscellaneous

1. In good condition not cracked, worn or otherwise defective
2. Properly stored
3. Correct for job
4. Goggles, respirators and personal protective equal worn where necessary

6. Welding
1. Are shielded
2. Fire hazards controlled
3. Operator using suitable equipment
4. Adequate ventilation
5. Cylinder secured
 6. Valves closed when not in use

7. Spray Painting
1. Explosion proof electrical equipment
2. Proper storage of paints and thinners in approved metal cabinets
3. Fire extinguishers adequate and suitable, readily accessible
4. Minimum storage in work area.

8. Fire Extinguishers
1. Properly service and tagged
2. Readily accessible
3. Adequate and suitable for operations involved.

STATUTORY PROVISION FOR SAFETY IN INDIA

The Factories Act contains specific provisions for the safety of workers. These are referred to in sections
21 to 40. They are:

FENCING OF MACHINERY
It is obligatory on the part of the management to fence machinery with guards of a substantial construction,
which shall be maintained and kept in position when any part of the machinery is in motion.

WORK ON OR NEVER MACHINERY IN MOTION

Any examination, adjustment or lubrication of any part of an operating machine shall be effected or carried
out by a specially trained male worker wearing tight-fitting clothing.

EMPLOYMENT OF ADOLESCENTS ON DANGEROUS MACHINES

No adolescent shall be allowed to work on any machine which poses a danger to him unless.
a. He has been fully instructed to beware of the particular danger that is likely to arise from the
machine and to observe the necessary precautions, and
b. He has received training on that machine or is under the supervision or a person who has a through
knowledge of, and experience in working on, the machine.

STRIKING GEAR OR DEVICE FOR CUTTING OFF POWER

In every factory, a suitable striking gear or other efficient mechanical appliances shall be provided and
maintained. Driving belts, when not in use, shall not be allowed to rest or ride on a shaft in motion. Suitable
device for cutting off power in an emergency shall be provided and maintained in every workroom.
SELF ACTING MACHINES
No transverse part of self-acting machine and no material carried thereon shall be allowed to run on its
outward or inward transverse within a distance of 45 centimeters from any fixed structure which is not a
part of the machine.

PROHIBITION OF EMPLOYMENT OF WOMEN AND CHILDREN NEAR COTTON OPENERS

No women or child shall be employed in any part of a factory to press cotton when a cotton opener is at
work. But if the feed-end of a cotton-opener is in a room which is separated from the delivery end by
partition extending to the roof or to such height as the factory inspector may specify in writing, women and
children may be employed in that part of the room in which the feed end is situated.

HOISTS AND LIFTS

In every factory, hoists and lifts shall be of good mechanical construction and of sound material, and they
shall be sufficiently strong and properly maintained. Every hoist way and lift way shall be adequately
protected by a proper enclosure fitted with gates. The maximum safe working load shall be clearly
indicated on every hoist or lift. A heavier load shall not be allowed to be carried on that hoist or lift.

LIFTING MACHINES, TACKLES, CHAINS AND ROPES

In every factory, lifting machines, tackles, chains and ropes shall be of good construction and of sound
material. They shall be free from defects and strong enough to carry the necessary loads.

REVOLVING MACHINERY
It every room in which grinding jobs are carried on, a notice indicating the maximum working speed of the
machine shall be fixed near it.

PRESSURE PLANT
In any operation which is carried on at a pressure which is higher than the atmospheric pressure, effective
measures should be taken to ensure that the safe working pressure is not exceeded.

FLOORS, STAIRS, AND OTHER MEANS OF ACCESS

All doors, steps, stairs, passages and gang ways shall be of sound construction and shall be kept and
maintained in a state of good repair, and they shall be free of obstructions. No substance, which is likely to
cause a person to slip, shall be kept near them.

PITS AND OPENING IN FLOOR

In every factory, every fixed vessel, tank, pit or opening in the floor, which may be a sources of danger,
shall be securely covered or securely fenced.
EXCESSIVE WEIGHTS
No person shall be employed in any factory to lift, carry or move any load which is so heavy as to cause
him a possible injury.

PRECAUTIONS AGAINST DANGEROUS FUMES

No person employed in a factory shall be allowed to enter any chamber, tank, vat, pit, flue or such other
confined place in which dangerous fumes are likely to be present to such an extent as to constitute a
hazard unless such chamber, tank, vat, pit or flue is provided with a manhde of a large enough size or with
similar other means of egress.

PRECAUTIONS IN CASE OF FIRE

The following in case of fire
a) Exits doors shall no be locked or fastened and shall be capable of being easily opened, and
they shall be so constructed as to open outwards;
b) Proper means of escape shall be provided in every industrial establishment;
c) Every door, window or other exit, through which persons can escape in the event of a fire, shall
be distinctly marked in red letters in a language that is understood by workers.
d) Proper arrangements shall be made to raise an alarm in the event of a fire; it would be
preferable if a siren is sounded so that workers may recognize the signal as an indication that a
fire has broken out somewhere in the factory premises;
e) All the exists should be easily and freely accessible to all the workers in every place in the
factory premises, so that can easily make their escape when a fire breaks out, and
f) All the workers shall be trained in the routine to be followed in the event of a fire in the factory
premises.

REVIEW QUESTIONS
1. What are the various type of direct monetary payments that the considered Fringe Benefits?
Assess the positions of overtime payments, paid holidays and leave with wages provided to
employee in India.
2. What are the major sources of health hazards and other types of insecurity of industrial employees?
3. What is accident proneness? How can it be minimized as a factor in injury rates in an organisation?
4. Point out the causes and nature of accidents or employment injuries. What benefits are available to
employees in this regard.
 LESSON 15
DISCIPLINE

Discipline means orderliness the opposite of confusion. Good discipline refers to orderly behaviour in
accordance with the rules and procedures of the organisation. Poor discipline refers to the failure of
individuals to observe the rules established by the organisation. Disciplinary action means taking action
against an individual when the departs from the code of conduct observed by the organisation. The object
of disciplinary action is not to inflict punishment but to inhibit some undesirable behaviour of an employee.

Discipline may be of 2 types positive and negative. positive discipline or self-discipline is the best
discipline. This refers to an organizational atmosphere in which subordinates willingly abide by rules which
they consider fair. The techniques followed by the management to achieve this type of discipline include
positive motivational activities such as praise participation and incentive pay. Negative or punitive discipline
is one in which management has to exert pressure or hold out threat by imposing penalties on wrongdoers.
When this pressure becomes increasingly severe each time a man is disciplined, it is called progressive
or corrective discipline.

ARGUMENTS AGAINST PUNITIVE DISCIPLINE OR PUNISHMENT

Many people argue that punishment should be avoided as a means of trying to influence behaviour. Their
objections are as follows:

a) For punishment to be al all effective, there must be continued motivating or surveillance, which is a
very wasteful use of high priced management time.
b) Punishment never really extinguishes or eliminating undesirable response tendencies, but only
temporarily suppresses them. These tendencies reappear with full force when the threat of
punishment is removed.
c) Punishment has undesirable side effects. It may cause resentment and hostility towards the
punishers with motive of trying to get even later through sabotage output restriction, or doing
things that make the punisher look bad or caused him inconvenience. The fear associated with
the punishing agent may lead to punished person to avoid his very presence, this, in turn, makes it
more difficult for the manager to play the desired role of coach, teacher or counseller. Or the action
to punishment may be more extreme, resulting in generalized inhibition and rigidity or stereo typed
behaviours in the punished person, this can make it more difficult for the person to learn new
behaviour, including very desirable behaviour or to adjust to change.

ALTERNATIVES TO PUNISHMENT
Alternatives to punishment in eliminating undesired behaviour include the following:
(a) Extinction
Find out what reinforces the undesired behaviour, for example, the unruly subordinate may be getting
praise and recognition from peers. Then get those peers to co-operate with you by ignoring the unruly
behaviour. When such behaviour is not reinforced, it will eventually lose strength and extinguish.
 (b) Environment engineering
Rearrange the features of the environment so that he stimulus situation does nto evoke the undesired
response but some other response. Skinner (1953) tells the story of a manager who had a traffic problem
caused by women hurrying down the corridor as soon as the end of the work day was signaled. The
manager solved his problem by placing wall minors along the corridor. The stimulus situations that had
evoked stampeding down the hall way was transformed into one which encouraged a more leisurely and
orderly walk and stop sequence.

(c) Reward
Rewarding either desirable or natural behaviour which is physically incompatible with the undesired
behaviour. If children are rewarded for exercising or for performing light out door chores before dinner, they
are prevented from excessive snacking and television watching.

(d) Adjustment
Allow adjustment, development, or maturation to take its course. New or inexperienced employees make
many mistakes and do many wrong things that they win learn to avid, given a reasonable period of
adjustment punishment may not hasten this process and if it causes undue anxiety, it can actually retard
this process.

ESSENTIALS OF GOOD DISCIPLINARY SYSTEM

While punitive discipline or punishment may sometimes be ineffective in changing behaviour or may
produce unwanted by products, there is nevertheless considerable evidence that punishment can be an
effective tool under certain conditions. These are as under.

1. Knowledge of rules
The employee must be informed clearly about what constitutes good behaviour and the rewards that may
emanate from it. All instructions should be clear and understandable. It is common sense that an employee
will obey an instruction more readily if he understand it.
The supervisor himself must know all the rules. He cannot effectively communicate with his workers if his
own knowledge about rules is hall backed. In fact, he needs to know more than the barest minimum that he
wants his workers to know. this reserve of knowledge is essential in order to be able to answer several
unexpected questions from workers. In other words, a supervisors span of knowledge and understanding
of rules should be greater than that of his workers. If this is not so, the supervisor will lose personal
prestige both before his supervisors and sub ordinates.

2. Prompt action
All violations and misconducts big and small should be promptly enquired into. For example, a
supervisor is most unwise to wait until lunch break before rebuking a works for arriving late. Beat the iron
when it is hot. This is because when the penalty is imposed immediately following the violation of a rule the
person punished tends to identify the punishment with the act he committed. Accordingly, the sub ordinate
attempts to avoid the violation in future. This is called the law of effect. The greater the delay the more
one forgets and the more one feels that punishment is not deserved.

3. Fair action
Promptness of disciplinary action at the cost of its fairness is not proper. An action in order to be fair must
possess the following characteristics.
a) All violations big and small should be duly punished. A violation should not be over looked or
condoned merely because it is small otherwise this will give an impression that announced rules
are meaningless.
b) All individuals big and small should receive equal punishment for equal indiscipline. If a rule is
applied to one individual but not to another, the management is bound to be accused of favoritism.
c) Discipline should be uniformly enforced at all times. If management soft-pedals on taking a
disciplinary action when there is shortage of labour and toughens its policy when labour is plentiful
it is acting arbitrarily. Similarly, if the management over looks a wrong on one occasion and
punishes it on another occasion it is acting inconsistently. Inconsistent behaviour of management
leads to uncertainty in the minds of subordinates. They simply do not know where they stand.
d) The alleged violation should be fully inquired into making a mistake by hastily administering a
penalty which on the basis of facts collected later on is found to be uncalled for will mean a
permanent destruction of the morale of the punished worker and general loss of face for the
supervisor.
e) The employees should always be given an opportunity to explain his action. The common law
principle that an offender is innocent until he is proved guilty beyond doubt should be followed. The
burden of proving the violation always lies on the management.

4. Well defined procedures

The procedure to be followed to reach to a penalty decision should be carefully laid down. It should include
the following steps:
a) The supervisor must assure himself that some violation of the rules has taken place.
b) He should state precisely and objectively the nature of the alleged violation.
c) He should then proceed to gather full facts about the cases and maintain proper records. Facts will
have to be gathered concerning the nature of the event, the participants and the surrounding
circumstances. Extenuating circumstances such as ill-health, family troubles etc., should be found
out. A critical analysis should be made of the persons background such as his past service record,
length of service, local practice, etc. Fact gathering is often a process of fact sifting. Opinions
should not be mistaken for facts. The methods used for gathering the fact must not smack of spying
and statements should not be prejudged.
d) After all the facts have been gathered though should be given to the various gathered thought
should be given to the various ypes of disciplinary action which can be taken in the case in
question. It is advisable to prepare 3 separate lists of actions. The 1 st list should include all types of
disciplinary action to make certain that no possibility is over looked. The 2 nd list should classify
penalties according to rank in order to acquaint the executive with those actions which lie with in his
 command and those for which he should refer the case to his superiors. The 3rd list should include
only those penalties which the offence in question specifically calls for.
e) The appropriateness of a disciplinary action should be decided in terms of its effectiveness in
correcting the employee. This is very important because the purpose of a disciplinary action is to
mend an employee and not to punish him, to help him and not to harm him.
f) The accused employee should have the right to appeal to higher authorities.

5. Constructive handling of disciplinary action

Disciplinary action should be handled in a constructive manner. It should be carried out by the immediate
line supervisor. This is necessary to preserve the supervisors authority and status. The employee should
be told not only the reasons for the action taken against him but also how he can avoid such penalties in
future. Disciplinary action should be taken in private. By exposing an employee to public ridicule the
supervisor attacks his dignity and social standing. This may produce an opposite effect on the employee.
He may react violently or may become obstinate to preserve his ego.

It is most unwise for a supervisor to take a general disciplinary action against a group of subordinates.
Disciplinary action is a matter for the individual. It is the individual who should be held responsible for any
wrong. A management which takes disciplinary actions against a group is likely to set off a wave of unrest
associated with failing morale and even the possibility of a wild cat strike.

After the disciplinary action has been taken the supervisor must assume a normal attitude towards the
employee. The should revert to his role of a helping hand as if noting has happened. This is possible only
when the supervisor uses an impersonal approach in administering a penalty. He should not engage in
personal ridicule, insult or even criticism. He should avoid getting into an argument. In short, he must play
the role of a judge enforcing the law with impartiality.

KINDS OF PUNISHMENTS
As a normal rule, punishment should be commensurate with the gravity of the offence. An employee found
guilty ofanact of minor misconduct like unpunctuality or irregular attendance cannot be awarded the same
punishment as may justifiably be awarded to an employee, found guilty of an act of major misconduct like
the theft of employers property. For various types of misconduct like the theft of employers property, for
various types of misconduct there are various punishments which are set out below in he ascending order
of their severity.

1. Oral reprimand
2. Written reprimand
Minor Punishments 3. Loss of privileges
4. Fines
5. Punitive suspensor
 6. With holding of increments
Major Punishments 7. Demotion
8. Discharge
9. Dismissal

1. ORAL REPRIMAND
This is the mildest from of disciplinary action in which the superior makes it clear to his subordinate that he
does not approve of the subordinates behaviour. This punishment is generally given for some minor
offences such as failure to obey safety rules, smoking in a prohibited area, on the job or giving sub-
standard performance.

Issue of reprimand does not involve loss of status or wages to the employee and, therefore, though it
amounts to disciplinary action, it is not deemed to be substantive punishments. However, as possible
invariably value the social approval of their actions by their superiors and fellow beings a reprimand is
generally effective in correcting subordinates. But it should be used sparingly, otherwise it will not produce
any effect on the subordinate. A subordinate who is continually criticized tries to cover up his mistakes,
becomes tense and loses his sense of security. He does not want to accept responsibility and on account
of low morale commits further mistakes.

2. WRITTEN REPRIMAND
An oral reprimand may not be sufficient in case of habitant misconduct or inefficiency. In such a situation it
is desirable that it is issued in writing and brought on record so that it may support, if necessary, any
substantive punishment that may have to be given to the employee in future. A written reprimand may state
that certain privileges would be with held or withdrawn if the subordinates continues with his present
conduct. In some enterprises the records to an employee may be marked and the employee shown a copy
of the notation to serve as a warning.

A warning serves to alter the expectations of an individual by making him aware of the exact nature of
punishment that awaits him following further acts of disobedience. It is not fair for a superior to warn a
subordinates and later punish him more severely than was expected at the time of the warning.

3. LOSS OF PRIVILEGES
For such offences as tardiness or learning work without permission, the employee may be put to loss of
various privileges such as good job assignments right to select machine or other equipment and freedom
of movement about the workplace or company.

4. FINES
Fine means a deduction from the remuneration of the employee be way of punishment. Power to make
penal deductions from the remuneration of the employee is not an implied term of ordinary contract
between master and servant and such can be exercised only if especially reserved to the employer under
the contract of employment.

5. PUNITIVE SUSPENSION
Punitive suspensions inflicted on the workman as a punishment for some misconduct where as suspension
pending an enquiry is only an expedient action which a manager may find necessary to take following
commission of a grave and serious misconduct. Under punitive suspension an employee is prohibited from
performing the duties assigned to him and his wages are withheld for so long as the prohibition subsists.
Under suspension pending an enquiry, unless the conditions of service make a contrary provision, a
workman would be entitled to wages for the period of suspension.

6. WITH HOLDING OF INCREMENTS

With holding of annual increments of an employee in a graded scale is a major punishment and generally
speaking the acts of misconduct for which this punishment may be awarded are the same as those for
which the extreme punishment of dismissal may be awarded. The cumulative effect of losing an increment
is considerable. It is equal to the amount of increment times 12 months, time the number of the years of
service still remaining.

7. DEMOTION
It means reduction of an employee to a lower grade from the one hitherto enjoyed by him. According to
some writers since demotion implies condemnation of the employees as being unfit for the position
occupied by him it should not be used as a penalty if the employee is properly qualified for the present
assignment. Demotion should be sued only in a case where an employee does not meet present job
requirement or in the event of a cutback in the work force.

8. DISCHARGE
In common law, if both parties to an agreement have performed what they have agreed to do the contract
is discharged. Thus, in a contract of service if both parties have agreed to terminate the contract by giving
stipulated amount of notice or by paying money in lieu there of the contract of service can be terminated in
the agreed manner for reasons which do not imply any act of misconduct; for example, an employee may
be discharged owing to either redundance or superannuation or infirmity, etc. in accordance with his
contract of service, without any fault on his part.

9. DISMISSAL
Also referred to as industrial capital punishment, dismissal is the ultimate penalty which is rarely resorted to
nowadays. Though discharge and dismissal both have the same result, namely the termination of service
of the employee, there are some vital differences between the 2.

a. While dismissal is always a punishment that discharge, may or may not be a punishment
 b. A dismissal is a more severs punishment than discharge. There is a stigma attached to the
expression dismissal which makes dismissal a disqualification for future employment. This is not
so in the case of discharge.
c. A dismissal is usually summary, that is immediate action is taken to terminate the employment
contract of the employee without notice. But is case of a discharge an agreed amount of notice may
have to be given. The justification for not giving a warning lies in the general acceptance that the
acts and omissions for which the punishment of dismissal may be inflicted are socially repugnant
and a management is fully entitled to protect itself against such acts.
d. In cases of dismissal the employee is not usually entitled to provident fund or gratuity benefits but
this is not so in the case of a discharge.

The supreme punishment of dismissal is inflicted rarely. Managers generally try to avoid it. They very often
follow several other means of eliminating a person without an outright dismissal. These are as follows:
a. The flow of work may be altered so that it goes around the particular employee; thus he may take
hint and submit his resignation.
b. The job may be abolished and duties scattered about among other employees, then after the
employee has left the organisation the dutics can be reassembled and a new employee hired to fill
the job.
c. Resignation may be demanded by holding out threat of discharge
d. In higher position, the employee may be kicked upstairs and promoted out of the way, he may be
made a special consultant and never consulted. The cost of his salary may be much less than the
loss from retention in his present job.
e. The employee may be transferred to some other department

INDIAN LAW ON PUNISHMENT

Indian law on punishment is contained in
- The Industrial Employment (Standing Orders) Act, 1946
- Section 8 of the Payment of Wages Act 1936 and
- Section ILA and Section 33 of the Industrial Disputes Act 1947.
A brief description of this law is under:

INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1946

The object of this act is to require employers in Industrial establishments employing 100 or more persons
to define precisely the condition of employment including the rules of discipline and procedure for
punishment for indiscipline and to make them known to the workmen employed by them. The matters to be
defined are prescribed in the schedule to the act. These are as follows:

1. Classification of workman e.g. whether permanent, temporary, apprentices, probationers, or badlis.

2. Manners of intimating to workmen periods and hours of work, holidays, pay days and wage rates.
 3. Shift working
4. Attendance and late coming.
5. Conditions of procedure in applying for, and the authority which may grant leave and holidays.
6. Requirements to enter promises by certain gates and liability to search
7. Closing and reopening of sections of the industrial establishment and temporary stoppages of work
and the rights and liabilities of the employer and workmen arising there form.
8. Termination of employment, and the notice thereof to be given by employer to workman.
9. Suspension or dismissal for misconduct and acts or omissions which constitute misconduct.
10. Means of redress for workmen against unfair treatment or wrongful exactions by the employer or
his agents or servants.
11. Any other matter which may be prescribed by the appropriate government.

Rules relating to above inatters are known as Standing orders. It should be noted tht it is not permissible
for the employers to frame. Standing orders in respect of the matters not provide for in the scheme of the
Act. In other words, an employer can make standing orders only with regard to the matters set out in the
above schedule. Thus, the central government has by notification dated 17 th January 1983 added the
following 8 matters for framing standing orders in all industrial establishments except coal mines:
1. Service record
2. Confirmation
3. Age of retirement
4. Transfer
5. Medical aid in case of accident
6. Medical examination
7. Secrecy
8. Exclusive services

MODEL STANDING ORDERS

The central and state governments have framed their own rules on the above listed matters. These are
known as Model orders and are contained in schedules to the Industrial Employment (Standing orders)
Rules of these governments. Once the act becomes applicable to an industrial establishment, the Model
Standing orders framed by the appropriate government become immediately applicable till the standing
orders framed by the establishments itself are certified and brought into force according to the act.

CERTIFICATION OF STANDING ORDERS

a. The procedures for certification of standing orders requires that within 6 months from the date on
which the Industrial Employment (Standing orders) act becomes applicable to an industrial
establishment. The employer should submit 5 copies of the standing orders proposed by him to the
certifying officer. Such draft should provide for every matter set our above and should be in
 conformity with model standing orders as far as it is practicable. The draft standing orders shuld be
accompanied by a statement giving prescribed particulars of the workmen employed in the
industrial establishment and the name of the trade union which they belong to. In case there is no
union in the establishment the certifying officer may hold the election and have 3 workers elected
as representatives of the workmen in the establishment.
b. On receipt of the draft the certifying officer shall forward a copy there of to the trade union or where
there is not such trade union to the elected representative of the workmen within 15 days from the
receipt of such notice.
c. After giving the employer and the trade union or representatives of the workmen an opportunity of
being heard, the certifying officer shall decide whether or not any modification or addition to the
draft submitted by the employer is necessary to render the draft certifiable under the act. For this
purpose he shall ensure that :
i) The draft is in conformity with the model standing orders issued by the government
j) The draft provides for every matters set out in the schedule and
k) The draft is reasonable and fair

He shall then certify the Draft Standing Orders with or without modification and shall send within 7 days
authenticated copies there of to the employer and to the trade union or the representatives of the
workmen.

Any person aggrieved by the order of the certifying officer may within 30 days from the date on which
copies were sent by the certifying officer to the respective parties appeal to the Appellate Authority notified
under the Act by the appropriate government, whose decision shall be final.

If no appeal is preferred, the standing orders shall come into operation on the expiry of the 30 days from
the date on which authenticated copies are sent by the certifying officer to the respective parties. Where an
appeal is preferred, the standing orders shall come into operation on expiry of 7 days from the date on
which copies of the orders of the Appellate Authority are sent.

MISCONDUCT
No punishment can be imposed on an employee unless he is proved guilty of some misconduct mentioned
in the standing orders. Misconducts which are most common in the standing orders are as under:

1. Disobedience or willful in subordination

2. Theft, fraud or dishonesty in connection with employers business or property.
3. Willful damage to or loss of employers goods or property.
4. Taking or giving nay bribes or illegal gratification
5. Habitual absence with out leave or unauthorized absence for more than a certain number of days.
6. Habitual late attendance
 7. Habitual breach of any law applicable to the establishment
8. Riotous or disorderly bahaviour during working hours at the establishments or any act subversive of
discipline.
9. Habitual negligence or neglect of work or frequent repetition of any act or omission for which time
may be imposed.
10. Striking work or inciting others to strike in contravention of any law.
11. Adopting go slow tactics
12. Collecting or canvassing for the collection of funds for any trade union or canvassing for its
membership during working hours within the company premises.
13. Failure to observe safety instructions, unauthorized removal, interference or damage to machinery
guards, fencing and other safety devices installed in the factory.
14. Distributing or exhibiting inside the factory any newspapers, hand-bills, pamphlets, or posters
without the previous sanction of the manager.
15. Refusal to work on another machine of the same type.
16. Holding general meeting inside the factory premises without the previous sanction of the managers.
17. Disclosing to any unauthorized person any information in regard to the working to process of the
factory which comes into the possession.
18. Sleeping or dosing while on duty
19. Refusal to accept a charge sheet, order or other communication
20. Interfering or tampering with the records of the company.
21. Convection by any court of law for nay criminal offences involving moral turpitude.
22. Smoking within the factory except in places where smoking is permitted.

FORMS OF PUNISHMENT
Generally, the forms of punishment as laid down in the standing orders are follows:
1. Warning
It is bad remark in the workers service record and is likely to be used against him in future.

2. Fine
The maximum fine allowed to be deducted from a workers wage in laid down in the Payment
Wages. It is 3 paise in the rupee of the workers total monthly wage. Section 8 of the act places
several statutory restrictions on the service of this power.

3. Stoppage of promotion
Stoppage of promotion or demotion or with holding of increment for a certain period.
 4. Suspension
Standing orders prescribe the maximum number of days (generally it is 4 times) for which such
punishment may be inflicted.

5. Discharge
In standing orders there is usually a provision of termination of a workers service by giving 15 days
notice or paying wages in lieu there of.

6. Dismissal
Standing orders generally provide that no order of dismissal shall be made unless the workman
concerned is informed in writing of the alleged misconduct and is given an opportunity to explain
the circumstances alleged against him.

PROCEDURES FOR TAKING DISCIPLINARY ACTION

Whether or not there are standing orders the procedure for taking disciplinary action against workers
should be based on the following principles of natural justice.
a. The person accused should know the nature of the accusation made,
b. The person accused should be given an opportunity to state his case and
c. The management should act in good faith.

If the standing orders of an organisation provide for the procedures the same should be strictly followed for
the punishment may be held invalid if there is any deviation from the laid down procedure.

The management starts the procedure for taking disciplinary action against the works by giving him a
charge sheet. Charge sheet is not a punishment in itself. It is merely notice of a charge that the worker is
responsible for some misconduct and that the management wants to know what he has to say about it. It
gives the workers an opportunity to explain his conduct. A charge sheet is therefore also called a sham
cause notice. The following guidelines may be followed in framing the charges.

1. Each charge must be very clear and precise. It should not be vague.
2. There should be a separate charge for each allegation
3. There should be not multiplication of charges for the same allegation
4. Charges must not relate to any matter which has already been divided upon.

An enquiring officer is disqualified on any of the following grounds:

a. If he is involved in the incident which led to the charge sheet
 b. If he has personal knowledge of the incident or himself gives or collects evidence for the very
enquiry conducted by him or helps others in doing so.
c. If he himself has issued the charge sheet
d. If he is directly subordinate to the person accused.

Many standing orders have a provision permitting a charge sheeted workers to be defended by a co-
worker or by an official of the union. Nonparticipation in the enquires of a charge sheeted workers cannot
stay the enquiry proceedings. The management may proceed with the enquiry even in his absence of the
worker the management leads its evidence and the enquiry officer records his findings on the basis of the
evidence produced before him. The person who leads evidence from the management side is called the
presentation officer.

On the basis of the conclusions arrived at by the enquiry officer, the management issues punishment
orders. The report of the enquiry officer it should be noted, is generally silent on the past service record of
the accused because such record is not brought to the notice of the enquiry officer during the enquiry
proceedings except in cases of habitual misconduct. The question therefore arises should past record be
considered by the management while issuing punishment orders? There is no unanimity among High
court decisions on this point. the desirable course however, appears to be consider such records before
inflicting punishment. It would be still better if the past record is brought to the notice of the enquiry office
during enquiry proceeding so as to give an opportunity to the accused workers to make his submission
regarding his past record also.

It should be noted that when a dispute is pending in conciliation, arbitration or adjudication proceedings
the employer his not right to punish a workman for his misconduct which is connected with the pending
dispute. For example, a workman who has taken part in a gherao in furtherance of some demands covered
by the dispute being guilty of misconduct connected with the pending dispute cannot be punished.
Punishment in such cases can be awarded only with the written permission of the authority before which
the proceeding is pending when the misconduct of the employee is not connected with the pending dispute
or discharge. Dismissal or discharge of the employee can be made only after the employee has been paid
wages for the month and an application has been made by the employer to the authority before which the
proceeding is pending for approval of the action taken by him (Sec. 33 of the Industrial Disputes Act)

Sec. 11-A of the industrial Disputes Act, 1947 empowers a Labour court Tribunal or National Tribunal as the
case may be to act aside the order of discharge or dismissal of an employee even if passed following a
proper and valid enquiry by the employer.

REVIEW QUESTIONS
1. What are the essentials of a good disciplinary system? What is Hot Store rule?
2. Describe the various kinds of punishment which are inflicted on a workers for misconduct?
3. Describe the salient features of Domestic Enquiry. Can aggrieved employee seek the assistance of
an outside advocate to plead the case with the employer on behalf of he employee?
4. What is meant by model standing orders? Are these orders applicable to all establishment? What is
the scope of their application?
5. Describe the Indian Law on discipline in industry.
 LESSON 16
GRIEVANCE

MEANING
A grievance is an alleged violation of the rights of workers on the job. It may occur in one of several forms:

- As a violation of the collective bargaining agreement

- As a violation of Central or State laws
- As a violation of past practice
- As a violation of company rules
- As a violation of managements responsibility

According to Michael J. Jucius, the term grievance means any discontent or dissatisfaction, whether
expressed or not and whether valid or not, arising out of anything connected with the company that an
employee thinks, believes or even feels, is unfair, unjust or inequitable this definitions very broad and
covers dissatisfactions which have the following characteristics:

1. The discontent must arise out of something connected with the company Workers may be
dissatisfied because of several reasons, e.g. illness in the family, quarrel with a neighbor, disliking
for the political party in power, and so on. Such outside sources are beyond the control of the
company and therefore do not constitute a grievance.
2. The discontent may be expressed or implied

Expressed grievances are comparatively easy to recognize and are manifested in several ways, e.g.
gossiping, jealously, active criticism argumentation, increased labour turnover, carelessness in the use
of tools and materials, untidy house keeping, poor workmanship, etc. Unexpressed grievances are
indicated by indifference to work, day dreaming, absenteeism, tardiness, etc. it is not wise to recognize
only expressed grievances and over look the unexpressed ones. In fact \unexpressed or implied
grievances are more dangerous than the expressed ones because it is not known when they may
explode. Hence, the executive should develop a seventh sense for anticipating grievances. He should
be sensitive to even the weak and implied signals from the employee. An employee may causally
remark that it is too be in the room or that he has been assigned a job that he does not like. All such
casuals remarks and grumblings are grievances by implication. Only for a pain staking and of servant
supervisor it is possible to discover what is bothering employees before they themselves are aware of
grievances. The personnel department can be helpful by training supervisors to become proficient in
observing employees. the techniques of attitude surveys and statistical interpretations of trends of
turnover complaints transfers, suggestions etc. are also helpful in this connection.

3. The discontent may be valid legitimate and rational or untrue and irrational or completely ludicrous.
The point is that when a grievance held by an employee comes to the notice of the management it
 cannot usually dismiss it as irrational or untrue. Such grievances also have to be attended to by the
management in the same way as rational grievances. We should know that a large part of out
behaviours is irrational this may be largely due to our distorted perception Emotional grievances
which are based upon sentiments (like love, hatred resentment, anger, envy fear, etc. )
misconceptions and lack of thinking are examples of our irrational behaviour. These grievances are
the most difficult to handle.

CAUSES OF GRIEVANCES
The causes of grievances may broadly be classified in the following categories:

(A) Grievances resulting form working conditions

a. Improper matching of the worker with the job
b. Changes in schedules or procedures
c. Non-availability of proper tools, machines and equipment for doing the same.
d. Tight production standards
e. Bad physical conditions of work place
f. Failure to maintain proper discipline.
g. Poor relationship with the supervisor.

(B) Grievances resulting from management policy

a. Wage payment and job rates
b. Leave
c. Overtime
d. Seniority
e. Transfer
f. Promotion, demotion and discharges
g. Lack of career planting and employee development plan
h. Lack of role clarity, delegation etc.
i. Lack of regard for collective agreement
j. Hostility toward a labour union

(C) Grievances resulting from personal mal adjustment

a. Over ambition
b. Excessive self-esteem
c. Impractical attitude to life, etc.
GRIEVANCES PROCEDURE
Every organisation has need for a continuing process of conciliation to facilitate settlement of controversies
and to assure an employee with a grievance that his case will be given a fair hearing. One of the important
jobs of front-line supervisors is to handle problems with employees right on the spot to mutual satisfaction
of workers and management. Inevitably grievances will arise the cannot be easily settled by the parties
immediately concimed at the outset. The supervisor him self may be the cause of the grievance in the
workers mind. To this reason, an organisation needs a standing procedure or machinery for orderly
rediressal of grievances. The machinery makes provision for appeal up the ladder to top level
management. In situations where union contracts so provide, grievances not otherwise settled may be sent
to arbitration. Morale is boosted by speedy disposition of grievances handled in conformance with set
procedures.

A grievance procedure is a graduated series of steps arranged in a hierathy of increasing complexity and
involvement. The number of step in a grievance procedure very with the size of organisation. A small
organisation may have 2 steps the supervisor and the manager but a big organisation may have as
many as 10 steps. The first and the last steps are almost the same for all organizations. Though a labour
union is not essential to the establishments and operation of a grievance procedure, one is assumed in the
schematic, diagram of a 4 step grievance procedure which is shown in Fig. 4.

As is shown in the diagrams the frontline supervisor is always accorded the 1 st opportunity to handle
grievances. He is the 1st rung of the ladder. If the concern is unionized, a representatives of the union may
also join him. This step is very necessary to preserve the authority of the supervisor over his workers. But
all grievances cannot be handled by the supervisor because many of them involve issues or policies which
are beyond the limits of the authority. There may be some grievances which he may fail to redress and find
solution for. Hence provision is made for a second step in handling grievances. This 2 nd step may be the
personnel officer himself or some middle-level line executive. If the concern is unionized, some higher
personnel in the union hierarchy may join him. It should, however, be renumbered that by insetting the
personnel officer into the procedure at this step and by giving him authority to overrule and reverse the
decision of the supervisor the fundamental principal of line and staff relationship is violated. A 3 rd step is
constituted by the top management to handle grievances involving company wide issues. In this step the
top union representative join. The redressal of grievance complex and difficult because by not they acquire
political hues and colours. If the grievances to not been settled by top management and to top union then
in the first and final step it may be referred to an impartial outside person called an radiator the other
possibilities are that are issue may be temporarily or permanently dropped or the workers may go on strike.

The OPEN DOOR Policy

This policy may appear very attractive but it has the following limitations.
1. Under this policy the front line supervisor who should be the first man to know about the grievances
of his subordinates is by passed. The provokes him in two ways. First, he thinks the man who
skipped him disrespectful. Secondly, he fears that he will issue his superiors displeasure because
this will be interpreted by the superior as his failure to handle his subordinates.
2. By following an open-door policy the top management cannot have adequate clues to assess a
supervisors skill in handling grievances. It does not know what action, if any the supervisor would
have taken to resolved a grievance.
 3. Top management is likely to be too unfamiliar with the work situation in which grievances developed
to the able to correctly evaluate the information that it gets. There may be several levels of
management between the operative employee and the top president of a company. Theoretically,
each level affords an equal opportunity for distortion fading and delay of certain facts on which a
complaint may be based.
4. Though the door of the executives office remains physically open, psychological and social barriers
prevent employees from actually entering it. Some employees hesitate to be singled out as having
a grievance. Others are afraid they will incur their supervisors disfavor.
5. Sometimes an open door policy is used to hide the top managements own hesitation to make
contacts with the operatives and the open door is often a slogan to conceal closed minds.

The way the open-door can be most effective is for a manager to walk through it and get out among his
people. The open door is for managers to walk through not employees. the true test of such a policy is
whether the top man behind the door has an open door attitude and his employees psychologically free to
enter.

DESIRABLE FEATURES OF A GRIEVANCE PROCEDURE

A grievance procedure should incorporate the following features:

1. Conformity with existing legislation

The procedure should be designed to supplement the existing statutory provisions where practicable, the
procedure can make use of such machinery as the law might have already provided for.

2. Acceptability
The grievance procedure must be accepted by everybody. In order to be generally acceptable it must
ensure (a) a sense of fair-play and justice to the worker, (b) reasonable exercise of authority to the
manager, and (c) adequate participation of the union.

3. Simplicity
The procedure should be simple enough to be understood by every employee. The steps should be as few
as possible. Channels for handling grievances should be carefully developed. Employees must know the
authorities to be contacted at various levels. Information about the procedures can be thoroughly
disseminated among all employees through pictures, charts, diagrams etc.

4. Promptness
Speedy settlement of a grievance is the corner stone of a sound personnel policy. Justice delayed is justice
denied. The procedure should aim at a rapid disposal of the grievance. This can be achieved by
incorporating the following features in the procedure.
(a) As far as possible grievance should be settled the lowest level.
 (b) No matter should ordinarily be taken up at more than 2 levels i.e. normally there should be only
once appeal.
(c) Different types of grievances may be referred to appropriate authorities. It may be useful to classify
grievances as those arising from personnel relationship and others arising out of conditions of
employment. In the former case a grievance should be taken up in the 1 st instance, with the
authority in the line management immediately above the officer against whom the complaint is
made. Thereafter, the matter may go to the grievance committee comprising representatives and
management and worker. Other grievances should be taken up, in the 1st instance with the authority
designated by the management. Thereafter, a reference may be made to the grievance committee
and finally to the top management.
(d) Time limit should placed at each step and it should be rigidly followed at each level.

5. Training
In order to ensure effective working of the grievance procedure it is necessary that supervisors and the
union representatives are given training in grievance handling.

6. Follow-up
The working of the procedure should be reviewed periodically by the personnel department and necessary
structural changes introduced to make it more effective.

A good grievance procedure attacks problems as they arise, excellent grievance procedure
anticipates them and prevents then from occurring. A manager can know about the simmering even before
they turn into actual grievances through several means such as opinion surveys, open door policy
suggestion schemes and exit interviews.

BENEFITS OF GRIEVANCE SYSTEM

1. It brings human problems into the open so that management can learn about them and try
corrective action.
2. It helps in preventing grievance by encouraging management to probe underlying problems before
and to correct them. The management catches and solves a problem before it becomes a
grievance.
3. It provides employees a formalized means of emotional release for their dissatisfactions. Even it a
worker does not use the grievance system for his own emotional release in a particular situation, he
feels better because he knows the system is there to use if he wants to do so. it builds within him a
sense of emotional security.
4. It helps in establishing and maintaining a work culture or way of life. As problems one interpreted in
the grievance procedure, the group learns how it is expected to respond to the policies that have
been set up.
5. It acts as a check upon arbitrary and capricious management action. When a manager knows that
his actions are subject to challenge and review in a grievance system he becomes more careful in
taking his decisions.
POINTS TO BE REMEMBERED WHEN HANDLING A GRIEVANCE
1. Every grievance must be considered important no matter how irrelevant or insignificant it is or
seems.
2. A grievance should not be postponed in the hope that people will see the light themselves. If an
executive is tired, in a bad temper or otherwise feeling out of sorts, he may courteously,
apologetically and with regret postpone a grievance hearing, but he should never say something
that would incur the distrust or enmity of the aggrieved employee.
3. All grievances should be put in writing. This is necessary to avoid ambiguity and to correctly
determine the exact nature of a grievance.
4. All relevant facts about a grievance should be gathered by the management and their proper
records maintained. This will convince the employees about managements sincerity, integrity and
honesty of purpose. Full facts will also help the management in reaching a fair decision.
Maintenance of records is essential for future reference.
5. The worker should be given free time off purpose his grievance.
6. Management should make a list of an solutions and later evaluate them one by one in terms of their
total effect upon the organisation and not solely upon their immediate or individual effect. Tentative
solutions can be determined on the basis of experience, example of other companies, technical and
trade publications and pure guess.
7. Decision once reached should be communicated to the employee and acted upon by the
management. If the decision is unfavorable its legitimate foundations should be well explained.
8. Follow-up must be done by the management to determine whether action taken by it has favorably
changed the employees attitude net.

SETTLEMENT OF GRIEVANCES IN INDIAN INDUSTRY

Settlement of grievances has not received adequate attention in our legislative frame work present
enactments which only indirect deal with the redressal of individual grievances are the Industrial
Employment (Standing Orders) Act, 1946, the Factories Act 1948, and the Industrial Disputes Act, 1947.
The Industrial Employment act provides that every establishment employing 100 or more workers should
frame standing orders which should contain, among other matters, provisions for means of redress for
workmen against unfair treatment or wrongful exactions by the employer or his agents as servants.
Similarly, Section 49 of the Factories Act provides for the appointment of Welfare Officers in every factory
where in 500 or more workers are ordinarily employer. These officers are generally entrusted with the task
of dealing with complaints and grievances.

Under Section 2-A of the Industrial Disputes Act (which was added to the Act by an amendment made in
1965), the term industrial dispute includes all differences between an individual workman and his
employer connected with, or arising out of his discharge, dismissal, retrenchment or termination not
withstanding that no other workman nor any union of workman is a partly to dispute.
In order to meet the short coming, the Industrial Disputes Act. 1982, which has not yet been enforced
provides for the setting up of grievance settlement authorities and reference of certain individual disputes
to such authorities. Section 9-C of the amended Act provides.

1. The employer in relation to every industrial establishment in which 50 or more workman are
employed or have been employed on any day in the preceding 12 months, shall provide for, in
accordance with the rules made in that behalf under this Act, a grievance Settlement Authority for
the settlement of industrial disputes connected with an individual workman employed in the
establishment.
2. Where an industrial dispute connected with an individual workman arises in an establishment
referred to in sub-section (1) a workman or any trade union of workmen of which such workman is a
member, refer in such manner as may be prescribed such dispute to the Grievance Settlement
Authority provided for by the employer under that sub-section for settlement.
3. The Grievance Settlement Authority referred to in sub-section (1) shall follow such procedure and
complete its proceedings with in such period as may be prescribed.
4. No reference shall be made under chapter III with respect to any dispute referred to in this section
unless such dispute has been referred to the Grievance Settlement Authority concerned and the
decision of the Grievance Settlement Authority is not acceptable to any of the parties to the dispute.

QUESTIONS
1. Describe the meaning of the term grievance.
2. Point out the causes for grievances
3. Discuss the grievance procedure with its desirable features.
 B. B. A. Degree Examination
Model Questions Paper
Paper 3.5 Principles of Personnel Management
Max. Marks 100 Time 3 Hours
Part A : Answer any five questions : - (5 x 8 = 40 )
1. Explain the importance of managing human resources.
2. Describe the functions of a Personal Manager.
3. What is Job Analysis? Point out the differences between job Description and Job Specification.
4. Describe the Principles of a good promotion policy.
5. What are the various types of transfers?
6. What are the objectives of performance appraisal in an organisation?
7. Describe the principles of a good compensation plan?
8. What is discipline? State the principles of employees good discipline.

Part B : Answer any four Questions:- (4x15 = 60)

9. Discuss the objectives of Personal Management and state the structure of a Personal Department
in an organisation.
10. State the importance of human resources planning and nature in detail the HRP process.
11. Discuss in detail the process of selecting the employees in an organisation.
12. Discuss the various performance appraisal methods and state the merit of each method.
13. State the important principles of a good wage and salary administration. Point out the various
methods of wage payment to employees.
14. Discuss the various welfare and safety measures provided under the law for the benefit of
employees.
15. What are the causes for grievances? State the grievance handling procedures as used in business
organisation.