UNIT 3

RECRUITMENT AND SELECTION

RECRUITMENT
Meaning:-
Recruitment is generating of application for specific positions to be filled in the organization.
Definition:-
According to Flippo Recruitment as “a process of searching for prospective employees and
stimulating and encouraging them to apply for job in an organization.
According to Werther and Davis, “Recruitment is the process of finding and attract capable
applicants for employment.
The process begin when new recruits are sought and ends when their application are submitted.
The result is pool of applicants from which new employees
Features:-
• It is a process rather than a single act or event.
• Linking activity as brings together the employer and the prospective employee
• Positive activity to seek out eligible persons from suitable ones are selected
• To locate the sources of people required to meet job requirements.
• Ability to match jobs to suitable candidates
• A two way process recruiter and recruited.
• A complex job that involves lots of factors like image of the company nature of jobs
offered, organizational policies, working condition etc.

RECRUITMENT

• Recruitment is the process of locating and encouraging potential applicants to apply

for existing or anticipated job opening.

• It is actually a linking function, joining together those with jobs to fill and those
seeking jobs.

Recruitment, logically, aims at,

(1) Attracting a large number of qualified applicants

(2) Offering enough information for unqualified person (for eg: bank recruitment they
specify the qualification, like degree or equalant etc.)
ACCORDING TO EDWIN D FLIPPO
RECRUITMENT IS THE PROCESS OF SEARCHING FOR PROSPECTIVE
EMPLOYEES AND STIMULATING THEM TO APPLY FOR JOBS IN THE
ORGANISATION .

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SIGNIFICANCE OF HRM

• Determine present and future requirement

• Creates and increases applicant pool
• Increases success rate of selection.
• Meet organisation's obligations
• Increases and evaluates effectiveness
• Reduces turnover

Objectives of recruitment

• Introducing recruitment process that suit your business

• Finding skilled employees
• Finding employees who fit your culture
• Meeting your salary requirements
• Finding trustworthy employees
• Conducting a fair and legal search

Process of Recruitment
 Steps involved in the Process of Recruitment
1. Identify Vacancy and Evaluate Need
2. Recruitment Planning
3. Strategy Development
4. Searching
5. Screening
6. Evaluation and Control
1. Identify Vacancy and Evaluate Need
 The first step in the process of recruitment is to identify the vacancies of the job in the
organisation.
 If there is vacancy, evaluate whether the organisation has the need of recruiting the
employees or not.
2. Recruitment Planning
Here, planning involves to draft a comprehensive job specification for the vacant
position, outlining its major and minor responsibilities; the skills, experience and
qualifications needed; grade and level of pay; starting date; whether temporary or
permanent; and mention of special conditions, if any, attached to the job to be filled ”
3. Strategy Development
Once it is known how many with what qualifications of candidates are required, the
next step involved in this regard is to devise a suitable strategy for recruiting the
candidates in the organisation.
The strategic considerations to be considered may include issues like
 Whether to select the required candidates from the organisation or hire it from
outside i.e.; source of recruitment to be practiced
 What type of recruitment method to be used:
 It may be Direct method, Indirect method or Third party method.
 Direct method includes holding job fairs, college recruiting etc.

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  Indirect method includes advertisements in newspapers, radio,
television, Professional journals, technical magazines, etc.
 Third party method includes the use of private employment agencies,
management consultants, professional associations, Labour contractors
etc. to establish contact with the job-seekers.
 What geographical area be considered for searching the candidates
 What sequence of activities to be followed in recruiting candidates in the
organisation.
4. Searching
 This step involves attracting job seekers to the organisation. There are broadly two
sources used to attract candidates:
 Internal Sources
 External Sources
5. Screening
 Though some view screening as the starting point of selection, it can be considered it
as an integral part of recruitment. The reason being the selection process starts only
after the applications have been screened and shortlisted. Let us take an example.
Example: In the Universities, applications are invited for filling the post of Professors.
Applications received in response to invitation, i.e., advertisement are screened and
shortlisted on the basis of eligibility and suitability. Then, only the screened applicants
are invited for seminar presentation and personal interview. The selection process starts
from here, i.e., seminar presentation or interview.
 Applications are screened against the qualification, knowledge, skills, abilities, interest
and experience mentioned in the job specification. Those who do not qualify are
straightway eliminated from the selection process.
 The techniques used for screening candidates vary depending on the source of supply
and method used for recruiting.
 Preliminary applications, de-selection tests and screening interviews are common
techniques used for screening the candidates.
6. Evaluation and Control
 It is necessary to enhance the efficiency of recruitment attempts in future. It should be
kept in mind that recruitment is an expensive process, involving costs such as
i. Salary of recruiters
ii. Cost and time spent for preparing job analysis, advertisement, etc.
iii. Administrative expenses
iv. Cost of outsourcing or overtime while vacancies remain unfilled
v. Cost incurred in recruiting unsuitable candidates

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1. Sources and methods of recruitment
2. Internal source
3. External source

1. Internal methods of recruitment

a) Transfer and Promotion
Transfer and promotions are ways of internally filling organisational job
vacancies .Transfer involves shifting of persons from present jobs similar other jobs. These
do not involve any change in rank, responsibility and prestige.
Promotions refers to shifting of persons to positions carrying better prestige,
higher responsibilities and more pay. The higher positions falling vacant may be filled up
from within the organisation.
b) Job Posting:
It is an in-house method of recruitment in which notices of vacant jobs are posted
at important places of the organisation such as employee lounges, cafeterias, elevators
etc. and employees are provided with a large amount of time to apply for the available job.

c) Employee Referrals:
Using of personal contacts to find a job opportunity is known as employee referral.
It is a reference from an existing employee regarding a candidate be it a friend or a close
relative. A major problem with this method is that it encourages favoritism.
d) Former Employees:
Former employees are increasingly becoming a feasible source of recruitment,
as the employers mostly contact former employees, and try to change them. They are more
trusted as an internal sources because they have a relation with the company.
Merits of internal sources
 Familiarity
 Better utilization of Internal talents
 Economy
 Self-development
Demerits of internal sources
 Restricted Choice
 Inbreeding
 Conflict
 Absence of Competition

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 2. External source
METHODS
 Direct method: recruiters are send to educational and professional institutions building
public contact and exhibits
 Indirect method
 Third party method

1. Direct method
1. Campus recruitment: it is a method of recruiting by visiting and participating in
college campuses and their placement centers . Here the recruiter visit reputed
educational institutions with a view to pick up job aspirants having requisite technical
or professional skills.
2. Scouting: it is like job fair.
3. Recruitment at the factory gate: here notice is posted outside the factory gate stating
information regarding job vacancies

2. Indirect Method
1. Advertisements: It generally gives a brief outline of the job responsibilities,
compensation package, prospects in the org etc..
2. Employees trade association or clubs: meeting conferences seminars and other social
functions of employee trade associations /clubs are more ways of spoting suitable
candidates
3. Professional associations: professional organization or associations maintain
complete bio data of their members & provide the same to various organization on
requisition
4. Other reputed firms: many firms made effort to discover appropriate candidates from
such firms for filling job positions

3. Third party methods

1. Private employment agencies: A search firm is a private employment agency that
maintains computerized lists of qualified applicants and supplies these to employees
willing to hire people from the list for fee.
2. Trade union :they offer manual and skilled workers in ample in quantity
3. Employment exchanges: as a statutory requirement companies are expected to notify
the, vacancies through the respective employment exchanges, created all over India for
helping unemployed youth, displaced persons, ex-military personnel, physically
handicapped etc.
4. Internet recruiting: In recent years most companies have found it useful to develop
their own website and list job openings on it. The website offers a fast, convenient, cost
effective means for job applicants to submit their Resume through the internet
5. Unsolicited applicants/walk ins: Here applicants depend on economic conditions,
the image of the company etc. Such applicants are generally kept in a data bank and
whenever a suitable vacancy arises the company would intimate the candidates to apply
through a formal channel..

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Constraints of recruitment
1. Unattractive jobs:
If the job to be filled not very attractive, most prospective candidates may turn indifferent
and may not even apply. This is especially jobs that are dull, boring, anxiety producing,
devoid of career growth opportunities and generally do not reward performance in a
proper way.
2. Poor image:
If the image of a firm is perceived to be low (due to factors such as operating in a declining
industry, earning a bad name because of environmental pollution, poor quality products)
the likelihood of attracting a large number of qualified applicants reduced.
3. trade union requirement:
Trade union may also act as a constraints to employ persons from outsides. An
understanding with the union to fill up certain percentage of posts through it will restrict
the choice of management.
4. Organisational policies:
Internal policies of the enterprise may also act as a constraint on recruitment of new
persons. A policy of filling up higher positions from out sides can discourage competent
persons to apply in such an enterprise.
5. Restrictive policies of government:
Governmental policies often come in the way of recruiting people as per the rules for
company or on the basis of merit /seniority, etc. Enterprise to recruit new persons only from
the lists supplied by government employment exchange.
Challenges of Recruitment
1. Finding a qualified employee in time:
If the company just laid someone off or had to fire someone because of
uncontrollable circumstances. By this time the recruiter have to find a suitable employee.
2. Making sure a resume is legitimate:
There may be fake resume, fake certification, fake referrals. This is because most
employers don’t have time to research a potential employee’s resume
3. Balancing speed and quality:
Recruiter want to hire an applicant as fast as possible , but you also want to ensure
you get the right employee.
4. Finding a qualified employee:
Many job postings get hundreds of resumes, it is challenge to sort through all that
in order to find the qualified candidate.

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5. Planning the interview process:
Recruiter has to plan the structure of the interview. Interview process have the lot
of work when you have the lot of candidate.
NEW APPROACHES TO RECRUITMENT
Introduction:
New method of recruitment are devised to eliminate the drawbacks of traditional methods
of recruitment such as forecasting demand and crucial supply forecasting .such methods
are termed as modern or scientific recruitment methods. modern recruitment methods help
in deep analysis of labour market and assist in searching, those people who actively
participate in online programmes.
1.Electronic recruiting:
It is an efficient methods due to its cost effectiveness, swiftness and capability to select
candidates who are techno-sarvy
2.Social media:
today’s youth devotes less time to newspapers and generally spend more time on facebook
and twitter starting from news to family renewal, everything is available on facebook and
twitter.
3.Smart phones:
Various applications and nearly any type of web page can be connected to smart phones.
The job applicants are connected with their phones across the world, companies provide
various kind of information about themselves through their portals and even advertise the
job posts through sending messages
4. On-site recruitment:
The organisation that need candidate’s every day and also need larger workforce prefer this
method. The information about the job and various benefits for the workers and telephone
number of the organisational representatives is printed on the hand-outs of the enterprise.
Candidates who are keen for the job can contact the organisational representatives
5. Bill board advertising:
An expanded logo showing the organisation’s names, benefits, employment openings and
phone numbers are the few features of billboard advertising. Billboards gives only precise
information so that even an average driver who is passing by can quickly absorb all the
information
6. Display through air:
Hydrogen balloons carrying company’s logo or aeroplanes bearing flags of company’s logo
are used for advertising. These are the recent styles of showing vacancy in a company. This
is a good medium of advertising because it is visible to a vast number of people.

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7. Glow sign board:
The employment opportunities in an organisation can also be displayed through glow sign
boards. While driving at night, these glow sign boards are easily and therefore it is also a
good medium of advertising
8. Stickers:
Job opportunities in an organisation are also demonstrated by using stickers. These stickers
have the name of vacant job position along with the contact number of the organisation
these are applied on walls and vehicles to grab the attention of applicants
9. Kiosks :
The selling &marketing messages are included in kiosks. It also included audio –visual
exercise like aptitude tests through which they can connect with the user. It similar to video
game in appearance. The kiosks combine the talent pool with the gathered knowledge about
the applicant.
10. Cultural or social events:
These days companies actively take part in cultural and social programmes. In these
programmes each company has its own stalls where hand-outs are distributed which
provide information related to vacancies and other employment related information.
11. Response cards:
The individuals who are concerned about employment are offered these pre designed cards
by the organization. The willing applicants get these cards through e-mails. These cards
include updates about employment and questionnaire to be solved by the candidates. The
applicant is asked to simply answer those questionnaires. These solved questionnaires are
returned to the organisation via electronic mail. Through this procedure, the organisation
gets the full knowledge of the applicant concern for the employment and above all, the
organisations also comes to know about the applicants concern for the job.
12. Conversion of clients as employees:
This method has been put into use by a large number of organisations. In this method,
customers are requested by the organisation to become their employees and are offered
employment proposal. Customers who regularly visit the company have proper information
about its products. so, it is easier for the company to inform the customers or prospective
employees about their products

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SELECTION
MEANING AND DEFINITION OF SELECTION

Selection refers to a process in which individuals are picked up from the pool of job
applicants possessing the required knowledge and skills for the job to be perfomed in an
organisation.
Selection is a process which includes various phases such as exploring the applicants in
order to check whether they are suitable for the job or not, picking up the right ones from
the pool of applicants and eliminating the rests.

Selection can be regarded as a negative process in its application, as its main aim is to
reject the unsuitable individuals as many as possible; so as to get the right and appropriate
candidates for the organisation.
Definition:
According to Terrie Nolinske, “Selection is the process of making a hire or no-hire
decision regarding each applicant for a job”.

According to steven P.Robbins and mary coulter, “Selection is the process of screening job
applications to ensure that the most appropriate candidates are hired”.

According to hunt, and osborn, “Selection is a series of steps from initial applicant
screening to final hiring of the new employee”.

FACTORS AFFECTING SELECTION

. Internal Environmental Factors:
Internal environmental factors which affect the selection process include:
a] Type of the organization:
Organizations having a complicated structure significantly require a refined working
structure. Most organizations split their organizational structure into three basic types. One
type is a line structure where specific duties are set to be performed from top to bottom. In

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line and staff structure, duties are defined by staff and line, i.e.., with staff departments
supporting the line managers.

b] Size of the organization:

Selection process is influenced by the size of the organization. Small organizations
use more informal selection process in comparison to the big organizations.
c] Nature of social pressure:
Selection process is influenced by the social pressure as well, because selection of
human resource is greatly influenced by legislation, executive orders, and court decisions,
etc..
d] Applicant pool:
Selection process is affected by the pool of applicants. It can be an effective process
only if the applicant pool is large and comprises of competent applicants for a specific job
position.
e] speed of decision making:
Selection process is effected by the time provided for making the selection decision.
Organisation can averse the legal problems by strictly following the selection policies and
procedures.
2. External environmental factors:
a] Nature of the labor market:
Selection process is affected by the nature of the labour market as well. For example,
election process will be short and simple, if there are very few applicants having required
knowledge and set of skills, and vice versa.
b] Trade unions:
A trade union is an organization of workers that is formed with a view of protecting
and promoting the interests of workers.
c] Government regulations:
Organization need to follow the selection norms defined under the regulations
prescribed by the government. Thus, government rules and regulations such as legislation
also effect the execution of selection procedure in an organization.
Selection
Selection is a process in which individuals are picked-up from the pool of job aplicants.
Selection process includes various phases such as exploring the applicants in order to check
whether they are suitable for the job or not and then picking the right ones & eleminating
the rests.

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Process of selection
Selection process consists of various stages. Selection aims at generating full
information regarding the candidates, in order to determine whether they are appropriate
for the job or not. The selection process varies from organization to organization and from
job to job, Therefor an ideal process of selection includes following steps.
• Screening of Applicants
It includes filling up the application forms by candidates. Forms contain information
as personal bio-data, achievement, experience etc. The information is utilized in order to
get the right candidates for right job.
• Selection test
The selection test helps to evaluate the candidates much effectively. The selection test
provides information in terms of their aptitude, personality etc.
• Selection interview
Under this process a personal interview will be done with the candidate. The main
purpose of this process is to fully evaluate the candidate for the job.
• Medical examination
As there are several jobs which require a ot of patience, the medical examination is
performed to examine the candidate's ability to work under pressure. This process helps
to a lot the right person to right ob.
• Reference check and Background verification
This process is included in selection for the purpose of bringing out more
information about the candidate. Candidates are requested to mention the reference name
like ex-employers, educational institute, or those people who know about candidates.
• Hiring decision
Finally, based on the above steps, the appropriate candidates are recommended for
selection by selection committee.

Types of selection tests in HRM:

Depending upon the job description, job specification, level of job, organizational culture,
etc. different selection tests can be used. Brief description of these tests is given below:
1. Ability tests:

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Ability tests determine how well the candidates if selected will perform the job. Ability
tests are thus, the instruments which ensure the level of performance of selecting
employees. There can be different types of selection tests like aptitude test, achievement
test and intelligence test.

 Aptitude tests:
Aptitude is the ability, capability, talents, propensity, skills and fitness. So, aptitude tests
measure the ability, capability and talents of the candidates to ensure that they can learn
job related skills and knowledge in future. It deals with possibility of future achievement
of candidates. GMAT, Mechanical Aptitude Tests, Psychomotor Aptitude Test, Artistic
Aptitude Tests etc. are very common aptitude tests used for the different purpose.
 Achievement tests:
Achievements are related with past. These tests are thus, measures of past achievement and
performance of candidates. These tests measure level of proficiency achieved at previous
jobs. Achievement test assure the candidate grows the level of excellence at job. These tests
prove the claim of candidates for the experience. Job knowledge test and work sample test
are two most common tests used in employee selection process.
 Intelligence tests:
Intelligence refers to the level of cleverness or intellects. This is the state of mind or brain
understands the problem and provides the logic reasoning capacity to solve the problem.
Intelligence tests are more important for managerial jobs. They measure IQ in terms of
comprehension, reasoning, numbers, memory etc. Intelligence tests compare mental with
actual age of candidates.
2. Personality tests:
Personality of managers is most important especially to the managerial level jobs facing
to general public consumers and employees. Personality dimensions of employees
significantly affect to the level of satisfaction of concern groups. So, personality tests are
used to measure such personality dimensions of candidates. Such dimensions can be
assertiveness, emotional stability, openness to experience, motivation, agreeableness,
conscientiousness etc. Three types of personality tests can be used for employee selection
which are listed as follows:
 Interest tests:
They measure general preferences of employees. Such preferences guide the activities of
employees. So, interest tests examine the likes and dislikes related to hobbies, recreational
activities, group activities, and career choice.
 Attitude tests:
Attitude refers to the mind set of the person which directs the behavior, thoughts and
feelings. Attitude of the candidates thus influences to the organizational performance. Thus,

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attitude tests measure the tendencies to act favorable or unfavorable towards objects, people
or events.
 Projective tests:
Projection is the act of estimating the future. Projection capacity thus, indicates the capacity
of employees to estimate the consequences of any act at the future with the greater accuracy.
So, while doing the employee selection, their projection capacity is also conducted with
projection tests. Such tests measure whether a candidate can put complete image of any
event or not. For this, a situation, a event is given to candidates describe.
3. Situational tests:
How effectively the candidate tackles the situation is one of the interest area for the
managerial jobs. This means, situation based problem capacity is judged by situational
tests. Such tests are conducted by asking candidates to respond the situation specific
problems. Group discussion can be conducted for getting information regarding instant
judgement capacity of the candidates. Their response can be captured by video and then
evaluated.
4. Honesty tests:
Honesty is the degree of accuracy. In order to ensure the accuracy of information
provided by the candidate, honesty test is conducted. Such tests measure how far
candidate can be honest towards job.
PLACEMENT
Meaning:
The employee should be placed on his/her right job after he/she has been hired.
Allocation of people to jobs is known as placement.
It is a process of assigning or re- assigning employees to a new
or different job thus, placement is the procedure of placing the right person on the right
job and the aim of placement is to place the hired, candidates in the jobs for which they
have the needed skills.
DEFINITION
According to Dale Yoder, “the assignment of a particular job to a newly appointed
employee is the placement.”

According to Pigors and Myers, “placement is the determination of the job to which an
accepted candidates is to be assigned , and his assignment to that job.”
Process of placement
There are 4 steps in the procedure of employee placement which are as follows.
Step 1: data collection
Step 2: evaluation

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Step 3: allocation/placing
Step 4: control

Step 1. Data collection:

In the employee placement procedure, the first step is to collect data about
the employee for the purpose of identifying qualifications, skills and abilities of present
employees.
Step 2. Evaluation:
After completing the first step of collecting employee data, the next step
is to evaluate the capability of an employee in order to analyze the type of job that best
suits to the employee.
Step 3. Allocation/placing:
In this step the company places the employee on the job which is best
suitable for him.

Step 4. Control:
The final step in this procedure is control. This step involves
measuring and observing the employee performance in that particular job.
INDUCTION
Induction is a process through which a new employee is introduced to the job and the
organisation. All the activities of introducing a new candidate to the organisation and his
department are involved in the induction process.
DEFINITION:
According to Armstrong-”Induction is the process of receiving and welcoming an
employee when he first joins a company and giving him the basic information he needs
to settle down quickly and start work”.
According to Edwin B.Flippo-”Induction is the welcoming process to make the new
employee feel at home and generate in him a feeling of belonginess to the organisation”.
OBJECTIVES OF INDUCTION
 To help the new comer to overcome his shyness and overcome his shyness
nervousness in meeting new people in a new environment.
 To give new comer necessary information such as location of a cafe, rest period etc.
 To build new employee confidence in the organisation.
 It helps in reducing labour turnover and absenteeism.

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 It reduces confusion and develops healthy relation in the organisation.
 *To ensure that the new comer do not form false impression and negative attitude
towards the organisation.
 *To develop among the new comer a sense of belonging and loyalty to the
organisation.

PROCESS OF INDUCTION
1.General orientation;
 The main aim is to make the employee comfortable and motivate him to be serious
during the orientation process.
 Employee is also made aware of the history, business objectives, & process of the
organisation. He also taken for a visit of the whole organisation for understanding the
business process.
2. Departmental orientation;
 The individual is introduced to the department where he has to work. There is need for
the new incumbent to be aware of the role, responsibility and the operating practices of
the department.
 The new employees should be made familiar with each and every activity of the
department for a few months.
 The new employee needs to build up a relationship with the colleagues& subordinates,
after which he will be allotted a particular job.
3. Specific Job orientation;
 The individual is provided a particular assignment with a job description. The employee
need to have the knowledge of the used for a specific job.
 The responsibility involved in that specific work has to be mentioned precisely to the
newcomer along with the role expectation.

TYPES OF INDUCTION
 1.FORMAL INDUCTION

Formal induction is a planned attempt to introduce new employees to the organization, job
and the working environment. This induction type may consume more time of the superiors
to learn and deliver the new employees needs at the beginning.But this may create new
employees less number of errors at the working period and good coordination among all
the parties.
New employee will have the chance to carry his/her works clearly, with less numbers of
errors. Also, new employee will fit to the organizational culture and the work group easily,
and strongly.

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2. INFORMAL INDUCTION
 Informal induction is not planned and is ad hock. New employees learn through trial
and error method. They get familiar with the work and work environment by
themselves. This induction type will make the stress on new employee at the very
beginning, because of his/her not knowing things at the operations.
 The advantage of informal induction is, if the new employee survived, then he/she may
know the process by his/her experience, and the later on errors may minimize. But at
the beginning the vice versa thing of above advantage may create loses, if the new
employee unable to survive at the organization.

Internal Mobility
As the organisations are expanding, their requirements are also changing.
Mobility & flexibility have started playing an important role to deal with these changing
requirements. Expansion of global operations by various business organisations which are
well prepared & competitive are considered as the ‘best’ among all the competitors in the
market.
Objectives/purposes of Internal Mobility
 To improve the effectiveness of the organisation- The organisational effectiveness
depends largely on how well the policies, programmes and procedures are implemented
in actual practice, which in turn depends on suitability of employee's skill, knowledge,
commitment etc. to the job requirements.
 To maximise employee efficiency - Employees' existing skill, knowledge be utilised
when a proper job is assigned to them besides other factors. Upward job assignment to
an employee certainly helps in motivating the employee, boosting his morale and
improving his commitment to the job and organisation in addition to utilising the skills
of higher order which were higher to unutilised.
 To ensure discipline - Discipline is highly essential to implement the programmes in
right time and in right manner. Demotions can be used to ensure discipline and to
correct the wrong placements and job assignments.
 To adopt to organisational changes - Here operational changes like changes in
production level and schedules, market level, schedule and direction, economic change
like inflation and deflection, changes in technology, expansion, diversification,
geographical spread etc. All these organisational changes should be met by proper job
reassignment to the existing employees
Need for Internal Mobility:
 Changes in job structure, job design, job grouping changes in technology,
mechanization etc., resulting in encasement of job demand.

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  Expansion and diversification of production or operations
 Adding different lines of auxiliary supportive activities
 Taking up of geographical expansion and diversification
 Introduction of creative and innovative ideas in all the areas of management resulting
in increased job demands
 Changes in employee skill, knowledge, abilities, aptitude, values etc.
 Changing demands of trade unions regarding protecting the interests of their members.
 Chancing government role in human resource development
Purposes of Internal Mobility
1. To improve the effectiveness of the organization
2. To maximize the employee efficiency
3. To ensure discipline and
4. To adopt organizational changes

TRANSFER
A transfer is a change in job assignment. It may involve a promotion or demotion or no
change at all in status and responsibility.
MEANING AND DEFINITION OF TRANSFER:
Transfer means shifting of employees from one job to another without any job related
increase in the pay, benefits and status of employees is called transfer
“ Transfer is defined as a lateral shifting causing movement of individual from one
position to another usually without involving any marked change in duties, responsibilities,
skill needed or compensation”.
-Dale Yoder
OBJECTIVES OF TRANSFER:
1. To meet the organisational requirement:
organisations may have to transfer employees due to changes in technology, change
in volume of production, production schedule, product line , quality of products , change
in job pattern caused by change in organisational structure, fluctuations in the market
condition like demands fluctuations ,introduction of new lines. All these changes demand
the shifting in job assignments with a view to place the right man on right job.
2. Optimum utilization of skills:
An employee may be transferred because management feels that his skills,
experience and job knowledge could be put to better use elsewhere.
3. To reduce conflicts :

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 Where employees find it difficult to get along with colleagues in a particular
section, department or location- they could be shifted to another place to reduce conflicts.
4. To provide relief to the employees:
Transfer may be made to give relief to employees who are overburdened or
doing hazardous jobs for long periods.
5.Employee request:
Organisation may order a transfer to fulfil the request of an employee for it.
Employees may cite health, family or other personal problem for seeking voluntary
transfer.
REASON FOR TRANSFER:
 To meet the organisational requirement when there are changes in technology, volume
of production, change in organisational structure, fluctuation in market conditions ect.
 To utilise employees skills and knowledge where it best suits or required.
 To improve interpersonal relationship and thereby reduce interpersonal conflicts.
 To give relief to the employees who are over burdened or doing complicated or risky
work for a long period.
 To punish the employees for violating the disciplinary rules.
TYPES OF TRANSFER:
1. On the basis of purpose:
Transfer may be classified into,
A. Production Transfer:
Such transfer are made when labour requirements in one division or branch is
decline. The surplus employees from such division are transferred to those division or
branches where there is shortage of employees.
B. Replacement Transfer:
A replacement transfer is a transfer of senior employees to replace the junior
employees of new employee when the latter is laid off or shifted to another job.
C. Versality Transfer:
Versality transfer are effected to make employee versatile and competent in
more than one skill.
D. Shift Transfer:
When the unit runs in shift, employees are transferred from one shift to another
on similar job.
E. Remedial Transfer:

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 Remedial transfer means transfer initiated to correct wrong placement.

F. Precautionary Transfer:
Such transfer are made as a precaution measures to aviod the misuse of office
or misappropriation of funds by the employees.
2. On the basis of unit:
A. Sectional Transfer:
Such transfer are made within the department from one section to another
section is called as sectional transfer.
B. Departmental Transfer:
Transfer from one department to another department within the organisation is
called as departmental transfer.
C. Inter Departmental Transfer:
When employees are rotated from one job to another within the same
department is called as inter departmental transfer.
3. Other types:
A. Voluntary Transfer:
When an employee Voluntary applies transfer to same other position or place
within the same job classification, it is called as voluntary transfer.
B. Involuntary Transfer:
When employees are transferred by the organisation for administrative or other
reasons without their concurrence, it is called as involuntary transfer.

PROMOTION
Promotion is a term which is very commonly used in every organisation. When
a person moves to a higher position because of his/her good performance, this
movement from lower to a higher level position is called promotion.
Purpose of promotion
1. To utilise employee’s skills:
The best way to make an organisation effective and successful is to ensure
the best use of skills and knowledge of the existing employees of the organisation.
2. To develop competitive spirit:
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 Promotion is one of the best ways to develop a spirit of competition among the
existing employees.

3. To promote employee’s self-development:

Promotion leads to the self-development of the employees.
4. To promote feeling of contentment:
Promotion gives a sense of satisfactory to the employees working in an
organisation.
5. To promote employee’s interest:
Promotion includes a zeal and interest in the existing employees in different training
and development programmes.
. To reward employees:
Promotion is a form of reward which is given to the employees on the basis of
their past performance, dedication, loyalty, etc.
7. To help in problem solving:
Promotion helps in reducing several problems created by the union leaders.

Types of promotion
1. Horizontal promotion:
it is a type of promotion in which employees remains in the same classification
of job but with more responsibility and increased salary.
2.Vertical promotion:
in vertical promotion, there is a change in the rank , responsibilities, salary and
classification of job.

2. Dry promotion:
When there is an increase in responsibilities and rank but there is no salary
increment or other financial benefits.
4. Open versus closed promotion:
In case of open promotion systems, all the employees are allowed to apply for the
promotional vacancies in the organisation.

Basis of Promotion – Merit vs. Seniority

Promotion is made either on the basis of seniority or on the basis of merit or both. Normally,
management of any organization prefers merit. But the trade unions and workers favor

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seniority. Seniority means the length of service put in by an employee in the working
organization Merit, on the other hand, means the qualification which an employee possess. We
shall now discuss the advantages and limitations of these bases briefly:

Advantages of Promotion based on Seniority

1. Seniority is an objective basis for promotion and so each employee is sure of getting
promotion.

2. It develops a sense of loyalty among the employees and the morale of the employees will be
higher.
3. It limits the scope for favoritism, casteism, nepotism, etc.

4. It avoids disputes among employees regarding promotion.

5. It encourages the employees to work hard and efficiently.

6. If seniority is accepted as the basis for promotion, management can’t abuse their privilege
of selecting the best man.

Disadvantages of Seniority based promotion

1. Since the employees are sure of getting promotion, it makes them lethargic in performing
their duties.

2. New brilliant employees will be left with no motivating factor for improving their
performance, if eligibility for better jobs depends just upon their length of service. This leads
to greater labour turnover. As a result, overall production of the concern will be very much
affected.
3. Talented and average workers are considered alike. Promotion is made by giving weightage
only to seniority, and efficiency of the workers is not at all considered.

Advantages of Promotion based on Merit

1. Since efficiency and talents are rewarded, it encourages the employees to increase their
knowledge in maintaining a high level of productivity.
2. It helps in putting the most productive and competent person for specialized jobs.

3. New employees are also encouraged to improve their performance as promotion is made on
the basis of competence, capability and efficiency.

4. It results in overall improvement of the organization.

Disadvantages of Merit based promotion

1. It may result in partiality, nepotism, favoritism, casteism, etc., by the management.

2. Senior employees in the organization may become unsatisfied and they may indulge in
certain activities that may lead to industrial unrest, strikes, lockouts, etc.

3. Merit as a basis of promotion is normally opposed by workers and their representatives. They
give more importance to the seniority factor.

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4. Promotion of employees on the basis of merit requires proper method of performance
appraisal or merit rating. But, normally formulation of correct method of performance appraisal
may not be done.

Demotion
Meaning:
• Demotion in simple words, is opposite of promotion. When an employee is moved to a
lower rank from a higher position it is called demotion. It is a downward movement of
an employee in the organisational hierarchy along with the reduction in his pay scale.
• According to Dale Yoder, “Demotion may be defined as a shift to a position in which
responsibilities are decreased. Promotion is an increase in in rank and demotion is
decrease in rank.
Reasons for Demotion:
There are various reasons that are reasonable for demotion. Some of them are as
follows:
1) Lack of Employee’s competence:
Employees promoted on the seniority basis and past performance may prove out to
be incompetent when promoted to higher positions. They are unable to take
responsibility of such a high position. In such cases, employees having better
knowledge regarding the respective job are not given chance to show their talent. Thus,
in order to select a better candidate for the respective position, certain employees have
to be demoted.
2) Adverse working conditions:
Bad working conditions of an organisation not only results in reduced production
quality but may also lead to shutting down of certain departments. In addition
organisation suffers from economic crisis, minimising the number of employees in turn.
In this situation junior employees are suspended and senior ones are demoted.
3) Demand for new and higher level skills:
When an organisation promotes any employee, the employee is expected to give
new ideas and higher level skills. But when the promoted employees are unable to fulfil
the requirements of newly allotted higher positions, they are demoted to that level
where their skills can be used more suitably. It has to be done for the smooth functioning
of the organisation.
4) To maintain discipline:
In order to maintain discipline among the employees, the step of demotion is taken
for certain employees. Although, demotion is very rarely used for this purpose but most
of the time it works.
5) Deteriorating health or capacity:

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 Sometimes demotion is given to the employees considering their poor health. This
demotion can be permanent or temporary, depending upon the chances of the recovery.
In such cases, unhealthy employees are demoted to such a level where there is less
physical and mental pressure.

6) work-Life Balance:
Some employees need more time for family, career, studies and other community
work and thus they demand for less time consuming job. In such cases, employees are
demoted to such a level which is less demanding so that they can maintain their work-
life balance.
Employee separation:
Separation involves ending the employment relationship with an employee. Simply,
it can be denoted by ‘termination of employment’. It is also known as employee
turnover. The employment of an employee is terminated when an employee even after
getting the notice is not in a position to improve his /her performance or when an
employee behaves in an unethical manner or is involved in any type of misconduct.
Employees are separated from their job due to resignation, lay-off and dismissal.
In sick industries and loss-making business ventures, separations are most
commonly visible. When the market demands are not adequate then it leads to decrease
in activities of production, thereby leading to separation of employees. Both the parties
(employer and employee) feel the pain of separation. Therefore, separation should be
managed carefully.

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