CHAPTER 4

PERSONNEL MANAGEMENT

Chapter Outline
Meaning and function of Human resource

management
Job Analysis
Job description
Recruitment
Performance appraisal
Training
Compensation

Meaning of Human resource management

Personnel management refers to the managerial

function of estimating and classifying of human

resources requirements for meeting organizational
goals. It involves strategies that ensure sufficient
staff, a right combination of talent and performance
in jobs.
It is an important part of management that is

concerned with employees at work and their

associations within the company.

Function of personnel management

1. Job analysis
2. Human resource planning
3. Recruitment and selection
4. Training and development
5. Performance appraisal
6. Compensation and benefits
7. Health and safety
8. Employee relation

Job Analysis
Job analysis is the process of defining a job in term of
tasks or behavior and specifying the education , training
and responsibilities needed to perform the job
successfully.

Job description
Job description is the organized, factual statement of the
duties and responsibilities of a specific job. It provides
both organizational and functional information. It defines
the scope of job, major responsibilities and positioning of
the job in the organization.

Components of Job Description (JD)

Job identification or organizational position (title, position, department,

etc. )
Job summary
Job duties and responsibilities
Relation to other jobs
Supervision
Machine , tools and equipment
Working conditions
Hazards

Job specification
Job specification is a statement of the minimum

acceptable human qualities necessary to perform a job

properly. It is a standard of a personnel and specifies the
qualities for acceptable performance. They are intended
to serve as a guide in hiring and job evaluation.

Components of job specification (JS)

Physical characteristics (age, health, weight, body size, eye,

etc)

Psychological characteristics (attitudes, judgmental abilities,

mental concentration, etc )

Personal characteristics (good appearance, pleasing manner,

emotional stability, etc.)

Other characteristics (demographic variables: age, sex,

education, experience, language ability etc.)

Recruitment
The process of attracting individuals on a timely basis, in

sufficient numbers, and with appropriate qualifications, and

encouraging them to apply for jobs with an organization.
Recruitment is the process of attracting potential employees

to the vacant position in the organization.

The process begins when new recruit are sought and ends

when their application are submitted.

Purposes of recruitment
1. Determine the present and future requirement of the organization in conjunction with its
personnel planning and job analysis activities;
2. Increase the job pool of job candidates at minimum cost;
3. Help increase the success rate of the selection process by reducing the number visibly under
qualified or job application;
4. Help reduce the probability that job applicants, once recruited selected, will leave the
organization only after a short period of time;
5. Meet the organizations legal and social obligation regarding the composition of its workforce;
6. Being identifying and preparing potential job applicants who will be appropriate candidates;
7. Increase organization individual effectiveness in the short term and long term;
8. Evaluate the effectiveness of various recruiting technique and sources for all types of job
applicants

Sources of recruitment
Internal sources and
methods of recruitment
Internal sources

Internal Methods

promotions

Job Posting

Transfers

Employee referral
programmes

Rehire

Previous application

HR inventories

Sources of recruitment (contd.)

Externalsources and
External sources
External Methods
methods of recruitment
Casual applications

Advertisements

Educational Institutions
Employement agencis

Educational institutions
placement

Labour unions
Contract
Professional organizations
Employee referrals

Bhawani Shankar Achrya

Steps in recruitment process

Application form received
Selection test
Selection interview
Reference check
Medical/physical examination
Final selection decision

Performance appraisal

Performance refers to the accomplishment of

assigned tasks by an employee.

Performance appraisal is review of an employees
actual performance on the job.
It provides feedback to employees,
It is the basis of allocating rewards.
Employee should receive the performance appraisal
system as fair, equitable and transparent.

Importance of performance appraisal

Performance improvement
Reward management
Training and development decisions
Promotion, transfer decisions
Career and succession planning

Methods of performance appraisal

Job- standard
oriented

Essay
Checklist
Critical incident
Graphic rating scales

Comparisionoriented

Objective oriented

Ranking
Paired comparision

MBO approach

Training
Training is the act of increasing the knowledge and

skills in an employee for doing a particular job.

Training enhances the capabilities required to
improve performance in the present job.
It involves positive changes in knowledge, skills and
attitudes of employees.

On the job training

These methods includes learning while working.
Training takes place on the job.
It is learning under the supervision of experienced

employee.
Different methods of on-the-job training are:

Apprenticeship Training Method

Internship training method
Job Instruction training (JIT) method

On the job training (contd.)

Apprenticeship training method
Employee learn by working with those already
skilled in their jobs. Eg. Electricians, plumbers.
Trainers are allowed to perform different tasks.
2. Internship Training method
In this method, trainee is given both practical and
theoretical knowledge. The trainee is interned in
organizations for a specified period and works as an
employee.
1.

On the job training (contd.)

3. Job Instruction training (JIT) method
It is a systematic step-by-step approach to teach
new skills. It is received directly on the job and
consists of four steps:
Training preparations
Presentation
Practice
Follow up

Off the job training

The training outside the job situations.
They are mostly classroom based.
Trainee are removed from the stresses and demands

of workplace.
The various methods are:

Lecture/Conference
Simulation exercises
Programmed Instruction
Experiential exercises

Off the job training (contd.)

Lecture/Conference method
It is based on talking and showing. It is teacher
centered training by telling. Audio visual aids like films,
video and power point are used to make formal
presentation.
2. Simulation method
Simulation is the abstraction of real working
conditions in the lab or classroom. The training is placed
in an artificial environment that closely resembles to the
actual working conditions. Airlines use simulation
exercises to train pilots.
1.

Off the job training (contd.)

3. Programmed Instruction
This is self-instruction method. Computer assisted
instruction is widely used.
4. Experiential exercises method
Includes role play which consists human interaction
involving realistic behaviour in imaginary situation.

Compensation
Compensation include all forms of employees pay or rewards

arising from the employment.

Compensation management consists of designing a cost effective

pay structure that will attract, retain and motivate the competent
employees.
It should be perceived as fair by the employees.
Compensation dissatisfaction can lead to absenteeism, turnover,

job dissatisfaction, low performance, strikes and grievances.

Majority of the labour disputes relate to compensation.

Types of compensation
DirectCompensation
1.
2.

Pay
Incentives

Commission, bonus,
profit sharing

Indirect Compensation
1.

Benefits

.Pay for time not worked

.Retirement benefits
.Executive benefits
2. Services

Housing, childrens
education, discount on
purchases, credit cards,
vehicles, stock scheme,
management loans etc.

Methods of compensation
1. Job Analysis
Job description
Job specification
Job performance standards

2. Job Evaluation
. Job ranking
. Job grading factor
. Factor comparison
. Point method

Compensation Surveys
Market rates

4. Compensation
Structure
Pay level
Pay structure

3.

Job Analysis
Job Description
Job Specification
Job performance standards

Job Evaluation
Specifies the relative worth of each job
Ranks job into hierarchy
Basic compensable factors considered for job

evaluation are:

Duties and responsibilities of job

Skills required for the job
Efforts required for the job
Working conditions of the job

Job evaluation methods

Job ranking method
Ranking the job in order of difficulty from simplest
to the most complex.
2. Job Grading method
Jobs are categorized into grades. Grade os a group
of different jobs requiring similar skills, efforts and
responsibilities.
3. Factor comparison method
Uses monetary scale for evaluating jobs on factorby-factor basis.
1.

Factor

Rs

Responsibilities
Skills
Mental efforts
Physical efforts
Working conditions

24
32
24
12
8

Total per hour

100

Fig. factor comparison method

4. Point method
Compensable factors

Minimum
1

Low
2

Moderate
3

High
4

5
5
5
5

10
10
10
10

15
15
15
15

20
20
20
20

2. Skill
Education
Experience
Knowledge

14
22
14

28
44
28

42
66
42

56
88
56

3. Effort
Physical
Mental

10
5

20
10

30
15

40
20

4. Job conditions
Working conditions
Hazards

10
5

20
10

30
15

40
20

1.
.
.
.
.

Responsibility
Equipment Process
Material Product
Safety of others
Work of others

Compensation surveys
Surveys the prevailing market rates.
Discovers what other employers are paying for

specific jobs.
The sources of data for compensation surveys can
be:

Published surveys
Consultants and agencies
Applicants
Informal communication

Establish compensation structure

Point range

Grade

0-100
101-200
201-300
301-400

1
2
3
4

10000

8000

3
6000
4000

2
Grade 1

100

200

300

400