MODULE I HRM CERT

1908/101: ELEMENTS OF HUMAN RESOURCE MANAGEMENT

Introduction

This module is intended to equip the trainee with knowledge, skills and attitudes
to perform human resource management functions in an organization

General objectives

By the end of this module unit, the trainee should be able to:

a) Understand the development of human resource management

b) Appreciate the role of human resource management in an organization
c) Understand human resource management policies in an organization
d) Analyse effectiveness of human resource management records in an organization

Chapter one: Introduction to human resource management

 Meaning of human resource management

 Reasons for studying human resource management

Evolution of human resource management

Chapter two: Role of human resource management in an organization

 Structure of human resource department

 Functions of human resource
 Role of human resource manager

Chapter three: individual and group behaviour in an organization

 Individual and group in an organization

 Factors influencing individual and group behaviour in an organization
 Factors leading to group formation in an organization
 Types of groups in an organization
  Stages of group formation
 Factors affecting group performance
 Effects of group behavior on organization effectiveness

Chapter four: human resource policies

 Meaning of human resource policy

 Importance of human resource policy
 Areas covered by human resource policies
 Types of human resource policies

Chapter five: human resource records

 Meaning of human resource records

 Importance of human resource records
 Types of human resource records
 Computerised human resource records

Chapter six: emerging trends in elements of human resource management

 Emerging trends
 Challenges posed by emerging trends
 Coping with challenges

CHAPTER ONE: INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

1.1 Meaning of Human Resource Management

French Wendell, defines ― Human resource management as the recruitment,

selection, development, utilisation, compensation and motivation of human
resources by the organisation.

According to Edwin B. Flippo, ―Human resource management is the planning,

organising, directing and controlling of the procurement, development, resources to
the end that individual and societal objectives are accomplished. This definition
reveals that human resource (HR) management is that aspect of management, which
deals with the planning, organising, directing and controlling the personnel
functions of the enterprise.

Generally HRM refers to the management of people in organizations. It comprises of

the activities, policies, and practices involved in obtaining, developing, utilizing,
evaluating, maintaining, and retaining the appropriate number and skill mix of
employees to accomplish the organization’s objectives. The goal of HRM is to
maximize employees’ contributions in order to achieve optimal productivity and
effectiveness, while simultaneously attaining individual objectives (such as having a
challenging job and obtaining recognition), and societal objectives (such as legal
compliance and demonstrating social responsibility).

In short Human Resource Management (HRM) can be defined as the art of

procuring, developing and maintaining competent workforce to achieve the goals of
an organization in an effective and efficient manner.

Human Resource Management is a process, which consists of four main activities,

namely, acquisition, development, motivation, as well as maintenance of human
resources.

There are two different definitions. The first definition of HRM is that “It is the
process of managing people in organizations in a structured and thorough
manner.”This covers the fields of staffing (hiring people), retention of people, pay
and perks setting and management, performance management, change management
and taking care of exits from the company to round off the activities. This is the
traditional definition of HRM which leads some experts to define it as a modem
version of the Personnel Management function that was used earlier.

The second definition of HRM encompasses “The management of people in

organizations from a macro perspective, i.e. managing people in the form of a
collective relationship between management and employees.” This approach focuses
on the objectives and outcomes of the HRM functions. It means that the HR function
in contemporary organizations is concerned with the notions of people enabling,
people development and a focus on making the “employment relationship” fulfilling
for both the management and employees.

In simple words, Human resource management is management function that helps

manager to recruit, select, train and develop organization members. Or HRM is a
process of making the efficient and effective use of human resources so that the set
goals are achieved.

In general terms, Human Resource Management is “concerned with the people

dimension in management. Since every organization is made up of people, acquiring
their services, developing their skills, motivating them to high levels of performance
and ensuring that they continue to maintain their commitment to the organization
are essential for achieving organizational objectives. This is true regardless of the
type of organization government business, Education, Health, regression or social
action.”(6) In the words of Dunn and Stephens, “The HRM is the process of
attracting, holding and motivating all manager line and staff.

1.2 Reasons for Studying Human Resource Management

1. Social Significance: Proper management of personnel enhances their dignity by
satisfying their social needs. This is done by:
(i) maintaining a balance between the jobs available and the jobseekers,
according to the qualifications and needs;
(ii) Providing suitable and most productive employment, which might bring
them psychological satisfaction;
(iii) making maximum utilization of the resources in an effective manner and
paying the employee a reasonable compensation in proportion to the
contribution made by him;
(iv) eliminating waste or improper use of human resource, through conservation
of their normal energy and health; and
(v) By helping people make their own decisions, that are in their interests.
2. Professional Significance-. By providing healthy working environment it
promotes team work in the employees. This is done by:
 (i) maintaining the dignity of the employee as a ‘human-being’;
(ii) Providing maximum opportunity for personal development;
(iii) providing healthy relationship between different work groups so that
work is effectively performed;
(iv) improving the employees’ working skill and capacity;
(v) Correcting the errors of wrong postings and proper reallocation of work.
3. Significance for Individual Enterprise: It can help the organization in
accomplishing its goals by:
(i) creating right attitude among the employees through effective motivation;
(ii) utilizing effectively the available goals of the enterprise and fulfilling their
own social and other psychological needs of recognition, love, affection,
belongingness, esteem and self-actualization.
1.3 Evolution of Human Resource Management

Nevertheless, six major stages can be identified in the British version of the evolution
of Human Resources Management.

The first phase is the Welfare - Era (1915 – 1920s). This was the period that the
management of factions have to provide employees with welfare facilities such as
canteen, medical centres and showed interest in employee’s personal well-being.

The second is Personnel Administration which covered 1930’s – 1940’s. The need to
provide factory managers with personnel support services in the area of recruitment,
training and record keeping here accentuated by the great depression of 1930’s The
personnel management phase I as they are in two (2) phase’s spans 1940’s – 1970’s.
The first phase is between 1940’s to 1950’s. The era witnessed an enlargement of
personnel functions from the mere provision of welfare and support services to
other, they personnel functions from the mere provision of welfare and support
services to other key personnel functions: such as appraisal compensation, and
bargaining, designated welfare officials now transformed into labour matters and
become involved in industrial relation practices. The environmental factor
responsible for this rapid transformation from personnel administration to personnel
management was, the World War II which led to the scarcity of required personnel
needed to keep the factories in operation. However, it must be stated that during this
period, personnel management was practiced at the tactical level.

The Personnel Management Phase II Spans (1960’s – 1970’s). This was more
developed stage of human relations in which services and functions provided in the
rudimentary Stage that characterized phase one was extended into organizational
and management levels. These included a systematic and scientific training,
manpower planning and salary administration.

Concepts such as organizational development and job enrichment were integrated

into the personnel function. Industrial relations became a major pre-occupation and
this period witnessed production bargaining. Just as welfare officers become labour
managers so did personnel managers evolve into personnel directors and
consequently attended the meeting of board of directors and participated in the
formulation of business policies and strategies, however, their involvement in
formulating strategies was limited to the parochial and streamlined functions
assigned to the personnel department.

As was the case in Personnel Management whose stages were in two phases so also
was that of the Human Resources Management.

The phase one of the Human Resource Management was in the 1980’s. This concept
evolved from the writings of American academics. It wasconceptualize to reflect the
practices of hitherto personnel specialistadjusting to the work place culture and
dynamic market. The focus shifted from mere management of people to an attempt
by the personnel specialist to contribute to the overall growth of the firm by
strategies. This goal of contributing to the growth of the organization, necessitated
the rise of such concept as performance related pay and performance management
system.

The Human Resources Management Phase two was in the 1990’s. During this
period, the concept emphasized the virtues of team work, empowerment and
continuous development in the learning organization. The role of Human Resources
in total quality management also came to the forefront; new approaches were
developed to such processes as culture management, reward management and
management development. With the re-structuring of organizations and its
attendant consequences on staff strength, personnel directors become involved in
redundancy and downsizing exercise in other to maximize the gains of the firm. The
importance of being strategic was buttressed and human resources specialist became
more concerned with bench marking in order to establish the best practice.

1.4 Differences between Human Resource Management and Personnel

Management

Human resource
Basis Personnel management
management
Human resource
Personnel management management means the
means to manage management activities that
Meaning manpower and to maintain focus on the effective use of
their relationship with the manpower in order to
organization.(Reese, 2012) achieve organizational
goals.
As per performance
Basis of pay As per job evaluation.
evaluation.
It has a traditional It has a modern approach.
Approach
approach. (Sparrow, 2006)
Human resources are Human resources are
Manpower treatment
treated as a tool. treated as an asset.
It includes an indirect It includes a direct
Communication
communication. communication.
There is a fast process in
There is a slow process in
Decision making process human resource
personnel management.
management.
 It consists of routine It consists of strategic
Functions
functions.(Sekhri, 2010) function.
 CHAPTER TWO: ROLE OF HUMAN RESOURCE MANAGEMENT IN AN
ORGANIZATION

2.1 Structure of Human Resource Department

Human Resource Management

Compensation
Development

Maintenance
Procurement

Integration

Separation
Figure 1: Pillars of Human Resource Management

1. Procurement of HR
2. Development of HR
3. Remuneration of HR
4. Integration of HR
5. Maintenance of HR
6. Separation of HR
1. HR Procurement
This is the first operative function of HRM. It is concerned with obtaining proper
kind and number of personnel necessary to accomplish the organization’s goals. It
specifically deals with such subjects as the determination of HR requirements and
their recruitment, selection and placement. The determination of the HR required
must rest upon a prior design of job duties, a decision that is increasingly being
affected by the Hr manager’s objective of meeting human needs.
2. Development of HR
After personnel have been obtained, they must be developed to some degree.
Development has to do with the increase of skills through education and training
that is necessary for proper job performance. This is an activity of very great
importance and will continue to grow because of the changes in technology that the
re-alignment of jobs and the increasing complexity of managerial tasks. Training is
for acquisition of skills and a sub-set of education.
3. Remuneration/Compensation
This function is defined as the adequate inequitable remuneration of personnel for
their contribution to the organization’s objectives. It basically concerns itself with job
evaluation, wage policies, wage systems and some of the recently devised extra-
compensation plans.

4. Integration of HR
With the employee procured and reasonably compensated, there follows one of the
most difficult and frustrating activities for the management i.e. integration.
Integration is concerned with the attempt to effect a reasonable reconciliation of
individual, organizational and societal interests.
5. Maintenance of HR
If we have executed the foregoing functions well, we now have a willing and able
workforce. Maintenance is concerned with the perpetuation of this state i.e. willing
and able workforce. The maintenance of willingness is heavily affected by
communication with employees. The physical condition of employees should be
maintained while the health and safety of individuals and groups will be of utmost
importance here.
6. Separation of HR

If the first function of HRM is to secure the employee or member, it is logical that the
last function should be separation and return of that person to society. Most people
don’t die on the job. The organization, and in particular HR, is responsible for
meeting certain requirement of due process in separation as well as ensuring that the
returned person is in as good shape as possible. This therefore calls for proper
retirement, lay-offs, outplacements, discharge and termination.
2.2 Functions of Human Resource

The main functions of human resource management are classified into two
categories: (a) Managerial Functions and (b) Operative Functions

(a) Managerial Functions Following are the managerial functions of Human

Resources Management.

1. Planning : The planning function of human resource department pertains to the

steps taken in determining in advance personnel requirements, personnel
programmes, policies etc. After determining how many and what type of people are
required, a personnel manager has to devise ways and means to motivate them.

2. Organisation : Under organisation, the human resource manager has to organise

the operative functions by designing structure of relationship among jobs, personnel
and physical factors in such a way so as to have maximum contribution towards
organisational objectives. In this way a personnel manager performs following
functions :

(a) preparation of task force; (b) allocation of work to individuals; (c) integration of
the efforts of the task force; (d) coordination of work of individual with that of the
department.

3. Directing : Directing is concerned with initiation of organised action and

stimulating the people to work. The personnel manager directs the activities of
people of the organisation to get its function performed properly. A personnel
manager guides and motivates the staff of the organisation to follow the path laid
down in advance.

4. Controlling : It provides basic data for establishing standards, makes job analysis
and performance appraisal, etc. All these techniques assist in effective control of the
qualities, time and efforts of workers.
 (b) Operative Functions : The following are the Operative Functions of Human
Resource Management

1. Procurement of Personnel: It is concerned with the obtaining of the proper kind

and number of personnel necessary to accomplish organisation goals. It deals
specifically with such subjects as the determination of manpower requirements, their
recruitment, selecting, placement and orientation, etc.

2. Development of Personnel : Development has to do with the increase through

training, skill that is necessary for proper job performance. In this process various
techniques of training are used to develop the employees. Framing a sound
promotion policy, determination of the basis of promotion and making performance
appraisal are the elements of personnel development function.

3. Compensation to Personnel : Compensation means determination of adequate and

equitable remuneration of personnel for their contribution to organisation objectives.
To determine the monetary compensation for various jobs is one of the most difficult
and important function of the personnel management. A number of decisions are
taken into the function, viz., job-evaluation, remuneration, policy, inventive and
premium plans, bonus policy and co-partnership, etc. It also assists the organisation
for adopting the suitable wages and salaries, policy and payment of wages and
salaries in right time.

4. Maintaining Good Industrial Relation : Human Resource Management covers a

wide field. It is intended to reduce strifies, promote industrial peace, provide fair
deal to workers and establish industrial democracy. It the personnel manager is
unable to make harmonious relations between management and labour industrial
unrest will take place and millions of man-days will be lost. If labour management
relations are not good the moral and physical condition of the employee will suffer,
and it will be a loss to an organisation vis-a-visa nation. Hence, the personnel
manager must create harmonious relations with the help of sufficient
communication system and co-partnership.
5. Record Keeping : In record-keeping the personnel manager collects and maintains
information concerned with the staff of the organisation. It is essential for every
organisation because it assists the management in decision making such as in
promotions.

6. Personnel Planning and Evaluation : Under this system different type of activities
are evaluated such as evaluation of performance, personnel policy of an organisation
and its practices, personnel audit, morale, survey and performance appraisal, etc.

2.3 Role of Human Resource Manager

i. Helps management in the preparation adoption and continuing evolution of

personnel programmes and policies.
ii. Supplies skilled workers through scientific selection process.
iii. Ensures maximum benefit out of the expenditure on training and
development and appreciates the human assets.
iv. Prepares workers according to the changing needs of industry and
environment.
v. Motivates workers and upgrades them so as to enable them to accomplish the
organization goals.
vi. Through innovation and experimentation in the fields of personnel, it helps in
reducing casts and helps in increasing productivity.
vii. Contributes a lot in restoring the industrial harmony and healthy employer-
employee relations.
viii. Establishes mechanism for the administration of personnel services
that are delegated to the personnel department.
 CHAPTER THREE: INDIVIDUAL AND GROUP BEHAVIOUR IN AN
ORGANIZATION

3.1 Individual and Group in an Organization

Groups have been a central part of our everybody lives. At any given time, we are
members in many different groups such as family, student association, workgroups,
and different clubs.

A group is a collection of two or more individuals, interacting and interdependent,

who have come together to achieve a particular common objective.

According to D.H.Smith, “A group is the largest set of two or more individuals who
are jointly characterized by a network of relevant communication, a shared sense of
collective identity and one or more shared disposition with associated normative
strength.

Definition

A “group” is defined as two or more individuals, interacting and interdependent,

who come together to achieve particular objectives.

3.2 Factors Influencing Individual and Group Behaviour in an Organization

Factors Affecting Behavior of an Individual in the Organization

Every individual is different from each other, as the behavior of the human is
considered as the most complex one. There are various challenges in an effective
organization that could directly or indirectly affect the behavior of the employees. In
certain situations, the manager of the organization have to first analyze the
particular task, determine the skills required and gather a team that could
complement and match the skills of each other. For addressing various factors, safety
settings, capabilities of people and limitations have to be analyzed first.  

There are various factors that could affect the organizational behavior of an

individual, some of them are:
A. Personal factors – The personal factors that can influence the behavior of an
individual is further categorized into 2 parts that includes Biographic and learned
characteristics.

1. Biographic Characteristics – Every human being have certain type of

characteristics which are inherited and genetic in nature. These characteristics cannot
get changed. In an organization, if the manger will come to know about the
limitations and qualities each personal possess, then they can easily make use of
their behavior techniques of an organization in an effective manner. These
characteristics include:

(i) Physical Characteristics – It mainly consists of skin, vision, height, complexion

and many more. It creates impact on the performance of the individuals. Also,
certain features includes tall, fat or slim. A person with good personality is always
expected to dress and behave well in an organization, even if there is any correlation
between the behavior and body structure or not.

1. Age– It is the inherited characteristic of an individual. In increasing performance,

it is considered as an issue. Young people are expected to behave more energetic,
adventurous, innovative, risk taking and ambitious. With the advancement in age,
performance of a person is more likely to decline.

2. Gender – It is a genetical feature. This concept has initiated lots of discussion,

debates and opinions. It is a traditional view that women are more emotional. A
small difference between men and women can affect their job performance. Without
any male-female differences, some of the people have competitive drive, leadership,
motivation, learning ability, analytical skills or problem solving ability. A study have
been conducted which says that the female employees generate more turnover rates.
This is because there are more chances of females to quit their job for their personal
reasons.

3. Religion– In determining some of the aspects of individual behavior, religion and

its related cultures plays a significant role especially that have the basic concern with
ethics, morals and code of conduct. It also helps in identifying the attitude of an
individual towards their work and  financial management incentives. But nobody
can deny from the fact that people who are highly religious have more moral values
than others.

4. Marital Status – A recent research says that the responsibilities of the person
inclined with their marital status and it has become difficult to s6table in a particular
job for the longer period of time. Employees that are married have fewer absences,
more job satisfaction and fewer turnovers.

5. Experience – The tenure or the experience of an employee plays a significant role

within the organization. It creates lot of speculations and misconceptions due to the
seniority factor. Also, work experience is considered as a good indicator that helps in
increasing productivity with greater efficiency and effectiveness. There is a positive
relationship between the job performance and the seniority. The turnover of an
employee is also considered as negative in relation to the seniority.

2. Learned Characteristics – Learning is defined as a permanent change in the

behavior of an employee that results in the interactions with the environment. The
biographical features of a person are impossible to modify. Therefore, the managers
of the organization paid a great interest in learning, studying and predicting the
learned characteristics that include:

(1)Personality– Personality does not only lie with the physical appearance of the
person. A person with a good personality comprised of smart person, smiling face
and charming personality. This concept is considered as dynamic that describes the
growth and development of the psychological system of the person. It is also
refereed as personal traits or characteristics that include persistence, dominance,
aggressiveness and other qualities that is reflected through the behavior of the
person within the organization.

(2)Perception– It is the viewpoint that helps in the interpretation of some situation.

Also, it is considered as the process which allows the information to enter in the
minds and allowed to obtain sensible meaning for the whole world.
(3)Values – Values are considered as the global belief that instructs different
judgments and actions across various situations. It consists of an individual’s idea
based on the right, good and desirable opinions. It is closely embedded in the people
who could be reflected through their behavior. Also, most of time values are directly
influenced from the teachers, parents, friends and various other external factors that
completely changed the ideas, opinions and thoughts of the person. For an
organizational behavior, values are very significant. It helps in understanding the
motivation and the attitude of an individual along with the influences of their
perceptions or view point.

B. Environmental Factors – On the behavior of a person, the external environment

plays a significant role.

1. Economic Factors – In an economic environment, the behavior of an individual is

largely affected due to certain factors including:

(a)Employment Level – The employment opportunities available to an individual

directly influence the behavior of an individual. Even after the lack of job
satisfaction, the individual have to stick to the same job as there are less job
opportunities for him/her. In such cases, it is important that they may be loyal to the
company in providing better productivity; they are only remaining in the same
organization due to the monetary benefits offered to them.

(b)Wage Rates – Every employee is majorly concern with the wages offered to them
by the company or the organization. The decision of a worker or an employee is
directly affected by the monetary terms from the side of the company.

(c)General Economic Environment – There are various employees that does not
have any effect of economic cycle whether in a public sector undertakings or
government offices. Regardless of their economic position within the organization,
they will receive their salaries. Employees in the private sectors are greatly affected
by the stable income and job security but the former employees can be motivated
from other factors.
Similarly, there are various other environmental factors in an organization that could
affect the behavior of the employees, including social factors, political factors or legal
environment.

C. Organizational Factors – With wide variety of resources and organizational

systems, individual behavior is influenced that includes:

1. Physical Facilities – At a workplace, the physical environment is considered as an

arrangement of people and things positive that could also create influence on other
people. There are certain factors that influence the behavior of an individual
including cleanliness, light, ventilation, noise level, nature of job, number of people
working, etc.

(a)Structure and Design – The way in which every department of the organization is
set-up has direct concern with the structure and design. The performance and the
behavior of an individual is directly influenced by the position at which person
could perfectly fits in the whole organizational hierarchy.

(b)Leadership – The management of the organization establish the system of

leadership so that the proper assistance, advice, guidance, direction and coaching
could be given to the individuals. The behavior of each employee is influenced to the
large extent to the behavior of the leaders or the superiors of the same organization.
The behavior of the leaders is more important than the qualities of the leaders.

(c)Reward System – The performance and the behavior of individuals are directly
influenced by the reward system that is established by the organization so that the
employees could be able to compensate.

Factors affecting group behavior

A group is defined as two or more individuals, interacting and independent, who

have come together to achieve particular objectives. Group behaviors are affected or
influenced by some significant variables or factors. The major variables are:

1. Formal leadership: Almost every work group has a formal leader. The

common titles of those leaders are superior, foreman, project leader, department
 manager, general manager, chainman or managing director etc. These leaders can
play an important role in group’s success. They are also liable for the failure of
group.

2. Roles: The world is a stage and all men and women are merely players. All
group members are actors; they are playing different types of roles. A role is an
expected behavior in a given position in a social unit. Different groups impose
different roles on different individual. We can have different concepts about role
in a group.

1. Role identity: there are certain attitudes and behaviors consistent with

a role. This is called role identity.

2. Role perception: Group’s members need role perception. Role

perception in an individual’s view of how he or she is supposed to act in a
given situation.

3. Role expectations: Role expectations are defined as how others behave

the one should act in a given situation.

4. Role conflict: Role conflict is a situation in which an individual is

confronted by divergent role expectation.

3. Norms: All groups have some establish norms. Norms refer to the acceptable
standards of behaviors that are shared by the group’s members. Formalized
norms are written up in organizational manuals, and all the people in an
organization are bound to follow that rules and regulations. But the majority of
norms in organizations are informal.

4. Group status: Status may be defined as a social rank or position given in a

group by others. We live in a class structured society. Status is important for
group members.

5. Group size: The size of a group affects the group’s overall performance or

behavior. Small groups are faster at completing task than are larger ones. If the
 group is encouraged in problem solving, large groups are perfect to small group.
So if the goal of hand, smaller group is better in achieving productivity.

6. Composition of the group: Since group is association of different types of

people with variety of skills and knowledge. When a group is heterogeneous
rather than homogeneous in terms of age, gender, race, educational background,
personalities, opinions, abilities skills and knowledge, it can be effective to
complete a work.

7. Group cohesiveness: The degree in which members are attracted to each

other and are motivated to stay in the group are called group cohesiveness. Group
behavior are significantly affected by group are cohesiveness. The following
suggestions can increase group cohesiveness:

i.      the group smaller

ii.      Make Increase the members spend together

iii.      Encourage agreement about group goals

iv.      Increase the status of the group

v.      Stimulate competition with other group

 vi.      Give reward to the group rather than the members

  vii.      Physically isolate the group

3.3 Factors Leading to Group Formation in an Organization

The most popular reasons for joining a group are related to our needs for security,
identity, affiliation, power and engaging in common tasks.

 Distribution and control of work.

 Problem solving and generation of ideas.
 Information collection and processing.
 Testing and ratifying decisions.
 Co-ordination and liaison.
 Conflict resolution.
 Protection of common and individual Interest: By joining a group, members
can reduce the insecurity of being alone. The membership will make them feel
stronger, gaining resistant to threats, having fewer self-doubts etc. New
employees are particularly vulnerable to a sense of isolation and turn to the
group for guidance and support. Employees develop a sense of security at
personal as well as professional front by joining groups.
 Status: Inclusion in a group that is viewed as important by others provides
recognition and status for its members. Being a member of Rotary Club, the
members feel pride and gain status and recognition.
 Self-Esteem: Groups can provide people with feelings of self-worth. That is,
in addition to conveying status to those outside the group, membership can
also give increased feelings of worth to the group members themselves. The
self-esteem is bolstered when members are accepted by a highly valued
group. Being assigned to a task force whose purpose is to review and make
recommendations for the location of the company’s new corporate
headquarters can fulfill one’s intrinsic needs for competence and growth.
 Affiliation: Groups can fulfill social needs. People enjoy the regular
interaction that comes with group membership. For many people, these on-
the-job interactions at work are the primary source for fulfilling their needs
for affiliation.
 Power: For individuals who desire to influence others, groups can offer
power without a formal position of authority in the organization. As a group
leader he or she may be able to make requests of group members and obtain
compliance without any of the responsibilities that traditionally go either
formal managerial position.
 Goal Achievement: There are times when it takes more than one person to
accomplish a particular task- there is a need to pool talents, knowledge in
order to complete a job. In such instances, management will rely on the use of
a formal group.
3.4 Types of Groups in an Organization

Groups can be either formal or informal. By formal, we mean defined by the

organization’s structure, with designated work assignments, establishing tasks and
work groups. In formal groups, the behaviour that one should engage in are
stipulated by and directed towards organizational goals. In contrast, informal
groups are alliances that are neither structured nor organizationally determined.
These groups are natural formations for the work environment, which appear in
response to the need for social contact. It is possible to further sub-classify groups as
command, task, interest or friendship groups. Command and task groups are
dictated by the formal organization, whereas interest and friendship groups are
informal alliances

Formal Groups

May be classified as:

1. Command groups/Functional groups

Consists of managers and the subordinates and showed up on organizational chart

e.g. A director of matching and his subordinates

The command groups “fits together” to make up hierarchy. The leader of each
group is typically also a member of a higher level group and these serves as a
linking pin, coordination activities and communication between levels. They are
relatively permanent.

1. Task Group /Committee

Are those working together to complete a working task

They are formed for specific purposes e.g. Exchange of information, coordination of
activities, generation of recommendations, development of new procedures or
solution of specific problems
Adhere committees are typically created for a short term purpose and have limited
life. Standing committees are relatively permanent task groups that deal with issues
on going bases.

Informal Groups

May be classified as

a) Interest groups

Are those working together to attain a specific objective with which each is
concerned They arise when individuals unite to achieve some common purpose, e.g.
Employees who band up together to support a colleague

b) Friendship groups

Those brought together because they share one or more characteristic. They are
formed because some attractions or avoid, something they don’t want, most
learning in organization relies on the low of effect which states that behaviour
which is rewarded will tend not to be rewarded.

The features of such groups are as under:

(a) Informal groups are formed by various members themselves, it has no official
sanctity.

(b) These groups are formed based on commonality of culture, religious function,
liking for each other and common interests.

(c) Their contribution for success of formal group is immense if properly handled by
official authority.

(d) These groups evolve their own structure, elect their own leaders and have
followers. They work based on group norms, social norms and code of conduct.

(e) They represent the human side of an organization.

(f) The group exist without any rigid rules. Their common interest is bond for
existence.

3.5 Stages of Group Formation

i) Forming: At this stage, group members try to comprehend where they stand in the
group and how they are being perceived by others in the group. The members are
very cautious in their interactions with each other and the relationships among the
group members are very superficial. Members’ seldom express their feelings in the
group and the individual members who are trying to understand who they are in the
group have concerns about how they will fit in the group as permanent group
members. This is characterized by much uncertainty about group’s purpose,
structure and leadership. Members are ‘testing the waters’ to determine what types
of behavior are acceptable. This stage is complete when members have begun to
think of themselves as part of a group.

ii) Storming: At this stage, disagreement tends to get expressed among the group
members, and feelings of anxiety and resentment are also expressed. Some power
struggle may ensure at this stage to determine who should assume the informal
leadership role in the group. This storming stage is also known as the sub-grouping
and confrontation. This group is characterized by intra- group conflict. Members
accept the existence of the group, but there is resistance to the control the group
imposes on individuality. There is sometimes conflict over who will control the
group. When this stage is complete, there will be a relatively clear hierarchy of
leadership within the group.

iii) Norming: This stage is characterized by close relationships and cohesiveness. The
group sets norms, tries to attain some degree of cohesiveness, understands the goals
of the group, starts making good decision, expresses feelings openly and makes
attempts to resolve problems and attain group effectiveness. At this stage, members’
roles get defined, and task and maintenance roles are assumed by group members.
Group members’ also begin to express satisfaction and confidence about being
members of the group.

iv) Performing: This stage is characterized by collaboration and integration. The

group members evaluate their performance so that the members develop and grow.
The group relationships and structures are set and accepted. Group energy has
moved from getting to know and understand each other, to performing the task at
hand. Feelings are expressed at this stage without fear, leadership roles shared
among the members, and the group members’ activities are highly co-coordinated.
The task and maintenance roles are played very effectively. The task performance
levels are high and member satisfaction, pride and commitment to the group also
high. Both performance and members’ satisfaction are sustained indefinitely;

v) Adjourning: This stage is characterized by concern with wrapping up activities

rather than task performance. The group prepares for its disbandment. High task
performance is no longer the group’s top priority. Instead, attention is directed
towards finalizing activities. As the group approaches the terminal phase, members
break off their bonds of affection and stop interaction with each other. Responses of
group members vary in this state. Some feel pride in what the group has
accomplished. Others may be negative and critical of the way the organization has
treated the group and others may be sad over the loss of friendship gained during
the life of the work groups. These five stages of group development are only a
suggestive and not prescriptive. Sometimes, groups do not always proceed clearly
from one stage to the next. Sometimes, several stages go on simultaneously as when
groups are storming and performing at the same time. Under some conditions, high
levels of conflict are conducive to high group performance.

3.6 Factors Affecting Group Performance

i. Attitude and Value: “Birds of the same feather flock together”. Group members
having identically attitude and high level of value system will behave themselves
identically and promote group norms and achieve Cohesiveness. In such
situation decision making and implementation of group task is comparatively
 easy . Conflict situations are avoided and a smooth sailing is achieved. Interest of
the group is well protected due to cohesiveness of the group.
ii. Degree of participation in group Activities: Participation in group activities is
important as it leads to more frequent interaction between group members.
Success in group activities also bring cohesiveness as each of the participants
feels that he has been the contributor for achievement of group goals. For
example participation in sports team and achieving the victory.
iii. Threat and Challenges: Every group has its objectives. It has been experimented
that whenever there is a threat to disturb the group norm or group objective,
group members get more united to protect the group objective from the party
threatening the same. It will be noticed that external threat brings higher degree
of cohesion to the group. In the fast moving world to day, the importance of
group has increased many fold. Employees have sacrificed their perks and
privileges to ensure higher productivity by adhering to group norms. For
example employees in a well organized industry work beyond specified time to
achieve group goals. Meeting higher challenges brings personal satisfaction to
group members and higher level cohesiveness to the group they are part of.
iv. Entry Norms: There are organizations whose membership is difficult to obtain.
There are also clubs which are reserved for exclusive members of a particular
background like Defence Services Officers club. Joining of such group elevates
the status, position and members feel a sense of pride and accomplishment.
Because the membership of such clubs is exclusive. At times, there is also a long
waiting list to join such groups. More exclusive the group more cohesive it will
be. More difficult to get entry, more cohesive the group would be.
v. Group Size: Cohesiveness of a group depends upon the close interaction of the
group members with each other. In a large group it not possible for the
individual to communicate with eachother hence there is likelihood of large
group being less cohesive than the small group. In work environment small
group is more effective. If a group is large, there is also a possibility of formation
of small sub groups within a large group. This will lead to delusions of group
norms and power politics within the sub group, which is not desirable. Another
interesting factor about group cohesion is the sex, whether the group composes
 of all male members of female members. Studies showed that if all member were
of the same sex then small group had better cohesion than large ones (Robbins
stephon). In a mix group situation, even larger group has a better cohesion
because people like to be a part of mix group and are more interactive with
opposite sex that increases group Cohesion. What should be the optimum size for
a effective group cohesion can not be decided, as other factors like attitude of
group members and demographic factors play a decisive role.
vi. Togetherness: It is a natural tendency that people want to remain together When
they interact they know each other better and are attracted by their nature and
behaviour pattern. People share their happiness and hardships and a bond of
togetherness is formed. In organizational setting, people on the same floor,
department, residing in the same colony, bus stoop friendship are attracted to
each-other because of their close proximity. It will invariably be found that the
people who are closely associated by virtue of even seating arrangement in the
work-place share their views and display more cohesiveness than those who are
located away.

vii. Group effort. The amount of effort group members exert toward task
accomplishment.

viii. Group knowledge and skill. The amount of knowledge and skills possessed
by group members that are available for group effort and performance.

ix. Task performance strategies. The extent to which the group’s strategies for task
performance (that is, how it analyzes and attempts to solve problems) are
appropriate.

3.7 Effects of Group Behaviour on Organization Effectiveness

To achieve group cohesiveness following suggestion are made (J L Gbson and J M

Lvancevich)

(a) Small group have better Cohesiveness.

(b) Encourage unilateral acceptance of group goals.

(c) Time spent by members for group activities should be increased.

(d) Increase status of group and group members.

(e) Create an environment of perceived difficulty in attaining group membership.

(f) Competition with other groups.

(g) Introduce reward systems.

(h) Physical Isolation of group increases cohesiveness.

 CHAPTER FOUR: HUMAN RESOURCE POLICIES

4.1 Meaning of Human Resource Policy

Whatever business an organization is involved in, personnel policies and procedures

are crucial for the smooth and profitable operation of the company. Personnel
procedures on the other hand, extend beyond questions of recruitment, hiring and
benefits to issues that affect the motivation, productivity, loyalty and safety of
employees in every area of the organization.

It is therefore no doubt that the manual of personnel policies and procedures is such
an essential tool in the daily battle against the barrage of questions and complaints
about pay procedures, promotion policies, vacation scheduling conflicts, turnover
problems and grievance procedures.

With policies and procedures in place, all management teams, from the chief
executive to the factory floor, will have standard guidelines to follow in handling
HR problems as they arise.

Most organizations which employ a reasonable number of people will have a policy
of some kind. It may be disorganized, unwritten or even unintentional but it exists
because there will be occasions when the people running the organization will have
to make judgments and decisions about their employees. Given similar
circumstances, most managers will try to arrive at consistent decisions and these
soon become precedents for future action. This approach may work well for some
small and relatively informal organizations in a limited range of situations such as
deciding holiday arrangements, the treatment of absence from work and allocation
of benefits but it begins to falter when more complicated cases arise.

There will be times when there will be no precedents to fall back on and those in
charge have to rely on their own judgement to handle a given situation. Further
difficulty arises when the organization becomes larger. The situations which occur
become more involved and the judgements of managers and supervisors become
inconsistent. Add to this the fact that some managers have a tendency towards
inventing their own policies regardless of what others are doing and the result is a
prime case for establishing a formal set of policies.

The views of those running the business are of supreme importance when it come to
deciding what form of function to establish and what areas of policy it will
concentrate on.

Some organizations see personnel management as an administrative function

through which procedures are implemented and records maintained. To others, it
performs an operational role concentrating on developing employment policies
which help to support the overall purpose of the enterprise.

Most HR practitioners will be called upon to develop, implement and interpret

personnel policies regularly.

If managing change, for example, is seen to be crucial to the future of the enterprise,
policy is likely to concentrate on developing attitudes, skills and flexible working
patterns so that the business can move from one position to another more easily. If
equal opportunities is an issue, then there will be more time spent on developing
policy on the role of women, ethnic minority groups and employment opportunities
for the disabled. There will also be outside influences which lead to development of
policy such as new legislation, population fluctuation and re-organization in the
education system.

The challenge for HR practitioners is to respond to these internal and external

pressures by ensuring that the policies which are developed are supportive of the
overall purpose of the organization and do not hinder what is to be achieved. This
also means that it must support the kind of culture, attitudes and beliefs which are
conducive to the success of the organization. Too often, managers just add one
policy after another to the company’s portfolio without relating them to each other
or to the main purpose of the concern, pulling together the strands of employment
policy and relating them to the aims and beliefs of the organization are important
features of policy development.

Definition 0f Policy
Policies are general statements of understanding which guide or channel thinking
and action in decision making. Policies show the limits of an area within which a
decision can be made, hence providing answers to many broad issues in an
organization. Policies should be based on a thorough analysis of organizational
objectives. Policies together with procedures are concerned with improving the
efficiency of an organization.

Setting objectives and framing policies require decisions to be made once in a while,
but many other operations involve frequent decision making. To facilitate such
recurrent decision making, an organization needs to lay down guidelines. Such
guidelines are known as policies.

Policies may pertain to either the internal operations of a firm or to those decisions
which have to be taken internally but vitally affect the implementation of the
strategy and achievement of objectives.

To ensure that policies act as an aid and not an obstacle in the implementation of
strategy, it is important that they be derived from the design of the strategy itself.

4.2 Importance Of Human Resource Policy/Purpose Of Policies / Why Have

Policies

Most professionally managed companies find that it is necessary to have policies in

all the major functional areas of management. Policies are an important tool for
management for ensuring for ensuring the smooth running of the firm’s day-to-day
activities. All policies should thus support the overall objective of the organization as
defined by the management and at the same time complement each other.
There are several reasons why policies are needed.
1. To ensure consistency of individual decisions taken by different branches and
departments. Among different departments or even within the same
department, specific decisions are recurrent, but the situation in which the
decision has to be taken may be different in each case. Hence the need for
policies which provide for a set of common parameters and criteria for
decision making in different situations.
2. to ensure compatibility of individual decisions with the mission and strategy
3. it is impossible to rely on expediency or precedence to solve problems which
arise. Decision making is more consistent when policies are more defined and
known. This ensures consistency of decisions over time.
4. to facilitate delegation of work and authority
5. policies serve to avoid ad-hoc and arbitrary decisions
6. policies provide continuity for the organization. They are more permanent
than the individuals who come and go and therefore help to create an
enduring foundation for human relationships
7. they help to facilitate expansion and integration of new business into the
company so that when growth occurs, there is already a firm foundation of
policy to apply in the new situation
8. they provide the yardstick against which to measure progress in defined
areas. For example a policy on equal opportunities in employment will lay
down the steps required in order to ensure that ethnic groups in the local
community are adequately represented in the workforce. This may not be
achievable overnight but it sets a standard against which progress may be
measured and policy implemented.
9. policies stimulate action because managers and supervisors have knowledge
and confidence to make decisions and take actions knowing that they are
following the agreed policy.
10. policies also save management time as the information is available and the
procedures for carrying them out are known. The assumption here is that the
policies are made freely available to those who need them.
11. they provide fairness to employees provided that the policies take account of
the needs of the workforce and are interpreted consistently.
12. policies can help to defend an organization in the event of a challenge in the
tribunal or court. They protect the organization against the possibility of
charges of favouritism, unfair treatment, unfair rewards or promotions.

4.3 Areas Covered by Human Resource Policies

1. Compensation and benefits

 2. Labor management relations

3. Employment practices and placement

4. Workplace diversity

5. Health, safety and security

6. Human resources information systems

7. Human resource research

8. Training and development

9. Human Resource Planning

10. Design of the Organization and Job

11. Selection and Staffing

12. Training and Development

13. Organizational Development

14. Compensation and Benefits

4.4 Principles Of Good Policies

1. Policies should be broad and allow discretion in decision making

2. Policies should be consistent with strategies and objectives

3. Policies must be clear, attainable and in writing

4. Policies must be made clear to all employees who are affected by them

5. Policies should be stable enough so as not to be changed so frequently and also

flexible enough to allow changes whenever they are needed.

6. Superior policies must be bases for junior policies

 7. Policies should be based on principles and ideas which are easy to comprehend

4.5 Considerations when framing policies

While framing policies, top management must take into consideration the following
considerations.
i. While objective setting and strategy design are “outward directed”, policies,
programmes and procedures are “inward directed”. Their concern is how best to
utilize the available resources in achievement of the mission. While the former is
concerned with finding the right match between the environment and the firm’s
objectives, the latter’s concern is to provide the right infrastructural support to
achieve the stated objective.
ii. Policies must evolve from past experiences, facts and participation of people who
are going to be affected by them.
iii. Policies must change with change in the characteristics of the operations or
decisions which they are meant to govern and change in the environment.
iv. Policies must be flexible enough to allow for the exceptional situation which may
call for unconventional or exceptional solutions.
v. Policies are best implemented when they are fully accepted by the people
responsible for their implementation. The best way of ensuring acceptance is to
involve the concerned people in the process of framing the policies.
vi. Too many policies governing every aspect of decision making would only retard
achievement of objectives. In such a case, instead of acting as an aid, policies may
become an obstacle.

4.6 Types of Human Resource Policies

HR policies may be classified on the basis of their source, scope or form (Gupta,
2003)

a) HR policies in respect of source

This consists of originated, appealed and imposed policies

i. Originated policies
These are policies established formally and deliberately by top management or
senior executive’ initiative with a view to guiding their subordinates.

ii. Appealed policies

These policies are formulated on requests of subordinates who wish to know how to
handle some situations not covered by earlier policies.

iii. Imposed policies

These are policies accepted by organizations due to pressure of external agencies

such as government, trade associations, trade unions, etc.

b) HR policies in respect of scope

Policies in this category can be either general or specific.

i. General policies

These are policies that do not relate to any specific issue but represent the basic
philosophy and priorities of top management.

ii. Specific policies

They relate to specific issues like staffing, compensation, collective bargaining, etc.

c) HR policies in respect of form

This refers to either written or implied policies

4.7 Sources Of HR Policies

i. Government legislation – This is the superior document that sets the

background for policies. Included here are prevailing labour laws.
ii. Past practices in the organization – Policies may be picked from past practices
which are within and form BEST practice for the organization.
iii. Prevailing practices within similar organizations – Policies in this category may
be obtained through a study of benchmarked organizations.
iv. Employee suggestions and complaints – This has to do with involving
employees in decision making as a way of improving their morale and ensuring
that they have ownership of policies developed.
v. Philosophies and ideals of the business owner – Policies must have blessings
and support of top management. Vision of directors/business owners have to be
incorporated in the mission and goals of the organization.
vi. Changes in the national economy – Levels in inflation and cost of living index
may determine policies in specific areas such as pay management and pay
reviews
vii.Knowledge and experience gained from handling day-to-day HR problems –
Problems experienced by the organization and known by stakeholders can form
basis for policy formulation but within the law.
viii. Goals, mission and vision of the organization – Policies created should of
necessity assist the organization achieve its goals.
 CHAPTER FIVE: HUMAN RESOURCE RECORDS

5.1 Meaning of Human Resource Records

 Refers to any information created or received by an organization in the course of

performance of its duties and maintained for the pursuance of certain obligations
or in the transaction of business.
 A record therefore is any information irrespective of its physical appearance that
has been kept or stored in a retrieval system in the organisation

 A record can be either in a tangible form or digital information. for example-

marriage certificates, usual office documents, databases, or e-mail. Records
management is mainly concerned with the evidence of an organization's
activities, and is usually applied according to the value of the records rather than
their physical format.

 Records must be identified and authenticated. This is usually a matter of filing

and retrieval
 Records Management refers to that area of general administration concerned
with achieving economy and efficiency in the creation, maintenance, use and
disposal of records.
 This is the practice of maintaining the records of an organisation from the time
they are created up to their eventual disposal. This may include classifying,
storing, securing, and destruction (or in some cases, archival preservation) of
records.
 A policy called Records Management and Disposal guides the organisation in
this regard.

5.2 Importance of Human Resource Records

1. It helps to supply crucial information to managers regarding the employees.

2. To keep an update record of leaves, lockouts, transfers, turnover, etc. of the

employees.
3. It helps the managers in framing various training and development programmes
on the basis of present scenario.

4. It helps the government organizations to gather data in respect to rate of

turnover, rate of absenteeism and other personnel matters.

5. It helps the managers to make salary revisions, allowances and other benefits
related to salaries.

6. It also helps the researchers to carry in- depth study with respect to industrial
relations and goodwill of the firm in the market.

5.3 Types of Human Resource Records

1. Records of employment contain applicants past records, list sources, employees

progress, medical reports, etc.

2. Wages and salaries records contains pay roll records, methods of wages and
salaries, leave records, turnover records and other benefit records.

3. Training and development contains appraisal reports, transfer cases, training

schedule, training methods.

4. Health and safety records include sickness reports, safety provisions, medical
history, insurance reports, etc.

5. Service Records are the essential records containing bio-data, residential and
family information, academic qualifications, marital status, past address and
employment records.

5.4 Computerised Human Resource Records

As defined by Kettley and Reilly (2003), a computerized human resource

information system consists of ‘a fully integrated, organization-wide network of HR-
related data, information, services, databases, tools and transactions’. Such a system
can be described as ‘e-HR’, meaning ‘the application of conventional, web and voice
technologies to improve HR administration, transactions and process performance’.
They suggest that the reasons for adopting e-HR are:

 HR service improvement;
 cost-cutting and operational efficiency;
 The desire of the HR function to change the nature of its relationship with
employees and line managers;
 The transformation of HR into a customer-focused and responsive function;
 The offer of services that fit the new world of work and are attractive to
current and future staff.

The benefits of a computerized human resource management system are:

● increased access to HR data;

● streamlined and standardized processes;

● more consistent and accurate data;

● a higher internal profile for HR.

Components of a human resource management system

A Human Resource management system would incorporate the following

components:

a) Personal data

Personal data should include the following:

i. Name, address and telephone number (if available)

ii. Personal employment number; also known as clock or company number

iii. Sex

iv. Date of birth

v. Marital status
 vi. Disability registration number (if any)

b) Company / Employer data

i. Date of joining the company / date hired

ii. Past and present departments and dates of inter-departmental transfers

iii. Records of absence from duty

iv. Accident records

v. Wage/salary progression record

vi. Hours of work

vii. Holiday and leave entitlement

viii. Retirement date and pension scheme membership as provided by the

scheme trustees

ix. Disciplinary record

c) Qualifications and skills

i. Academic qualifications

ii. Professional qualifications

iii. Qualifications held before and after joining the company

iv. Performance appraisal results

d) On exit from the company

i. Date of leaving and reason

ii. Name of new employer (if known)

iii. Suitability for re-employment

Payroll processing will also be integrated in the system

Problems which may be encountered when implementing computer based

system:

1. Resistance to change

2. Lack of skilled manpower

3. High installation costs

4. Productivity may decline as people adjust to new system

5. Errors in system if not properly tested

6. Transcription errors during data conversion (GIGO garbage in garbage out)

7. Its very tedious to do data conversion and verification

Factors That Make Organisations Change From One System To Another

1. Due to increased work load (old system not able to cope with the work load).

2. Due to technology change.

3. If the current system cannot meet the demand of an organization (limitation of

existing causing dissatisfaction).

4. To cut short the expenses. (if old current system is not economical to operate).

5. In order to improve the security of the system.

6. If an organization change her objective or goal

7. If the current system is error prone and doesn’t have proper controls.

8. Government legislation

9. Change in customer taste / preference

10. In order to have competitive advantage
CHAPTER SIX: EMERGING TRENDS IN ELEMENTS OF HUMAN RESOURCE
MANAGEMENT

6.1 Emerging Trends

i. Total Quality Management

The concept of TQM is based on the 14 principles of Deming that deal with this
subject. Deming was born and brought up in USA and migrated to Japan in the early
50’s, where he evolved these total quality principles. TQM is a culture based on the
realization that the high quality of products and services and associated customer
satisfaction are the keys to organizational survival.

At its core, Total Quality Management (TQM) is a management approach to long-

term success through customer satisfaction.

In a TQM effort, all members of an organization participate in improving processes,

products, services and the culture in which they work. The methods for
implementing this approach come from the teachings of such quality leaders as
Philip B. Crosby, W. Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa
and Joseph M. Juran.

A core concept in implementing TQM is Deming’s 14 points, a set of management

practices to help companies increase their quality and productivity:

1. Create constancy of purpose for improving products and services.

2. Adopt the new philosophy.

3. Cease dependence on inspection to achieve quality.

4. End the practice of awarding business on price alone; instead, minimize total cost
by working with a single supplier.

5. Improve constantly and forever every process for planning, production and
service.
6. Institute training on the job.

7. Adopt and institute leadership.

8. Drive out fear.

9. Break down barriers between staff areas.

10. Eliminate slogans, exhortations and targets for the workforce.

11. Eliminate numerical quotas for the workforce and numerical goals for
management.

12. Remove barriers that rob people of pride of workmanship, and eliminate the
annual rating or merit system.

13. Institute a vigorous program of education and self-improvement for everyone.

14. Put everybody in the company to work accomplishing the transformation

ii. Assessment Centres

An assessment centre is a comprehensive, standardized procedure in which multiple

assessment techniques such as situational exercises and job simulation (business
games, discussions, reports, and presentations) are used to evaluate employees for a
variety of manpower decisions. “An assessment centre consists of a standardized
evaluation of behaviour based on multiple inputs. Several trained observers and
techniques are used. Judgments about behaviour are made by these specially trained
observers. At the end of the assessment the assessors get together to share their data
which is scientifically recorded on a set of evaluation forms. They come to a
consensus on the assessments of each candidate. Most frequently the approach has
been applied to individuals being considered for selection, promotion, placement, or
special training and development in management.

The basic purpose of Assessment Centre is:

(a) Making selection and promotion decisions; and

(b) Identify the strengths and weaknesses of an individual for development
purposes.

The requirements of Assessment Centre are listed below:

1. Multiple assessment techniques must be used like in basket exercises,

management games, leaderless group discussions, tests, personality inventories etc.
2. Multiple assessors must be used. They can be line managers who are two to three
levels senior to the candidate and or professional psychologists.

3. Judgment should be based on pooling of information among assessors.

4. An overall evaluation of behavior should be made, separate from the observation

of behavior.

5. Simulation exercises must be used.

iii. Quality Circles

Quality Circles are (informal) groups of employees who voluntarily meet together
on a regular basis to identify, define, analyze and solve work related problems.
Usually the members of a particular team (quality circle) should be from the same
work area or who do similar work so that the problems they select will be familiar to
all of them. In addition, interdepartmental or cross functional quality circles may
also be formed. An ideal size of quality circle is seven to eight members. But the
number of members in a quality circle can vary.

The Main Objectives of Quality Circles are

 Promote job involvement

 Create problem solving capability
 Improve communication
 Promote leadership qualities
 Promote personal development
 Develop a greater awareness for cleanliness
 Develop greater awareness for safety
 Improve morale through closer identity of employee objectives with
organization’s objectives
 Reduce errors.
 Enhance quality
 Inspire more effective team work
 Build an attitude of problem prevention
 Promote cost reduction
 Develop harmonious manager, supervisor and worker relationship
 Improve productivity
 Reduce downtime of machines and equipment
 Increase employee motivation

Problem Solving Tools and Techniques Used by Quality Circles: Given below are
the most commonly used tools and techniques. These are called the old QC tools:

 Pareto analysis.
 Cause and effect diagram (or fish bone diagram or Ishikawa diagram).
 Histogram.
 Scatter diagram
 Stratification
 Check sheet
 Control charts and graphs

Benefits of QC:

 Self development.
 Promotes leadership qualities among participants.
 Recognition.
 Achievement satisfaction.
 Promotes group/team working.
 Serves as cementing force between management/non-management groups. 
Promotes continuous improvement in products and services.
 Brings about a change in environment of more productivity, better quality,
reduced costs, safety and corresponding rewards.
iv. Telecommuting:

Telecommuting is working from one’s home or some other remote location outside
the company’s office. Telecommuting offers benefits to both employees and
companies. For employees, telecommuting increases quality of life by enabling a
meshing of personal and professional lives. The ability to work from home can assist
workers with child/elder care issues, transportation restrictions, or employees who
may be physically unable to report to work on a daily basis due to health-related
issues (e.g., need for regular medical treatments such as dialysis or chemotherapy).
Other economic benefits that companies can realize from telecommuting include
productivity gains, reduced absenteeism, reduced employee turnover costs, reduced
real estate costs, and reduced relocation costs to name a few.

v. Globalization:

In the future, multinational companies (corporations operating in more than one

country) may utilize telecommuting to attract local talent that can work effectively
across international borders through electronic communication. Training such
“home grown talent” can allow companies to reduce international relocation
expenses, manage competition levels for talented resources, and reduce issues
related to working in foreign countries such as personal safety, security, political,
and regulatory issues. Reducing globalization efforts through telecommuting can
help to address some of the issues related to dealing with international workforces,
such as language barriers, cultural relationship differences, and time zone
differences that often lead to companies needing to maintain continuous operations
known as “24/7”.

vi. Outsourcing/Off-shoring:

Outsourcing is defined as “turning over all or part of an organization’s information

systems operation to outside contractors or service providers”. Outsourcing seems to
be the wave of the future. Many companies are outsourcing parts of their operations
in order to move parts of their businesses off site in order to focus on their core
competencies and try to give them an advantage over their peers. One of the more
popular departments which are outsourced is the Human Resources Department.
This is because most companies aren’t focused on HR and their needs might be
better served by an outside company. There are advantages and disadvantages to
outsourcing this vital department.

Offshoring refers to outsourcing in another country. Conceptually, outsourcing and

off-shoring can be viewed together, since both involve employing individuals
outside of the organization to handle operational work. There are some major
drawbacks to sending operations overseas, such as a loss of domestic talent, loss of
intellectual assets, decreased levels of customer satisfaction resulting from
diminished organizational values that do not translate across cultures, and threats to
organizational performance

Advantages of Outsourcing

a) Cost Savings: The main benefit to outsourcing the HR department is the cost
savings which will be associated with such a move. These cost savings can manifest
themselves in several ways. Many times a company can get the same level of service
for less cost. They can then use the savings to reinvest in their business. By doing
this, they might be able to hire more people or operate more efficiently which might
put them a step above their competitors.

b) Regaining Primary Focus: Outsourcing also allows a company to regain its

primary focus. When there is an internal HR department, senior management may
have to spend some time dealing with that department’s issues. This is time which
might be better spent on whatever business the company is in. The company as a
whole will begin to shift toward its primary business.

Disadvantages of Outsourcing

a) Employee Morale: There are some drawbacks to outsourcing, however. The

biggest of these is the morale of the employees of the outsourcing company.
“Outsourcing” is a loaded word which brings connotations of sending jobs overseas
and the loss of income. If the employees aren’t behind the move to an offsite HR
department, there may be less productivity from them. Any company considering
moving the HR department off site should carefully gauge the attitude of the
employees to get a feel for how this will affect them.

b) Loss of Expertise: Another disadvantage to this process is a loss of in-house

expertise. When there is an in-house HR department, any questions related to labor
laws or benefits can be answered quickly and sufficiently. If the HR is done off-site,
it can cause a delay in knowing how to proceed in an employee issue, or worse, a
manager may act in conflict with the law, opening the company up to bigger issues
in the

c) Issues with the Workplace of the Future: Security is the main issue facing
companies with mobile workforces. Employees in the field, such as salespeople or
telecommuters, have access to “mission critical” data and pose a significant threat to
organizational systems security. There are numerous potential breaches of security
related to mobile electronic devices such as PDAs and laptop computers that can be
misplaced, stolen or damaged. The challenge facing IT departments is to protect
sensitive company data, enable secure remote access, and provide user-friendly and
productive electronic tools for its mobile workforce. IT departments must also
implement an education process for training employees not to use unauthorized
devices or install any unauthorized programs that might threaten the integrity of
company data.

Electronic - Human Resource Management

 The major goals of e-HRM are mainly to improve HR’s administrative

efficiency/to achieve cost reduction.
 Next to these goals, international companies seem to use the introduction of e-
HRM to Standardize/ harmonize HR policies and processes.
  Though e- HRM hardly helped to improve employee competences, but
resulted in cost reduction and a reduction of the administrative burden.

There is a fundamental difference between HRIS and e-HR in that basically HRIS
are directed towards the HR department itself. Users of these systems are mainly
HR staff. These types of systems aim to improve the processes within the HR
departments itself, although in order to improve the service towards the
business. With e-HR, the target group is not the HR staff but people outside this
department: the employees and management. HRM services are being offered
through an intranet for use by employees. The difference between HRIS and e-
HR can be identified as the switch from the automation of HR services towards
technological support of information on HR services. e-HRM is a way of
implementing HR strategies, policies, and practices in organizations through a
conscious and directed support of and/or with the full use of web-technology-
based channels. The word ‘implementing’ in this context has a broad meaning,
such as making something work, putting something into practice, or having
something realized. e-HRM, therefore, is a concept - a way of ‘doing’ HRM. The
e-HRM business solution is designed for human resources professionals and
executive managers who need support to manage the work force, monitor
changes and gather the information needed in decision-making. At the same time
it enables all employees to participate in the process and keep track of relevant
information.

The e-HRM business solution excels in:

 Modularity
 The solution can be accessed and used in a web browser
 Security of data, protected levels of access to individual modules, records
documents and their component parts
 Parametric and customizability
 Access to archived records and documents
 User-friendly interface
 Connectivity with the client’s existing information system (payroll accounting,
ERP, attendance registration, document systems…)
 Multi-language support Advantages of the e-HRM business solution:  Gradual
implementation
 Adaptability to any client
 Collection of information as the basis for strategic decision-making
 Integral support for the management of human resources and all other basic and
support processes within the company  Prompt insight into reporting and
analysis  A more dynamic workflow in the business process, productivity and
employee satisfaction
 A decisive step towards a paperless office  Lower business costs e-HR Activities
We talk about using technology in HR functions. Here we focus on recruitment,
selection, training, performance management and compensation. 1. e-
Recruitment: e- recruitment strategy is the integration and utilization of internet
technology to improve efficiency and effectiveness of the recruitment process.
Most companies understand this and have begun the evolution by integrating e-
recruitment strategy into their hiring process.

E-Recruitment Methods:

Methods of E-recruitment are many, among those the more important ones are: Job
Boards: These are the places where the employers post jobs and search for
candidates. Candidates become aware of the vacancies. One of the disadvantages is,
it is generic in nature. Employer Websites: These sites can be of the company owned
sites, or a site developed by various employers. For an example,
Directemployers.com is the first cooperative, employerowned e-recruiting
consortium formed by Direct Employers Association. It is a non profit organization
formed by the executives from leading U.S corporations. Professional Websites:
These are for specific professions, skills and not general in nature. For an example,
for HR jobs Human Resource Management sites to be visited like www.shrm.org.
The professional associations will have their own site or society.
Advantages of e-Recruitment: e-recruiting offers several benefits to the firms
practising it

1) Centralised Platform i.e. collects candidate information in a standard format. 

Consolidate data from multiple recruitment sources.
2) ) Streamline Workflow: Automates workflow from job requisition to completion
of the hiring process, Captures and files candidate information and history for
future retrieval by all users of the system.
3) Better Communication and Increased Productivity: Shares knowledge and
information between hiring team members online in real time, Collaboration
with colleagues to increase productivity.
4) Less Wastage of Paper: Electronically collects and files information to reduce
paper usage. : Reduces manual administrative workload.
5) Candidates Pool : Locates qualified candidates within a private pool of talent
with precision. : Centralized database collects and provides candidate
information for various units and location.
6) Centralised Reports: Provides consolidated HR reports for the entire
organization.
7) Save Cost and Time: Improves productivity and reduces hiring expenses in the
long run.

Drawbacks of E-Recruitment

1) Require being Computer Savvy: The process is restricted within computer savvy
candidates.
2) Legal Consequences: Alike other recruitment sources this source also should be
aware of the words used in the advertisements otherwise it may lead to the
charge of discrimination.
3) Vast Pool of Applicants: This benefits the Organizations as well as it is
disadvantage to them also. Because the huge database cannot be scanned in
depth. Either first few candidates are called for interview or the resumes are
screened based on some key words.
4) Non-serious Applicants: Lot of applicants forward their resumes just to know
their market value.
5) Disclosure of Information: Candidates profile and company details are available
to public. The applicants do not want their employer to know that they are
looking for a change. Phone number, address information has lead to many
security problems. Again the companies do not want their competitors always to
know the current scenario.

e- Selection: Usually it is difficult to decide where recruiting ends and selection

begins. The main purpose of selection process is to distinguish individuals on the
basis of important characteristics. In a changing environment, the speed of
selection process becomes very important.

Other RECENT TRENDS IN HUMAN RESOURCE MANAGEMENT

i. Work-force Diversity

Workforce diversity means similarities and differences among employees in terms of

age, cultural background, physical abilities and disabilities, race, religion, gender,
and sexual orientation. No two humans are alike. Diversity is critically linked to the
organization’s strategic direction. The workforce composition is also changing over
the years. Demands for equal pay for equal work, putting an end to gender
inequality and bias in certain occupations, the breaking down of grass ceiling have
already been met. A family friendly organization is one that has flexible work
schedules and provides such employee benefits such as child care. In addition to the
diversity brought by gender and nationality, HRM must be aware of the age
differences that exist in today’s work force. HRM must train people of different age
groups to effectively manage and to deal with each other and to respect the diversity
of views that each offers. In situations like these a participative approach seems to
work better. In current scenario, employing diversified workforce is a necessity for
every organization but to manage such diversified workforce is also a big challenge
for management.

ii. Employee expectations

Nowadays workers are better educated, more demanding and are ready to voice
strong, violent and joint protests in case their expectations are not met. The list of
financial and non-financial demands is ever-growing and expanding. In fast-
changing industries such as software, telecom, entertainment and pharmaceuticals
the turnover rations are rising fast and if HR managers do not respond positively to
employee expectations, the acquisition and development costs of recruits is going to
mount up steadily. An efficient organisation is, therefore required to anticipate and
manage turnover through human resource planning, training schemes followed by
appropriate compensation packages.

iii. Changing skill requirements

Recruiting and developing skilled labour is important for any company concerned
about competitiveness, productivity, quality and managing a diverse work force
effectively. Skill deficiencies translate into significant losses for the organization in
terms of poor-quality work and lower productivity, increase in employee accidents
and customer complaints. Since a growing number of jobs will require more
education and higher levels of language than current ones, HRM practitioners and
specialists will have to communicate this to educators and community leaders etc.
Strategic human resource planning will have to carefully weigh the skill deficiencies
and shortages. HRM department will have to devise suitable training and short term
programs to bridge the skill gaps & deficiencies.

iv. Corporate downsizing

Whenever an organization attempts to delayer, it is attempting to create greater

efficiency. The pressure to remain cost effective has also compelled many a firm to
go lean, cutting down extra fat at each managerial level. The premise of downsizing
is to reduce the number of workers employed by the organization. HRM people
must ensure that proper communication must take place during this time. They
must minimize the negative effects of rumours and ensure that individuals are kept
informed with factual data.

v. Continuous improvement programs

It is a process whereby an organization focuses on quality and builds a better
foundation to serve its customers. This often involves a companywide initiative to
improve quality and productivity. The company changes its operations to focus on
the customer and to involve workers in matters affecting them. Companies strive to
improve everything that they do, from hiring quality people, to administrative paper
processing, to meeting customer needs. HRM plays an important role in the
implementation of continuous improvement programs. HRM must prepare
individuals for the change. This requires clear and extensive communications of why
the change will occur, what is to be expected and what effect it will have on
employees.

vi. Re-engineering work processes for improved productivity

Although continuous improvement initiatives are positive starts in many of our

organizations, they typically focus on ongoing incremental change. Such action is
intuitively appealing – the constant and permanent search to make things better. Yet
many companies function in an environment that is dynamic- facing rapid and
constant change. Re-engineering occurs when more than 70% of the work processes
in an organization are evaluated and altered. It requires organizational members to
rethink what work should be done, how it is to be done and how to best implement
these decisions. Re-engineering changes how organizations do their business and
directly affects the employees. Re-engineering may leave certain employees
frustrated and angry and unsure of what to expect. Accordingly HRM must have
mechanisms in place for employees to get appropriate direction of what to do and
what to expect as well as assistance in dealing with the conflict that may permeate
the organization. For re-engineering to generate its benefits HRM needs to offer skill
training to its employees.

vii. Contingent workforce

A very substantial part of the modern day workforce are the contingent workers.
Contingent workers are individuals who are typically hired for shorter periods of
time. No organization can make the transition to a contingent workforce without
sufficient planning. As such, when these strategic decisions are being made, HRM
must be an active partner in these discussions. After its entire HRM department’s
responsibility to locate and bring into the organization these temporary workers. As
temporary workers are brought in, HRM will also have the responsibility of quickly
adapting them to the organization. HRM will also have to give some thought to how
it will attract quality temporaries.

viii. Decentralized work sites

Work sites are getting more and more decentralized. Telecommuting capabilities
that exist today have made it possible for the employees to be located anywhere on
the globe. For HRM, decentralized work sites present a challenge. Much of that
challenge revolves around training managers in how to establish and ensure
appropriate work quality and on-time completion. Work at home may also require
HRM to rethink its compensation policy. Will it pay by the hour, on a salary basis, or
by the job performed? Also, because employees in decentralized work sites are full
time employees of the organization as opposed to contingent workers, it will be
organization’s responsibility to ensure health and safety of the decentralized work
force.

ix. Employee involvement

For today’s organization’s to be successful there are a number of employee

involvement concepts that appear to be accepted. These are delegation, participative
management, work teams, goal setting, employee training and empowering of
employees. HRM has a significant role to play in employee involvement. What is
needed is demonstrated leadership as well as supportive management. Employees
need to be trained and that’s where human resource management has a significant
role to play.

x. Technology

With the current technological advancement and its projection in the future, it has
brought in new eyes in the face of HRM. A number of computerized systems have
been invented to help in the HRM of which they are seen as simplifier of HR
functions in companies. For instance the paper work files are being replaced by
HRMIS which may be tailor made or Off the Shelf. These systems help in handling a
lot of data on a chip other than having a room full of file shelves. What HRM is
concerned with here is the safety (confidentiality) of the data/information of staff,
and therefore it is at the forefront of having to train personnel in operating such
systems and developing the integrity of such personnel to handle the sensitivity of
the matter.

xi. Health and Safety

The area of safety and accident prevention is of great concern to managers, at least
partly because of the increasing number of deaths and accidents at work. Failure to
provide a safe place to work can result in major fines and even criminal conviction
for managers. Supervisors play a key role in monitoring workers for safety. With the
emergence of the wellness clubs and fitness centres together with the need for
having healthy workforce, it has emerged that HRM has to move to another step like
having to subscribe for its employees to such clubs, paying health insurance services
for the staff. This is not only a productivity strategy but also a strategy used to
attract and retain valuable employees. HRM to continue showing relevance it has
shifted to providing health services to staff through health insurance, sensitization,
and free medical treatment bills. This has seen high results in not only in
performance but also in attraction and retention of highly qualified personnel.

xii. Family work life balance

Over a long time now in HRM history it has been a big debate about family life work
balance. Employees have been on toes of the employers to see if there could be
justice done and on the other hand employers have been keen to minimize the effect
of the same. The fact is a happy family is equal to a happy workforce. With the
current trend HRM have to work it out that every employee’s family to some extent
is a happy one. Therefore investing in what may seem out hand for the organization
is inevitable. It is time HRM to convince management to organize family day out for
the staff and their families, sacrifice sometimes for days off to enable employees to
attend to their family issues.
xiii. Confidentiality

The current trends have been seen as new challenges in the terms of costs especially
in the short run but for organization to strive well in this competitive market to
together with the labour mobility it is imperative important to rethink the HRM in
terms of the current trends at all levels. It goes without say that as longer as there is
no clear defined human resource management strategies in the given organization
there is definitely a problem boiling in the same organization or an explosion is
bound to happen. With the current trend in managing the most valued organization
resource, organizations have to dig deeper to maintain

6.2 Challenges Posed by Emerging Trends

The HR Managers of today may find it difficult because of the rapidly changing
business environment and therefore they should update their knowledge and skills
by looking at the organization’s need and objectives.

1. Managing the Vision: Vision of the organization provides the direction to

business strategy and helps managers to evaluate management practices and make
decisions. So vision management becomes the integral part of the process of Man
management in times to come .

2. Internal Environment: Creating an environment which is responsive to external

changes, providing satisfaction to the employees and sustaining through culture and
systems is a challenging task.

3. Changing Industrial Relations: Both the workers and managers have to be

managed by the same HRM Philosophy and this is going to be a difficult task for the
managers of tomorrow.

4. Building Organizational Capability: Even in the adverse circumstances the

employees have to be made to live in psychological state of readiness to continually
change.
5. Job Design and Organization Structure: Instead of depending on foreign
concepts we need to focus on understanding the job, technology and the people
involved in carrying out the tasks.

6. Managing the Large Work Force: Management of large workforce poses the
biggest problem as the workers are conscious of their rights.

8. Employee Satisfaction: Managers should be aware of techniques to motivate their

employees so that their higher level needs can be satisfied.

9. Modern Technology: There will be unemployment due to modern technology and

this could be corrected by assessing manpower needs and finding alternate
employment.

10. Computerized Information System: This is revolutionary in managerial decision

making and is having impact on coordination in the organization.

11. Managing Human Resource Relations: As the workforce comprises of both

educated and uneducated, managing the relations will be of great challenge. One of
the challenges HR managers face is issues of up gradation of the skill set through
training and development in the face of high attrition. Indian companies are
recognizing their responsibilities to enhance the employee’s opportunity to develop
skills and abilities for full performance within the position and for career
advancement.

6.3 Coping with Challenges

Refer to the challenges and inherent solution