BMS SEM-4th​

HUMAN RESOURCE MANAGEMENT

SYLLABUS
Unit 1: Introduction to Human Resource (9 Hours)
Human Resource Management: Concept and Functions; HRD
– Definition, goals and challenges; The changing environment

S
R
of HRM– globalization, cultural environment, technological

O
advances, workforce diversity, corporate downsizing, changing

IV
skill requirement, HRM support for improvement programs,
Work life balance.​

RV
Human Resource Management SU
Definition:
S
M

HRM is the process of recruiting, developing, and managing an

B

organization's human capital effectively and strategically.

)&

Or
IA

HRM refers to the strategic approach to the effective and

(F

efficient management of people in an organization. It involves

A

recruiting, hiring, training, developing, and retaining employees

B

to achieve both individual and organizational goals.

B
U

Functions of HRM
D

Category Functions
Managerial Planning, Organizing, Directing, Controlling
Functions
Operative Recruitment, Selection, Training,
Functions Compensation, Appraisal, Labor Relations
Developmental Career planning, HR development,
Functions Employee motivation

In detail :-

S
R
1.​ Human Resource Planning – Forecasting HR needs and

O
developing plans to meet them.

IV
2.​Recruitment and Selection – Attracting and choosing

RV
candidates for employment.
3.​Training and Development – Enhancing employees'
skills and capabilities. SU
4.​Performance Management – Assessing and improving
S
employee performance.
M

5.​Compensation and Benefits – Developing fair and

B

motivating salary and benefit systems.

)&

6.​Employee Relations – Maintaining positive

employee-employer relationships.
IA

7.​Legal Compliance – Ensuring adherence to labor laws

(F

and regulations.
A

8.​Health and Safety – Creating a safe and healthy working

B

environment.
B

Example:
U
D

A company like Infosys uses HRM to hire software engineers,

train them in coding languages, and provide bonuses based on
performance.
Human Resource Development (HRD)

Definition:
HRD is a subset of HRM that focuses on the development of
employee competencies through training, career development,
organizational development, and performance improvement.

S
Goals of HRD

R
O
1. Enhancing Employee Capabilities – Developing

IV
employees' technical and managerial skills.

RV
2. Encouraging Innovation and Creativity – Promoting a
culture of continuous learning.
SU
3. Improving Employee Engagement – Increasing motivation
S
and job satisfaction.
M
B

4. Facilitating Organizational Change – Helping employees

adapt to new challenges.
)&

5. Career Development – Providing opportunities for

IA

professional growth.
(F

6. Fostering Leadership and Management Development –

A

Preparing employees for future leadership roles.

B
B

Challenges in Human Resource Development

U

(HRD)
D

1.​ Technological Changes – Need for constant upskilling to

keep pace with new technologies.
2.​ Resistance to Change – Employees may resist new
learning or development initiatives.
 3.​ Aligning with Strategy – Difficulty in aligning HRD
programs with organizational goals.
4.​ Measuring Effectiveness – Challenges in evaluating the
impact of training and development.
5.​ Budget Constraints – Limited resources for
comprehensive HRD initiatives.
6.​ Rapid Workforce Changes – Adapting to changing

S
employee expectations and job roles.

R
7.​ Globalization – Managing cross-cultural training and

O
development.

IV
Example:

RV
Tata Steel conducts leadership training to develop future
managers.
SU
S

Changing Environment of HRM

M
B

A. Globalization
)&

●​ Employees working across borders

IA

●​ Need for managing global talent and cultural differences

(F

Example: IBM hires teams in India, the USA, and Germany to

A

work on the same project.

B
B

B. Cultural Environment
U

●​ Values, ethics, traditions differ by region

D

●​ HR must ensure cultural inclusivity

Example: Offering vegetarian meals in countries where it's a

cultural norm.
C. Technological Advances

●​ Use of AI, automation, HR analytics

●​ Remote hiring and online onboarding

D. Workforce Diversity

●​ Differences in age, gender, ethnicity, and background.

●​ HRM must promote inclusion, equity, and manage conflicts

S
effectively.

R
O
IV
RV
Type of Example
Diversity

Age Gen Z, Millennials, SU

Boomers
S
M

Gender Equal opportunity

B

policies
)&

Ethnic Multilingual training

E. Corporate Downsizing
IA
(F

●​ Reducing staff due to costs or automation

●​ HRM must manage layoffs with compassion and ensure
A

morale of remaining staff.

B
B

F. Changing Skill Requirements

U

●​ Demand for soft skills, critical thinking, digital fluency

D

●​ Continuous learning programs needed

G. HRM Support for Improvement Programs

Program HRM Role

Type
Six Sigma Train staff in process improvement

TQM Promote quality culture through

employee training

Lean Engage employees in waste

Management reduction

S
​It aligns talent management with continuous improvement

R
O
efforts.

IV
H. Work-Life Balance

RV
●​ HRM facilitates policies like flexible working hours, remote
work, leave benefits. SU
●​ Promotes mental health and employee well-being.
S
Example: Google offers nap pods and flexible work to support
M

balance.
B
)&

Summary Table: Trends in HRM

IA

Factor Impact on HRM

(F

Globalization International HR strategies

A

Culture Inclusive policies

B
B

Technology Virtual HR tools, AI in

U

recruitment
D

Diversity Non-discrimination training

Downsizing Counseling, outplacement
services
Skill Changes Reskilling programs
 Improvement Quality and productivity
Programs training
Work-Life Balance Flex-time, well-being
initiatives

S
R
O
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S
M
B
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IA
(F
A
B
B
U
D
Unit 2: Human Resource Planning, Recruitment and
Selection (12 Hours)
Human Resource Planning: Process, Forecasting demand &
supply, Skill inventories, Succession planning; Human
Resource Information System (HRIS); Job analysis – Uses,
methods, Job description & Job specifications; Recruitment:
internal & external sources, Selection process, Tests in

S
selection, concept of reliability and validity in selection;

R
Orientation: Concept and process.

O
IV
Human Resource Planning

RV
Definition:
SU
HRP is the process of ensuring the right number of people with the
right skills are in the right place at the right time to meet
S
organizational goals.
M
B

Process of HRP
)&

Step1: Analyzing Organizational Objectives

IA

● Identify business goals and strategies.

(F

● Assess workforce needs based on business expansion,

A

diversification, or downsizing.
B
B

Step 2: Assessing Current Human Resources

● Conduct workforce audits and analyze existing employee
U
D

skills.
● Identify strengths and weaknesses of the current workforce.

Step 3: Forecasting HR Demand

● Predict the number and type of employees needed in the
future.
● Consider internal and external factors (e.g., market trends,
retirements, turnover rates).

Step 4: Forecasting HR Supply

● Analyze the availability of employees from internal and
external sources.
● Internal supply: Promotions, transfers, retraining.

S
● External supply: Labor market conditions, hiring new

R
employees.

O
IV
Step 5: Identifying Gaps and Developing HR Strategies

RV
● Compare HR demand with HR supply.
● Plan recruitment, training, and workforce restructuring if
required. SU
S
Step 6: Implementing HR Plans
M

● Execute recruitment, training, and development programs.

B

● Implement succession and retention strategies.

)&

Step 7: Monitoring, Review, and Feedback

IA

● Evaluate the effectiveness of HRP.

(F

● Make adjustments based on performance reviews and

A

changing business conditions.

B
B

forecasting Demand and Supply:

U
D

Demand Forecasting Methods:

●​ Trend Analysis: Studying past trends to predict future
needs.
●​ Workforce Analysis: Linking output with required staff
levels.
 ●​ Delphi Technique: Expert group opinions are gathered
and refined.
●​ Managerial Judgment: Expert estimation by department
heads or HR professionals.

Supply Forecasting:
●​ Internal Supply: Availability of current employees who

S
can be promoted, transferred, or reassigned.

R
●​ External Supply: Availability of potential hires from

O
outside the organization (labor market).

IV
RV
Skill Inventories

SU
A detailed record of employee skills, education, experiences,
and certifications.
S
Helps in:
M
B

●​ Internal promotions
●​ Project team formation
)&

●​ Training need identification

IA

●​ Succession planning
(F

Example: A bank identifies employees skilled in data analytics

A

for future digital transformation projects.

B
B

Succession Planning
U
D

Definition:
A strategic process of identifying and developing future leaders
or key personnel for critical positions.
Steps in Succession Planning:
1.​Identify key positions
2.​Assess potential successors
3.​Develop individual development plans (IDPs)
4.​Provide training and mentoring
5.​Monitor and update the plan regularly

S
Benefits:

R
O
●​ Ensures business continuity

IV
●​ Reduces leadership gaps

RV
●​ Motivates employees with career growth opportunities

Example: Infosys trains senior developers for managerial

SU
roles.
S

Human Resource Information System (HRIS)

M
B

Definition:
)&

HRIS is a computer-based system that helps HR departments

IA

manage information regarding human resources efficiently.

(F

A digital system to store and manage employee information,

A

track attendance, payroll, performance, and more.

B
B

Functions of HRIS:
U

1.​Employee Information Management:

D

○​ Stores data like personal details, job history,

performance, benefits, etc.
2.​Recruitment and Selection:
○​ Automates job postings, application tracking, resume
screening, and interview scheduling.​
 3.​Payroll and Compensation Management:
○​ Calculates salaries, deductions, taxes, and generates
pay slips.
4.​Training and Development:
○​ Tracks training needs, attendance, completion, and
evaluation.
5.​Performance Appraisal:

S
○​ Maintains appraisal records and helps in goal setting

R
and feedback processes.

O
6.​Leave and Attendance Management:

IV
Tracks attendance, absenteeism, vacation, and sick leave.

RV
Benefits of HRIS:
SU
●​ Enhances data accuracy and reduces paperwork
S
●​ Speeds up HR processes and decision-making
M

●​ Supports strategic HR planning

B

●​ Improves communication and transparency

●​ Saves cost through automation
)&
IA

Job Analysis
(F

Definition
A
B

Job Analysis is the process of studying and collecting

B

information related to the operations and responsibilities of a

U

specific job.
D

Uses of Job Analysis:

●​ Recruitment & Selection – Helps create job descriptions
and specifications.
●​ Training & Development – Identifies skills needed for job
performance.
 ●​ Performance Appraisal – Provides criteria for evaluating
employee performance.
●​ Compensation Management – Determines job value and
pay structure.
●​ Workforce Planning – Aligns jobs with organizational
goals.

Methods of Job Analysis:

S
R
1.​Observation Method: Directly observing employees at

O
work.

IV
2.​Interview Method: Asking employees and managers

RV
about job duties.
3.​Questionnaire Method: Structured forms filled by
employees.
SU
4.​Diary/Log Method: Employees record their activities over
S
time.
M

5.​Technical Conference: Information is gathered from

B

experts or supervisors.
)&

Job Description:
IA

●​ A written statement that outlines the job title, duties,

(F

responsibilities, reporting relationships, working

A

conditions, and tools used.

B
B

Job Specification:
U
D

●​ A list of the qualifications, skills, experience, education,

and personal attributes required to perform the job.
Job Description vs Job Specification
Feature Job Description Job Specification

Focus Tasks, duties, Skills, qualifications,

responsibilities traits

S
Exampl "Manage sales "MBA with 3 years

R
e reports" experience"

O
IV
RV
Recruitment

Definition SU
S
Recruitment is the process of attracting qualified candidates to
M

apply for job openings in an organization.

B

Sources of Recruitment:
)&

A. Internal Sources:
IA
(F

These refer to filling job openings from within the organization.

A

1.​Promotions – Advancing employees to higher positions.

B

2.​Transfers – Shifting employees to similar positions in

B

other departments or locations.

U

3.​Internal Job Postings – Posting job vacancies on

D

company notice boards or intranet.

4.​Employee Referrals – Recommendations from existing
employees.
5.​Retired Employees – Hiring back skilled retired staff for
temporary roles.
Advantages:
●​ Boosts employee morale and motivation
●​ Cost-effective and faster
●​ Lower training and orientation time
●​ Better knowledge of candidate’s strengths

Disadvantages:

S
R
●​ Limits new ideas

O
●​ May cause internal conflict or resentment

IV
●​ Promotes favoritism if not transparent

RV
B. External Sources:
SU
These involve hiring candidates from outside the organization.
S
1.​Advertisements – In newspapers, job portals, company
M

websites, etc.
B

2.​Employment Agencies – Professional recruiters who

)&

provide suitable candidates.

3.​Campus Recruitment – From colleges, universities, or
IA

technical institutes.
(F

4.​Walk-ins and Write-ins – Candidates who directly

approach the organization.
A
B

5.​Job Fairs – Events that bring together employers and job

B

seekers.
6.​Social Media – LinkedIn, Facebook, etc., for sourcing and
U

engaging talent.
D

Advantages:
●​ Brings in fresh ideas and skills
●​ Expands talent pool
●​ May help find specialized or scarce skills
Disadvantages:
●​ Higher cost and time
●​ Unfamiliarity with company culture
●​ Requires more orientation and training

Example: TCS hires fresh graduates through campus

recruitment (external) and promotes internal project managers

S
(internal).

R
O
2. Selection

IV
RV
Definition:

SU
Selection is the process of choosing the most suitable
candidate from those who have applied for a job.
S

Selection Process:
M
B

1.​Screening of Applications: Reviewing resumes to

)&

shortlist candidates.
2.​Selection Tests: Assess candidate abilities and suitability.
IA

3.​Preliminary Interview: Brief discussion to filter

(F

applicants.
A

4.​Employment Interview: In-depth, structured/unstructured

B

interview.
B

5.​Background Verification: Checking references, criminal

U

records, etc.
D

6.​Medical Examination: Ensures the candidate is

physically fit for the job.
7.​Final Selection and Job Offer: Formal appointment is
made.
8.​Joining Formalities: Documentation and onboarding.
Tests in Selection:
1.​Aptitude Tests: Assess general abilities like reasoning,
problem-solving.
2.​Personality Tests: Evaluate emotional stability, attitude,
interpersonal traits.
3.​Skill/Trade Tests: Measure specific job-related
competencies.

S
4.​Cognitive Ability Tests: Assess memory, logic,

R
verbal/numerical ability.

O
5.​Integrity Tests: Gauge honesty, ethics, and

IV
trustworthiness.

RV
6.​Situational Judgment Tests: Present hypothetical job
SU
situations to assess decision-making.

Concepts of Reliability and Validity:

S
M

Reliability:
B

●​ Refers to the consistency of a test over time.

)&

●​ A reliable test yields similar results under consistent

IA

conditions.
(F

●​ Example: A typing test gives similar results if taken again

after a few days.
A
B

Validity:
B
U

●​ Refers to whether a test measures what it is intended to

D

measure.
●​ A valid test accurately predicts job performance.
●​ Example: A customer service test should assess
communication and empathy, not only technical
knowledge.
 Note: A test can be reliable without being valid, but a
valid test must be reliable.

3. Orientation

Definition:
Orientation (or onboarding) is the process of introducing a new

S
employee to the organization, its culture, colleagues, job roles,

R
and responsibilities.

O
IV
Orientation Process:

RV
1.​Pre-Orientation Activities:
SU
○​ Welcome email, agenda, basic HR paperwork.
2.​Organizational Introduction:
S
○​ History, vision, mission, culture, policies, rules.
M

3.​Job-Specific Orientation:
B

○​ Duties, reporting lines, expectations, and objectives.

4.​Team Introduction:
)&

○​ Meeting colleagues, manager, support teams.

IA

5.​Tour of Facilities:
○​ Workstations, cafeteria, restrooms, emergency exits,
(F

etc.
A

6.​HR Formalities:
B

○​ ID cards, payroll setup, benefits enrollment.

B

7.​Training (if needed):

U

○​ Technical and soft skills training.

D

8.​Follow-up:
○​ Check-in meetings to address doubts or challenges.

Benefits of Orientation:
●​ Faster adaptation to the role and environment
●​ Reduces new employee anxiety and confusion
 ●​ Increases job satisfaction and engagement
●​ Improves retention and productivity

Example:
Google offers a 2-week orientation where new hires learn
about company culture, policies, and tools.

S
R
O
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IV
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RV
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)&
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Unit 3: Training and Development (12 Hours)
Training: Concept, Training Process, Methods of training.
Management Development: Concept & Methods. Performance
Management System: concept, uses of performance appraisal,
performance management methods, factors that distort
appraisal. Career Planning: career life stages, career anchors.
Compensation: Steps in determining compensation, job

S
evaluation, components of pay 8 structure, factors influencing

R
compensation levels, Trends in Compensation. Incentives:

O
Importance and types; Benefits - Types, Brief introduction to

IV
social security, health, retirement & other benefits.

RV
Training
SU
Concept:
S
M

Training is a systematic process of increasing the skills,

B

knowledge, and competencies of employees to perform a

specific job effectively.
)&

Goal: Improve current job performance and prepare

IA

employees for future roles.

(F

Training Process:
A
B

1.​Training Needs Assessment:

B

○​ Identify skill gaps through job analysis, performance

U

reviews, and future requirements.

D

2.​Setting Objectives:
○​ Define what the training aims to achieve (e.g.,
improve productivity, enhance safety).
3.​Designing the Training:
○​ Decide content, delivery method, time duration,
trainer, and materials.
 4.​Implementation:
○​ Conduct the training session (in-house or external).
5.​Evaluation:
○​ Measure training effectiveness using feedback, tests,
performance metrics (Kirkpatrick’s model).

Methods of Training

S
1. On-the-Job Training (OJT)

R
O
Training provided at the workplace while the employee

IV
is actually doing the job.

RV
Methods:

1.​Job Rotation:
SU
○​ Employees rotate between different jobs to gain a
S

broad skillset.
M

○​ Increases flexibility and understanding of the

B

organization.
)&

2.​Coaching:
○​ One-on-one guidance from a senior or supervisor.
IA

○​ Focuses on job performance and development.

(F

3.​Mentoring:
A

○​ Long-term development through relationship with an

B

experienced mentor.
B

○​ Emphasizes personal and professional growth.

U

4.​Apprenticeship:
D

○​ Combines classroom instruction with hands-on

training.
○​ Common in skilled trades (e.g., carpentry, electrician
work).
5.​Job Instruction Training (JIT):
○​ Step-by-step training on job procedures.
 ○​ Trainer demonstrates, explains, and lets trainee try.
6.​Internships and Assistantships:
○​ Temporary positions for students or freshers to gain
work experience.

Advantages:
●​ Real work environment

S
●​ Cost-effective

R
●​ Immediate feedback

O
●​ Builds practical skills

IV
2. Off-the-Job Training

RV
Training conducted away from the workplace, typically in
classrooms or simulated environments.
SU
S
Methods:
M
B

1.​Lectures/Classroom Training:
○​ Instructor-led sessions on theoretical or technical
)&

subjects.
IA

○​ Cost-effective for large groups.

2.​Case Studies:
(F

○​ Analyzing real or hypothetical business situations to

A

build problem-solving skills.

B
B

3.​Role Playing:
○​ Participants act out situations to improve
U

interpersonal and decision-making skills (e.g.,

D

handling a customer complaint).

4.​Simulation:
○​ Imitates real-life job conditions (e.g., flight simulators
for pilots).
○​ Risk-free practice for complex tasks.
5.​Business/Management Games:
 ○​ Interactive games to teach strategy, teamwork, and
resource management.
6.​Vestibule Training:
○​ Training in a simulated work environment with actual
equipment.
○​ Ideal for technical and mechanical jobs.
7.​E-Learning / Web-Based Training:

S
○​ Self-paced learning modules, webinars, or virtual

R
classrooms.

O
○​ Flexible, accessible, and cost-efficient.

IV
Advantages:

RV
●​ Focused learning environment
●​ Exposure to new ideas SU
●​ Structured content delivery
S
●​ Suited for theoretical and complex subjects
M
B

Management Development
)&

Concept:
IA
(F

Management development is a long-term educational process

focused on developing leadership abilities, decision-making
A
B

skills, and strategic thinking in managers and future leaders.

B

Goal: Build a strong leadership pipeline and enhance

U

managerial competence.
D

Methods of Management Development:

On-the-Job Methods:

1.​ Coaching & Mentoring – One-on-one guidance from

experienced seniors.
 2.​Job Rotation – Moving across roles to gain a broad
perspective.
3.​Committee Assignments – Participation in
decision-making bodies.
4.​Understudy Assignments – Grooming a successor.

Off-the-Job Methods:

S
1.​ Workshops/Seminars – Organized by institutions or

R
universities.

O
2.​Simulation Exercises – Business games, real-life

IV
scenario role plays.

RV
3.​Case Studies – Analyze real business problems.
4.​Conferences – Networking and idea exchange.
SU
5.​Formal Education Programs – MBA, executive
education, etc.
S
M

Performance Management System

B
)&

(PMS)
IA

Concept:
(F

Performance Management is a strategic approach to improve

A

organizational effectiveness by enhancing individual and team

B
B

performance.
U

It includes goal setting, continuous feedback,

D

performance appraisal, and development planning.

Uses of Performance Appraisal:

1.​Employee Development – Identifies strengths and

areas for improvement.
 2.​Training Needs Assessment – Helps determine skill
gaps and training requirements.
3.​Compensation Decisions – Basis for salary hikes,
bonuses, and incentives.
4.​Promotion & Career Planning – Supports decisions on
promotions and career growth.​

S
5.​Performance Feedback – Provides constructive

R
feedback to employees.

O
6.​Motivation – Encourages better performance through

IV
recognition.

RV
7.​Workforce Planning – Assists in succession planning
and role alignment.
SU
8.​Legal Documentation – Serves as a formal record of
employee performance.
S
M

Performance Management Methods:

B

Traditional Methods:
)&

●​ Graphic Rating Scale – Rating traits like punctuality,

IA

cooperation, etc.
(F

●​ Ranking Method – Ranking employees from best to

A

worst.
B

●​ Checklist Method – Yes/No list of behaviors or

B

performance traits.​
U
D

Modern Methods:

●​ Management by Objectives (MBO):

○​ Setting specific, measurable goals jointly with
employees.
●​ 360-Degree Feedback:
 ○​ Feedback from peers, subordinates, superiors, and
self.
●​ Behaviorally Anchored Rating Scales (BARS):
○​ Pre-defined behavioral statements for various
performance levels.
●​ Balanced Scorecard:
○​ Measures performance from four perspectives:

S
Financial, Customer, Internal Process, Learning &

R
Growth.

O
IV
Factors That Distort Appraisal:

RV
1.​Halo Effect – One positive trait influences all ratings.
2.​Horn Effect – One negative trait overshadows
performance.
SU
3.​Leniency or Strictness Bias – Tendency to rate too
S
M

high or too low.

B

4.​Central Tendency – Avoiding extreme ratings, giving

average scores to all.
)&

5.​Recency Effect – Focusing only on recent events.

IA

6.​Personal Bias – Prejudices based on race, gender, age,

etc.
(F

7.​Contrast Error – Comparing employees to each other

A

rather than standards.

B
B

Career Planning
U
D

Concept:

Career planning is the process by which an individual

evaluates their career goals and develops strategies to
achieve them. For organizations, it aligns employee growth
with business needs.
Career Life Stages:

1.​Exploration (15–25 years):

○​ Education, internships, first job
○​ Self-discovery of interests and abilities
2.​Establishment (25–35 years):
○​ Settling into a career
○​ Gaining experience and developing expertise

S
R
3.​Mid-Career (35–50 years):

O
○​ Advancement, stagnation, or career change

IV
○​ Seeking higher responsibility or work-life balance

RV
4.​Late Career (50–65 years):
○​ Mentoring roles
SU
○​ Gradual reduction in responsibilities
5.​Decline/Disengagement (65+ years):
S

○​ Retirement planning
M

○​ Possible part-time or advisory roles

B
)&

Career Anchors :
IA

Career Anchors, developed by Edgar Schein, are core

(F

values and motivations that guide a person’s career

A

decisions. Each individual has one dominant anchor that

B

they are not willing to compromise.

B

Types of Career Anchors:

U
D

1.​Technical/Functional Competence – Focus on

expertise in a specific skill.
2.​General Managerial Competence – Desire to lead
and manage organizations.
3.​Autonomy/Independence – Preference for freedom
and self-directed work.
 4.​Security/Stability – Need for job security and steady
employment.
5.​Entrepreneurial Creativity – Passion for creating new
ventures or ideas.
6.​Service/Dedication to a Cause – Commitment to
meaningful or social work.
7.​Pure Challenge – Thrives on solving complex

S
problems.

R
8.​Lifestyle Integration – Seeks balance between work

O
and personal life.

IV
RV
Compensation
Concept:
SU
S
Compensation includes all forms of financial returns and
M

tangible benefits employees receive as part of the

B

employment relationship.
)&

Steps in Determining Compensation:

IA

1.​Job Analysis:
(F

○​ Understanding job duties, responsibilities, and

A

required skills.
B
B

2.​Job Evaluation:
○​ Determining the relative worth of a job using
U
D

methods like:
■​ Ranking
■​ Point-Factor
■​ Factor Comparison
3.​Conducting Salary Surveys:
○​ Gathering market pay data to stay competitive.
 4.​Designing the Pay Structure:
○​ Creating pay grades, ranges, and levels.
5.​Administering Pay:
○​ Aligning with internal policies and budget.

Components of 8 Pay Structure:

1.​Basic Pay – Fixed salary component; foundation of

S
total pay.

R
2.​Dearness Allowance (DA) – Cost of living adjustment,

O
IV
especially in inflation-prone regions.
3.​House Rent Allowance (HRA) – Helps employees

RV
cover housing expenses.
SU
4.​Conveyance Allowance – Provided for commuting or
travel expenses.
S
5.​Performance Incentives/Bonuses – Variable pay
M

based on performance.
B

6.​Overtime Pay – Extra pay for hours worked beyond

)&

normal working hours.

7.​Benefits/Perquisites (Perks) – Non-monetary
IA

advantages like company car, accommodation, etc.

(F

8.​Provident Fund/Retirement Contributions –

A

Employer’s contribution towards retirement savings.

B
B

Factors Influencing Compensation Levels:

U

●​ Internal Factors:
D

○​ Job worth, company policy, ability to pay.

●​ External Factors:
○​ Market rates, labor laws, cost of living, economic
conditions.

Trends in Compensation :
 1.​Pay for Performance – Linking pay to individual or
team results (e.g., bonuses, incentives).
2.​Skill/Competency-Based Pay – Employees are paid
based on their skills, not just their job title.
3.​Variable Pay Plans – A larger portion of compensation
is performance-based, not fixed.
4.​Pay Transparency – More openness about salary

S
structures to promote fairness and trust.

R
5.​Flexible Benefits (Cafeteria Plans) – Employees

O
choose benefits that suit their personal needs.

IV
6.​Equity-Based Compensation – Stock options or

RV
ownership plans to align employee and company
goals. SU
7.​Use of HR Analytics – Data-driven decisions for
S
setting competitive and fair compensation.
M

8.​Gig Economy Pay Models – Customized

B

compensation for freelancers and contract workers

)&

INCENTIVES
IA
(F

Importance of Incentives:
A

Incentives are rewards used to motivate employees to

B

improve their performance, productivity, and

B

commitment to organizational goals.

U
D

Their key benefits include:

●​ Encouraging high performance and efficiency

●​ Enhancing employee satisfaction and morale
●​ Supporting retention of top talent
 ●​ Promoting goal alignment between employees and
the organization
●​ Reducing absenteeism and turnover

Types of Incentives:

1. Monetary Incentives:

S
These are financial rewards given to employees for

R
performance or achievements.

O
●​ Individual-based:

IV
○​ Bonuses – Given for achieving targets.

RV
○​ Commission – Typically used in sales jobs,
based on sales made. SU
○​ Piece-rate pay – Payment based on the number
S
of units produced.​
M
B

●​ Group-based:
)&

○​ Team Incentives – Shared by team members

based on group performance.
IA

○​ Profit Sharing – Employees receive a portion of

(F

company profits.
A

○​ Gainsharing – Employees share in cost savings

B

or productivity gains.​
B
U

●​ Organizational-based:
D

○​ Stock Options/ESOPs – Employees get the right

to buy company shares at a discounted rate.
○​ Incentive Plans – Linked to overall company
performance.

2. Non-Monetary Incentives:
These incentives aim to fulfill employees’ psychological and
career growth needs.

●​ Recognition and Awards – Employee of the month,

certificates, appreciation letters
●​ Career Development Opportunities – Training,
promotion, leadership programs
●​ Job Enrichment – Giving more responsibility and

S
R
autonomy

O
●​ Flexible Working Hours – Remote work, flextime

IV
options

RV
●​ Work-Life Balance Programs – Leave policies,
wellness initiatives
SU
BENEFITS
S
M

Definition:
B

Benefits are indirect compensation provided to

)&

employees in addition to their salary. They contribute to

IA

employee well-being, job satisfaction, and loyalty.

(F

Types of Employee Benefits:

A
B

1. Statutory Benefits (Legally Mandated):

B

These are required by law and include:

U
D

●​ Provident Fund (PF) – Long-term savings scheme for

retirement
●​ Employee State Insurance (ESI) – Health insurance
for low-income workers
●​ Gratuity – Lump-sum payment after 5+ years of
service
 ●​ Maternity/Paternity Benefits – Paid leave for new
parents
●​ Leave Benefits – Sick leave, casual leave, earned
leave​

2. Voluntary (Discretionary) Benefits:

S
Provided by employers to enhance employee satisfaction

R
and competitiveness:

O
IV
●​ Health Insurance – Medical, dental, vision coverage

RV
●​ Paid Holidays and Vacation – Annual leave, festival
holidays
SU
●​ Housing and Transportation Allowances
●​ Childcare and Education Assistance
S

●​ Meals, Uniforms, Mobile/Laptop Reimbursement

M
B

3. Perquisites (Perks):
)&

Special non-monetary benefits for executives or senior staff:

IA

●​ Company Car
(F

●​ Club Memberships
A

●​ Company-owned Accommodation
B

●​ Travel Perks
B

●​ Stock Options
U
D

Social Security, Health & Retirement

Benefits
1. Social Security:

Programs aimed at providing financial security during

retirement, illness, or unemployment. In India, these
include:

●​ Employees' Provident Fund (EPF)

●​ Employee Pension Scheme (EPS)

S
●​ Employee State Insurance (ESI)

R
O
These protect workers from loss of income due to old age,

IV
illness, or disability.

RV
2. Health Benefits:

Organizations often provide:

SU
S
●​ Group Medical Insurance
M

●​ Hospitalization Cover
B

●​ Outpatient Services
)&

●​ Mental Health and Wellness Programs

IA

These improve employee health, reduce absenteeism, and

(F

enhance productivity.
A

3. Retirement Benefits:
B
B

●​ Provident Fund (PF): Monthly contribution by

U

employer and employee.

D

●​ Gratuity: Payable after at least 5 years of service,

based on last drawn salary.
●​ National Pension Scheme (NPS): Voluntary
retirement savings managed by the government.
●​ Superannuation Fund: Employer-contributed
retirement fund for employees.
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U
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Unit 4: Industrial Relations (12 Hours)
Industrial Relations: Introduction to Industrial Relations; Trade
unions role, types, functions, problems. Industrial disputes –
concept, causes & machinery for settlement of disputes.
Employee Grievances – concept, causes & grievance redressal
procedure. Discipline – concept, aspects of discipline &
disciplinary procedure. Collective bargaining: concept, types,

S
process, problems, essentials of effective collective bargaining.

R
O
Industrial Relations (IR)

IV
Industrial Relations refers to the relationship between

RV
employers, employees, and trade unions, as well as the
SU
government in the context of industrial employment.
S
It aims to promote harmonious relations, minimize conflicts, and
M

ensure productivity and employee welfare.

B

Key Objectives:
)&

●​ Promote harmonious relationships in the workplace

IA

●​ Prevent and resolve industrial conflicts

(F

●​ Improve productivity and worker satisfaction

A

●​ Facilitate employee participation in management

B

●​ Ensure compliance with labor laws

B

Importance of IR:
U
D

●​ Promotes industrial peace and stability

●​ Encourages mutual respect between labor and
management
●​ Aids in economic development
●​ Reduces the risk of strikes, lockouts, and disputes
Trade Unions

Definition:
A trade union is an organized group of workers formed to protect
and promote the interests of its members regarding wages,
working conditions, and other employment matters.

Roles of Trade Unions:

S
R
Collective Bargaining: Negotiate with employers for

O
●​
better wages and conditions

IV
●​ Representation: Defend workers in disciplinary and

RV
grievance cases
Legal Advocacy: Push for legislation to protect workers’
●​
rights
SU
Industrial Peace: Help mediate and prevent industrial
S
●​
M

disputes
Social Upliftment: Promote welfare schemes like
B

●​
education and housing
)&

Types of Trade Unions:

IA
(F

1.​ Craft Unions – Based on specific trades (e.g., electricians,

plumbers)
A

2.​ Industrial Unions – All workers in the same industry (e.g.,

B
B

textile workers)
3.​ General Unions – Open to all workers, regardless of
U

industry or skill
D

4.​ Federations – Alliances of multiple trade unions (e.g.,

INTUC, AITUC, CITU)

Functions of Trade Unions:

●​ Protective Function: Safeguard rights against exploitation

 ●​ Negotiating Function: Bargain for better pay, conditions
●​ Welfare Function: Provide education, healthcare, financial
aid
●​ Political Function: Influence labor policy through political
channels
●​ Social Function: Promote solidarity and social awareness

Types of Trade Unions:

S
R
1.​ Craft Unions – Workers of a specific skill or trade (e.g.,

O
electricians)

IV
2.​ Industrial Unions – All workers in a particular industry

RV
(e.g., mining workers)
3.​ General Unions – Open to all workers regardless of job or
industry
SU
4.​ Federations – A group of multiple unions (e.g., INTUC,
S

AITUC, CITU)
M
B

Problems of Trade Unions:

)&

●​ Multiplicity of Unions – Too many unions in one

IA

organization weakens unity

Inter-Union Rivalry – Conflicts between unions hamper
(F

●​
collective strength
A

Politicization – Unions often influenced by political agendas

B

●​
Lack of Trained Leadership – Unions may be led by
B

●​
unqualified or self-serving leaders
U

Poor Membership – Many workers avoid joining due to

D

●​
fear or disinterest
●​ Employer Resistance – Many employers do not support
or recognize trade unions
●​ Financial Weakness – Lack of funds to support union
activities and member welfare​
Industrial Disputes
An Industrial Dispute refers to a conflict or disagreement between
employers and employees or between workers themselves, which
arises out of employment, non-employment, terms of employment,
or conditions of labor.

Legal Definition:

S
According to the Industrial Disputes Act, 1947, an industrial

R
dispute means:

O
IV
“Any dispute or difference between employers and

RV
employers, or between employers and workmen, or
between workmen and workmen, which is connected with
SU
the employment or non-employment or the terms of
employment or with the conditions of labor of any person.”
S

Causes of Industrial Disputes:

M
B

1.​ Wage demands – Pay, bonuses, allowances

)&

2.​ Poor working conditions – Unsafe or unhealthy work

environment
IA

3.​ Layoffs and retrenchment – Job insecurity or termination

(F

4.​ Workload and hours – Long hours, shift disputes

5.​ Violation of labor laws or agreements
A
B

6.​ Indiscipline or victimization of workers​

B
U

Machinery for Settlement of Industrial Disputes:

D

Under the Industrial Disputes Act, 1947, several mechanisms are

provided for resolving disputes:

1. Works Committees:

●​ Applicable in establishments with 100 or more workers

 ●​ Composed of employer and employee representatives
●​ Objective: Promote harmony and address day-to-day
grievances
●​ Role is advisory and consultative

2. Conciliation:

A conciliation officer or board of conciliation tries to mediate

between the parties.

S
R
●​ Appointed by the government

O
●​ Tries to bring both parties to an agreement

IV
●​ Submits a report to the government

RV
●​ Non-binding in nature

3. Arbitration: SU
●​ Dispute is referred voluntarily by both parties to a neutral
S
arbitrator
M

●​ The arbitrator’s award may be binding

B

●​ Encouraged to reduce the burden on courts

)&

●​ Flexible and faster resolution method

IA

4. Adjudication:
(F

When other methods fail, disputes are referred to labor courts or

A

tribunals:
B
B

Tribunal Jurisdiction
U

Type
D

Labor Matters like dismissal, reinstatement,

Court wrong discharge
 Industrial Wage issues, bonus, PF, holidays,
Tribunal working hours

National Disputes involving more than one state or

Tribunal national importance

S
●​ Decisions are legally binding

R
●​ Government decides when to refer disputes to adjudication

O
IV
5. Collective Bargaining:

RV
●​ A bilateral negotiation process between employer and trade
union
●​ Ends with a Collective Agreement
SU
●​ Reduces chances of dispute and builds trust
S
M

6. Code of Discipline and Grievance Redressal:

B

●​ An agreement between management and workers to maintain

)&

discipline
●​ Avoids strikes, lockouts, and violence
IA

●​ Promotes self-regulation
(F
A
B

Employee Grievances
B
U

Concept
D

A grievance is any dissatisfaction or feeling of injustice an

employee has concerning their job or workplace environment.

It can arise from real or perceived causes and if not addressed,

may escalate into disputes.
Definition
According to Michael Jucius:

“A grievance is any discontent or dissatisfaction, whether

expressed or not and whether valid or not, arising out of
anything connected with the company that an employee
thinks, believes, or feels is unfair, unjust, or inequitable.”

S
Causes of Employee Grievances

R
O
1.​ Working Conditions: Poor safety, hygiene, or facilities

IV
2.​ Wages and Benefits: Low pay, delayed payments, lack of

RV
incentives
3.​ Promotion and Transfers: Unfair practices, favoritism
SU
4.​ Discipline and Supervision: Harsh treatment, biased
behavior
S
5.​ Violation of Agreements: Breach of contracts or labor laws
M

6.​ Job Security: Fear of retrenchment or automation

B

7.​ Workload Issues: Excessive work or unrealistic

)&

expectations​
IA

Grievance Redressal Procedure (As recommended by

(F

ILO & Indian law)

A
B

1.​ Informal Resolution

B

●​ Step 1: The aggrieved employee approaches their immediate

U

supervisor or manager.
D

●​ Goal: Resolve the issue informally and promptly.

●​ If unresolved, the employee proceeds to the formal grievance
procedure.

2. Formal Written Complaint

 ●​ Step 2: Employee submits a written grievance to the next
level (e.g., HR or grievance officer).​

●​ The complaint must clearly mention the nature of the

grievance, date, and any evidence.​

3. Grievance Committee Review

S
R
●​ A Grievance Redressal Committee (as mandated in Indian

O
organizations with 20 or more employees under the Industrial

IV
Disputes Act, amended in 2010) evaluates the complaint.
●​ Committee includes representatives of employees and

RV
management.
●​ The grievance is investigated fairly within a stipulated time
(often 15 days).​
SU
S
M

4. Hearing & Decision

B

●​ The employee is given an opportunity to present their case.

)&

●​ The committee deliberates and issues a decision or

recommendation.
IA

●​ If the grievance is found valid, corrective action is initiated.​

(F
A

5. Appeal (if dissatisfied)

B
B

●​ If the employee is unsatisfied with the committee’s decision,

U

they may appeal to higher management or an external

D

authority, such as:

○​ Labor Commissioner
○​ Conciliation Officer
○​ Labor Court or Tribunal (under Industrial Disputes Act)

Legal Provision in Indian Law:

 ●​ Section 9C of the Industrial Disputes Act, 1947 (amended
in 2010) mandates a Grievance Redressal Committee in
every industrial establishment employing 20 or more
workers.​

●​ The committee should:

○​ Have equal representation from employer and
employees

S
○​ Include at least one female member

R
○​ Resolve grievances within 15 days

O
IV
Discipline

RV
Concept
SU
Discipline refers to the practice of training employees to obey rules
or a code of behavior. It ensures adherence to organizational
S
M

policies and promotes a productive work environment.

B

Definition
)&

Dale Yoder defines discipline as:

IA

“Discipline is a condition in the organization where

(F

employees conduct themselves in accordance with the

A

organization’s rules and standards of acceptable

B

behavior.”
B

Aspects of Discipline
U
D

1.​ Positive Discipline: Encouraging self-discipline through

motivation and rewards
2.​ Negative Discipline: Imposing penalties for rule violations
3.​ Preventive Discipline: Preventing misconduct through
orientation and communication
 4.​ Corrective Discipline: Actions taken to correct behavior
and prevent recurrence​

Disciplinary Procedure (Principles of Natural

Justice)
1.​Issuance of Charge Sheet: Notify the employee of

S
misconduct

R
2.​Explanation by Employee: Allow employee to respond

O
3.​Domestic Enquiry: Fair investigation by impartial officer

IV
4.​Report Submission: Findings of enquiry documented

RV
5.​Final Decision: Appropriate disciplinary action taken
SU
6.​Appeal: Employee can appeal to higher authority

Collective Bargaining
S
M

Concept
B
)&

Collective Bargaining is the process where representatives of

employers and employees negotiate employment terms like wages,
IA

working conditions, and benefits.

(F

Definition
A
B

According to Dale Yoder:

B

“Collective bargaining is the process of arriving at an

U

agreement through negotiation between the employer and a

D

group of employees.”

Types of Collective Bargaining

Type Description
Distributive One party’s gain is another’s loss (e.g., wage
Bargaining hikes)

Integrative Win-win solution for both parties

Bargaining

S
Productivity Linking wages to performance or productivity

R
Bargaining

O
IV
RV
Concessionary Unions agree to reduce demands (e.g., during
Bargaining crises)
SU
Composite Covers multiple issues – job security, working
S
Bargaining conditions, etc.
M
B

Process of Collective Bargaining

)&

Collective bargaining generally proceeds in the following stages:

IA

1. Preparation
(F
A

●​ Both sides gather information, analyze the environment, and

B

identify key issues.

B

●​ Trade unions prepare a charter of demands.

U

2. Negotiation
D

●​ Formal meetings are held.

●​ Parties present demands and proposals, bargain, and
counter-bargain.

3. Agreement
 ●​ If successful, a collective agreement is reached.
●​ This agreement is generally put into writing and signed by
both parties.

4. Implementation
●​ Terms of the agreement are implemented by the employer and
monitored by both parties.

S
5. Administration of the Agreement

R
O
●​ Both parties ensure compliance with the agreement.

IV
●​ Grievance handling procedures are followed in case of

RV
disputes.

Problems in Collective Bargaining SU

1.​Multiplicity of Trade Unions
S
○​ Competing unions often create conflicts and weaken
M

bargaining power.​
B
)&

2.​Political Interference
○​ Many unions are affiliated with political parties, which
IA

complicates negotiations.​
(F
A

3.​Lack of Skilled Negotiators

B

○​ Both employers and unions may lack trained

B

personnel to conduct effective bargaining.​

U
D

4.​Lack of Trust
○​ Suspicion and distrust between employers and
employees hinder the process.​
 5.​Unfair Labour Practices
○​ Employers may refuse to recognize unions or may
engage in victimization.​

6.​Inadequate Legal Support

○​ The absence of comprehensive laws for private
sector bargaining in India leads to weak enforcement.​

S
R
Essentials of Effective Collective Bargaining

O
IV
1.​Strong and Recognized Union

RV
○​ Representation of majority workers ensures
legitimacy and stronger negotiations.
2.​Willingness to Bargain
SU
○​ Both parties must be open to negotiation and
S

compromise.
M

3.​Mutual Trust and Respect

B

○​ A cooperative spirit leads to constructive dialogue

)&

and better outcomes.

IA

4.​Clear Objectives
○​ Well-defined demands and logical justifications make
(F

bargaining more effective.

A

5.​Effective Communication
B

○​ Transparent and timely communication avoids

B

misunderstandings.
U

6.​Legal Framework
D

○​ Legal backing enhances enforceability and clarity.

7.​Trained Negotiators
○​ Skilled representatives improve the quality and
outcome of negotiations.
8.​Good Faith Negotiation
 ○​ Parties must engage honestly and sincerely in
discussions.​

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O
IV
RV
SU
S
M
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)&
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(F
A
B
B
U
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