2014 – Solved Question Paper | Human Resource Management | Final Year – Masters of Commerce (M.Com) | Dibrugarh University

2014 – Solved Question Paper | Human Resource Management | Final Year – Masters of Commerce (M.Com) | Dibrugarh University




PAPER- 204

1(a) Briefly describe the evaluation and growth of Human Resource Management in India. (16)

-> The term “human resource management” is of recent origin. In its modern connotation, it came to be used mainly from the 1980s onwards. During ancient times and for a long period in the medieval era, production of goods was done mainly by skilled artisans and craftsmen. They themselves owned the tools and instruments, produced articles and sold these in the market. As such, the question of employer-employee or master-servant relationship did not arise in their cases. They managed their affairs themselves and with the help of the family members. However, many effluent craftsmen also employed apprentices and certain categories of hired laborers. There existed a very close relationship between the master craftsmen and the apprentices, and they themselves took care of the problems facing the apprentices and their family members.

A sort of human approach was involved in their relationship. After a prolonged period of training, many apprentices established their own enterprises, and many others remained attached with their master craftsmen on lucrative terms. During the medieval period, the skilled craftsmen also formed their guilds primarily with a view to protecting the interests of their respective trades.

These guilds also determined the price of their products, the wages of the journeymen and hired laborers, and regulated the terms and conditions of their employment. The ancient and a major part of the medieval period also witnessed prevalence of certain other distinct types of laborers. These comprised slaves, serfs and indentured laborers.

A brief description of the manner in which they were treated and managed will be relevant for a proper understanding of human resource management in a historical perspective.

1. Managing Slaves:

Slaves comprised an important source of manpower in almost all ancient civilizations. They could be sold and purchased like commodities. Their main purchasers were the wealthy rulers, landlords, tribal chiefs and effluent businessmen. The purchasers of slaves had a rather complete control over their slaves.

The masters of the slaves took a variety of arduous work from them such as carrying heavy loads, rowing ships and boats, construction of buildings and forts, digging canals, cattle-rearing and tillage of soil. The remuneration or compensation for their efforts comprised mainly food, shelter and clothing. The slaves were dealt with iron hands.

They were subjected to strict supervision, and non-compliance of the orders of their masters or supervisors was generally punishable with physical tortures, and occasionally with mutilation of their limbs and even death sentence for grave offences.

2. Managing Serfs:

Serfdom was widely prevalent in the feudal societies of the pre-and early medieval era. Serfs were engaged by landlords mainly in agricultural operations and allied activities. The landlords would usually give them a piece of land for their habitat and often, some land for their own cultivation. In many cases, a paltry sum of money was advanced to them in order that they could remain attached to their masters.

In lieu of these facilities, the serfs and their family members were required to serve their masters. The work assigned to serfs mainly comprised – tillage of soil, cattle-rearing, domestic work and similar other activities. Many landlords would also give them a meager amount as wages, whether in cash or in kind. Usually, serfs could become free after returning to their masters the habitat, the piece of land and advances with interest. They could also be transferred to some other landlord on payment.

Under serfdom, some measure of personal relationship existed between the landlords and the serfs. Many landlords often tried to solve their genuine grievances and extended some help to those who were in distress. The feudal lords also occasionally gave some economic inducements to their serfs in the form of additional supply of food-grains and some money for their increased productivity and good behavior.

Although the management of serfs was based on the principle of authoritarianism, the element of human treatment was often found in their relationship. With the abolition of the feudal system, serfdom also came to an end. However, some remnants of the past can still be found even today, especially in rural areas. The bonded labor system in India is comparable to the system of serfdom prevalent in European countries during the medieval period.

3. Managing Indentured Labor:

The system of indentured labor emerged primarily with the flourishing of mercantilism and advent of industrial revolution. The discovery of new lands through sea and land routes led to a substantial increase in the demand of European goods abroad, and at the same time, gave a fillip to the establishment of industries in the continent.

As a consequence, trade flourished leaps and bounds, and the mercantilists, taking advantage of the expanding markets, tried to accumulate as much wealth as possible. In their quest for maximizing wealth, the mercantilists would offer attractive inducements to the artisans and skilled craftsmen for accelerating production of goods in demand. The artisans and craftsmen responded and they started engaging an increasing number of apprentices and hired laborers to cope with the demand of the products.

Emergence of Modern Industrial Labor and Improvement of Status:

Even during the periods when slavery and serfdom were rampant, there were various categories of workers who enjoyed a certain amount of freedom in the relationships with their employers. They were mainly skilled craftsmen and artisans and experienced apprentices. However, the composition of free workers materially changed with the spread of industrialization and establishment of factories and other kinds of industrial and business establishments.

Industrialization led to the congregation of a large number of workers at the same establishment owned by an individual employer or a company. The employers were generally interested in maximizing their profits, and callously disregarded human aspects in managing the affairs of their enterprises.

The state also remained a mute spectator to the miseries and sufferings of the toiling masses of workers, primarily because of the widespread prevalence of the doctrine of individualism and laissez faire. These situations led to further deterioration in the conditions of industrial workers who had to face numerous problems in their employment.

Notable among these problems were low wages, excessive hours of work, hazardous and strenuous physical working conditions, instability of employment, and arbitrary treatment by supervisors and managers.

The industrial workers, sooner or later, came to realize that individually they might be dispensable to the employer, but collectively, they were indispensable as the running of the enterprise was in the interests of both. This realization induced them to organize and pressurize the employers and the state to take positive steps to improve their conditions.

However, these early combinations received severe blows from the courts of law either under common law or under special statutes such as Combination Acts, 1799 and 1800 of England.

The conditions, however, changed during the course of time. Certain notable developments relevant to the management of human resources included spread of democratic ideals and principles, growth of socialist ideas, emergence of the concept of welfare state, strengthening of workers’ organizations, efforts of social reformers, and changes in the size and composition of the labor force.

These developments led to substantial changes in the attitude of the employers towards workers and the role of the state in regard to labor matters.

The state started enacting labor laws with a view to ameliorating physical working conditions at the place of work, laying down minimum standards in specified areas of terms and conditions of employment, making available to workers certain welfare amenities, adopting social security measures against certain contingencies such as disablement and death resulting from work-injuries, sickness and maternity and establishing workers’ right to form trade union and bargain collectively with the employer.

The employers increasingly came to realize that their prerogatives of “hiring and firing” workers at their will and unilaterally laying down the terms and conditions of employment had been enormously encroached upon by union pressures and state intervention, and it would be difficult for them to manage their enterprises if they did not give due attention to human aspects in dealing with their workers.

These conditions have come to exist even today, but in a greatly modified form. Some of the more notable developments relating to human resources in modern perspective comprise – (i) substantial change in the composition of labor force with the entry of a large number of educated and highly skilled workers with specialization, (ii) greatly improved status of all categories of employees, (iii) extensive state intervention in the domain of human resources, (iv) development of liberal attitude of employers towards employees with major attention on human aspects, (v) enhancement of strength and status of unions, and (vi) growing international deliberations and exchanges in human resources matters.

Evaluation of Human Resource Management- From 19th Century till Recent Times: Different Eras of Human Resource Management:-

Identification of evolution of HRM over the period of time is important for understanding the philosophy, functions, and practices of HRM that are followed in different situations so that relevant HRM practices are evolved in the present situation. HRM, being a part of management discipline, has followed the pattern of development of management because of the interrelationship of the problems of both the fields.

Though HRM as a field of study has relatively recent origin, history of management of people in the organizations particularly in state administration, is quite old. However, these ancient developments could not create much impact on the recent development of literature and practices of HRM as these developments were concerned primarily to state administration.

Some serious thoughts were applied towards the effective utilization of labour force in industrial organizations after the industrial revolution that started in 19th century. Since then, organized practices relating to management of people, initially labour force and subsequently managerial personnel also, started taking place and literature describing these practices started emerging.

From industrial revolution era to the present era, various stages to development of management of human resource practices may be classified as follows:

1. Industrial revolution era— 19th century

2. Trade union movement era — close to the 19th century

3. Social responsibility era — beginning of the 20th century

4. Scientific management era— 1900-1920s

5. Human relations era— 1930s-1950s

6. Behavioral science era— 1950s-1960s

7. Systems and contingency approach era – 1960 onwards

8. Human resource management era — 1980 onwards

The classification of various stages of development of management of human resources in terms of period shows the beginning of that era. In each era, emphasis has been put on a particular approach of managing people at work. A succeeding era does not mean the complete end of preceding era but there has been overlapping in these.

Main features of these eras and the type of practices related to managing human resources are as follows:

1. Industrial Revolution Era:

The systematic development of HRM started with industrial revolution that started during 1850s in Western Europe and USA. The industrial revolution consisted, essentially, the development of machinery, the use of mechanical energy in production processes, and consequently the emergence of the concept of factory with large number of workforce working together.

The factory system replaced the old cottage system. Industrial revolution brought out a number of changes like centralized work locations with large number of workers working together, mechanized production process, migration of workers from their place of origin, and indirect contact between factory owners and workers.

In order to manage people in the factory system of industrial revolution, three systems of HRM were developed- recruitment of workers, training for workers, and control of workers. However, the basic philosophy of managing workers revolved around master-servant relationship.

2. Trade Union Movement Era:

Shortly after the emergence of factory system, workers started to organize themselves based on their common interests to form workers’ associations which were subsequently known as trade unions. The basic objectives of these associations were to safeguard interest of their members and to sort out their problems which arose primarily because of employment of child labor, long hours of work, and poor working conditions.

Later, other aspects of work such as economic problems and wages, employee benefits and services, etc. also became issues. These trade unions started such weapons as strikes, slowdowns, walkouts, boycotts, etc., for the acceptance of their demands.

These activities of the trade unions forced owners and managers to adopt employee grievance handling systems, arbitration as a means of resolving conflicts between owners/managers and workers, disciplinary practice, expansion of employee benefit programmers, holiday and vacation time, clear definition of job duties, job rights through seniority, and installation of rational and defensible wage structures.

3. Social Responsibility Era:

In the first decade of 20th century, some factory owners started adopting a more humanistic and paternalistic approach towards workers. Paternalistic approach to labor management is based on the philosophy that labor is just like a child and owner is just like a father and the owner should take care of his labor just like a father takes care of his children.

Those industrialists who adopted paternalistic approach offered a number of concessions and facilities to labor force like reduced number of work hours, improved facilities at workplace, model villages to workers, etc. All these practices led to the development of social welfare aspect of labor management.

Many critics to paternalistic approach viewed that this approach was adopted to overcome the problems posed by labor union movement as plenty of trade unions emerged which frequently interrupted work performance. Employers observed that workers were going out of their control and to overcome this problem, they implemented welfare scheme. Thus, this was a compulsion rather than a philosophy.

4. Scientific Management Era:

Around the beginning of 20th century, Taylor started to find out ‘one best way of doing thing’ based on time and motion studies. On the basis of his experiments, he was able to increase workers’ productivity considerably and wrote many papers based on these experiments and a book on scientific management.

The main principles of scientific management are:

(i) Replacing rule of thumb with science, (ii) harmony, not conflict, (iii) cooperation, not individualism, and (iv) development of each and every person. Scientific management techniques relevant to management of workers are- functional foremanship, standardization and simplification of work, and differential piece wage system.

5. Human Relations Era:

Around 1920s, management researchers gave a close look at the human factor at work and the variables that affected people’s behavior. Before that, Hugo Munsterberg wrote a book on ‘Psychology and Industrial Efficiency’ which suggested the use of psychology in the field of personnel testing, interviewing, attitude measurement, learning, etc.

This brief period was termed as ‘Industrial Psychology Era’. In 1924, a group of professors from Harvard Business School, USA, began an enquiry into the human aspects of work and working conditions at Hawthorne plant of Western Electric Company, Chicago.

They conducted researches from 1924 to 1932 and arrived at the conclusions that productivity of workers depended on- (i) social factors at the workplace, (ii) group formation and group influence, (iii) nature of leadership and supervision, and (iv) communication.

They concluded that in order to have better productivity, management should take care of human relations besides the physical conditions at the workplace. Consequently, the concepts of social system, informal organization, group influence, and non-logical behavior entered the field of management of personnel.

6. Behavioral Science Era:

In contrast to human relations which assume that happy workers are productive workers, the behavioral scientists have been goal and efficiency- oriented and considers understanding of human behavior to be the major means to that end. They have tried several sophisticated research methods to understand the nature of work and the people in the work environment.

The contribution of behavioral scientists to management practices consists primarily of producing new insights rather than new techniques. It has developed or expanded a useful way of thinking about the role of the manager, the nature of organizations, and the behavior of individuals within organizations. As against human relations model, they have given the concept of human resource model.

Major conclusions of the contributions made by behavior lists are as follows:

i. People do not dislike work. If they have been helped to establish objectives, they will want to achieve them. In fact, job itself is a source of motivation and satisfaction to employees.

ii. Most people can exercise a great deal of self-direction and self-control and generate more creativity than required in their current job. Therefore, their untapped potential remains unutilized.

iii. Managers’ basic job is to use untapped human potential in the organization.

iv. Manager should create a healthy environment wherein all persons can contribute to the best of their capacity. The environment should provide a healthy, safe, comfortable, and convenient place to work.

v. Managers should provide opportunity for self-direction by their subordinates and they must be encouraged to participate fully in all important matters.

vi. Operating efficiency can be improved by expanding subordinate influence, self- direction, and self-control.

vii. Work satisfaction may improve as a ‘by-product’ of subordinates making full use of their potential.

Behavioral science era led to the development of two-way communication, participation of employees in decision making, joint goal-setting, group dynamics, management development, and management of change in the organization. These contributions of behavioral science era are backbone of behavioral approach of human resource management even in the present context.

7. Systems and Contingency Approach Era:

Systems and contingency approach has attracted maximum attention of thinkers in management in the present era. It is an integrated approach which considers management of human resources in its totality based on empirical data. The basic idea of this approach is that analysis of any object must rely on a method of analysis involving simultaneous variations of mutually-dependent variables. This happens when systems approach is applied in managing human resources.

8. Human Resource Management Era:

When the factory system was applied in production, large number of workers started working together. A need was felt that there should be someone who should take care of recruiting, developing, and looking after welfare of these workers. For this purpose, industrial relations department came into existence in most of the large organizations which was concerned mostly with workers.

However, as the time passed and the complexity of managing human resources in large business organizations increased, the scope of industrial relations department was extended to cover supervisory staff and subsequently managerial personnel. Industrial relations department was named as personnel department.

With the increasing competition for market share, competition for resources including human talents, and increased knowledge in the field of managing human resources, people were not treated merely as physiological beings but socio-psychological beings as a prime source of organizational effectiveness and large organizations changed the nomenclature of their personnel department to human resource ‘department to reflect the contemporary view.

Even the American Society for Personnel Administration, the largest professional association in the field of human resource management, changed its name to the Society for Human Resource Management in 1990. At the academic level, similar pattern was followed and the title of personnel management course was changed to human resource management. Since then, the expression is gradually replacing the hackneyed term ‘personnel management’.

Evalution of Human Resource Management- 3 Stages for the Growth of Human Resource management

Historically, the beginning of HRM from the writing of Robert Owen, Charles Babbage and Henry Towde. Especially, the HRM growth was particularly marked in the inter-war era. It has branched out specifically along the domains of applied psychology and sociology. The latter in turn has evolved around the concept of the “welfare state”. While the former has proceeded as the behavioral science movement.

Human Resource Management (HRM) is relatively a very recent term considered for managing human resources in an organization. HRM is still evolving to become an amalgam of organizational behavior, personnel management, and industrial relations and labor legislation.

Following stages explain the process involved for reaching to the current HRM stage:

1. Labor Welfare Stage:

Formal beginnings of HRM may have emerged from industrial disputes and conflicts. An enquiry on determining reasons for industrial disputes and conflicts gave light to several problems related to living and working conditions of employees across industries. This enquiry highlighted limitations of businesses that perceived human resources as machines for obtaining increased productivity and more profits at lower costs.

Workers worked long hours in strenuous working conditions that led to the formation of trade unions. These trade unions focused on protecting and promoting workers’ interests but faced resistance from the management of businesses thus leading to industrial disputes and conflicts.

2. Personnel Management Stage:

When labor welfare issues were provided legal assurances, organizations began focusing on behavior of employees at all levels at an individual, group and overall organizational basis. A “Personnel” was appointed to manage the employee-employer relationship by managing issues related to human resource planning, recruitment and selection, training and development, performance and potential appraisal, promotions, transfers, quality of working life, compensation, compliances to labour laws and legislations.

3. HRM Stage:

Human Resource Management or HRM is a mix of labor welfare and personnel management. HRM aims at maximizing employee performance in accordance to the objectives set by an organization. HRM is a result of increasing organizational size, changing social and cultural norms, easy access to information (via technology) and globalization. Accordingly, it attempts to build worker-employees relationship more humanely through motivation, training and development, retention, worker protection, etc.

Also, under HRM, HR managers need to obtain and incorporate knowledge about possible changes that may affect the overall organization. HR managers thus attempt to execute relevant strategies to ensure smooth transition of changes without disturbing inter-relationships and avoiding disputes/conflicts within an organization.

Evaluation of Human Resource Management- From 18th Century to the Modern times:-

In today’s global and competitive environment, human resource is the key to efficient running and survival of an organization. The concept of human resource management has emerged from the personnel management. The term personnel management has emerged in 1945 after the World War. During this stage, the personnel managers distinguished themselves from other managerial functions, and personnel function being declared as a separate managerial function.

At that time, the scope of personnel function was criticized due to the ‘hire and fire’ policy of the organizations. The concept of HRM has evolved through various stages of Industrial revolution, trade union, scientific management, Behavioral science and human relations. Hence, the concept HRM has gradually replaced the term Personnel Management. HRM is the most appropriate name to deal with human resource, as it highlights the significance of the human beings working in an organization.

The evolution of HRM has evolved through the stage of the industrial revolution in the 18th century to the modern times:

(1) Industrial Revolution:

The momentum for the industrial revolution started in 17th century. Technical advances and improved agriculture methods resulted into mass production of goods. The advancement in technology initiated the need for skilled and trained labor and improved work methods for producing goods on large scale. Hence, this period witnessed rapid technological improvement and led to the beginning of the industrial revolution.

In 1776, Adam Smith in his works ‘The wealth of Nations’ proposed the concept of specialization to increase efficiency through division of labor in the work. Adam Smith considered as father of capitalism also lighted the term ‘Invisible Hand or Laissez Faire Approach’.

In the words of Rossouw, “according to hidden approach, the only responsibility of business is to maximize profits according to the market principle and within the constraints of the law. If government interference in business is restricted to a minimum, society will benefit automatically from the activities of the business sector”.

However, this approach failed to benefit the employees, as the government failed to protect the interest of employees. In 1832, Charles Babbage further elaborated the concept of division of labor in his work, and explained the advantages of division of labor.

(2) Trade Unionism:

Trade union is a group or an organization of workers formed to achieve common goals. These trade union organizations may compose of workers, professionals, or unemployed workers. The working class also formed general union of all workers irrespective of the trade and industry.

The basic purpose of the trade union is to bargain with employers on behalf of its members for better ways. Working conditions grievance redressal, rules governing hiring and promotion, workers benefits i.e. maintaining or improving the conditions of their employment.

Trade unions become very popular in many countries during Industrial Revolution. These unions emerged as a result of concentration of bargaining power on the employer’s side resulting into exploitation of workers.

Trade unions are in the current scenario still an influential force to protect the social and economic development of its members in many countries around the world.

(3) Scientific Management:

The concept of scientific management focused on professional relationship between employer, and employees to improve/enhance productivity. F. W. Taylor (1856-1915) is regarded as father of scientific management and a great leader of the efficiency movement. He advocated the principles of scientific management to improve industrial efficiency.

Taylor’s scientific management consisted of four principles mentioned as follows:

(i) Adopt work methods based on scientific study of the tasks instead of rule of thumb method.

(ii) Scientific methods of selection, training and development of each employee.

(iii) The managers should apply scientific management principles to plan the work.

(iv) Close supervision and detailed instructions to each worker in the performance of specific task. This principle stresses on the fact that workers should be capable of understanding the task they were doing.

The concept of scientific management advocated the payment of wages should be linked to productivity. The principles of scientific management have been challenged and criticized by trade unions, as well as social intellectuals.

(4) Industrial Psychology:

Industrial Psychology is also known as I-O psychology (industrial organizational psychology) work and organizational psychology occupational psychology and personnel psychology. It applies psychology to industrial organizations and the work place. It attempts to achieve organizations goals by improving the performance and welfare of its employees.

Industrial psychologist includes research in job performance, job analysis, performance appraisal/management, compensation, work motivation, job attitudes, work/life balance, organizational culture, leadership, ethics, and technology in workplace, job design and human resource. Industrial psychologist believes in the “scientist-practitioner model”. Generally, I-O psychologist are employed within organization, generally as a part of HR Department.

(5) Human Resource Approach:

Human resource approach explored management from a social as well as psychological view. Advocates of this approach are concerned with welfare of the employees, and treat them as people. Robert Owen, Hugo Munsterberg, Walter Bill Scott, Mary Parket Follet, Abraham Marslow and Douglas Mc Gregor are Popular as behavioral theorist.

These behavioral scientists believed that the managers should focus on employee’s motivation, MBO and inter-personal communication, etc. instead of mechanist production. It would make the worker more satisfied and productive. So this theorist advocated the need for scientific study of human relations aspect of organization.

(6) Human Relations Movement:

Human Relations movement gained momentum as a result of contributions of management thinkers like Elton Mayo, Mary Parker Follet and Hawthrone Experiments. This movement identified and encouraged the human relation factors which help improve the quantum of production and the level of satisfaction of employees. Elton Mayo’s contribution in the development of human relations is unforgettable approach.

Mayo is known as father of Human Relations movement. This movement considered that organization is not only a formal system but also a social system and principles of human relations and behavioral sciences can be successfully applied in it to achieve the organizations objectives. Human relations approach realized the significance of informal human relations in management.

Evaluation of Human Resource Management- From Industrial Revaluation Era to Present Era:-

The real strength of the country lies in the development of the human mind and body. India is a very big country with people of different backgrounds. Organizations consist of all different people working under one roof.

The role of the organization in society is changing the demands of the organization in society is changing the demands of the organization and the expectations of the people that the employees perform their task and challenges according to the changes in the environment.

But some serious views were given and were applied for the effective utilization of labor force in organization after the Industrial Revolution started in 19th century. From the beginning of Industrial Revolution era to the present era, various stages of development took place.

It is classified as follows:

1. Industrial Revolution Era:

It started in 19th century. In this the emphasis was given on the development of machinery for better and large amount of production with so many people working together with these changes and the replacement development was there as use of machinery was there for production and unskilled workers were given training for the operation of machinery.

By this way large number of people migrated from their place of origin to their place of working creating housing problems. In this way method of production was changed from manual or small tools to mechanical with increasing emphasis on machineries.

2. Trade Union Movement Era:

The basic objectives of these unions are to safeguard the interest of the people and to sort out their problems like labor problems, child labor and poor working conditions etc. In this aspect various economic problems and wages, various benefits also became major issues. These trade unions started such weapons as strikes, walkouts etc. for the acceptance of their demand.

3. Scientific Management Era:

It started in 19th century. Taylor started to find out the best way of doing the things in proper time duration so that goals can be achieved. He was able to increase workers’ productivity by his experiment, based on time and motion studies and named it as scientific management.

The principles are:

(a) Harmony in group action

(b) Cooperation between management and workers.

(c) Development of workers

(d) Replacing rule of thumb with science

These principles were implemented through the following elements:

(i) Job Analysis:

It is undertaken to find out the best way of doing. It can be determined by taking up method time – motion – fatigue studies. To take minimum time for best performance with amount and frequency of required rest is the basic aim.

(ii) Standardization and Simplification:

It should be maintained in respect of instruments and tools, period of work, working conditions etc.

(iii) Financial Incentives:

It plays an important role as it can motivate the workers to put their best efforts. In this scheme basically a person who complete the work and those who do not complete the work are judged.

The person who completes the normal work on time gets higher rate per piece and who does not complete the work on time get lower rate. In this Taylor suggested that wages should be given according to the individual’s performance and not on the position that the individuals hold.

(iv) Scientific Selection and Training of Workers:

Taylor suggested that selection of workers should be based on scientific approach taking into account their work for which they are most suitable. Proper emphasis should be given on training of workers which can make them more capable in performing the job and can increase the efficiency.

(v) Mental Revolution:

It all depends upon the mutual cooperation between management and workers. There should be a mental change of views and ideas in both the parties to avoid conflict and to have proper cooperation among each other. Taylor feel that it is one of the important feature of scientific management as without this no principle of Scientific Management can be applied.

During the period of Taylor, other persons also worked to develop workers efficiency and suggested some change in Taylor’s principles particularly in differential piece rate system.

4. Social Responsibility Era:

Robert Owen in 20th century an industrialist, reformer adopted the approach “the principal social and economic environments influence the physical, mental and psychological development of workers. Therefore in order to increase productivity, it is necessary to improve the conditions of employees by removing them from an adverse environment by providing them more satisfactory living and working conditions”.

5. Human Relations Era:

In this basically close look was given on human factors at work and the variables that affected people’s behavior.

It included the following factors:

(i) Social factors at the workplace

(ii) Group formation

(iii) Type of supervision

(iv) Proper Communication

By this they observed that there existed a conflict between management and workers. In order to have better production, management should take care of human relations besides the physical conditions at the workplace.

6. Behavioral Science Era:

In this it is assumed that if the workers are happy they can do more and proper production as human behavior can help in doing the work in a proper way. Behavioral scientists to management practices consist primarily of producing new insights rather than new techniques.

Major conclusions of the contributions by behavioralists are as follows:

(j) People like work and they want to achieve their objectives through motivation and with proper job satisfaction,

(ii) Managers responsibility is to create a healthy environment, so that all subordinates can contribute to the best of their capacity.

(iii) Manager should provide self-direction by subordinates and they must encourage participating fully in all matters.

(iv) Working satisfaction can be increased and improved by full potential utilization in right direction.

Behavioral science era led to the development of two way communication of employers in decision making, management development story of the organization. These are all necessary for the right approach of Human Resource Management in the present context.

7. System and Contingency Approach:

It has attracted maximum attention of thinkers in management in the present era. The basic idea of this approach is that any object must rely in a method analysis involving simultaneous variations of dependent variables.

It has the following features:

(i) It is a combination of various parts which can be known as subsystems. Each part may have various subparts and it has same features of a system.

(ii) System and subsystem are mutually related to each other and if there is any kind of change, it affects the other depending upon the relationship in between them.

(iii) A system has boundary which makes it different from other system.

(iv) A system is not only the total parts and supports but the arrangement of this as a whole plays an important role.

Contingency approach suggests that where the behavior of one sub unit is dependent on its environmental relationship to other units that have control over the other sub units.

8. Human Resource Management Era:

When the factory system was started in production, large number of workers started together. After observation need was there that someone should take care of recruiting, developing and looking after the welfare of various activities taking place.

With the increase in the competition for market share, competition for resources including human talents and increased knowledge in the field of Human resource management.

7 Important Stages in the Growth of Human Resource Management in India:-

1. The Report of the Royal Commission on Labor in India:

Human resource management in India dates back to the Report of the Royal Commission on labor in India (1929-31) which recommended the appointment of labor officers to deal with recruitment in order to check corrupt practices in industries in India, particularly in areas of selection of workers. The Royal Commission observed that:

(i) The jobber should be excluded from the engagement and dismissal of labor and that, instead, a labor officer is appointed for the purpose.

(ii) The qualities required of a labor officer should be integrity, personality, energy and the gift of understanding individuals and he should have a linguistic facility.

If he is of the right type, the workers will rapidly team to place confidence in him and regard him as a friend.

(iii) All labor should be engaged by him, and none should be dismissed without consulting him and

(iv) The labor officer should fulfill many duties and should particularly initiate and administer welfare measures.

2. Appointment of Labor Officers:

Labor officers were entrusted with the responsibility of promoting welfare activities. They functioned as industrial relations officers to handle grievances. The Bombay Mill Owners Association in Bengal appointed Labor officers to settle grievances and disputes.

3. The Second World War:

During the Second World War, the need for enlisting labor support for the war effort was considered imperative.

These officers were generally entrusted with the handling of welfare and labor administration. They were to deal with working conditions, canteens, ration shops, recreation facilities, medical facilities, workers’ housing etc.

The Second World War resulted in welfare officers being appointed by government as well as industry. The function of the welfare officers included welfare activities, personnel activities and industrial relations.

4. Enactment of Industrial Disputes Act:

The enactment of the Industrial Disputes Act 1947 made adjudication compulsory. This made the welfare officer handle disputes and adjudicate relating to conditions of service, wages, benefits etc.

The welfare officer thus became industrial relations officers. As a result employers employed welfare officers with a legal background.

5. Enactment of Factories Act:

Section 49 of the Factories Act 1948 made it obligatory for factories employing 500 or more workers to appoint welfare officers.

A welfare officer had a list of duties laid down for him. Thus, they had to perform activities concerned with welfare, personnel administration and industrial relations.

6. 1960 and After:

Till 1960, recruitment was untouched by law but the rapid growth of industry and the consequent demand for skilled and semi-skilled workers led to the government enacting the Employment Exchange Act, 1959, to regulate recruitment of workers and the Apprentice Act, 1961, to regulate the training of workers to some extent.

7. In India:

Thus, human resource management in India began with industrial discipline and getting rid of troublemakers. At a later stage, personnel officers were appointed as “labor welfare officers” to satisfy statutory requirements.

Later, the role of a personnel officer was converted into that of an “industrial relations officer”. Today, his role is that of a “human resource manager”.

He works in the three areas-labor welfare, industrial relations and personnel administration.

(b) HRM involves two categories of functions- managerial and operative. How these functions have helped in changing the role of HRM? (16)

-> Human resource management (HRM) is the process of employing people, training them, compensating them, developing policies relating to them, and developing strategies to retain them. As a field, HRM has undergone many changes over the last twenty years, giving it an even more important role in today’s organizations. In the past, HRM meant processing payroll, sending birthday gifts to employees, arranging company outings, and making sure forms were filled out correctly—in other words, more of an administrative role rather than a strategic role crucial to the success of the organization.

The functions of HRM can be broadly classified into two categories:

I. Managerial Functions.

II. Operative Functions.

I. Managerial Functions:

The HR manager is basically a manager and as such must perform the basic functions of management which are as follows:

1. Planning:

Defined in its simplest terms, planning is the determination of anything in advance of the action. It involves scanning of the external and internal environment, setting up of goals and objectives, preparing an action plan to achieve these objectives/goals, laying down policies and procedures, formulating standards of evaluation and allocating resources.

It requires anticipation, forecasting, predictions and so on. Thus, planning is a deliberate and conscious effort to utilize the resources to achieve the given ends. Planning is a link between the present and the future and is a continuous and never-ending process.

The goals set up under planning may be – (a) short term and (b) long term. Besides, these objectives may be – (a) financial, (b) non-financial and (c) mixed. Above all, planning should be flexible so that necessary adjustments could be made as and when needed.

Thus, planning provides the basis for effective and most economical action in the future. It leads to integrated action and reduces considerably the probability of unanticipated crisis. It also leads to the use of effective and efficient methods and helps in accomplishing the desired goals of the enterprise through better control and coordination.

So far as an HR manager is concerned, he/she is required to determine in advance an HR programmed that will contribute towards the achievement of goals specified for the organization. Thus, it involves planning of manpower requirements and related issues. Obviously, it is necessary that the HR manager should be an expert in the field of HRP.

2. Organizing:

After plans have been developed and the course of action determined, organizing is next in order. The process of organizing is essential for accomplishing the objectives of the enterprise. Organizing involves the establishment of an organization structure through determination and grouping the activities, the assignment of activities to the specified individuals and departments, defining their role, establishing relationships, the delegation of authority to carry out the responsibilities and provision of coordination of men and work.

So far as an HR manager is concerned, in order to execute the HR plans and programmers, he/ she also have to form an organization. He/she is required to design the structure of the relationships among – (a) various jobs, (b) various personnel, (c) jobs and men (d) men and machinery, (e) a specialized unit and the rest of organization (f) and other physical factors.

In case the relationships among these are well defined, it will leave practically no scope for any sort of confusion and thus lead to smooth sailing of the organization towards the specified goals.

The HR manager is expected to procure the resources necessary to carry out the HR programmed, design an appropriate system to carry out such a programmed and also establish lines of authority and communication between the various people working with or receiving benefits from the HR programmers. However, the development of sound organization requires certain principles.

3. Staffing:

Staffing is a process of manning the organization and keeping it manned. Needless to mention that the future of any enterprise is governed by the quality of the hired personnel. In case the enterprise has failed to get right man for the right job, the accomplishment of the objectives of the enterprise will be quite difficult.

So far as an HR manager is concerned, he/ she is required to recruit, select, train, place, compensate, promote and retire the personnel of the organization at the appropriate time in a manner most conducive for accomplishing the objectives of the enterprise. The HR department itself is all about staffing.

4. Directing:

Having a plan and an organization to execute it, the next step is getting the job done. As the process of management is concerned with getting work done through and with people, they require proper motivation. The management is required to lead, guide, motivate, supervise, communicate and inspire them towards improved performance.

An HR manager is also expected to do all these things in getting people to go to work will­ingly and effectively. Although all managers must unavoidably direct their subordinates, the HR manager should possess exceptional expertise in this regard.

5. Controlling:

Controlling is a very important function of management. In an undertaking, control consists in verifying whether everything occurs in conformity with the plan adopted, the instructions issued and the principles lay down. In this way, controlling is a measuring and corrective device.

Through control, we evaluate the performance against the goals and the plan. Two important things in the process of control are – (a) a comparison of actual performance as against standards and (b) taking corrective actions.

So far as the HR manager is concerned, he/she has to evaluate the results of the personnel activities in comparison with the desired objectives. Through control, he/she measures the progress of the HR programmed along the lines laid out in the programmed and determines how effectively the desired HR objectives were attained.

Thus, we can say that through direct observation, supervision report, records, and audits and so on, the HR manager ensures that the enterprise is carrying out the HR programmed on the desired lines and, if necessary, takes cor­rective steps.

II. Operative Functions:

Operative functions are performed by the human resource manager continuously and regularly. Its nature is like a routine type.

The Operative functions are as follows:

1. Procurement of Human Resource / Employment:

The first important function of HRM is securing and employing the right type of personnel according to the needs or requirements of the organization. For effective performance of procurement function, HRM has to perform a number of functions such as manpower planning which gives the estimate of manpower requirements.

Job analysis includes job description and job specification which gives the idea of title and nature of job, duties and authorities on that job, specification of personnel required to perform on that job such as qualification, qualities, experience, skill, talent, training, abilities etc.

Then he has to perform the function of recruitment which involves the identification of sources of recruitments, selecting the right type of source for recruiting the personnel. Then he has to perform selection function. Selection procedure has to be chalk out and selecting the right man for the right job.

Then placing the personnel which involve allocation of job to the most suitable candidates. After placement arrange the induction programmed for the new entrant and give the information about the company in detail and create a good image and opinion about the organization.

2. Employee Compensation:

After procurement of employees the next operative function of HRM is compensation function. It means providing adequate, equitable, regular and fair remuneration to the employees. According to the services rendered by the employees, remuneration should be given.

For equitable and fair compensation, it should be based on job evaluation, merit rating Techniques. HRM has to look after the wage and salary administration. He has to formulate the incentives, bonus, fringe benefits, and social security measures in the interest of the employees.

3. Development of Human Resource:

Development of Human Resources is done through the training and development programmed. Development process includes improving the skills and knowledge, creativity, ability, intellectual ability, capacities of employees.

Development process also moulds and changes the attitude and behavior of the employees, improves their aptitude, commitment etc. Performance appraisal helps in employee development programmed.

A systematic training programmed has to be arranged by the HRM for employee and management development. He has to prepare career planning and development programmed. HRM has to frame the policies and plans of promotion, demotion and transfer of employees.

4. Developing Healthy Human Relations:

One of the most important operative functions of HRM is developing, maintaining and preserving the healthy, friendly, harmonious relationship between the management and employees or employer and employee.

He is also responsible for developing healthy relations between the employee and employer, between workers and trade unions and management. Due to healthy relations there are no disputes, clashes and misunderstanding. But it improves morale, team spirit, team work, cooperation, togetherness, and oneness among the employees.

5. Integration of Conflicting Interest:

HRM has to perform one more important function that is integration of individual employee interest and business organization interest. Employees are interested in higher wages and salaries, more facilities, bonus, social security, less working hours, overtime wages, and best working conditions and so on.

On the other hand company is interested in more profit, higher production and efficiency, long working hours, minimum working condition, etc. HR managers have to integrate these conflicting interests in a way that both the parties should be satisfied.

6. Safety and Health of Employees:

HR manager has to take the care of safety and health of the employees. In case of employees whose work is risky, and hazardous, HR manager has to provide the safety measures to the employees. Regular medical checkup of the employees has to be done. Free medicines, treatment should be provided to the employees who fall sick.

7. Stability and Optimum Utilization of Employees:

HR manager has to maintain the employees in the organization and has to utilize them at the optimum level; He must ensure the best utilization of employees. For this he has to motivate the employees and to give them job satisfaction, job security, participate them in management.

Their grievances should be promptly resolved. Opportunities for career development should be given so that employees may prefer to stay in the same organization and company can enjoy the benefits of stable workforce.

8. Personnel Research, Audit and Records:

HR manager has to conduct research in various areas of human resource for example, research in motivational techniques, behavioral sciences, attitude, turnover, absenteeism, development, performance, morale and so on. Audit involves the periodical assessment and appraisal of employee performance.

Moreover he has to maintain the updated records of the employees since joining till their retirement by maintaining service books or records. These records would help at the time of promotion, demotion and transfer of employees.

2(a) “Manpower Planning is pre-requisite for effective management of human resource.” In the right of above statement, analyze the significance of manpower planning. (16)

-> Manpower is a primary resource without which other resources like money, material etc. cannot be put to use. Even a fully automatic unit such as an unmanned satellite requires manpower to execute it and plan further improvements/activities. That is why man learned the use of manpower much before he learned to use other resources.

In order to achieve a goal, manpower requirement needs to be assessed, located and harnessed. Manpower planning requires not only a simple assessment of the number of men required but also their categories and skills as well as their balanced allocation. Improper planning may lead to either over-staffing or under-staffing, both of which should be avoided. Over-staffing not only increases direct cost (salary) but adversely affects the cost of training, housing amenities etc., besides production cost. Under-staffing also affects production morale and, therefore, industrial relations.

Optimum manpower planning therefore assumes importance.

It should aim at:

1. Avoiding imbalances in distribution or allocation of manpower

2. Controlling the cost aspect of human resources

3. Formulating transfer and succession policy

Manpower planning is needed wherever production of goods and services is involved. It is an important factor of labour productivity and profitability of the enterprise. In an industrial undertaking this is done very carefully by-

External agencies such as professional consultants and suppliers of plant and machinery for they have the knowledge of working of similar units. It is generally done in the initial stages or when internal agencies do not have the required expertise for manpower planning.

Internal agencies such as the personnel department, industrial engineering, plant manager and finance department as all these agencies are interested in production, productivity, industrial relations and other aspects of manpower planning.

Manpower Planning is the development of strategies to match the supply of manpower to the availability of jobs at organizational, regional or national level. Manpower planning involves reviewing current manpower resources, forecasting future requirements and availability, and taking steps to ensure that the supply of people and skills meets demand.

Manpower Planning is estimating or projecting the number of personnel with different skills required over time or for a project, and detailing how and when they will be acquired.

Manpower planning in terms of human resource development is the skills, knowledge and capacities of all human beings actually or potentially available for economic and social development in the country.

Manpower planning refers to optimal use of human resources. It is a procedure used in organizations to balance future requirements for all levels of employee with the availability of such employees.

Manpower planning is the rightsizing and achieving the balance of demand and supply of workforce. The penalties for not being correctly staffed are costly.

i. Understaffing loses the business economies of scale and specialization, orders, customers and profits.

ii. Overstaffing is wasteful and expensive, if sustained, and it is costly to eliminate because of modern legislation in respect of redundancy payments, consultation, minimum periods of notice, etc. Very importantly, overstaffing reduces the competitive efficiency of the business.

Manpower Planning is the process of systematically forecasting the future demand and supply for employees and the deployment of their skills within the strategic objectives of the organization. It is the process by which Management determines how the management should move from its current manpower to its desired manpower utilization.

Main objectives:-

1. Demonstrate understanding of competency based approach in human resource.

2. Utilise tools in identifying current staff competencies and gaps, vis-a-vis, the organization’s goal and targets.

3. Demonstrate skills in conducting training needs analysis.

4. Formulate strategies for addressing identified training needs, prepare and design training modules and develop curriculum for training course and cost estimates.

5. Demonstrate the abilities to have the human resources development plan approved by the appropriate decision making body.

6. Design different training programmers to meet specific needs of particular group.

7. Formulate detailed implementation schedule.

8. Design evaluation tool.

9. Implement training and development activities, programmes and plans.

10. Write a professional report.

11. Demonstrate knowledge on using relevant analytical tools for planning.

12. Explain the relationship between the organization strategic plan and the strategic human resources development planning process.

13. Conduct a comparative study on the current human resources development planning process.

The need for manpower training in an organization may be categorized in the following ways:

i. Updating the knowledge – The first and foremost need for manpower training is to renew and update knowledge and skills of employees to sustain their effective performance and so also to develop them for future managerial positions.

ii. Improving performance – Continuous training is required to renew and update the knowledge of the employees which makes them functionally more useful. The performance of the employees is depends on the type of training given to them. One way training the employee’s skills is directly proportional to the performance of those employees.

iii. Developing human skills – Apart from emphasizing on technical and conceptual skills, new training programs also put emphasis on developing human skills of employees. Such human skills are necessary for effective interpersonal relations and sustaining healthy work environment.

iv. Imparting trade specific skills – In industrial employment, the convention is to recruit workers and employees through compulsory apprenticeship training. Such apprenticeship training enables an organization to impart industry and trade specific skills to workers.

v. Stabilizing the workforce – Throughout the world, the importance of training is now increasingly felt for stabilizing the workforce to withstand the technological change and making the organization dynamic in this changing process.


1. Key to Managerial Functions:

The four managerial functions, i.e., planning, organising, directing and controlling are based upon the manpower. Human resources help in the implementation of all these managerial activities. Therefore, staffing becomes a key to all managerial functions.

2. Efficient Utilization:

Efficient management of personnel’s becomes an important function in the industrialization world of today. Setting of large-scale enterprises requires management of large-scale manpower. It can be effectively done through staffing function.

3. Motivation:

Staffing function not only includes putting right men on right job, but it also comprises of motivational programmers, i.e., incentive plans to be framed for further participation and employment of employees in a concern. Therefore, all types of incentive plans become an integral part of staffing function.

4. Better Human Relations:

A concern can stabilize itself if human relations develop and are strong. Human relations become strong trough effective control, clear communication, effective supervision and leadership in a concern. Staffing function also looks after training and development of the work force which leads to co-operation and better human relations.

5. Higher Productivity:

Productivity level increases when resources are utilized in best possible manner, higher productivity is a result of minimum wastage of time, money, efforts and energies. This is possible through staffing and its related activities (Performance appraisal, training and development, remuneration).


1. Manpower Plan and Objectives of the Organisation:

In the organization, Human Resource Planning plays a significant role. The objectives of the organization have to be started with personnel requirements and efficiency should be measured by specific norms. Within the broad parameter of objectives, priorities have to be ordered and performance indicators specified in quantifiable or measurable terms.

2. Assessment of the Manpower Situation:

Human Resource Planning deals with collecting all possible information which is basically regarding educational qualifications, experience, abilities, aptitudes performance, date of joining, date of birth and date of retirement etc. of individual employees. It mainly based on skills of employees and also the resource base of the organization.

Organizational effectiveness over a period of time can be assessed by statistics prepared. It also help for the future in terms of how efficiency levels can be enhanced, what qualifications need to be prescribed at what level, what training to institute, etc. in order to raise efficiency to desired.

3. Projection of Manpower Requirements:

A manpower plan has two components:

(1) Manpower Demand Plan, and

(2) Manpower Supply Plan.

The supply plan deals with the source of proposed manpower. A manpower plan should spell out the manpower requirements of an organisation in totality. The process of manpower planning involves use of techniques such as quantitative analysis, multi-variety skills analysis, operations research, PERT and CMP, orthogonal polynomials, etc.

4. Classification and Interpretation of Information:

Information collected must be classified to facilitate analysis. Data have to be ready properly and inferences drawn accurately to derive correct conclusion and formulate objective policy based up such conclusions. Therefore, the information collected a data, which is essential for the organization to be classified and interpreted.

5. Developing Work Standards and Performance Norms:

Human Resource Planning deals with a lot of developing work standard and also performance the norms of the organization. For the improvement, work norms need to be developed and should be framed realistically in that the limitations or constraints of ‘bounded rationality’ should be provided for. Standards must be developed in the light of all available information at specific levels.

Objectives should be laid down clearly in that they should be intelligible to the ordinary worker and should not in any way result in ambiguity or lack of role specify. Therefore, standard should be (1) realistic, (2) provisional, (3) appropriate, (4) flexible and (5) clearly defined.

Hence, the Human Resource (manpower) planning is to set up hierarchy of objectives, stipulate qualifications for each level, set up a manpower plan, assign weights to performance indicators, work-out plan, judge efficiency by performance indicators, review plan, etc.

6. Anticipating Manpower Problems:

There is a gap between the qualitative and quantitative in the performance of personnel manpower needs. All types of information is useful in writing job descriptions and specifications and also plugging “gaps” to reduce the efficiency ‘lag’ by discovering requirements at different levels and making provision for the same.

7. Costing Inventory:

For the Human Resource Planning, information is also needed regarding:

(a) Materials available in the organization

(b) Building in use

(c) Availability of computers.

8. Supply of Personnel:

Policy planners need to work in close co-operation with educational and training institutes to ensure adequate supply of personnel. Policy should be sustainable in that organization must have sufficient funds to pay for new and added services. One way could be to avoid employing highly trained personnel for tasks that can be accomplished by less qualified staff.

The ministry of public health, for example, employed trained midwives in family planning programmers to reduce costs and free doctors who were in short supply for more skilled tasks. The measure reduced costs and pilot studies revealed that performance of nurse, midwives was a good as qualified doctors.

9. Research Studies:

Basically, Research Studies is based on the evaluation of manpower planning in the organization. It also deals with the empirical studies, which advised for future changes. Policy has to be fact based and as objective as possible to maximise rationality and avoid satisfying solutions or a priori judgment in decision-making. It mainly focuses on the economic dimension on policy-making and implementation.

So, research is effectiveness of training programmers by application of tools like post training surveys. Sophisticated analysis is needed to examine discrimination claims and complaints.

(b) Examine the need for executive development programmed. Do you think that executive development programmed now followed in Indian industry is adequate? (10+6=16)

-> Executive development – or simply development because it refers to learning opportunities thrown open to managers working at various levels – is any attempt to improve managerial performance by imparting knowledge, changing attitudes or increasing skills. The aim of development is not just to improve current job performance of managers but to prepare them for future challenging roles.

This would involve upgrading their knowledge, looking at things from a refreshing fresh angle or simply increasing their skill sets so that they can slip into complex and more demanding roles effortlessly. Development aims at building the competencies of people, of preparing them for planned career growth and is always future-focused.

Development is different from training because it focuses on less tangible aspects of performance, such as attitudes and values. It is a long-term educational exercise that helps managers to acquire conceptual and theoretical knowledge in a systematic manner.

The reasons for undertaking executive development in organizations may be summarized as follows:

i. Change and competition are continuous features which require continuous adaptation by the organizations. For this, continuous upgradation of skills and competencies at all levels, specifically at the management levels, is necessary.

ii. There is a need to hone the leadership skills of managers. Today’s organizations need leaders, not managers. The executive development programme (EDF) aims to address this particular need.

iii. Continuous learning and knowledge development inform and mould managers, which also helps them gain the respect of their subordinates. Motivating the management towards learning executive development is a systematized approach.

iv. Information technology (IT) has become an all pervasive phenomenon and a majority of the present-day organiza­tional processes are seamlessly integrated with IT. The decision making process has also been made easy with the help of IT support. It is thus necessary for the managers to become IT savvy to use IT for enhancing the performance of their departments.

v. People management skills, along with technical skills, play a crucial role in the growth and evolution of managers. The EDF addresses the need for developing the human competencies of managers.

Executive development is highly beneficial to both the organization and the individuals. Employees and managers with relevant experiences and capabilities enhance the ability of an organization to compete and adapt to a changing competitive environment. In the development process, the individuals’ careers also gain focus and evolve. The success of development effort, to be marked as effective depends upon the following inputs-

Trainee’s personal characteristics, such as his intelligence and motivation to learn; his actual learning efforts. Development can turn out to be a fruitful venture, if the individual firmly believes in the exercise and seeks to undertake the explorative journey in a sincere way. All development is actually self-development. The motivation to change for the better should come from within. External factors could only facilitate the transformation process.

Need for executive development programmed:-

There is growing need for the development of an efficient managerial pool to meet the challenges of industry. Realizing this, many management institutes and training organizations have geared up their training and development activities to a great extent. However, there is a certain imbalance in the spread of management education. A concentration of management training is found in the industrial sector mostly in traditional industries and public sector enterprises.


1. Techno-managers in such sectors as engineering and steel, coal, fertilizer, oil and cement industries. Personnel in these industries need training not only in the functional areas of management but also need to acquire a thorough knowledge of the sector.

2. Management resource mobilization towards professionalizing such public utilities as water supply, power distribution, transport and communications, for agriculture and industry are dependent on the efficient functioning of these utilities.

3. Government and civic offices organized to render public services, including municipal services, housing, insurance, mass media, police, medical services and education, have been untouched by the management movement. The “managerialisation” of these services needs immediate attention.

4. Management principles and techniques need to be introduced in other areas of national economy – managerial services for agriculture and rural development, irrigation, co-operation and animal husbandry, fisheries, forestry and marketing. Management know-how also needs to be brought to bear on production processes at the farm level with a view to increasing efficiency in the tertiary or service sector in rural areas.

5. Public administration is a vast sector which needs management attention, because this segment has a direct relevance to economic and social activity, for it brings functionaries into contact with the citizenry and the entrepreneurial class.

6. Management development programmes for all those who are engaged in positions above the supervisory level of operations – whether as Deans of hospitals, the Vice-Chancellors of Universities, Superintendents of Police or Collectors of districts. Their job calls for the use of a management component which is concerned with such skills as leadership and communication. For them, training in management, productivity and human relations would be very valuable.

Executive development programmers help managers to cope with rapid technological change, cut­throat competition, sudden changes in government policies, changes in the outlook and expectations of a vast majority of workers possessing transferable skills.

Managers can update their skills, knowledge and competencies from time to time in sync with these changing trends and tackle knotty issues with confidence. In short, no organization can achieve success in the long run unless it tries to improve, expand and develop its talent pool through constant learning initiatives.

3(a) Critically discuss any two of the following: (8X2=16)

i) Time wage system.

ii) Payment by result.

iii) Incentive plan.

-> Time Wage System:

This is the oldest method of wage payment. “Time” is made a basis for determining wages of worker. Under this system, the wages are paid according to the time spent by workers irrespective of his output of work done. The wage rates are fixed for an hour, a day, and week, a month or even a year.

The supervisor may ensure that workers do not waste their time and the quality of goods is also maintained. There are no hard and fast rules for fixing rates of wages. These may be decided according to the level of the past higher positions may be paid higher rates and vice- versa.

Wages are calculated in the method as follows:

Earnings = T x R where T stands for time spent and R is rate of pay.


Time wage system is suitable under following situations:

(1) When productivity of an employee cannot be measured precisely.

(2) Where quality of products is more important than the quantity produced.

(3) Where individual employees do not have any control over production.

(4) Where close supervision of work is possible.

(5) Where work delays are frequent and beyond the control of workers.


1. Simplicity:

The method of wage payments is very simple. The workers will not find any difficulty in calculating the wages. The time spent by a person multiplied by the rate will determine his wages.

2. Security:

Workers are guaranteed minimum wages for the time spent by them. There is no link between wages and output; wages are paid irrespective of output. They are not supposed to complete particular task for getting their wages. They are sure to set certain wages at the end of a specified period of time spent in working.

3. Batter Quality of Products:

When workers are assured of wages on time basis, they will improve the quality of products. If wages are related to output, then workers may think of increasing production without bothering about quality of goods.

In this method, workers will concentrate on producing better quality of goods. In certain situations, only time wage system will be suitable. If some artistic nature products are produced, then this method will be most suitable.

4. Support of Unions:

This method is acceptable to trade unions because it does not distinguish between workers on the basis of their performance. Any method which gives different wage rates or wages based on output is generally opposed by trade unions.

5. Beneficial for Beginners:

Wage rate system is good for the beginners because they may not be able to reach particular level of production on entering employment.

6. Less, Wastages:

The workers will not be in a hurry to push through production. The materials and equipment’s will be properly handled leading to less wastage.


Time wage system suffers from the following drawbacks:

1. No Incentive for efficiency:

This method does not distinguish between efficient and inefficient workers. The payment of wages is related to time and not output. Thus, the method gives no incentive for more production.

Efficient workers may start to follow inefficient persons because rates of pay are same. Rates of wages fixed in this method are also low because these are fixed by taken into account the output of dullest workers. Thus, this method does not provide incentive for efficiency.

2. Wastage of time:

Workers may waste their time because they will not be following a target of production. Efficient workers may also follow slow workers because there is no distinction between them. This may lead to wastage of time.

3. Low production:

Since wages are not related to output, production rate shall be low. The responsibility for increasing production may mostly lie on supervisors. Because of low production, overhead expenses per unit will go up, leading to higher production cost.

4. Difficulty to determine labor cost:

Because wages are not related to output, employees find it difficult to calculate labor cost per unit. The output will go on varying from time to time while wages will remain almost same. Production planning and control will be difficult in the absence of a relationship between wages and output wages and output.

5. Difficult supervision work:

Under this system, workers are not offered incentives for production. To get more workers from them, there will be need for greater supervision. More supervision may be required to maintain proper quality of goods also. In wage system supervision cost goes up to a great extent.

6. Employer-employee trouble:

When all employees, irrespective of their merit are treated equally, there is likely to be a trouble between management and workers. Those employees, who are not satisfied with this method, may start disobeying order from their superiors.

Payment by Results

‘Payment by Results’ or ‘PBR’ is a payment or remuneration method used to reward workers or employees in proportion with the amount of work done or deliverables achieved. In this method, a staff member or worker or even an external service provider, such as an agent or advertising agency or a consultant, is remunerated on the basis of achievement of objectives.

For a factory worker, it may be defined as wages based on the amount of factory units produced; for a service agent, the number of customers serviced satisfactorily. Similarly, a sales person may be compensated by sales commission on the basis of number of units sold. The underlying principle behind ‘variable pay’ in most organizations is mostly based on rewarding employees according to the amount of work done by them in terms of predefined deliverables.

The same evaluation, and hence, remuneration system may be used for compensating external service providers/ agencies/ consultants also, by linking their ‘pay’ with the requisite levels of desired ‘performance’. This kind of remuneration compensation method has increasingly gained popularity in social, health and public sectors, and attracted both positive and negative publicity.

Payment by Result instruments has three key features:

  • Payments for pre-agreed results

· Recipient discretion over how the results are achieved

· Independent verification as the trigger for disbursement

There are many cases of Payment by Result models being used to achieve domestic policy goals, in particular the delivery of social or community services, with payments linked to the results a provider achieves, rather than its inputs and processes. The use of Payment by Result models is often promoted as a way to drive service improvements and achieve increased value for money by aligning incentives to desired outcomes.

In practice, a diverse range of Payment by result models has been implemented by Governments, varying by the degree to which:

1. Payments can be based on the achievement of pure outcomes; and

2. Risk can be transferred away from Government and towards providers.

The purest form of Payment by Result is Payment by Outcomes, which seeks to maximize payments linked to outcomes. This is where the commissioner (central or local Government) is fully able to contract in terms of the outcomes it wants and to transfer the financial risk of non-delivery to providers. However, commissioners may face a number of challenges that may make a pure Payment by Outcomes approach either impractical or sub-optimal in terms of achieving the aims of Payment by Result models. These challenges largely stem from commissioners’ ability to manage different risks and responsibilities, especially in relation to their understanding of desired outcomes and their measurement.

Challenges can include outcomes only being delivered beyond the provider or investor’s return horizon, meaning an earlier payment or proxy outcome must be used; having sufficient confidence that the cash savings used to fund the payment of outcomes will ultimately be realized (e.g. that a reduction in re-offending translates to a reduction in prison capacity); finding a contractual solution that ensures transactional costs are reasonable; and determining how far the delivery of outcomes is attributable to the actual intervention rather than other services or background factors. Commissioners may also find providers are reluctant to accept all of the delivery risk (e.g. where there is a dependency on future Government actions or policies) or where Government cannot truly transfer all of the delivery risk.

There are no known cases where all Government services are commissioned out. Furthermore, Payment by Result will not always be the optimal contracting model, especially where in-house delivery is more appropriate, or where greater control is required over the service to be delivered.

Incentive plan.

Many companies have come out with compensation programmed that offer additional benefit based on individual, group or organizational performance. They want every individual to think of performance to succeed in a competitive business environment. Every employee has to work hard, deliver results on a daily basis.

An incentive scheme is a plan to motivate individual or group performance. An incentive scheme basically involves monetary rewards, i.e., incentive pay but also includes non-monetary rewards. Incentives are variable rewards granted according to level of achievement of specific results. Incentives are payment for performance or payment by results.

According to Dale Yoder, “Incentive wages relate earnings to productivity and may use premiums, bonuses or variety of rates to compensate for superior performance. Under incentive plan, employees are encouraged to produce more and are rewarded accordingly.”

The term “Pay for Performance” refers to compensation options such as merit pay, commission, individual incentive, group incentive, gain sharing scheme. Pay for performance aims at increasing productivity and lower personnel costs. Under this scheme, the compensation payable is tied to employee effort and performance.

Any action/programme which induces workers to produce more is described as ‘incentive’, and remuneration paid for increased output is known as ‘incentive wage’. As such, the output-based system is a broad or general type of incentive plan. However, an efficient plan must provide for minimum guaranteed wage based on hourly rate and extra remuneration for increased output.

In other words, an incentive plan must include in its purview the characteristics of time-based and output-based systems of wage payment. There are a large number of such plans that are applied in industrial concerns these days. However, before these differ­ent types of plans are discussed, the various requirements of a sound wage-incentive system must be noted.

Wage Incentive also called ‘Payment by results’ is anything that attracts the worker and motivates him to work. It determines their standard of living and their attitude towards the company. Incentive schemes provide payment based on either individual output or group output. The use of incentive assumes that people’s actions are related to their skills and ability to achieve important goals.

The following characteristics of sound incentive plans are:

1. The incentive plan consists of both monetary and non­monetary schemes.

2. The incentive plan must be guaranteed minimum wages to all employees of the organization.

3. The incentive plan should be properly communicated to all the employees of the organization to encourage both individual and group performance.

4. The employee is expected to perform his task within the standard time because the standard time is fixed and set after making job analysis or time and motion study.

Characteristics of Incentive Plan:

(a) Incentives have direct linking to performance.

(b) Incentives induce the employee to move from existing level of performance to optimum achievable performance.

(c) It helps to improve level of technology and thus increases productivity.

(d) Incentives are measurable in monetary terms.

(e) The timing, accuracy and frequency of incentives or the very basis of successful incentive plans.

(f) Incentive plan encourages attendance and reduces absenteeism.

(g) Incentives vary from person to person, depending on their performance.

(h) Minimum wages are guaranteed to all workers.

Features of Incentive Plan:

An incentive plan has the following important features:

(a) An incentive plan may consist of both ‘monetary’ and ‘non-monetary’ elements. Mixed elements can provide the diversity needed to match the needs of individual employees.

(b) The timing, accuracy and frequency of incentives are the very basis of a successful incentive plan.

(c) The plan requires that it should be properly communicated to the employees to encourage individual performance, provide feedback and encourage redirection.

A manager takes different measures to motivate the employees to improve their performance. These measures are called incentives which can be financial or non-financial. Financial incentives refer to those incentives which are in direct monetary form or are measurable in monetary terms. They serve to motivate the employees for better performance.

Financial incentives are as follows:

(a) Profit sharing – It is often discussed that labor being the live factor in production, is entitled to share in the surplus earned by his firm. Employers often use this device to extort their loyalty and reduce the influence of trade unions. This provides group incentive to the workers for higher productivity and greater profitability.

(b) Co-partnership – Under this system, employees are offered company shares at a price lower than the market price. Thus, employees share the capital as well as profits. The workers get their usual wages, a share in the profits of the company and a share in the management of the company as well. When co-partnership operates with profit sharing, the employees are allowed to leave their bonus with the company as shares (bonus shares).

(c) Bonus – It is a reward that is offered on a one-time basis for high performance. A bonus may be in cash or in some other form, e.g., many sales organisations periodically offer prizes, such as trips, for their top sales people.

(d) Commission/Productivity linked wage incentives – Under this plan, a sales person be paid a guaranteed base salary plus a commission on sales. A commission plan has the advantage at relating rewards directly to performance.

(e) Pay and allowances – Salary is the top most priority/incentive for work to any employee in the organization. If performance of an employee improves each year, then he may be rewarded by hike in salary and other allowances.

(f) Retirement benefits – Every employee wants to secure his life after retirement, therefore benefits like provident fund, pension, gratuity act as a motivator for employees.

(g) Perquisites – Employees feel motivated if the company provides benefits like housing, car allowance, etc.

Non-Financial Incentives:

Incentives which are not measurable in terms of money are known as non-financial incentives. They tend to satisfy the psychological, social and emotional needs of a person.

Some important non-financial incentives are:

(a) Status – It means formal position in the organization. Higher status motivates people by satisfying their ego needs as lot of perquisites and authority is attached to it.

(b) Career advancement opportunity – Most of the employees want to grow in their careers. If sound promotion policy and training programmes are implemented, it will help them to achieve promotions.

(c) Organizational climate – If management takes special efforts in maintaining better organizational climate in the form of better working conditions, consideration towards employees etc. as compared to other companies, it acts as motivating factor to an employee for better performance.

(d) Job security – In India, due to widespread unemployment, job security is very important. It ensures regular income in future and relieves them of worry. However, it may make them complacent.

(e) Job enrichment/Assignment of challenging jobs – It involves basic changes in the content and level of responsibility of a job so as to provide greater challenge to the employees. It gives the employees more authority and more control over the job situation. He is allowed to plan, decide, schedule, inspect and evaluate his own work activities. Job enrichment results in high internal work motivation, high ‘growth and development’ satisfaction, high work effectiveness and high commitment.

(f) Employee participation – Managers should encourage participation of subordinates in organizational matters even if the ultimate decision-­making power vests with the managers.

(g) Employee empowerment – Employees will use their skills and talents positively if they are given more powers and autonomy. It will improve their performance in the organization.

(h) Recognition – Praise/appreciation has its greatest impact when given and received as recognition which helps in improving attitudes of employees and motivates them to perform better. People with positive attitude towards work perform better than those with negative attitude.

The objectives of an incentive plan include one or more of the following:

1. To increase productivity of individual as well as group.

2. To reduce per unit cost and increase employee’s earnings.

3. To improve industrial and interpersonal relations,

4. To increase profit of the organization.

Top 12 prerequisites for Effective Incentive Plan:

(a) There must be a commitment on the part of the top management to the incentive program.

(b) The incentive plan should reward employees in direct proportion to increased productivity or quality.

(c) The standards of performance and criteria for measurement should be fair, clear and aligned with firm’s strategy and objectives.

(d) There should be active participation of workers and union while installing incentive plan.

(e) A good incentive plan should be simple, clear and easy to operate. An average worker should know the linkage of pay for performance.

(f) There should be proper communication of details of the scheme to all the concerned persons.

(g) There should be a supportive environment from the employees for the scheme as any restriction can undermine the plan.

(h) The incentive plan should be in consistent with the corporate’ culture.

(i) An incentive wage plan must be fair and equitable to both employers and the employees. It should be motivating to employees and economical to the management.

(j) The time gap between actual performance and reward should be as small as possible.

(k) There should be an atmosphere of mutual trust and understanding between employer and employee.

(l) A minimum wage rate should be guaranteed to every worker irrespective of his performance. It increases sense of security among workers.

(b) Evaluate the importance of performance Appraisal in an industrial organization. How would you make it more effective? (10+6=16)

-> Every organization conducts regular performance appraisals for its employees. It is an important part of business culture. Performance evaluation promotes collaboration between staff and employers, and helps employees advance towards professional and personal success. Performance management software automates the entire process and makes it more efficient by tracking employees’ performance and providing appropriate feedback regularly.

Employees need to be compensated for their better performance; it helps them maintain their performance or even grow from where they already are. By using an automated software application HR managers can easily find who is performing better and who should be compensated more.

The system continuously tracks the performance of an employee and evaluates what his/her strengths and weaknesses are. It suggests the right learning and career development programs to address them adequately.

To develop and succeed, employees need regular feedback on their performance. The software ensures that there is continuous and objective feedback given to employees at regular intervals. It offers managers a few sample comment suggestions to use when providing feedback for an employee. Automated feedback process helps employees remain on the edge and work better.

By defining clear goals to employees and setting standards for high performance, the application enables managers and employees to better identify performance gaps. Real-time reporting offered by this solution helps you easily review an employee’s performance.

The performance appraisal process is one of the best ways to improve professionalism within your business. A fair process performed at regular intervals helps increase employees’ morale and enhances business productivity in the long term. Performance management software helps towards this.

Making Performance Appraisal Effective:

1. Make sure goals are explicit, descriptive, and shared.

This step is often the point where appraisal starts to derail. Unfortunately, most organizations do a pretty poor job setting expectations – a task that is not really all that difficult. You can only set expectations about three things – actions, work product, or impact on organization goals. The least useful and easiest to measure is actions; the most useful and difficult to identify is impact on results. In my experience, it’s possible to identify the expected organization impact from virtually any job, but most managers don’t typically have the skill or will to do this – and they settle for actions or work product goals.

2. Make sure measures are explicit, specific, and shared.

Once expectations are clear, the next step is to agree on measures. If you identify a link to organization results, then that measure is clear. If not, then you must identify relevant performance measures. Basically, there are four categories of performance measures (for either actions or work products) – Quality, Quantity, Time, and Cost. The key here is to remember that these are categories, not actual measures, and each category has multiple measures.

-quantity (how much, many?)

-time (elapsed time, touch time, intervals)

-cost (design, production, acquisition, maintenance, TCO)

-quality (more than 50 including accuracy, completeness, validity, reliability, simplicity, etc.)

3. Collect relevant, valid performance information.

Once goals and measures have been established, the next step is to collect relevant, valid information. Unfortunately, this step can be difficult, especially with jobs where is work product is intangible (information, influence, conflict resolution, etc.) When there is a tangible work product, make sure to collect samples. When there isn’t a product, direct observation is the best standard. Finally, if nothing else is available, use self and other behavioral reports – but make sure to link those reports to expected goals and make sure to look for actions, and not just unsupported judgments (“he was great!?”)

4. Compare performance with goals.

Once you have the information, the next step is to analyze it. I think of analysis as comparing actual with expected performance, for the purpose of understanding variance and its causes. Sometimes the variance exceeds goals and sometimes it meant that the person fell short of goals – but your analysis is intended to identify what happened and to try and understand why (skill limits, roadblocks or conflicts that the person should address, and roadblocks and conflicts beyond the scope of that role).

5. Make your judgment.

Once the analysis is complete, the next step is to judge the performance – meet, miss, or exceed the goals. Simply, your judgment should be evident from your analysis.

6. Describe both analysis and judgment so any reader can understand.

If you’ve done the previous steps effectively, the actual written appraisal is fairly easy to produce. When I was a corporate manager, I always used the following format – news, analysis, and commentary. The first section was the news – a simple and descriptive report of work product and behavior, described in terms related to the agreed performance measures. The second section (typically the longest) was the analysis – met/missed/exceeded and why, with descriptions of obstacles. The final section (always the briefest) was the rating and judgment – this score for these reasons, with information always drawn from the analysis section.

4(a) Give brief account of any two of the following: (8*2=16)

(i) Need for counseling for employees in Indian industries.

-> Counseling is the particular relationship between people that leads to healing, growth and change to be autonomous and caring in living with oneself and others. Employee counseling is one of the most important tools we have to tackle some personal problems and develop the potentialities of employees at the workplace. In this regard, the caring and helping professionals have an important role to play. The mental health professionals are few in number, in all of India and they alone will not be able to deal with even a fraction of the problem. With some training in personal and professional growth many teachers, social workers, industrial and other administrators, hospital personnel can do unlimited good in preventing serious problems and promoting positive health and happiness among people who seek their help.

The present, study aims to understand the need and importance of employee counseling in the 21st century workplace as well as to know the challenges and current scenario of employee counseling. The study has specific objectives such as understanding of the effectiveness of employee counseling program, the role of the employee counselors, their approaches, common problems of employees in workplace, and challenges of employee counseling at the workplace.

In present era of modernization and globalization the quality, competence, and characters of employee are most significant factors that influence the quality of work performance in the organization. Keeping in view these problems, our study focused on these issues and found that there is a greater need to deal effectively with these problems and provide them favorable environment for their healthy and peaceful work and family life. Therefore employee counseling in workplace is need of the hour.

Common problems of employees are issues pertaining to job performance, learning disability, depression, anxiety, behavior disorder, personality disorder and problems related to relationships, infatuation, absenteeism, drug addiction, excessive use of alcohol, love affair, family related problems etc. The challenges faced by counselor are issues related to dealing with such kind of complex problems, and administrators, issues related to maintaining confidentiality, maintaining a professional identity in organization, planning and executing the program in the workplace.

This study underlines a need for standard practices in employee counseling profession, better training to face the challenges and help the employee to help themselves. Therefore employee counseling in workplace is need of the hour.

(ii) Barriers of an effective communication system.

-> Communication barriers can have a significant impact on people’s personal and professional lives. Communication barriers can have a significant impact on people’s personal and professional lives. This is particularly evident now when people around the globe have been faced with social distancing restrictions.

When we are limited to communicate using digital tools and technologies, communication barriers have an even bigger impact. However, digital means of communication are here, and they are here to stay.

Employers across the world are forced to adjust to the new way of working, and they need to better accommodate their employees. Therefore, now when we depend on technology to communicate with our peers and colleagues, we need to find ways to leverage it and even use it to eliminate the existing communication barriers.

Communication barriers can include anything that prevents or disables communicators to deliver the right message to the right person at the right time, or a receiver to get the right message at the right time.

There are 3 main categories of communication barriers that can make effective communication challenging.

  • Physical communication barriers such as social distancing, remote-work, deskless nature of work, closed office doors, and others.
  • Emotional communication barriers resulting from emotions such as mistrust and fear.
  • Language communication barriers that refer to how a person speaks both verbally and nonverbally.

However, these communication barriers present just a high-level overview of the cause of inefficient communication. Let’s take a deeper look into some of the most common communication barriers that employers face today.

Top 13 Communication Barriers Organizations Face Today

When talking about communication barriers in the workplace, challenges to effective communication are more obvious than ever before. Multigenerational workplaces , the rise of remote work, dispersed workforce, the introduction of new communication technology and different employee expectations are just a few examples of communication barriers that have emerged in the past few years.

1. Communication skills and styles

People have different communication skills and styles . Often times, these differences in communication skills can create communication barriers between the communicator and the receiver of the message.

For example, while some people may be highly detailed and specific when communicating, others may tend to generalize. However, even though communication skills are extremely important, only 18% of employees are evaluated on their communication skills in performance reviews.

2. Social distance and physical barriers

As mentioned earlier, many companies now depend on digital means of communication due to social distancing and remote ways of working . These physical barriers are even more evident within organizations with blue-collar employees without designated working space.

Such barrier can go a long way in causing damage to an organization that doesn’t know how to leverage technology to eliminate communication challenges.

3. Disengagement

Effective communication is about engagement between the parties involved in communication. When there is no engagement from both parties, this ruins the purpose of effective communication.

Unfortunately, organizations across the world are fighting the problem of disengaged workplaces. They are struggling to catch their employees’ attention and drive the culture of open, engaged, and transparent communications.

4. Organizational structure

Complex and rigid organizational structure can be the main culprit for inefficient communication, making it one of the most common communication barriers. Such organizations may have inefficient information sharing and communication systems , often resulting in frustrations, lack of engagement, and productivity among employees.

If a company is highly hierarchical, information can easily get siloed, lost or distorted as it travels through each layer of the hierarchy.

5. Information overload

Too little information is not good, but too much information can cause even more damage. Yet, information overload has always been one of the biggest communication barriers. Moreover, information overload has proved to have a very negative impact on employees’ wellbeing, productivity, and success at work.

6. Lack of trust

When there is no trust, there is no effective communication. In other words, when employees don’t trust their employers, leaders, or managers, communication suffers.

This is the reason why one of the main goals for organizations across the world has become to build trust in the workplace . Yet, many employers still have a long way to go to become more trustworthy.

7. Clarity, consistency, and frequency

Communications professionals need to understand the importance of clear, consistent, and frequent communication. When messages across different channels are not consistent, trust gets hurt. When messages don’t get delivered frequently or in a timely manner, employees miss out on important information or updates.

According to a Gallup study , employee engagement increases when managers provide consistent and clear communication. Another study showed that 4 out of 5 employees surveyed wanted to hear more frequently from their bosses about how their company was doing, and more than 90% of employees surveyed said they would rather hear bad news than no news.

8. Listening

Communication should always be a two-way street. Moreover, listening is often much more important than speaking. Yet, many companies still don’t understand the importance of encouraging employees’ share of voice and the value of their feedback.

Those who drive and nurture the culture of open workplace communication enjoy a happier, healthier, and more engaged workforce.

9. Wrong communications channels

There are many different communication channels people use nowadays. The same is true for companies, especially large enterprises. Such complexity in the communication ecosystem makes it hard for employers to make sure that they use the right channels to inform their people and deliver relevant information in a timely manner.

As the result, the average employee spends around 20% of their time searching for internal information .

10. Demographic and cultural differences

The way people interact with each other can vary depending on the demographic and cultural differences. If communicators are not aware of these differences, communication barriers will arise.

Hence, it is important to find a common ground for effective communication and adapt to the work culture of the organization to communicate effectively.

11. Wrong communication technology

Communication technology can make or break any organization’s communication strategy. In the sea of available technology, employers need to be able to find and implement solutions that best fit their organizational needs and goals.

Luckily, modern internal communications solutions are made to tackle the biggest communication barriers.

12. Lack of personalization

Lack of personalization is one of the biggest reasons why disengagement happens. When receivers get information that is not relevant to their nature of work, or messages that are of no interest to them, they are much more likely to ignore future communications coming their way.

13. Grapevine communication

American Management Association estimating that 70% of all organizational communication emanates through the grapevine . Moreover, most people deem it trustworthy as well.

This informal type of communication may have a significant impact on your people, your business performance, and your ability to build trust with your employees. Therefore, it is crucial for employers to understand the power of grapevine communication in order to be able to control and manage it effectively.

(iii) Relationship between Morale and productivity.

-> There can be four combinations of morale and productivity:

High Morale-High Productivity: High morale reflects a predisposition to be more productive if proper leadership is provided. This situation is likely to occur when employees are motivated to achieve high performance standards through financial and non financial rewards. Complete identity between individual and organisation goals can lead to this situation. This is the ideal combination of morale and productivity and occurs when right motivational policies are adopted by managers. Workers know their jobs, they are trained to manage various aspects of the job and feel committed towards the organisational goals.

High Morale-Low Productivity: The situation arises when employees spend their time and energy in satisfying their personal objectives unrelated to the company’s goals. Faulty machinery, lack of training, ineffective supervision and restrictive norms of informal groups can also lead to low productivity on the part of employees with high morale.

Low Morale-High Productivity: Low morale cannot result in high productivity for a long period. However, this situation can occur for a temporary period due to fear of loss of job, exceptionally good supervision and machine paced work in which only a part of workers’ capabilities are used.

Low Morale-Low Productivity: This is a normal relationship. In the long run low morale is likely to result in low productivity. It represents the other extreme of morale- productivity continuum. Lack of motivation, unclear jobs and lack of harmonious superior – subordinate relationships reflect low morale and, therefore, frustrations, tensions, discontentment and grievances develop against managers which results in low productivity.

(iv) Requirements of a sound motivational system.

-> A sound system of motivation should have the following essential feature:

1. A sound motivation system should satisfy the needs and objectives of both organization and employees.

2. Motivational system should change with the changes in the situation.

3. Jobs should be designed in such a way as to provide challenge and variety.

4. Managers should recruit the active co-operation of subordinates in improving the organization’s output. Subordinates should be made to realize that they are stakeholders in the organization.

5. The motivational system should satisfy the different needs of employees. It should be directly related to the efforts of the employers.

6. The motivational system should be simple so that it is easily understood by the workers.

5(a) Explain the principles of Personnel policy. Point out the essentials of an ideal personnel policy. (8+8=16)

-> A personnel policy should have two types of objectives viz., general objectives and specific objectives. General objectives express top management’s philosophy of human resources whereas specific objectives refer to specific activities like staffing, training, wages and, motivation.

Principles of Personnel Policies:

These policies are formulated keeping in mind the following principles:

1. Principle of Right Placement:

There is a common saying that there should be square pegs for the square holes and round pegs for the round holes. Only those persons should be selected who are physically and mentally fit for the job so that they can become our ‘asset’ in the future.

2. Principle of Development:

All workers should be given the opportunity to develop so that their monetary position as well as their social status is enhanced. Workers tend to be more sincere and hard working when they are aware of the chances of promotion in the organization.

3. Principle of Participation:

This principle states that we should consider the organisation a co- ordinated team. If workers participate in the formulation of policies, a large number of problems which arise due to misunderstanding can be avoided.

4. Principle of Mutual Interest:

The workers should feel that interest of management is common with the
workers. This will provide motivation to the workers to put in hard work which will entitle them to earn higher wages and non-monetary benefits.

5. Principle of Good Working Conditions:

Workers should be given better tools, good working conditions, and adequate wages and there should be impartial appraisal of their work.

6. Principle of Flexibility:

A personnel policy must be such that it can be changed with the change in circumstances. Technological changes are taking place at a very fast speed in the industries and for that reason a constant review of such policies is necessary.

In a nutshell, personnel policies should contain the principle of justice as well as equity and must be fair to all employees.

The essentials of an ideal personnel policy:-

A policy is a general statement or a body of understanding which guides thinking and action in decision-making. A policy provides advance information and predictable decisions for situations which are repetitive or which occur widely throughout the organization. A personnel policy is a total commitment of the organization to act in a specified way while dealing with its employees. It gives an assurance that decisions made will be consistent, fair and in line with the objectives of the organization. Personnel policies, generally, deal with personnel selection, compensation, benefits, union relations and public relations.

1. The policy should be clear, precise and easily understandable. The objectives should be explicit from a look at the policy.

2. It should be in writing so that it can be properly understood. A written policy will be used for reference purpose also. It also avoids confusion or misunderstanding, if any, from its interpretation.

3. Personnel policy should protect the interests of all parties in the organization i.e. workers, consumers, entrepreneurs, government and the community.

4. It should be supplementary to overall policy of the organization. It should help in achieving organizational goals.

5. A policy should not be rigid. It requires adjustment according to the changing situations from time to time.

6. The policy should be responsive to the prevailing situation and environment. For example, if there is a thinking of taking workers’ representatives into Board of Directors, the policy should not oppose this idea.

7. It must provide two-way communication between management and workers so that the later are kept informed about latest developments in the organization. The reaction of employees to the policy may also be conveyed to top management from time to time.

8. A personnel policy should have the support of all concerned parties. It should have the support of top management and be acceptable to employees also.

9. A policy should be uniform throughout the organization even though some adjustments may be allowed as per the needs of local conditions. Some variations may be allowed in policies relating to staffing, compensation, benefits etc.

10. It should affirm the long range purposes of personnel relations.

(b) Outline the significance of Personnel Audit in Service Organization. (16)

-> “Extending the general meaning of auditing to the field of personnel management, personnel auditing may be defined as the analysis and evaluation of personnel policies, procedures and prac­tices to determine the effectiveness of personnel/human resource management in an organization. In other words, personnel audit is a periodic review to measure the effectiveness of personnel manage­ment and to determine the steps required for more effective utilization of human resources.

Outlining the need for personnel evaluation, Gordon” states that a major objective of personnel management is to “improve productivity” of individual employees and thus increase “organizational effectiveness” by better utilization of a firm’s human resources.

According to Gray “the primary objective of personnel audit is to know how the various units are functioning and how they have been able to meet the policies and guidelines which were agreed upon; and to assist the rest of the organization by identifying the gaps between objectives and results, for the end product of an evaluation should be to formulate plans for corrections of adjust­ments.”

The objectives of personnel audit can be listed in a more orderly manner as follows:

1. To review the whole organizational system of human resource practices, i.e., acquiring, developing, allocating and utilizing human resources in the organisation.

2. To evaluate the effectiveness of various personnel policies and practices.

3. To identify shortcomings in the implementation of human resource practices in the organization.

4. To modify the existing human resource practices to meet the challenges of personnel/human resource management.


The scope of personnel audit is very wide. It represents the encompassing approach; that is, it assumes that the management of human resources involves much more than the practice of recruiting, hiring, retaining and firing employees. In other words, personnel audit is interested in all the programmes relating to employees regardless of where they originate.

In this way, the areas personnel audit includes are recruitment, selection, job analysis, training, management development, promotions and transfers, labour relations, morale development, employee benefits, wage and salary administration, collective bargaining, industrial relations and communication. Further, the areas like leadership, grievances, and performance appraisal and employee mobility are also included within the scope of personnel audit.


The personnel audit should probe much deeper, evaluating personnel programmes, policies, philosophy and theory. For this, it is necessary to decide the appropriate levels of audit such as results, programmes, policies, philosophy, etc., before actually initiating the personnel audit. Experi­ence suggests that evaluation by results sometimes becomes just superficial. For example, high absentee rates may result from a variety of causes.

In order to make deeper probe, the process of personnel audit includes the following steps:

(i) Identifying indices, indicators, statistical ratios and gross numbers in some cases.

(ii) Examining the variations in a time frame in comparison with a similar previous corresponding period.

(iii) Comparing the variations of different departments during different time periods,

(iv) Examining the variations of different periods and then comparing them with the similar units working in the region,

(v) Drawing trends, ascertaining frequency distribution and correlations between them.

(vi) Preparing a report and send it to the top management for information and action.

According to VSP Rao the following questions can be asked to evaluate personnel policies, procedures and practices:

(i) What are they? (i.e., policies /procedures/practices).

(ii) How are they established?

(iii) How are they communicated to various managers and employers concerned?

(iv) How are they understood by individual employers, supervisors and managers at differ­ent levels?

(v) Are they consistent with the management’s organisational philosophy and human resource management philosophy?

(vi) Are they consistent with the existing trends towards human resource management and research?

(vii) What are the controls that exist for ensuring their effective and uniform application?

(viii) What measures exist to modify them to meet the organisational requirements?

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