HRM All chapters.ppt

Chapter 3
Job Analysis
and
HR Planning
October 4, 2023

Chapter Outline
1.Job analysis definition
2.Who is involved in JA
3. Components of JA
4. JA Steps
5. JA Potential Problems
October 4, 2023

Cont’d……..
HRP Meaning
(Definition)
7. HRP Importance
8. HRP Steps
October 4, 2023

1. Job Analysis Definition
• The reason why people are required in an
organization is to fill job vacancies and to
do the job.
• This requires human resource
management to understand the nature of
the job and the nature of the person
required for the job.
October 4, 2023

Cont’d
• Job analysis is a systematic process of
collecting and making judgment about all
of the important information related to the
nature of the job.
• It is the basis of all human resource
management activities.
• Job analysis objectives are to achieve
information on the following job and
person aspects.
October 4, 2023

Cont’d……
• What a worker does-workers function
• How a worker does-methods and techniques
used
• What aid is necessary-machines tools,
experts etc.
• What qualifications are necessary-
knowledge, skills, abilities, experience
• The output of job analysis are job description
and job specification
October 4, 2023

The Multifaceted Nature of the Job
Analysis
Safety & health
Compensate
Performance appraisal
Career dev’t Employee dev’t
October 4, 2023
Job
Analysis
Recruiting
Selection
Strategic HR
Planning
Employee
Training
Labor Relations

2. Components of Job Analysis
October 4, 2023
Job Description—a listing of the
job’s duties; its working
conditions; and the tools,
materials, and equipment
used to perform the job. It
identifies the picture of the
job
Job
Description
Job Specification—a listing of the
skills, abilities, and other
credentials the incumbent
jobholder will need to do a job.
It identifies the picture of the
person.
Job
Specification
Job
Analysis

3. Steps in Job Analysis
1. Determine the purpose of the
JA
2. Gather Information about
jobs to be analyzed
3. Write the job Analysis
4. Obtain Approval
October 4, 2023

3.1 Determine the Purpose of JA
 Job analysis serves several purpose of HRM
• How do you want to use the JA?
 Legal requirement
 Manpower Planning
 Recruiting
 Selection
 Performance appraisal
 Training
 Compensation, etc
October 4, 2023

3.2 Gather Information about Jobs
• Decide which jobs to include in the job
analysis project
• For similar jobs select representative
jobs
• Different methods of gathering data
include:
1. Interviews
2. Questionnaire
3. Observation
4. Diary/Logs
October 4, 2023

Cont’d
Interview Method
Individual
 Several workers are interviewed individually
 The answers are consolidated into a single
job analysis
Group
 Employees are interviewed simultaneously
 Group conflict may cause this method to be
ineffective
◦ The interview method requires that all
employees are asked the same questions in
the same order.
October 4, 2023

Cont’d
Questionnaires
◦ Employees answer questions about the
job’s tasks and responsibilities
◦ Each question is answered using a scale
that rates the importance of each task
 Not all jobs are the same, so questionnaires
may overlook certain aspects of the job. Also,
follow-up methods are not usually organized
to gather extra information.
October 4, 2023

Cont’d
Diary Method
◦ Incumbent Employees record
information into diaries of their daily
tasks
Record the time it takes to
complete tasks
◦ Must be over a period of several
weeks or months
This method can be very expensive
because of the time it takes to complete
October 4, 2023

Cont’d……….
Observation Method
◦ Analyst observes incumbent
Directly
◦ Useful when job is fairly routine
◦ Workers may not perform to
expectations
October 4, 2023

Cont’d
Critical Incident Technique (CIT)
◦ Takes past incidents of good and bad
behavior
◦ Organizes incidents into categories that
match the job they are related to
◦ The CIT is helpful in illustrating to an
employee what kind of behavior is
required for the job.
October 4, 2023

Disadvantage of observation
 Direct observation method is limited to jobs
with short and repetitive cycles. Jobs having
complex mental activity are difficult to observe
.Example, observing the activities of traveling
sales person or a lawyer is difficult.
 If observation is done by untrained persons,
there is a high possibility of missing important
information
October 4, 2023

Advantage of interview
It allows the worker being interviewed to report
activities and behaviors that might not otherwise
be available from organization chart.
Provides an opportunity to explain the need for
and functions of the job analysis.
Allows interviewees to express their views and
work related problems that may not have been
noticed by management
October 4, 2023

Disadvantage of interview
 There is a possibility of distortion of information
 Employees may tend to exaggerate certain
responsibility with expectation that information
gathered may have an impact on their pay.
 It is usually time consuming in terms of scheduling
the interview and actually conducting it. This is
especially true if a group of people are involved in
the interview process.
October 4, 2023

Questionnaire Advantage
October 4, 2023
 It is a quick and efficient way of obtaining
information from large number of employees.
 It is less costly than interviewing hundreds of
employees.

Questionnaire disadvantage
 Developing questionnaires and testing it
(making sure that employees understand the
questions) can be time consuming and
expensive.
 Respondents may misinterpret the question
and provide the wrong information.
 Exceptions to a job may be overlooked
October 4, 2023

Diary method advantage
 Provides detailed information about the job.
Disadvantages
 Job holder might exaggerate some aspect of
their jobs to make their task look more
important than other activities.
October 4, 2023

Write the Job Analysis
• Many organizations write as job
description combining both job description
and specification.
• However it can also be presented in two
parts as job description and specification.
• The following Items are common to both
job description and specifications:
October 4, 2023

Cont’d……..
1.Job Identification (Title, Date,
Approvals, Supervisor’s title ,Salary,
Grade level)
2.Job Summary (General nature,
Major functions or activities,
Includes general statements)
3.Relationships (works with who
October 4, 2023

Cont’d……..
Job Description
1. Job Identification (Title, Date,
Approvals, Supervisor’s title
,Salary, Grade level)
2. Job Summary (General nature,
Major functions or activities,
Includes general statements)
3. Relationships (works with who)
October 4, 2023

Cont’d……….
6. Responsibilities and Duties (Limits of
authority, what is done-such as
sales, lifts, drives etc.)
5. Standards of Performance (Quality,
quantity etc.
7. Working Conditions and Physical
Environment
October 4, 2023

Cont’d……….
Job Specification
1.Job Identification (Title, Date, Approvals,
Supervisor’s title ,Salary, Grade level)
2.Job Summary (General nature, Major
functions or activities, Includes general
statements)
3.Relationships (works with who)
4.Qualifications
5.Experiences
6.Behaviors
October 4, 2023

Steps in Job Analysis
The six steps in doing a job analysis are as
follows.
Step 1: Determine the use of the job analysis
information:- Start by identifying the use to
which the information will be put, since this will
determine the types of data you collect and the
technique you use to collect them.
October 4, 2023

Cont’d…….
• Step 2: Collect background information.
Next, review available background information
such as organization charts, process charts and
job descriptions.
• Organization charts: show you how the job in
question relates to other jobs and where it fits in the
overall organization
October 4, 2023

Cont’d……
A process chart: provides a more detailed
understanding of the flow of work than you can
obtain from the job under study.
Step 3: Select representative positions to be
analyzed. This is necessary when many similar
jobs are to be analyzed and it is too time-
consuming to analyze, say jobs of all assembly
workers.
October 4, 2023

Cont’d………
Step 4: Collect job analysis information. Your
next step is to actually analyze the job collecting
data on job activities, required employee
behaviors, working conditions, and human
requirements (like the traits and abilities needed
to perform the job).
October 4, 2023

Cont’d…………..
5: Review the information with the
participants. The job analysis provides
information on the nature and functions of the
job. This information should be verified with the
worker performing the job and the person’s
immediate supervisor.
Step 6: Develop a job description, and job
specification. In most cases, a job description
and a job specification are two concrete
outcomes of the job analysis
October 4, 2023

Potential Problems of JA
Employees may resist JA
because:
Resistance to change
Possible changes to job duties
Changes to pay
Lack of trust of consequences
October 4, 2023

5. Who is involved in the job
analysis?
• Management
• Supervisors
• Job analysts
• Job incumbent
• Unions
• Consultants
October 4, 2023

Cont’d……….
Job Design
Job design is the process of determining the
specific tasks to be performed, and methods used
in performing these tasks, and the way the job
relates to other work in the organization.
October 4, 2023

Cont’d………..
Job Enrichment
Job enrichment is the restructuring of the content
and level of responsibility of a job to make it
more challenging, meaningful, and interesting to
a worker.
Job Enlargement
There is a clear distinction between job
enrichment and job enlargement. Job
enlargement involves changes in the scope of a
job so as to provide greater variety to the worker.
October 4, 2023

Human Resource
Planning
(HRP)
October 4, 2023

Definitions of HR Planning
Different definitions of HR planning are given
below. Read each of them thoroughly
HR planning involves forecasting the need for
labor and the supply of labor, then planning
the programs necessary to ensure that the
organization will have the right mix of
employees and skills when and where they are
needed
October 4, 2023

Cont’d……………..
Human resource planning is the process of
analyzing and identifying the need for and
availability of human resources, so that the
organization can meet its objectives.
Human resource planning is the process of
analyzing and identifying the need for and
availability of human resources, so that the
organization can meet its objectives.
October 4, 2023

Essence of HR Planning
From the definitions given above, we can
identify the following activities HR planning is
concerned with:
 Information Gathering (information obtained
is used in the following stage to determine HR
needs and HR supply)
October 4, 2023

Cont’d…………
 Forecasting (information obtained form the
above stage is used as a basis for analyses, to
actually forecast the organization’s HR needs
and potential HR supply.
Predictions or assumptions developed in the
above stages are used as a basis for developing
HR plans to meet the organization’s present or
future HR requirements
October 4, 2023

Cont’d……
HR Plans, policies and programs used to adjust
the gap between HR demand and HR supply, to
ensure alignment (integration) with the
organization’s business and corporate strategies.
Evaluation of the accuracy of forecasts and Hr
plans used to match HR surpluses with HR
demand.
October 4, 2023

Cont’d………..
Hence, the aims of human resource planning are
to ensure that an organization:
Strategically aligns its HR plans, policies and
practices with supporting corporate objectives.
Is able to anticipate its future HR needs and to estimate
available HR supply, both inside and outside of the
organization, as a prerequisite for meeting those needs.
October 4, 2023

Cont’d…….
 Is able to anticipate the problems of potential
HR surpluses or deficits, as a basis for
managing these imbalances.
 Is able to develop the necessary HR plan and
practices required to obtain and retain the quantity
and quality of employees required to achieve the
organization’s corporate objectives.
October 4, 2023

Cont’d……….
 Can develop a well-trained and flexible
workforce, thus contributing to the
organization’s ability to adapt to an uncertain
and changing environment.
 Make the best use of human resources.
October 4, 2023

Steps in the HRP Process
HRP consists of the following stages.
Step 1. Studying short and long range plans of
the organization as well as determining the
impact of the organization’s objectives on
specific organizational units.
October 4, 2023

Cont’d……………..
Step 2. Forecasting the overall human resource
requirements i.e. defining the skills, expertise,
and total number of employees required in the
organization. A second element of the planning
process is forecasting human resourced needs
based on business strategies, production plans,
and the various indicators of change in
technology and operating method
October 4, 2023

Cont’d……….
• To assist with making such predications about
HR demand, two general approaches to demand
forecasting are commonly used:-
 Statistical / Mathematical Approaches
 Judgmental Approaches
October 4, 2023

Cont’d……….
• Statistical Approaches: - some forecasting
techniques are based on statistical methods.
Some of them are given below: -
October 4, 2023

Cont’d………
1.Ratio-trend Analysis:- The ratio-
tend analysis is carried out by
studying past ratio and forecasting
rations for the future. The
components of internal
environmental change are
considered while forecasting future
October 4, 2023

2.Econometric Model:- Under the
econometric model the previous data is
analyzed and the relationship between
different variables in a mathematical
formula is developed. The different
variables affecting the human resource
requirements are identified
October 4, 2023

Cont’d……….
3.Work-study techniques:- work-study
techniques are generally used to study
work measurement. Under the
workload analysis the volume of
workload in the coming years is
analyzed. These techniques are more
suitable where the volume of work is
easily measurable.
October 4, 2023

Cont’d………..
The work study method also takes into account
the productivity pattern for the present and
future, internal mobility of the workers like
promotion, transfer, external mobility of the
workers like retirement, deaths, voluntary
retirements etc.
October 4, 2023

Cont’d……….
• Judgmental Approaches: - Judgmental
Approaches are also known as the conventional
method. The forecasts are based on the
judgment of those managers and executives
who have intensive and extensive knowledge of
human resource requirement. Judgmental
forecasts could be of two types: -
October 4, 2023

Cont’d……….
1.Managerial estimate:- Under this
method, the managers or supervisors who
are well- acquainted with the workload,
efficiency and ability of employees, think
about their future workload, future
capabilities of employees and decide on the
number and type of human resources to be
required.
October 4, 2023

2. Delphi Method: - A survey approach can be
adopted with the Delphi technique. The Delphi
process requires a large number of experts who
take turns to present their forecast statement and
underlying assumptions to the others, who make
revisions in their forecasts. Face-to-face contact
of the experts is avoided
October 4, 2023

Cont’d………….
Step 3. Information Gathering
After engaging in demand forecasting using both
mathematical and judgmental tools to more
specifically determine the numbers and types of
employees that will be required to support the
achievement of the organization’s corporate
objectives, the third step in the HR planning
process is to collect information to be used for
developing HR Supply forecasts, to predict the
availability of these employees.
October 4, 2023

Cont’d…………….
Step 4- Taking an inventory of present human
resources i.e. developing a profile of current
status of human resources. Once the demand for
labor is predicated, and relevant information is
obtained about the internal and external labor
markets, it is now necessary to actually forecast
the supply of labor that the organization will
require to meet such demand.
October 4, 2023

Cont’d………
• Supply forecasting therefore involves
estimating the labor supply or the availability of
workers, in terms of number or the required
skills sets, to meet the organization’s labor
demand. An organization’s labor supply is
determined or estimated by assessing the:-
October 4, 2023

Cont’d……….
1. The numbers and skills sets and attitudes of the
existing employees within the organization.
That is, forecasting internal supply. (NB).
Remember, information about the
organization’s internal labor market would
have already been obtained from stage three-
see above.)
October 4, 2023

Cont’d……….
1. Or carrying out a similar evaluation of
potential employees form outside the
organization. That is, forecasting external
supply. (NB. Information about the
organization’s external labor market would
likewise already have been obtained from
stage three-see above.)
October 4, 2023

Cont’d………
Step 5. The process of Matching (Forecast of
total HR requirement – Internal supply of HR =
Net HR requirement.) This stage involves
matching the predications made for HR demand
against the predictions made for HR supply-to
determine the outcomes.
October 4, 2023

Cont’d……..
Step 6. Outcomes of the HR Planning Process
Having made demand and internal supply
forecasts and considered the state of the external
labor market, the HR planner can anticipate
future problems with the matching of HR
demand with employee supply.
October 4, 2023

HR Programs Used to Manage
Surplus Supply
• HR surplus supply results when forecasted
supply is greater than the forecasted demand.
HR department must design and apply
techniques to overcome the excess of supply
over demand. Usually the following techniques
are used.
October 4, 2023

• Downsizing (out placement)
Downsizing is a reduction in the number of
people employed by a firm (also known as
restructuring and rightsizing).
• Early Retirement
Early retirement of some present employees is
another way to reduce the number of workers.
Some employees will be delighted to retire, but
others will be somewhat reluctant.
October 4, 2023

• Layoffs- (unpaid leaves of absence)
At times, a firm has no choice but to lay off a
part of its workforce. Lay off is not the same
with firing but the effect is similar. In both cases
the worker is no longer employed.
• Lay off procedures are usually stated in the
labor-management agreement. Usually, workers
with the least seniority are laid off. first.
October 4, 2023

• Job Sharing
Job sharing is an approach to work that is
attractive to people who want to work fewer than
40 hours per week. In job sharing, two part-time
people split the duties one job in some agreed-on
manner and are paid according to their
contributions.
October 4, 2023

Cont’d…….
• Pay reduction
Firms use pay reduction to reduce the number of
full-time workers. A worker whose pay is
reduced usually tends to leave the company.
October 4, 2023

HR Programs Used to Manage
Demand
Deficit supply of employees results
when the forecasted employees
demand is in excess of the forecasted
employee’s supply. This is a more
serious problem which requires due
attention of management. Appropriate
methods to mitigate the deficit are
presented below
October 4, 2023

• Recruitment & Selection
• Improve Retention Rates
• Overtime
• Training
• Outsourcing
October 4, 2023

Guidelines for making HR
planning effective
Some of the steps that may be taken to improve
the effectiveness of human resource planning are
given below:-
1. Objectives: - The HR plan must fit in with the
overall objectives of the organization. Important
aspects such as working conditions, human
relationships etc., must kept in mind while
developing the plan.
October 4, 2023

Cont’d……………
2. Top Management Support: - The plan must
meet the changing needs of the organization and
should enjoy consistent support from top
management. Before starting the Human
Resource Planning process the support and
commitment of top management should be
ensured.
October 4, 2023

Cont’d………
3.Appropriate Time Horizon: - The period of a
human resource plan should be appropriate to the
needs and circumstances of the specific
enterprise.
4. Manpower Inventory: - The quantity and
quality of human resources should be stressed in
a balanced manner. The emphasis should be on
filling future vacancies with right people rather
than merely matching existing people with
existing jobs.
October 4, 2023

Cont’d………..
Human Resource Information System: - An
adequate database should be developed for
human resources to facilitate human resource
planning.
Adequate Organization and Co-ordination: -
Human resource planning function should be
properly organized.
October 4, 2023

Chapter 4
Employee Recruitment,
Selection, Placement &
Induction/Orientation

Chapter Outline
• After completing this part,
participants will be able to
understand:
1. Recruitment
2. Selection
3. Placement & Induction

Recruitment
. Definition
Recruitment is the process of reaching
out and attempting to attract potential
and qualified job candidates for a
particular job
• To avoid costs, the recruiting effort
should be targeted solely at
applicants who have the basic
qualifications for the job.

CONT’D……….
According to different Authors Recruitment
Defined as:-
 According to Kempner-“Recruitment forms the first stage
in the process which continues with selection and ceases
with the placement of the candidate”.
 According to Flippo- Recruitment “is a process of
searching for prospective employees and stimulating and
encouraging them to apply for jobs in an organization”.

CONSTRAINTS ON
RECRUITMENT
Logically, firms would seek to recruit in a manner that guarantees the
greatest number of qualified applicants. However, there are often
constraints on the recruitment process which prohibit some methods,
some of these constraints are
 Organization Policies
 Affirmative-action Programs
 Recruiter Habits
 Environmental Conditions
 Job Requirements

Sources of Recruitment
There are two sources of recruitment- Internal and
External Sources:-
Internal Sources
Vacant positions in organizations could be filled by those
existing employees through transfers, promotions and
recall from layoff. Most large organizations attempt to
develop their own employees for positions beyond the
lowest level.

Advantages of Internal
sources
a. The company has better knowledge of the strength and
weakness of job candidates: If accurate information is
gathered about an employee under consideration through
qualification inventory, performance evaluation, interview
with prior and present supervisors of the employee, there is a
high chance of recruiting the best employee from with in the
organization.

CONT’D………
b. Inside job candidates have better knowledge
of the organization and job operations. Thus,
they require less orientation and training than
outsiders. Moreover the likelihood of inside
candidates having inaccurate expectations and /or
becoming dissatisfied with the organization is very
low.

CONT’D………….
C. Employees see that competence is rewarded and
moral and performance may thus be enhanced.
Recruiting from within an organization creates promotion
opportunities to employees.
D. The return on investment that an organization has
on its present work force is increased. Most
organizations speed sizable amount of investment on their
employees in a form of short-term trainings, fringe
benefits, etc. Being able to use the workforce to its
maximum capability is considered as a return on
investment to the organization.

Disadvantage:
a. People can be promoted to the point where
they cannot successfully perform the job. An
organization can suffer of it uses inferior internal
sources just for the reason of boosting the morale
of its employees.

CONT’D………
b. Infighting for promotions can negatively affect
morale. Competition among employees for promotions
may be very intense to the extent of damaging the morale
of employees.
Inbreeding of ideas can stifle new ideas and
innovations. When an entire management team has been
brought up through the ranks, there may be a tendency to
make decisions “by the book” and to maintain the status
quo.

EXTERNAL SOURCES
External sources provide a larger pool of candidates. It is often
needed by organizations that are growing rapidly or have a large
demand for technical and skilled managerial employees.
Advantages:
a. The pool of talent is much larger. Internal source may not lead to
large number of possible candidates for a given open position. Thus,
using external sources provides the advantage of choosing from
among large pool of candidates.

CONT’D………
b. New insights and perspectives can be brought to the
organization. Expertise, excellence and experience in
other organization can be easily brought into the
organization.

DISADVANTAGES:
a. Attracting, contracting, and evaluating a potential
employee is more difficult: This is especially more
difficult for higher-level jobs.
b. Adjustment or orientation time is longer for
external candidates. As a result, it might take sometime
before they can perform with their full potential.

CONT’D……..
c. Morale problem can develop among internal
employees who feel qualified to do the job. Current
employees might feel neglected and their level of
performance may be affected.

Methods of Recruitment
Job Posting: It means posting notices of job
openings on organization bulletin boards for
recruiting possible internal candidates.
Accordingly, interested employees could apply
forthe job.
Skill inventory: It is an internal recruitment
method to identify employees with the attributes
needed for a particular job. It is the systematic
record, either manual or computerized, listing
employee’s education, career and development
interests, languages,special skills, etc.

CONT’D……….
Job Advertisement: It is a widely used recruitment
method in order to reach relatively large numbers of
potential applicants. Advertisements are commonly placed
in daily newspapers, trade and professional newspapers,
and occasionally on radio, TV, and billboards. However,
the choice of appropriate media for a specific
advertisement should depend on the type of job and the
required degree of coverage.

CONT’D……..
College Recruiting: It involves
recruitment from educational institutions
that offer opportunities to recruit recent
graduates. Educational institutions are
particularly excellent source of potential
employees for entry-level postings in
organizations.

CONT’D…………
Employment Agencies: There could be public or
private employment agencies. These agencies
have information on job seekers in terms of
qualifications, skills interests, etc. and can be a
good source of employment by organizations.
Employee Referrals: Some organizations
encourage their employees to refer potential
applicants to an open position. Announcements of
openings and requests for referrals are made in
the organization’s bulletin and posted on bulletin
boards.

CONT’D………
Executive Recruiters (“head hunters”):
There are people who are exclusively
known for seeking out top management
talent for their clients. Exclusively
recruiters could be a very expensive
method of recruitment but their services
might result in obtaining highly qualified
personnel for crucial executive and
technical positions.

CONT’D……
Walk-ins/Write-ins or Unsolicited
Applicants: ( are those applicants who
apply for a job with out any
advertisement or requirement from the
company). Unsolicited applications
whether they reach the employer by letter,
telephone, or in person, can be a source of
prospective applicants. Such applications
are kept in file if there are no particular
openings at that time.

Who Does the
RECRUITING?
In most large organizations the human
resource department is responsible to
for recruiting. There organizations
normally have an employment office
within the human resources
department. However, the recruiters
and interviewers in these departments
are required to closely work with the
hiring department.

CONT’D……….
Recruiting Function Operating manager (OM) HumanResource Manager
(HRM)
Set recruiting goals
Decide on sources of recruits
and recruiting policies
Decide on methods
of recruiting
College recruiting
Cost/benefit studies
of recruiting
Set by OM with advice of
HRM
Policy decision, outside
versus inside, set by OM
with advice of HRM
OM advises HRM on
methods or recruiting
OM occasionally recruits
at colleges.
OM evaluates results of
cost/benefit studies and
decides accuracy
Advises OM on state of labor
market
Advices on status of possible
inside recruits.
HRM decides on recruiting
methods with advice of OM
Normally recruits at colleges
HRM performs
cost/benefit studies.

Alternative Methods to
Recruitment
The commonly used alternative to recruitment include
outsourcing, using of contingent workers, and
overtime. Let us discuss each of them in detail below.
Outsourcing
Outsourcing is the process of transferring responsibility
for an area of service and its objectives to an external
provider. In other words, outsourcing is a subcontracting
of various functions to other firms.

CONT’D…….
Contingent Workers
Contingent workers are known as part-timers,
temporaries, and independent contractors. Some even call
them disposable workers.

CONT’D……..
Overtime
Perhaps the most commonly used method
used as alternative to recruitment is having
permanent employees work overtime.
Overtime may help both employer and
employees the employer benefits by
avoiding recruitment selection, and training
costs.

SELECTION OF HUMAN RESOURCES
Definition
Recruitment involves searching for and attracting
candidates to fill job vacancies. Selection is a later
stage of the recruitment process which involves
choosing competent and qualified applicants suited
for the job.

CONT’D…………
• Selection is the process of deciding
which candidate, out of the pool of
applicants developed in recruitment,
has the abilities, skills, and
characteristics most closely
matching job demands.

CONT’D……..
• Series of steps are used for selection
decision.
• The selection philosophy is either to
screen out the unqualified candidate
at each step or to screen in the
qualified ones

The Significance of Employee Selection
 Selection is more powerful way of
improving productivity. Selecting
qualified and competent employees
improves the benefits an
organization reaps.

CONT’D……….
Selection decision is a long
lasting decision. Once the decision
is made reversing it is very
difficult. If an organization hires
poor performers, it cannot be
successful long, even if it has a
perfect plans and good control
systems.

CONT’D……….
 Selection affects other HR
functions. If less qualified people
are selected, then it will be
necessary to budget funds for
training them.

CONT’D………..
Compare your answer with the
following descriptions of
environmental factors that impact the
selection process.

CONT’D……..
 Legal considerations
HRM is influenced by legislation,
executive orders, and court
decisions. Managers who hire
employees must have extensive
knowledge of the legal aspects of
selection.

CONT’D……….
 Organizational hierarchy
Different methods of selection are
taken for filling positions at varying
levels in the organization. For
example, extensive background
checks and interviewing would be
conducted to verify the experience and
capabilities of the applicant for the
sale’s manager position.

CONT’D………..
Applicant Pool) labor market)
The number of qualified applicants for a
particular job can also affect the selection
process. The process can be truly selective only
if there are several qualified applicants for a
particular position. When the applicants are very
few, the selection process becomes a matter of
choosing whoever is at hand.

Selection Process
The basic selection process involves the following steps:
a. Application Form It provides basic
employment information to be used at a
later stage of the selection process and also
to screen out unqualified applicants. It
involves basic questions ranging from
simple name and address kind of question
to extended personal history profile.

CONT’D…….
b. Preliminary Interview
It is used to get necessary information from
the prospective applicants and to assess the
applicant’s suitability to the job. The
information obtained may be related to the
job or personal specifications regarding
education, experience, salary expected,
attitude towards the job, age, physical
appearance and other physical
requirements.

CONT’D……….
c. Employment Tests
The next step is to conduct various
employment tests to gather further
information about applicants and thus
be able to asses their suitability to the
job.

CONT’D……….
d. Comprehensive Interview
It is used to supplement information gained in other steps
in the selection process. It is designed to investigate into
areas that cannot be addressed by the application forms or
tests. Questions to be asked in this interview should be job
related. The interview is usually done by a panel of
interviewers consisting of human resource personnel,
potential supervisor, and other executives that may be
relevance in assessing the applicant’s qualifications.

e. Reference Checking/Background Investigation
It involves contacting individuals who
are listed as references the applicant.
It may include contacting former
employers to confirm the candidate’s
work record and performance level,
contacting other job-related, personal,
and educational references to verify
accomplishments shown in the
application.

CONT’D………..
f. Physical Examinations
It is given to determine whether an
applicant is physically capable of
performing the job and also to
determine the applicant’s
eligibility for group life, health and
disability insurance.

CONT’D……………
g. Final Employment Decision
If the above steps are successfully accomplished,
the best qualified individual can be identified.
This decision is made by the hiring department as
per the qualifications set up for the job to be
filled.

PROBLEMS IN CONDUCTING
INTERVIEWS
 Interviewers may be favorably or unfavorably
impressed with the job applicant for the wrong
reasons.
 Interviewers may have personal biases. Example:
way of dress, hairstyle, etc.
 Interviewers may allow a simple characteristic to
dominate judgment of all traits. For example, an
applicant with a peasant personality may affect the
fair judgment of the interviewer. In this case, other
work related traits may be overlooked.

PLACEMENT/ORIENTATION OF EMPLOYEES
What is Orientation?
 It is the introduction of new employees to
the organization, work unit, and job. This
can be done by oral or written
communications like manuals,
guidelines, etc.
Orientation is the guided adjustment of
new employees to the company, the job,
and the work group. It is a common type of
formal training in organizations. For
example, they use computer-based training.

PURPOSES OF ORIENTATION
Orientation formats are unique to each
firm. However, almost all emphasize
these areas: the employment situation
(job, department, and company),
company policies and rules,
compensation and benefit, corporate
culture, team membership, employee
development, and dealing with change
and socialization. Let me describe this
point in detail one by one:-

CONT’D……….
The Employment Situation
The basic purpose, from the firm’s viewpoint is to have
the new employee become productive as quickly as
possible. Therefore, specific information about
performing the job may be provided at an early point in
time. Knowledge of how the job fits into the
departmental goal and goal of the company tend to
illustrate its importance and provide meaning to the work.

CONT’D………
Company Policies and Rules
Every job within an organization must be performed
within the guidelines and constraints provided policies
and rules. Employees must understand these to have a
smooth transition to the workplace. This information may
be quite detailed, so common practice is to include it in
the form of an employee handbook.

CONT’D……….
Compensation and Benefits
Employees will have a special interest in obtaining
information about the reward system. This information is
usually provided during the recruitment and selection, but
a review of the data is appropriate during orientation.

CONT’D……….
Corporate Culture
The firm’s reflects, in effect, “How we do things around
here.” This relates to everything form the way employees
dress to the way they talk. Companies have a number of
ways to communicate their culture, and knowledge of it
is critical to a new employee’s orientation.

CONT’D……….
Team Membership
A new employee’s ability and
willingness to work in teams is most
likely determination before he or she
is hired. In orientation, the importance
of becoming a valued member of the
company team may be emphasized.

CONT’D……..
An individual’s employment security is increasingly
becoming dependent upon his or her ability to acquire
needed knowledge and skills that are constantly
changing. Thus, employees should be kept aware of
company-sponsored developmental programs and those
available externally, and they should receive
encouragement to take advantage of any appropriate
opportunities.

CONT’D………
Dealing with change
Employees at all levels must learn to deal effectively with
change to survive in their jobs. The best way individuals
can be prepared for change is to develop and expand their
skills continually. It is mutually advantageous for both
employee and employer for this to occur as it provides
security for the employee and a more valuable performer
for the firm.

CONT’D……..
Socialization
To reduce the anxiety that new employees may
experience, attempts should be made to integrate the
person into the informal organization.

CONT’D……..
When should it be given?
Before or during the selection process
followed by a formal orientation period once
an individual is hired.
 Immediately after a job applicant is hired.

CONT’D……….
Who does the orientation?
Major responsibility of orientation falls on the
human resource department, especially as it
relates to the general information concerning the
organization. HRD is also responsible for
initiating and coordinating both the general and
job/department specific orientations. The new
employee’s immediate supervisor takes the
responsibility of job/department orientation as
he/she is likely to give accurate and relevant
information.

CONT’D………
Basic Levels of Orientation
There are two basic levels of orientation
A. General Company Orientation:
It covers topics of relevance and interest to all
employees. Some issues likely to be covered include:
Overview of the Organization: founding, growth, goals,
priorities, problems, etc
Traditions and customers, Organization’s structure and
relationship of various parts of the organization, community
relations, expectations & activities key policies and producers.

CONT’D……….
 Compensation: pay rates, how pay is received, advances on
payment, loans from credit unions, etc.
 Fringe Benefits: insurance, holidays and vacations, sick leave,
maternity, etc., retirement plans and options, training
opportunities, recreation and social activity etc.
 Safety and Accident Prevention: health and first aid clinic,
safety precaution, fire prevention and control, etc.
 Physical facilities, food service and cafeteria, parking, etc.

CONT’D…….
B. Department and Job Orientation
The content depends on the specific requirement of the department
and the skills and experience of the employee. Some of the topics
covered include:
 Department Functions: goals and current priorities,
department structure, department’s relationship with other parts
of the organization, etc.
 Job Duties and Responsibilities: detailed explanation of the
job description, common problems and ways to overcome
them, explanation on where and how to get materials, have
equipment maintained and repaired, overtime needs and
requirements, etc.

Chapter Five
Training & Development of Human
Resources
•Training is a process of learning a sequence of
programmed behavior. It is application of
knowledge. It gives people an awareness of the
rules and procedures to guide their behavior.
• It attempts to improve their performance on the current job or
prepare them for an intended job. According to Edwin D
Flippo “The purpose of training is to achieve a change in the
behavior this objective, any training programme should try
bringing positive changes in:

CONT’D…….
● Knowledge- it helps a trainee to know facts, policies,
procedures and rules pertaining to the job.
● Skills- It helps to increase technical and manual
efficiency necessary to do the job and
● Attitude-It moulds behavior towards the co-workers
and supervisors and creates a sense of responsibility
in the trainee.

Importance of Training
• The importance of training are-
1. Training enables the managements to face the pressure of changing
environments.
2. Training usually results in the increase of quantity and quality of
output.
3. Training leads to job satisfaction and higher morale of the
employees.
4. Trained workers need lesser supervision.
5. Trained workers enable the enterprise to face competition from
rival organization.
6. Training enables employees to develop and rise within the
organization and increase their earning capacity.

Benefit to Organization
•The major benefits of training to an organization are: -
Higher productivity: - Training can help employees to
increase their level of performance on their present
assignment. Training increases the skill of an employee in the
performance of a particular job.
Better organizational climate: - An endless chain of
positive reactions result form well planned training program.
Increased morale, less supervisory pressures improved
product quality, increased financial incentives, and internal
promotions etc., results in better organizational climate.

• Prevents Manpower Obsolescence: - Training prevents
Manpower obsolescence as it fosters the initiative and
creativity of employees. An employee is able to adapt himself
to technological changes.
• Less Supervision: - Training does no eliminate the need
for supervision, but it reduces the need for constant
supervision.

• improves Quality: - Trained employees are less likely to
make operational mistakes thereby increasing the quality of
the company’s products.
• Standardization of Procedures: - Trained employees will
work intelligently and make fewer mistakes when they
possess the required know- how and have an understanding
of their jobs.

Benefits to Employees
• Development of new skills: - Training improves the
performance of the employees and makes him more
useful and productive. The skill developed through
training serves as a valuable personal asset to the
employee. It remains permanently with the
employee.
● Personal Growth: - Employees on a personal basis gain
individually from training. They secure wider awareness,
enlarged skill and enhanced personal growth.

• Higher Earning Capacity: - By imparting skills, training
facilities higher remuneration and other monetary benefits to
the employee. Thus, training helps each employee utilize and
develop his full potential
• Confidence: - Training creates a feeling of confidence in the
minds of employees. It gives safety and security to them in
the organization

Training Process
a. Training need identification: Determining the need for training
is the first step in the training process. It can be done through
identifying the strength and weakness of the organization, the
departments or the individuals.
b. Selecting trainees: Selecting the right individuals for training is
the second step. Since training is very expensive there should be
a clear and definite relationship between the training and its
contribution.
c. Selecting Training Methods: There are several training methods
but the appropriateness of the training technique depends on
cost effectiveness, desired program content, availability of
training facility, trainees’ capabilities, etc. (Methods of training
discussed on next section) .

Cont’d………..
d. Conducting Training: Delivering the training by people
from the organization itself or by using outside trainers. A
careful analysis of the trainer’s qualification has to be done to
endure the desired level of qualify of training. Furthermore, it
is essential to determine the content of the training, appropriate
time schedule and training facilities.

e. Evaluation of training: Feedback on the training program
should be obtained in order to assess the value of the training
in light of the objectives it is expected to achieve. The
evaluation should be done in every aspect of the training
program starting from its objectives to the effectiveness of the
training method, training content, trainer’s ability, etc.

Methods of Training
a. On-the-job training: The employee is shown how to do the job and allowed to
do it under the trainer’s supervision. It is much more important for jobs that are
either difficult to simulate or learn quickly by watching. It has several advantages.
It is relatively inexpensive, trainees learn while producing, and there is no need for
expensive off-job facilities like classrooms. Some examples of on the job training
include apprenticeship programs and coaching or understudy programs.
Apprenticeship is a system in which an employee is given instruction and
experience on the job and off-the job to cover all practical and theoretical aspects of
a work required in a skilled occupation. . In coaching or understudy program,
employees are trained on the job by experienced worker or the trainee’s supervisor.

Cont’d……….
b. Job Instruction Training: It is the listing of each of a job’s
basic tasks, along with a “key point” for each, in order to
provide step-by-step- training for employees. This is more
effective to jobs that consist of a logical sequence of steps.
c. Lectures: It is a technique used to convey specific information like rules,
procedures, or methods. It is a quick and simple way of providing
knowledge to large groups of trainees.

Executives or Management
Development
According to G.R. Terry- “Management
development should produce change in behavior
which is more in keeping with the organization goals
than the previous behavior. The change frequently
consists of a number of small steps resulting from
training but the cumulative effect is considerable. It
is also basic that a terminal behavior is identified
before the development efforts start”. Thus, Executive
or Management Development implies that there will
be a change in knowledge and behavior of the
individuals undergoing development program.

Methods of Executive/Management
Development
Methods of executive/management development be classified
into tow broad categories-
1. On-the-job methods and
2. Off-the job methods.
On-the-job methods
Job/Position rotation: involves rotating key personnel in
different positions or departments. This will help employees
gain experience in variety of jobs in the organization. This
method is expected to equip employees with better
experience that will enhance their understanding of the
organization and the relationship among its different parts

Cont’d…………….
 Coaching: This method is mainly used to develop managers
by placing the trainee under a close guidance and supervision
of the trainer to perform an increasing range of management
tasks and share the trainer’s experience.
 Special projects: Under this method, a trainee is assigned a project that is
closely related to the objective of his department. The trainee will study
the problem and make recommendations upon it.

Cont’d……………
 Committee Assignments: Under this method, an ad hoc
committee is constituted and is assigned a subject to discuss
and make recommendations. The committee will make a
study of the problem and present its suggestions to the
departmental head.

Off-the job methods
 Role Playing: Role-Playing techniques is used for human
relations and leadership training. Under this method, a
conflict situation is artificially constructed and two or more
trainees are assigned different parts to play.
 Case study: Under this method, the trainees may be given a
problem to discuss which is more or less related to the
principles already taught. This method gives the trainee an
opportunity to apply his knowledge to the solution of realistic
problems.

 Conference Training: The trainee as a member can learn
from others. The conference is ideally suited to learning
problems and issues and examining them from different
angles.
 Management Games: a management game is a classroom
exercise in which teams of students compete against each
other to achieve common objectives. The game is designed to
be a close representation of real-life conditions.

CHAPTER SIX
PERFORMANCE APPRAISAL
Definitions of Performance Appraisal
 According to Wendell French,
Performance appraisal is, “the formal,
systematic assessment of how well
employees are performing their jobs in
relation to established standards, and the
communication of that assessment to
employees”

CONT’D…………….
 According to Flippo -
“Performance appraisal is the
systematic, periodic and an
impartial rating of an employee’s
excellence in matters pertaining to
his present job and his potential for
a better job”

CONT’D……….
Appraisal of employees’ serves several useful purposes
 Feedback: - It serves as a feedback to the employee. It
tells him what he can do to improve his present
performance and go up the “organizational ladder
 Compensation Decisions: - It provides inputs to system
of rewards. The approach to compensation is at the heart
of the idea that raises should be given for merit rather
than for seniority
 Data Base: - It provides a valid database for personal
decisions concerning placements, pay, promotion, transfer
etc. Appraisal also makes the employee aware ofhis key
performance areas

• Personal Development: - Performance appraisal can help
reveal the causes of good and poor employee performance
Uses of Performance Appraisal
 To create and maintain a satisfactory level of
performance
 To identify employees’ needs for training and thus
contribute to their growth and development
 To facilitate fair and equitable compensations based on
performance
 To facilitate selection test validation, i.e. employees
rating on performance evaluation may be used as the
variables against which test score are measured.

Process of Performance
Appraisal
 Performance appraisal is planned, developed and implemented
through a series of steps

JOB ANALYSIS
JOB DESCRIPTION AND JOB SPECIFICATION
ESTABLISHING STANDARD OF PERFORMANCE
COMMUNICATING PERFORMANCE STANDARDS TO EMPLOYEES
MEASURING ACTUAL PERFORMANCE
COMPARING ACTUAL PERFORMANCE WITH STANDARDS AND
DISCUSS WITH EMPLOYEES
INITIATING CORRECTIVE ACTION IF NECESSARY
Fig: -6.1 Performance appraisal process

1. Job analysis, job description and job specification:
Performance appraisal is a process not to be undertaken in isolation
of various human resources functions. It begins with job analysis,
job description and job specification. These help in establishing the
standard performance.
2. Establishing standards of performance: - Appraisal systems require
performance standards, which serve as benchmarks against which
performance is measured
3. Communicating performance standards to employees: - Performance
appraisal involves at least two parties; the appraiser who does the appraisal
and the appraise whose performance is being evaluated.

4. Measuring actual performance: - After the performance
standards are set and accepted, the next step is to measure actual
performance. This requires choosing the right technique of
measurement, identifying the internal and external factors
influencing performance and collecting information on results
achieved.
5. Comparing actual performance with standards and discuss
the appraisal with employees: - Actual performance is compared
with the predetermined performance standards. Actual performance
may be better than expected
6. Initiating corrective action, if any: - The last step in the process
is to initiate corrective action essential to improve the performance
of employee. Corrective action is of two types-

Performance Appraisal Methods
a. Goal Setting or management by objective (MBO): It involves
measuring and evaluating an employees’ performance based on
the work objectives set by both the employee and the supervisor.
MBO focuses attention on anticipatively set goals that are
tangible, verifiable, and measurable.
b. The Essay Method: In this method, the appraiser is expected to
describe an employee’s performance in written narrative form. It
focuses on issues such as strengths and weakness, job
knowledge, communication skills, quantity and quality of work,
potentials of the employee for promotion, training, etc.
c. Critical Incident Appraisal Method: It requires the rater to
write down critical or key behaviors of an employee that make a
difference between satisfactory and unsatisfactory job
performance. For example, recording exceptional good or poor
performances.

CONT’D……………..
d. Checklist appraisal method: The rater uses a list of behavioral
descriptions required to do a job and put a check mark against those
behaviors that apply to the employee.
e. Graphic Rating Scale method: It is a system that lists a number
of traits and a range of performance for each of these traits. The
employee is then rated by identifying the score that best describes
his or her level of performance for each trait. The list might include
such factors as quantity and quality of work, job knowledge,
cooperation, attendance, accuracy of work, etc.

CONT’D…………………
f. Forced- Choice Rating: It requires the rater to rank a set of
statements describing how an employee carries out the duties and
responsibilities of a job. The rater ranks the statement that describes
most the employee as the first choice and works his/her way to the
least descriptive statement. In this method, raters usually are not
aware of the weights attached to each of these descriptions thus leaves
little room for bias

CONT’D……………..
Who should do the Appraisal?
The most typical appraisers are one or combination of the
following:
the immediate manager or supervisors
the employee’s peers
the employee himself i.e. Self appraisal
the employees subordinates
other managers familiar with employees’ work
a higher- level manager
personnel department specialists

CONT’D………..
Most common problems observed in performance appraisal:
• Lack of Objectivity: Some traits used for evaluating performance are
difficult to measure and thus lack objectivity. These factors may include
loyalty, attitude, personality, etc
• Halo Error: raters may perceive one factor as having
significant importance and givea good or bad overall rating to
an employee based on this one factor.
• Leniency: rating consistently higher than the expected norm or
average.
• Strictness: being unduly critical of employees performance and thus
result in consistently lower rating than the expected norm.
• Central tendency: Consistently rating employees near the
average. In such cases, it would be very difficult to differentiate
good performers from poor performers.

The following essential characteristics.
Reliability and Validity: An appraisal system should provide
consistent, reliable and valid information and data, i.e., if two
appraisers equally qualified and competent to evaluate an employee
using the same appraisal technique, their rating should agree with
each other.
Job Relatedness: the criteria used for appraising employee
performance should be job related. Information for the criteria
should be determined thought job analysis.

CONT’D…………..
 Performance Expectations: Managers should clearly explain
performance expectations to their subordinates in advance of the
appraisal period.
 Standardization: Employees in the same job category should
be appraised by using the same appraisal technique. Appraisal
forms, procedures, administration of techniques, ratings, etc.,
should be standardized as appraisal decisions affect all
employees of the group.
 Qualified Appraisers: Responsibility for evaluating employee
performance should be assigned to the individuals) who directly
observe at least a representative sample of job performance.
 Employee Access to Results: An effective appraisal system
should provide feedback to employees on how well or bad
they’ve performed.

 Due Process: A formal procedure should be developed to
permit employees to appeal appraisal results that they consider
inaccurate or unfair.

CHAPTER SEVEN
COMPENSATION MANAGEMENT
Compensation refers to all forms of pay of
rewards going to employees and arising from their
employment. Employee compensation has two
components. It includes direct financial
payments in the form of ages, salaries, incentives,
commissions, and bonuses; and indirect payments
(fringe benefits) in the form of financial benefits
like employer-paid insurance and vacations.

Organizational reward includes, both intrinsic and extrinsic,
that are received as a result of employment by the
organization.
Intrinsic rewards: rewards that are internal to the
individual and are normally derived from involvement in
certain activities or tasks. Example: job satisfaction, feelings
of accomplishment, etc.
Extrinsic rewards: these are directly controlled and
distributed by the organization and are more tangible.
Example: salaries and fringe benefits. Provision of extrinsic
rewards usually leads to intrinsic reward.

Importance of Compensation
1. To employees:
 It is the primary (and often the only) source of
income for employees and their family.
 It is a fair reward for the work employees perform
and the benefit they provide for the employer.
 It determines employees’ social status. Income
level is often used as a measure of a person’s
worth.

2. To employers:
 To attract capable employees to the organization
 To motivate them towards superior performance
level
 To retain their services for an extended period of
time
Factors affecting compensation
a.Government: government rules, regulations, executive orders,
and laws have their influence on an organization’s compensation
policy. Every government provides laws for compensation in areas
like, minimum wage rate, equal pay provisions-to avoid pay
differentials based on sex in jobs requiring substantially equal skill,
effort, responsibility, and working conditions. Etc

CONT’D……………….
b. Cost of Living: Cost of living as measured in terms of
consumer price index may affect the organization’s
compensation policy as it tries to adjust its employees’
earning to the rate of inflation. This process is called cost of
living adjustment (COLA).
c. Comparable wage rates: The wage pattern in the industry
and community could have an impact on the compensation
policies and practices of organizations. Comparing wage and
salary rates in given areas may help in ensuring that the
organization is offering a salary that is not substantially
higher or lower than those paid by others in the same area.
d. Market Conditions: Regardless of other factors involved,
the supply and demand relationship in the labor market will
determine the wage and salary level in organizations.

d. Ability to Pay: Regardless of other factors, wage and salary rates
are ultimately dependent on the employer’s ability to pay. Ability to
pay, in term, is dependent on how well the organization is
functioning and its ability to continue to earn revenues.
Establishing Equitable Payment Structure
The primary objective of any base wage and salary system is to
establish a structured and system for the equitable payment of
employees, depending on their job and their level of performance in
their job.

Job Evaluation:
It is a systematic determination of the value of each job in relation
to other jobs in the organization. If done properly the relative value
of the jobs is reflected in the relative wage rate for the jobs.
It involves
 To enumerate the requirements of a job
 The job’s contribution to the organization
 Classifying it according to importance

 Problems in Job Evaluation
 The worth of all occupations cannot be precisely measured with the
same yardstick (standard). In some cases, a job that requires great effort
to execute may not be that important. Therefore, the job may be rated
high in one factor while it is rated low in another factor.
 It is difficult to measure the worth of scientific, technical, professional,
and managerial jobs.
 It is difficult to separate the individual’s contribution from the job being
evaluated. Even though a job’s contribution is low, it may seem to have
a great deal of contribution if being handled by a skilled individual.

2. Wage and Salary Survey
It is used to collect comparative information on the policies,
practices, and methods of wage payment from selected
organizations in a given geographic location or a particular type of
industry.
Employee Benefits (Fringe Benefit)
It refers to benefits given to employees in addition to salary or
wages. They constitute significant portion of the employees pay.
Unlike wages and salaries, benefits are not usually related to
employee performance. Broadly classified, there are two types of
fringe benefits.

a. Time –off pay: these are payments for the time not worked and
include paid vacations, paid holidays, paid sick leaves, pension
programs, rest periods, etc.
Examples:
 Paid Vacations – Organizations provide employees a certain
number of paid vacation days in a year. The number of days
may vary according to how long an employee has worked for an
organization. Usually, paid vacation times increase with
seniority.
 Sick Leaves: Providing employees with pay for days not
worked because of illness.
 Pension Programs: It represents a fixed payment other than
wages, made regularly to former employees or their surviving
dependents.

CONT’D……………….
b. Non-pay benefits: these are benefits not paid in cash but include
expenditures on items such as medical services, transportation
accommodation, insurance, cafeteria services, education programs,
child care services, and others.
Examples:
Health Insurance: medical insurance program designed to cover
a portion or total medical expense incurred by an employee. It may
include coverage for hospitalization, outpatient doctor bills,
prescription drugs, dental, eye, medical health care, etc.
Accident and Disability Insurance: It is designed to protect the
employees who experience a long-term or permanent disability.

Methods of Payment
There are three basic methods of payment:
1.Time-based payment: It is a payment computed in terms of some
time unit-hours, days, weeks, months, years, etc. Remuneration
does not vary according to quantity and quality or performance.
One good example is salary.
Advantage:
It is easy to administer since it is fixed amount.
It improves employees’ integration to the organization by
enhancing employees’ security. (Knowledge what they earn at the
end of a certain period of time).

CONT’D……………….
Disadvantage:
 It is not a good motivator as it is not associated with performance.
 In times of need to reduce costs due to financial problems,
organizations are forced to lay-off salaried employees as opposed
to reducing working hours and keeping employees with the
organization.

CHAPTER EIGHT
INTEGRATION AND MAINTENANCE
It is a continuous relationship between a defined group of
employees (represented by a union or association) and an
employer. The relationship includes the initial recognition of
the rights and responsibilities of union and management, the
negotiations of a written contract concerning wages, hours,
and other conditions of employment, and the interpretation
and administration of this contract over its period coverage.
(Ivancevich and Glueck, 1998).

The employee-employer relations are expressed in an
employment contract which may include element such as
amount and method of payment, hours of work, holidays pay,
provisions for sickness, injury, and entitlement to pay, terms
and conditions of pension rights, disciplinary rules and
procedures, institutional rights of unions and management,
terms and conditions of termination of the contract,
enforcement and administration.

There are three parties in employee relations-the
employees, the employer, and the government.
Employees are represented by labor union. A
labor union is a group of employees who have
joined together to achieve present and future goals
that deal with employment condition.
Why do employees join labor unions?
Although there are various reasons why
employees join unions, the general interest lies in
satisfying their needs that are important to them.
Some of these reasons include

CONT’D………………
 Job Security: employees have fear of loss of job for various
reasons (personal clash with manager, economic recession, etc.).
Labor unions could make negotiations with management to protect
employees from sudden loss of jobs or even prevent lay-offs.
 Socialization: As a member of a labor union, employees have a
chance to socialize with other employees of similar interest
through meetings, social events, educational programs, etc, and
create a strong friendship and team spirit.
 Safety and Health: Unions are instrumental in ensuring a safe
and healthy working environment in organizations.

CONT’D……………..
 Communication Link: Most employees consider labor unions
as a bridge that links them to management. Through this link, they
can express their dissatisfaction and disagreement. Through this
link, they can express their dissatisfaction and disagreement about
the job, management, and other issues.
 Fair and equitable compensation: Fair compensation is
usually at the top of the list of unions. They’re committed to
ensure that employees get a fair and comparable payment fringe
benefit. This is likely to attract employees to join unions.

CONT’D……………..
Collective Bargaining
 It is the process through which representatives of
management and the union meet to negotiate a labor
agreement. Under law, both management and the union are
required to negotiate wages, hours, and terms and
conditions of employment “in food faith”. Good faith
bargaining means that both parties are making a reasonable
effort during communication and negotiation to arrive at an
agreement.

CONT’D…………………
The process of collective bargaining includes three phases-
preparation, negotiation, and administration of the contract.
Preparation: At this stage, both parties make all
the necessary preparation for the negotiation in
terms of developing offensive or defensive
strategies regarding contract changes and assess
internal and external environment that may affect
the outcome of the negotiation (legal, economic,
political, and social, etc.)

CONT’D…………………
 Negotiation: the actual negotiation process requires a great deal
of skill and experience. The most typical bargaining/negotiating
stages involve
1. Each side presents its demands (usually the demands are very far apart
in some issues)
2. Reduction of demands: each side trades off some of its demands to
gain others.
3. Subcommittee studies: the parties form joint subcommittees to
develop reasonable alternatives.
4. If they agree, informal settlement is reached and each group goes back
to its sponsor- union representatives to their supervisors and members;
management to the top management.
5. If everything is in order, formal agreement is reached and signed.
 If an agreement is not reached by the parties, a situation called impasse
occurs.

 Administration of the contract: it involves the activities
necessary to put the agreed upon contract in practice including
adequate communication of the agreement to the concerned
parties.
Grievance Handling
The concept of grievance has been defined by various authors
differently
 Dessler defines is as any factor involving wages, hours, or
conditions of employment that is used as a complaint against the
employer.
 Beach defines a grievance as “any dissatisfaction or feeling of injustice
in connection with one’s employment situation that is brought to the notice
of the management.”

Grievance Procedure: It is an orderly system whereby disputes
between management and union/employees are resolved in a series
of steps. Grievance procedure differs from organization to
organization.
Disciplinary Action
Discipline is a procedure that corrects or punishes a subordinate
because a rule or procedure has been violated.
A fair discipline process is based on three prerequisites – rules and
regulations, a system of progressive penalties, and an appeals
process.
Rules and regulations: A clear definition of rules and regulations
should be set to help employees know beforehand what is expected
of them while working in that organization.

 A system of progressive penalties: Penalties may range from
oral warning to written warning to suspension from the job to
discharge. The higher and more frequent the offence is, the more
severe the penalty becomes.
 Appeals Process: In order to ensure the disciplinary action is
fair and equitable, there has to be an appeal process.

The disciplinary process may involve the following steps:
1. Establishing work and behavior rules.
2. Communicating these rules to employees
3. Establishing effective assessment mechanisms
(performance appraisal or observation)
4. Collecting full information on the case and deciding on
the type of penalty. (Usually based on set policies and
procedures)
5. Administering punishment or motivating change.
6. Following-up the case.

Disciplinary Action Guidelines
1.Discipline action should be applied consistently i.e. similar
incidents should get similar treatment.
2.The employee should be adequately warned of the consequences
of his/her alleged misconduct.
3.Disciplinary action should be taken in private.
4.Penalty should always carry with it constructive element. The
employee should be told clearly the reasons for the action to be
taken.
5.Disciplinary action should be taken promptly in order to for the
employee to understand clearly the relationship between the penalty
and the offensive act.

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