HRM Course

CHAPTER 1
AN OVERVIEW OF HUMAN RESOURCE
MANAGEMENT
Introduction
 An organization is a human grouping in which work is
done for the accomplishment of some specific objectives or
mission
 To achieve organizational objectives, there is a need to
coordinate the basic resources of the organization, i.e.
(4m’s)
 money;
 material (raw or semi-processed);
 machinery (or fixed assets or plants) and
 men (or human resources) and ….
 Cont.…

 People are responsive; they feel, think and act;

therefore they can not be treated like a machine
 Each individual has its own set of needs, drives,
goals and experiences.
 People come to work with certain specific
motives i.e.
o to earn money
o to get employment;
o to have a better prospect in the future;
o to be treated as a human being while at the place
of work.
 Contin..
 It is Human Resource which plays an important
(critical) role in coordinating these non-human
resources of an organization to achieve organizational
goals.
all tasks depend on how well the human resource is
managed….. If the human resource is managed
improperly, the result would be ineffective
People are determinants and
initiators/starter/beginner of all activities in a given
organization… this leads us
the principal component (asset) of an organization is
its “Human Resources or People at work”.
 Contin…

Human Resources : Refer to the knowledge,

skills, creative abilities, talents, and aptitudes
obtained in the population (from the national
point of view
because, it is you, “the people” or human
being who is going to make the difference in
whatever type of organization
So, management of human resource is
central and critical task in any organization.
 Definition of HRM

 HRM is a managerial function that tries to

match an organization’s needs to the skills and
abilities of its employees
 The functions covers the fields of staffing (hiring
people), retention of people, pay and
perks(bonuses) setting and management,
performance management, change
management and taking care of exits from the
company to round off the activities
 is responsible for how people are managed in
the organizations
 Contin…

 is defined as a strategic and coherent approach to

the management of an organization’s most valued
assets – the people working there who individually
and collectively contribute to the achievement of
its objectives.
 It is responsible for bringing people in
organization helping them perform their work,
compensating them for their work and solving
problems that arise
 HRM can be regarded as a ‘set of interrelated
policies with an ideological and philosophical
underpinning’.
 Contin..

There are four aspects that constitute the

meaningful version of HRM:
• a particular constellation of beliefs and
assumptions;
• a strategic thrust informing decisions about
people management;
• the central involvement of line managers; and
• reliance upon a set of ‘levers’ to shape the
employment relationship
 Contin..

• Whatever the definition we use the answer to

the question as to “what is HRM?” is that it is all
about people in organizations
Human resource management operates through
human resource systems that bring together in a
coherent way:
 HR philosophies: describing the overarching
values and guiding principles adopted in
managing people
 HR strategies: defining the direction in which
HRM intends to go
 Contin..

• HR processes: consisting of the formal

procedures and methods used to put HR
Strategic plans and policies into effect.
• HR practices: comprising the informal
approaches used in managing people
• HR programs: which enable HR strategies,
policies and practices to be implemented
according to plan.
 Difference b/n HRM and personnel Management

Personnel Management Human Resource

Management

Time & planning Short term, reactive, ad Long term, proactive,

perspective hoc, marginal strategic integrated

Psychological contract Compliance Commitment

Control system External controls Self-control

Employees relation Pluralist, collective, low Unitarist, individual, high

perspective trust trust

Preferred structures Bureaucratic/centralized , Organic, devolved, flexible

/systems formal defined role role

Roles Specialist/professional Largely integrated into line

management

Evaluation criteria Cost minimization Maximum utilization

 Objectives of Human Resources Management

 To help the organization reach its goals

 To ensure effective utilization and maximum
development of human resources
 To ensure respect for human beings.
 To identify and satisfy the needs of individuals
 To ensure reconciliation of individual goals with those of
the organization
 To achieve and maintain high morale among employees.
 To provide the organization with well-trained and well-
motivated employees
 To increase to the fullest the employee’s job satisfaction
and self-actualization
 Continue..

 To develop and maintain a quality of work life

 To be ethically and socially responsive to the
needs of society
 To develop overall personality of each employee
in its multidimensional aspect
 To enhance employee’s capabilities to perform
the present job
 To equip the employees with precision and
clarity in transaction of business
 To inculcate the sense of team spirit, team work
and inter-team collaboration
 Philosophy of HRM

 HRM is climbing up the peak of humanitarianism

with its distinct policies and programs.
 HRM insists or (maintains) mutuality.
 Mutuality is the common feeling felt by one
another.
 The mutuality relates to:
Mutual goal:
 The organization and individuals depend on each
other
 HRM states that these mutual goals if well
integrated make the overall system work with
effectiveness
 Contin…

• Mutual respect:
 HRM believes that individuals need to be
respected….give respect and take respect’
 Respect among the members leads to a healthy
culture and climate
 Mutual rewards: HRM believes in the mutual
reward system both for individuals and
organizations need to be rewarded
 Organizations reward is development and growth
 Individual rewards are in the form of financial and
non-financial incentives and benefits
 Contin..
This reward system paves way for effectiveness and
efficiency.
 Mutual Responsibilities:
 The individuals and the organization are responsible
mutually.
 This sense of responsibility will lead to effective
utilization of team work and leads to excellent
growth.
 It will elicit/bring out commitment
 committed work force leads to excellent
performance and wonderful human resource
development
 Role of HRM
• A Service Function: According to the needs of the
other departments, the HRM is required to
render coordinating services such as
– Posting job advertisement
– Organizing Training Courses
– Keeping personnel records
– Operating wage/salary systems
– Looking after the firms health and safety
arrangements at work
 B. Control Function

 Analyzing key operational indices in

personnel field like labor turnover, wage
costs, absenteeism, etc.
 Monitoring labor performance
 Recommending appropriate remedial action
to line managers.
Example: identifying training needs, change
of work methods, improved work
environments
 C. Advisory Function:

– Which employees are ready for promotion (as

per the policy of the organization, e.g. Based
on number of years of service, etc .)

– Who should attend certain training course?

– How a grievance procedure should be
operated.
– Interpretation of contracts of employment,
health and safety regulation, etc.
– Ensuring equal employment opportunity etc
 Why we concern on Human Resource Management?

 Helps us to get results - through others:

Different managerial techniques help mangers to
direct the performance of employees in
desirable direction in order to achieve the
organizational objectives.
 Through the efforts of others working in an
organization, managers get things done that
require effective human resource management
 Contin…

 Helps us avoid common personnel mistakes: Qualified HR

mangers utilize organization resources in such a way that
helps to avoid common personnel mistakes like the
following…
 Hiring the wrong person for the job
 Experiencing high turnover
 Finding employees not doing their best
 Having your company taken to court because of your
discriminatory actions
 Having your company cited under federal occupational safety
laws for unsafe practices
 Allowing a lack of training to undermine your department’s
effectiveness
 Committing any unfair labor practices
 Contin..
 Development and Growth of the organization
 Creation of healthy culture in the Organization
 Maintenance of Human Resources
 The concept of Human beings is a very crucial
and vital factor of production
 Gaining a Competitive Advantage by improving
 quality
 Quantity
 Innovative and change
 Speed
 CHAPTER 2: HUMAN RESOURCE MANAGEMENT
ENVIRONMENT
 Environment
 comprises all those forces which have their
bearing on the functioning of various
activities including human resource
activities
Environment scanning helps HR manager
become proactive to the environment which
is characterized by change and intense
competition.
 Cont..

1.External Environmental Factors:

 Are forces external to HR Activities
 Include political, economic, technological,
demographic, educational policies
 A. Political and legal environment:
 covers the impact of political institutions on HRM
practices
e.g.: democratic political system increases the
expectations of workers for their well-being.
 Cont..
 Government legislation/Regulations:
 These regulations influence every process
of the HR department, including
• hiring
• training
• compensation
• termination, and etc.
 Not adhering to such regulations could
cause the company/organization to shut
down.
 Cont..
Some legislation and regulation includes:
 Equal employment opportunity: it affects
recruiting, selection, evaluation, and promotion
 Compensation regulation: specifying the
minimum pay for any job, for employees with a
certain educational level, etc.
 Benefit Regulations: it requires employs to have
basic medical insurance plans for its employees.
 Worker’s safety laws: affects health and safety
programs in organizations.
 Privacy laws protecting employees’ personal
information.
 B. Economic environment
 Economic environment includes:
growth rate
industrial production, money
national and per capita incomes, etc.
All these forces have significant
influence on wage and salary levels,
recruitment and selection of employees
in organizations.
 Unstable state of economy
 negative growth for economies & would result in
 Employment rates would decrease
 Unemployment would rise up
 The social status of workers weakens.
 reduction of employees
 Changing the type and number of personnel
demanded.
 Any downgrade in the stocks and market values
would easily damage the relations between
owners and employees …. decreasement of sales
 Stabilization of the economy
 Shows positive growth of the economy and results
in:
 The unemployment rates will decrease
 The general wage and salary levels will increase,
 Employees will be stronger
 Top managements of firms would also behave in
the favor of their personnel because of the
increased revenues.
 It would increase exportation rates that will
enlarge manufacturing, which needs an increased
employment proportion.
 C. Technological environment
 Technology is a systematic application of organized
knowledge to practical tasks.
 It has positive and negative impact on HRM
Positive impact of technology development
 It makes the job more intellectual/ upgraded.
 Improved human resource functions such as:
 selection
 recruitment
 educating, training, performance appraisal
 Cont.…
 Developments in HRM can be learned faster
& be implemented.
Negative impacts of technological changes on
human resource policies.
Decrease the need for labor, which can result
in a lower employment level.
 demand for qualified workers would be
higher
Educating and training costs will increase.
Make some employees functionless
 Cont..
Some workers can be put out of organization
by retirement, breaking contract, or other
ways.
D.Cultural and demographic environment
 Demographic environment(like sex, age,
literacy, mobility)
Modem work force is characterized by literate ,
women, diversified skill and etc.
Now, workers are called knowledge workers’
and the organizations wherein they work are
 Cont..
As an older generation retires and a new
generation enters the workforce:
The HR department must look for ways to
attract this new set of candidates.
They must hire in a different way and offer
different types of compensation packages
that work for this younger generation.
The HRdep. must also offer a work
environment contusive to how this
generation works.
 E. General Education Policies in a country
Universities and other schools of a country
develop human resources
General education policies determine the
qualities of people/candidates
which affects the efficiency, productivity,
and profitability of firms.
Furthermore, if every new employee do not
carry out activities due to low skill…
 Cont..
The organization will be exposed to cost of
training and education
If a candidate employee is ready to work,
 then the education,
 training and development costs of employer
firm will minimize.
 Moreover, it would affect HR outcomes
such as performance, and turnover.
 2. Internal Environmental Factors
These are the forces internal to HRM
 It consists of
organizational culture and conflict
Power and politics
organizational objectives, polices,
Size of the organization
Structure of the organization
 Organizational Culture and Conflict
 As individuals have personality, organizations have
cultures.
 HR practices need to be implemented that best fit
the organization’s culture.
 There is often conflict between organizational culture
and employee’s attitude.
 Conflict usually surfaces because of dualities such as:
• personal goal vs. organizational goal,
• discipline vs autonomy, rights vs. duties, etc.
Such conflicts have their bearings on HR activities in
an organization.
 Issues of Power and Politics
Top management or unit managers might
prefer HRM implementations, which let
them gain power.
They can promote anyone who is in favor of
them, recruit personnel that could support
them.
Educating, training and development
opportunities could be given primarily to
those who are in the same side with
management.
 Nature of the Task
 The HRM activities highly influenced by the kind
of tasks/activities performed.
 Some of the issues relevant to nature task include:
 degree of physical exertion required,
 degree of environmental unpleasantness,
 physical location of work, time dimension of
work,
 degree of autonomy in the task.
 Structure of the Organization
 Size of the Organization
 Chapter Three

JOB ANALYSIS AND HUMAN RESOURCE PLANNING

 The corner stone of any organization is the
set of jobs performed by employees.
 The set of jobs provides the input needed to
accomplish the mission and objectives of the
organization.
 Thus, studying and understanding jobs is a
vital part of any Human resource program.
 Definitions of job analysis
Is the process of collecting and analyzing
information about jobs and employee’ s
knowledge or skills necessary to perform
them
Is the process of defining a job in terms of
its components, activities and requirements
is the procedure for determining the duties
and skill requirements of a job and the kind
of person who should be hired for it.
 Cont.…

WHEN JOB ANALYSIS IS PERFORMED?

1.When the organization is
established / instituted
2. When new jobs are created; and
3.When jobs are changed
significantly as a result of new
technology, methods, procedures or
systems
 TYPES OF INFORMATION COLLECTED
How much time is taken to
complete important jobs tasks?
Which tasks are grouped together
and are considered a job?
How can a job be designed or
structured so that employee
performance can be enhanced?
 Cont..

What kinds of behaviors are

needed to perform the Job?
What kind of person (traits and
experience) is best suited to the
Job?
How can the information acquired
with a job analysis are used in the
development of HRM programs.
 Job analysis helps to find inform/data/ about:

A. Work activities: Information is usually

collected on the actual work activities
performed, such as
 cleaning,
 selling,
 teaching,
 painting.
Such a list may also indicate how, what and
when the worker performs each activity
 Cont..

B. Human behaviors: Information on

human behaviors like sensing,
communicating, decision-making, and
writing may also be collected.
 Included information regarding human
job demands such as:
 lifting weights,
 walking long distances, and so on.
 Cont..

C. Machines, tools, equipment, and work

aids used:
Included information regarding
products made
materials processed
knowledge dealt with or applied (such
as finance or law), and
services rendered (such as counseling or
repairing).
 Cont..

D. Performance standards: Information

is also collected regarding performance
standards (in terms of):
quantity
quality and
speed for each job duty,
 for instance by which an employee in
the job will be evaluated.
 Cont..

E. Job context: Included here is:

physical working conditions,
work schedule,
organizational and
social context-
F. Human requirements: deals with human
requirements of the job, such as:
job-related knowledge or skills (education,
training, work experience) &
required personal attributes (aptitudes, physical
characteristics, personality, interests).
 source of data

Main sources of data for JA :

Employees
 Supervisor
 Manager
 Job Analyst (HR)
Outside consultant
 Importance Of conducting Job Analysis
Human resource planning: The number
and the type of personnel are determined by
the jobs which need to be staffed.
Recruitment and Selection: what the job
entails and what human characteristics are
required to carry out these activities
Compensation: is essential for estimating
the value of and appropriate compensation
for each job
 Cont.…

Ensures Complete Assignment of Duties:

 JA is useful for ensuring that all the duties that
have to be done are in fact assigned to particular
position
Training: training and development programs
can be designed on the basis of the JA
 Performance Appraisal: PA compares each
employee's actual performance with his or her
performance standards
 JA provides standards for such performance
 Cont..
Safety and Health: In JA, it is possible
to identify:
 hazardous conditions and unhealthy
environmental factors such as:
heat
noise
Fumes and
 dust
 Steps in Job Analysis

Step 1 :(Identify how information will be used)

• determine the types of data we collect and how
we collect them
Step 2:(Review background information)
• Review relevant background information such as:
organization charts, process charts, and job
descriptions
 Organizational chart
o show how the job in question relates to other jobs
o where it fits in the overall organization
 Cont.…
o should identify the title of each position
o show who reports to whom/communication
channel
o A process chart: provides a more detailed
understanding of the flow of work than we can
obtain from the organization chart alone.
 It shows the flow of input to and outputs from the
job/position.
 Job description, if there is one, can provide a good
starting point from which to build our revised job
description.
 Cont..
Step 3: (Select representative positions to be
analyzed
o Taking sample jobs when jobs are similar
and many
Step 4: (Collect data to analyze job
 collect data on the characteristics of the job,
 required behaviors,
working conditions, and the employee
characteristics needed to perform the job.
 Cont..
Step 5: (Review information with participants)
Review the information with job incumbents
verifying with the worker performing the job
and with his or her immediate supervisor
 this helpful to determine: correct, complete,
and easily understood by all concerned.
Step6:(Develop Job Description and Job
Specification)
  Products of job analysis
o Job description: is a written statement that
describes the activities and responsibilities of the
job, working conditions and safety, hazards of the
job
o Job specification: summarizes the personal
qualities, skills, and background required for getting
the job done
o Job Evaluation: If an organization is to have an
equitable compensation program, jobs that
have similar demands in terms of skills,
Knowledge and abilities should be placed in
common compensation groups.
Method of collecting Job Analysis information
1) Job performance:
 job analyst actually performs the job in question
 The analyst receives firsthand experience of
contextual factors on the job
 is useful for jobs that can be easily learned
2)Personal observation
 by observing the job holder at work
 how he /she does and how much time is needed for
completion of a given task
 observe without getting directly involved in the
job
 Cont..
3.Critical incidents:
is a qualitative approach to job analysis
used to obtain specific, behaviorally focused
descriptions of work or other activities
job holders are asked to describe excellent
and poor performance of the job based on
their past experience.
The job requirements behavior will become
clear.
 analyst draws the line between effective and
 Cont..
4. Technical conference method:
gather information from supervisors that are
experts on the job.
the emphasis is on the supervisors, not on the
jobholders
5. Diary method:
This is when the jobholder records his
activities in detail throughout a day, week, a
month and a year
 Cont..

This technique requires the job

incumbent to keep a diary/log on a daily
basis
diary method is difficult as most
individuals are not disciplined enough
to keep such a diary/log.
it is time consuming for both the
jobholder and the job analyst
 Cont..
6. Questionnaire method:
is a widely used method of collecting
jobs information
jobholders are given a properly designed
questionnaire aimed at eliciting relevant
job-related information
it is difficult to motivate the participants
to complete the questionnaires truthfully
and to return back.
 Cont.…
7. Checklists:
 It contains a number of activities and
job holders tick only those duties that are
included in their jobs
Which Method to Follow?
There is no one best way to conduct a job
analysis. Wherever possible, multiple
methods of job analysis must be followed.
 Potential Problems with Job analysis
A. Resistance to change/Employee fear
Employees resist changes because when
jobs are redefined, they may have to
handle difficulty tasks and shoulder
painful responsibilities.
B. Overemphasis on current employees
JA efforts should not place heavy emphasis
on what the employees are currently doing.
 Cont..
C. Top management support is missing
Message of JA is often not
communicated to employees to make it
clear and honesty by TM
D. Only a single means and source are used
for gathering data
people use single method in collecting the
data while combination of methods might
provide better job data
 cont.….
E. No training or motivations for jobholders:
 Unfortunately, job incumbents are seldom
trained or prepared to generate quality data for a
job analysis.
F. Employees are not given sufficient time to
complete the analysis
 Usually JA is conducted as if it were a crash
program
 employees are not given sufficient time to do a
through job analysis.
 Human Resource Planning (HRP)
It is ‘the process for ensuring that the
human resource requirements of an
organization are identified and plans
are made for satisfying those
requirements’
concerned with matching human
resources to business needs in the
longer term, although it will sometimes
address shorter term requirements
 Cont..
Importance of Human Resource Planning
attract and retain the number of people
required with the appropriate skills,
expertise and competencies;
anticipate the problems of potential surpluses
or deficits of people
To develop a well-trained and flexible
workforce
reduces dependence on external recruitment
 Process of Human Resource planning
Step1. Define organization mission:
o defines what the business organization is
o why it exists and who its customers are
o It is the foundation or direction of every
organization decisions
• All jobs in the organization must tide with the
organization mission
Step 2. Establishing corporate goal and objectives
At this stage senior management set Strategic goals
to establish targets for the organization to achieve
 Cont..
o Organizational objectives help determine
what organization action is required to
align HR demand with HR supply
Step 3. Corporate assessment
Is a stage company to analyze its goal, its
currents strategy, its external environment, its
strength and weakness and its opportunity and
threat
‘Commonly referred to as SWOT (Strengths-
Weaknesses-Opportunities-Threats) analysis
 Cont..
We determine what jobs need to be done and how

many and what type of workers will be require.

 determine what skills are needed:

to ensure that appropriate personals are available

to meet the requirement set by the strategic

planning process
 Step 4 Assessing current human resources
 is the stage of HRP that
 develop a profile of organization current
employees
 Used to determine what skills are currently
available in the organization
 A skills inventory is designed to take stock of
information about current employees’:
 experience
 education
 compensation history, and
 unique abilities.
Step 5. Determining the Demand for Labor
identifies the future workforce
requirements needed to maintain the
organization’s mission and goals
In HR planning, labor demand is
determined separately from supply
estimates because it facilitates a re-
examination of embedded assumptions
about the labor force
 Techniques of HR demand forecasting
Generally managers can use the following
techniques to forecast HR demand:
1. Judgmental Approach
2. Job analysis
3. Work study
4. Statistical Techniques
5. Productivity Measurement Method
1.Judgemental Approach
This approach in turn categorized as: -
A. Management estimation and
 Management estimation
 top-down approach: TM guesses about what future
human resource needs will be and dictate down to
those at the lower level
 bottom-up approach: lower level managers like
supervisors make initial estimates for their units
 send the proposed manpower needs to the top
officials
 participative approach:
 Is combination of above two approaches
It depends on :
 experiences of supervisors and
 the plans formulated by the top management.
 B. Expert forecasts

In this case the planner gathers information

from experts through different techniques like:
 Brainstorming
 Nominal group technique (NGT)
 Delphi technique
Brainstorming
the experts are given certain problem
statements like
“What will cause organizations staffing
needs to change over the next year?"
 Cont.…
In this technique
 group members are allowed to generate different
creative solutions
 No need of limiting members’ ideas &evaluating
merits.
 After each group member proposed any ideas that
come to his /her mind, the group considers the
positive and negative aspects of each proposal.
 Through a process of continual refinement, the
best possible solution (idea) for the problem
emerges.
 Nominal group technique

 Contains 5-15 managers /experts with a problem

statement about HR needs.
 Each participant writes down answers /solutions
he/she can imagine
 After all members present their ideas,
 the entire group discusses the ideas to clarify,
evaluate and rank them.
 A secret ballot is used to allow members to vote
independently and
 Finally the idea receiving the most votes is
adopted and implemented as a solution to the
problem.
 Delphi technique

 is used when NGT is impossible because:

 experts cannot meet due to geographic separation
or lack of time
 questionnaires on specific problems are prepared
and send to experts,
 the questionnaires results (responses) are compiled
and shared among group members,
 continue re-circulating the questionnaire results so
that individuals refine their responses until
consensus regarding the problem is reached.
 B. Job Analysis

 is one method of forecasting the demand of

manpower
 The ultimate result of job analysis is both job
description and job specification
 Accurate job description and specifications are
intimately related to the preparation of inventories of
executive talent, which form a basis of manpower
planning strategy.
C. Work Study Techniques
 Work-study is as old as industry itself
 Work-study is one of the principal aids by which an
organization can improve its productivity
 Cont.…
 The starting point in the work-study-based
approach is usually the sales or output forecasts
established for the planned period
For e.g.:
 Planned output for next year …….20,000
units
 Standard hours per unit …… 5
 Planned hours for the year . …… 100,000
 Productive hours for the year …… 2,000
 Number of direct workers required……50
Chapter 4: Recruitment, selection and induction
Definition of recruitment: is the process of
attracting individuals:
 on a timely basis,
 in sufficient numbers &
 with appropriate qualifications and
encouraging them to apply for jobs with an
organization
 Involves generating a ‘pool’ of candidates by
reaching the ‘right’ audience suitable to fill
the vacancy.
 Cont..

Its result is a pool of applicants from

which new employees are selected.
It ends when the applicants submitted
application
Features/goal of Recruitment
To attract qualified applicants
 To discourage non-qualified
applicants
 Factors governing recruitment:

Image of the Organization/Attractiveness

It relates with:
 performance
 Scale of salary
 Presence of fringe benefits
 About career development of the job
holder
Government Influence
• is influenced by the laws provided by the
government
 Cont.…
Recruiting Costs:
o high cost ,especially when recruitment is external.
• function this if they have sufficient resource
Philosophy of the Recruitment:
o Internal Recruitment and External Recruitment.
Diversity through Recruiting Efforts:
o the right of minority and non-discriminatory
action.
Sources of recruitment:
 The two main sources of recruitment are:
 I. INTERNAL RECRUITING SOURCES
When job vacancies exist:
A. looking for placement within organization
itself
Promoting employees to higher position
within organization or
Promoting low level employees to more
responsible positions
Is also said to be good in fitting human
resource planning system within organization
 Cont.…
B. Job posting
Announcing present internal vacancies
We can use :
o bulletin boards,
o company publications
o personal letters.
Should follow guidelines:
should be prominent
Clear job specification / eligible to apply or not.
applicants should be informed about the
 Cont.…
C. Contacts and referrals /employee recommendation
Involves asking present employees to encourage
friends or relatives to apply for the job openings
relatively inexpensive and produce quick
responses
provide the more accurate information
reduce unrealistic applicant expectation
 results in hiring friends of employees instead of
focusing on job performance
 Advantages of Internal Recruitment
 less expensive to recruit
Internal candidates are more familiar
Provides better opportunity to assess abilities
Improves morale and organizational loyalty
Disadvantages of Internal Recruitment
Talented candidates from out side groups are
not appointed
Creates a narrowing thinking and stale ideas
Creates homogeneous workforce
 Cont..
 infighting b/n rival candidates for promotion
 decrease moral level of those not selected.
 ii. External Sources Of Recruitment:
External recruitment Sources:
 High Schools and Vocational Schools,
 Colleges and Universities,
 Competitors and other Firms,
 Unemployed, Older Individuals, Self-
Employed workers
 External recruitment methods

Advertising: A way of communicating the

employment needs within the firm to the public
through media such as:
radio
newspaper
television
industry publications
Internet & notice board
 is the most popular method when an
organization wishes to tell the public it has a
vacancy
 Cont.…
 Employment Agencies: An organization
that helps firms recruits employees and,
aids individuals in their attempt to locate
jobs
 two types of the employment agencies
i.e. Public Employment Agencies and
Private Employment Agencies
 Both of these sources provide
coordination between the organizations
and applicants
  Executive Search Firms
sometimes called HEAD HUNTERS
specialized form of private employment
agencies
place top level executives and experienced
professionals
organizations use when they seek the most-
qualified executive for a specific position
Internships:
 A special form of recruiting that involves
placing a student in a temporary job.
 Cont.…
There is no obligation on the part of the
company to permanently hire the student
no obligation on the part of the student to
accept a permanent position with the firm
Professional Associations:
Most professional organizations have:
o newsletters,
o annual meetings and
o trade publications that advertise job openings
  Advantages of External Recruitment
Provides new ideas and new insights
Provides greater diversity
opportunities to get people with up-to-date
knowledge, education and training
Disadvantages of External Recruitment
It is more expensive and time consuming
Decreases present employees to strive for
promotion
More chances to commit hiring mistakes
Reduces loyalty of the retained employees
 SELECTION
is the process of choosing from a group
of applicants
Is about individuals best suited for
position
process involves making a judgment
 about the fit between the applicant and
the job (by considering knowledge, skills
and abilities & etc. required to perform
the job)
 Environmental factors affecting the selection process
Legal Considerations:
 Legislation, executive orders, and court decisions
have a major impact on selection process.
Speed of Decision Making: The time available to
make the selection decision can have a major effect
on the selection process.
Applicant Pool:
 The number of 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.
  Type of Organization
 The sector of the economy:—private,
governmental, or not-for profit— can also
affect the selection process.
 Selection Criteria:
Selection of applicant depends upon the following
criterions
o Education
o Competencies
o Experience
o Skills and abilities
o Personnel characteristics
 Steps in the selection process
Selection process consists of the ff steps:
1. Initial Screening
2. Application Blank
3. Pre-employment Testing
4. Interview
5. Background Checks
6. Conditional job offer
7. Medical Exam/Drug Tests
8. Final Selection Decision
 Step 1. Initial screening

 is an initial stage of selection process

is to remove individuals who do not meet the
position requirements.
If initial screening is successful, cost of selection
will be less
Step 2. Application form /review of applications
 specific employment form used to generate
specific information that the company went
 formal record of an individual’s application
for employment
 Cont..
 used to collect verifiable and fairly accurate historical
data from the candidate.
Step 3. Administration of selection tests/pre emplo.test
 Is used measure individual characteristics of tests
to measure various dimensions of behavior like:
mental abilities
knowledge
physical abilities
personality
interest
temperament
 Step 4. Job Interviews

 goal-oriented conversation (interviewer and

applicant exchange information)
A. Interview Planning:
 The physical location
 Must be pleasant and private
The interviewer should:
o possess a pleasant personality, empathy
o ability to listen and communicate effectively.
o be familiar with the applicant’s qualifications
B. Content of The Interview

Occupational experience: is about experience

requires determining the applicant’s skills, abilities,
and willingness to handle responsibility
Academic achievement: In the absence of
significant work experience, a person’s academic
background takes on greater importance
Interpersonal skills
 Ability to work well with other employees
 shows human labor relation skills
Personal qualities: include physical appearance,
speaking ability, vocabulary, poise, adaptability, &
etc.
 Organizational fit
is the degree to job applicant will
fit firm’s culture or value system.
Types of Interviews:
A. The Unstructured (Non directive)
 interviewer encourages the
applicant to do much of the
talking
 B. The Structured (Directive or Patterned) Interview
• Consisting of a series of job-related questions
contains four types of questions:
 Situational questions :Pose a hypothetical
job situation to determine what the applicant
would do in that situation
 Job knowledge questions: Probe the
applicant’s job-related knowledge.
 Job-sample simulation questions: applicant
may be actually required to perform a
sample task from the job.
 Worker requirements questions

Seek to know willingness to conform to the

requirements of the job.
C. Behavior Description Interviewing:
 A structured interview that uses questions
 designed to probe the candidate’s past behavior in
specific situations
D. Methods of Interviewing
 One-On-One Interview
o the applicant meets one-on-one with an interviewer
 Group Interview: Several applicants interact in the
presence of one or more company representatives.
 Board Interview:
o One candidate is interviewed by several
representatives of the firm.
 Stress Interview: Intentionally creates
anxiety to determine how an applicant
will react to stress on the job.
How to Avoid Common Interviewing Mistakes
• Snap Judgments: where the interviewer
jumps to a conclusion about the
candidate during the first few minutes of
 Negative emphasis
Receiving negative information about
candidate/Viewing the candidate negatively/
o The best way to avoid this is to keep
references or from other sources
o If possible, have different people do the
reference checks and the interviews
Not share the information until afterwards
 Poor Knowledge of Job
When interviewers
o do not have a good understanding of the job
requirements,
o do not know what is needed for success in
those jobs.
 Pressure to Hire: when an interviewer is
told that he or she must hire a certain
number of people within a short time frame
o poor selection decisions may be made.
 Step 5. Background Investigations

Check accuracy of application form through:

 former employers and references
 Verification of educn & legal status to
work
 Credit history Criminal records
 Knowledge about attendance problems,
 insubordination issues, theft, or others
 can help one avoid hiring someone who is
likely to repeat those behaviors.
 Step 6 Conditional Job Offer

After obtaining and evaluating

information about the finalists in a job
selection process
the manager must take the most critical
step of all: making the actual hiring
decision
Initially the conditional job letter is
offered that is followed by the physical
exam/test
 Step 7. Physical Exam

After decision has been made to extend a job

offer
 Checking completion of a physical examination
 permanent job offer is contingent on
successfully passing this examination.
Step 8. Permanent Job Offer
 If physical test/exam proves eligibility of the
candidate as per requirement of the job
 final job offer is made to applicant by the
concerned department or supervisor
  Orientation:
 Is the introduction of new employees to the
organization, work unit, & job
 It can be oral or written communications
When should it be given?
 During or after the selection process followed by a
formal orientation period once an individual is
hired.
Who does the orientation?
1. Human Resource Department
 initiating & coordinating both the general and job/
department specific orientations
 Cont.…
2. New employee’s Immediate Supervisor
 Two basic levels of orientations are there:
A. General Company orientation: issues like :
 Overview of organization: including
 founding, growth, goals, priorities
problems
 Traditions(customs), organizational
structure
 r/ships of various parts of the organization
 Cont.…
Key Policies and Procedures :
 Compensation (pay rates, how pay is
received, advance on payment, loan from
credit unions)
 Fringe Benefits:(Insurance, holidays and
vacations, sick leave, maternity, training
opportunities, recreation & etc.)
 Safety and Accident prevention:(health
and first aid clinic, safety precaution, fire
prevention and how to control, etc.)
 B. Departmental and Job Orientation

 Department Functions: Goals and current

priorities, department structure, department’s
relationship with other departments. etc.
 Job Duties and Responsibilities: is about job
description, common problems and ways to
overcome them, where and how to get
materials, overtime needs and requirements etc
 Policies, Procedures, Rules and Regulations:
Rules unique to the department, safety
precaution, tour of the department & facilities
CHAPTER 5: TRAINING AND DEVELOPMENT
Training: Is a process whereby people acquire
capabilities to aid in the achievement of goals
 Involves learning activities designed to
improve employee’s performance at her/his
current job
 is any process by which the aptitudes, skills
and abilities of employees to Perform specific
jobs are increased
 the act of increasing the knowledge and skills
of an employee for doing a particular job
 Definition of Development:
 is the systematic process of education, training
& growing by which a person learns and
applies information, knowledge, skills,
attitudes and perceptions.
 It involves learning opportunities aimed at
individual growth but not restricted to a
specific job rather general knowledge and
understanding
 Training is usually related to operational or
technical employees while development
is for managers and professionals.
 Process of Training and Development

 Some logical steps to be undertaken are:

1. Determining training needs
2. Determining training & development
objectives
3.Deciding w/c training technique to be
used
4. Establishing learning principle
5. Conducting training & dev’t programs
before, during and after implementation
 Cont..
1.Analyzing training and Dev’t needs:
identifying
 who needs
 how much
The training and dev’t needs of an
orgn fall into two:
 organizational needs &
 employee’s training needs
 Contd
training and dev’t needs are said to
be existed in an organization when:
 there is a gap between the existing
performance of an employee & the
desired performance
 To assess whether such a gap exists
requires skills inventory & analysis
in the orgn.
 Methods of gathering training &dev’t needs
It can be through:
 Organizational analysis /Performance/
 Supervisory recommendations
 Employee suggestions
 Test of job knowledge & questionnaire
survey
 Management requests
2. Determining training and development objective
 Effective training objectives should state:
 what will result for the
organization?
 departments or individuals and?
 when the training is completed?
 The outcomes should be described
in writing?
 Methods and techniques of training
o On- the- job training: is delivered to
employees while they perform their
regular jobs.
 Employees do not lose time while
learning.
 It is usually less expensive than off-job
training
 Off the job: Training away from the
actual work site. Training is at a Training
 Training Techniques
 Position rotation: is formal planned
program assigning trainees to various jobs
organization.
 Coaching: trainee is placed under a close
guidance and supervision of the trainer
 opportunity to perform an increasing range of
tasks using coach’s experience.
 Case study: is a method of classroom training
in which the learner analyses real or
hypothetical situations & suggests not only
what to do but also how to do it.
 Cont…
 lecture is a semi-formal discourse in
which the instructor presents a series of
events, concepts, principles or explains
relationships.
 Conference brings together individuals
with common interests to discuss &
attempt to solve the problem.
 seminar is a group of persons gathered
together for the purpose of studying a
subject under the leadership of an expert.
 4.Establishing learning principle
The ff are learning principles suggested
to be applied in the process of HR Dev’t:
o Need for positive motivation
o Need for relevance
o Need for continuity and change
o Need for overcoming resistance to training
o Need training for the trainer
o Need for feed back
 5. Evaluating training program success
Types of criteria
Trainers should try to collect 5 types of data when
evaluating training programs
 Measures of reaction
Learning
Behavioral change
Organizational results
Return on investment/ROI
 The first 4 of these criteria are widely used to
evaluate training programs and the last, ROI, has
recently been added as another important source of
 Cont..
Reactions - trainees’ attitude towards the
training program, instructors, facilities.
Learning - changes in knowledge by trainees
or level of knowledge reached after training
Behavior - changes in job performance or
level of job performance reached after
training
Results - changes in organizational measures,
e.g. productivity, turnover, absence due to
training,
 MANAGEMENT DEVELOPMENT
 MD: is any attempt to improve managerial
performance by imparting knowledge, changing
attitudes or increasing skills.
o The general management development process
consists of:
Assessing the company’s strategic needs (for
instance, to fill future executive ,opining, or to
boost competitiveness),
Apprising the managers performance, and then
Developing the managers (and future managers )
 How Succession Planning Helps
 Understanding organization's long-term
goals & objectives
 identifying the workforce's
developmental needs
 employees are ready for new leadership
roles as the need arises, and when
someone leaves,
 current employee is ready to step up to
the plan
 Chapter 6:Performance Appraisal
Definition of PA: is the process of
evaluating how well employees do their
jobs compared with a set of standards
 is a formal, structured system of
measuring and evaluating an
employee’s job related behaviors and
outcomes to discover how and why the
employee is presently performing on
the job
 Cont..
Research shows that PA is widely used for administering salaries,
giving performance feedback, and for controlling purpose.

However, now days, different organization start to use appraisal

result also for development of their employees.

Administrative Uses Development Uses
• Compensation 
Identifying strengths and
• Promotion weakness
• Dismissal
• Downsizing
• Identifying areas for growth
• Layoffs • Development planning
• planning training
• Coaching and career planning

PERFORMANCE
 Objectives of Performance Appraisal

1.To effect promotions based on competence &

performance
2. To assess training and development needs of
employees.
3. To decide upon a pay raise
4. To let the employees know where they stand
o to assist them with constructive criticism
o guidance for the purpose of their development.
5. To improve communication
6. It know effectiveness of HRR activities
 Appraisal steps

1.Establishing Performance Standards

2.Communicating standards to employees
3.Measuring actual employees’ performance
4.Evaluating factors affecting performance
5.Comparison of actual performance with
set standards
6.Discussing the appraisal with the employee
7.Initiating necessary corrective actions
 Designing appraisal Program
 It posses several questions need answers. They are
A. Formal versus informal appraisal,
B. Whose performance is to be assessed?
C. Who are the raters?
D. What problems are encountered?
E. How to solve the problems?
F. What should be evaluated?
G. When to evaluate?
H. What methods of appraisal are to be used
 A. Formal versus Informal Appraisal

 Formal appraisals: usually occur at

specified time periods - once or twice a
year
o are most often required by the
organization for the purpose of employee
evaluation
 Informal performance appraisal: can
occur whenever the supervisor feels the
need for communication
o is very helpful for more performance
 B. Whose performance should be rated?

 In PA the rater evaluates performance of:

o Individual employees
o work group
o division, or organization
C. Who are Raters?
• Raters can be:
o immediate supervisors
o subordinates, peers, committees, clients,
o self-appraisals or a combination of several
 D. What problems are encountered?

 Common problems seen in PA include :

 Halo Error: raters may perceive one factor
as having significant importance and give a
good or back 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.
 Cont.…
Central tendency: Consistently rating employees
near the average.
 difficult to differentiate good performers from poor
performers.
Recent Behavior bias: raters basing their
evaluation on the employees’ recent behavior.
• With out observing overall performance throughout
evaluation period.
Personal bias: raters having biases related
employees’ personal characteristics, race, religion,
gender, or age.
 E. How to solve the problems:
 provide training to the raters.
• Training should be effective and
address real-life problems.
 training can improve distortion occurs
due:
 halo, leniency, central tendency & bias.
o In typical training, raters are shown a
o videotape of jobs being performed &
o are asked to rate the worker
 F. What should be evaluated?
 Quality: result of carrying out an activity
approaches perfection, fulfilling the
activity’s intended purpose
 Quantity: amount produced, expressed in
monetary terms, number of units, or
number of competed activity cycles.
 Timeliness: degree to which an activity
is completed or a result produced, at the
earliest time desirable from standpoints
 Cost of Effectiveness
• degree to which the use of organization
resources
 Need for supervision
• requiring supervisory intervention to
prevent an adverse outcome.
 Interpersonal impact feeling of:
• self-esteem, goodwill and cooperation
among co-workers and subordinates.
 G. When to evaluate /timing of evaluation
The general trend is to evaluate employee:
 once in three months
 once in six months or
 once in a year and
 newly hired employees are rated more
frequently than the older ones.
There must be Frequent evaluation
 To improve performance if there is any
deficiency.
 H. What methods of appraisal are to be used

Approaches to appraisal can be classified into :

A. Past-oriented methods and includes:
1. Rating scales
 the simplest and most popular technique
 It uses a job related performance criterion such
as :
 dependability, initiative, output, attendance,
cooperation etc.
 It consists of several numerical scales.
 The scale ranges from excellent to poor .
 Checklists
o There is prearranged check list & each
person is evaluated against such list
o Rater merely record the list and a separate
weightage for each list and finally arrive at
total points or marks obtained
 Forced distribution method
o the rater distributes rates on all points on the
rating scale
o Is used to overcome leniency- clustering a
large number of employees around a high
 Critical incident method

 Is used to make difference between

effective and non-effective performance
of a job.
 Field review method
o The outsider reviews employee records
and holds interviews with the rater and
his or her supervisor.
o The method is primarily used for making
promotional decision at the managerial
 B. Future Oriented tests:
 Management by Objective (MBO):
 Supervisor & Subordinate in an organization:
 is mgt system and philosophy that stress on goals
rather than method.
 Jointly identifies its:
 common goal,
 define each individuals responsibilities and
 It is used as guides for operating the unit &
 assessing the contribution of each of its members.
 It provides responsibility and accountability.
 B. Psychological Appraisals

 Psychologists are used for evaluations, they

assess and individual’s future potential and not
past performance.
 It consists of in-depth interviews, psychological
tests, discussions with supervisors and a review
of other evaluations.
 The psychologists then writes an evaluation of
the employee’s intellectual, emotional,
motivational and etc.
 The evaluation by the psychologist may be for a
specific job opening for which the person is
 C. Assessment Centers

 Mainly used for executive hiring

 Here managers may come together to have
their participation in job-related exercise
evaluated by trained observers.
 The principal idea is to evaluate managers
over a period of time, say one to three days,
observing their behavior across a series of
selected exercises or work samples.
 After recording their observations of rate
behaviors, the raters meet to discuss these
CHAPTER-7: COMPENSATION

Defn. Compensation is HRM function that deals

with every type of rewards individuals receive
in exchange for performing organizational task
 direct financial payments (in the form of
wages, salaries, incentives, commissions and
bonuses),
 indirect payments (in the form of financial
benefits like employer –paid insurance and
vacation)
 Contd..
• Distinction needs to be made between compensation, incentives
and rewards:
• Compensation is the money paid to an individual in various
forms (and other benefits given) for the work he or she does.
• Incentive is additional payment in cash or kind, for extra work
(production of more units), or effort (more time spent), or
working in unfavorable places or conditions.
• Reward is a symbol or indicator of recognition of exceptional
contribution, exemplary behavior, or unique accomplishment.
 Compensation System Components
Benefits

Pay

Source of figure: Fisher, Schoenfeldt, & Shaw (2006), Figure 11.1, p. 485
 COMPENSATION POLICIES

 Minimum and maximum levels of pay

• job of the organization, organization’s ability to pay,
government regulations, and market pressure)
 General relationship among levels of pay
• b/n senior management, operating management,
& operative employees, & supervisors)
 The division of the total compensation dollar
what portion goes in to base pay, in to
incentive programs and in to benefits,
 will go in to pay increase for next year
 IMPORTANCE OF COMPENSATION
A. to employees:
 source of income for employees & family
 It determines employees ` social status
 is a faire reward for the work of employees
B. to employers
 To attract capable employees to the
organization
 To motivate employees to wards superior
performance levels
 To retain current employees
FACTORS AFFECTING COMPENSATION

A. EXTERNAL FACTORS
 Government:
 Cost of living:
 Comparable wage rate:
 Market condition:
B. INTERNAL FACTORS
 The size and age of the organization
 The labor budget (resource allocation strategy)
 Managerial philosophy and strategy
 Methods of payment
1.Time-based payment : It refers to the payment of a
predetermined rate for normal time of work and relative to a
time limit, such as an hour, day, week and month.
Merits of time rate method
 It is simple and convenient method,
 workmen are not in a hurry to finish job which helps to pay
attention to the quality of their work.
 It is can be used profitably where the output per worker is
not measurable
Draw Backs of Time-Rate Method
 is not a good motivator as it is not associated with
performance
 2. Performance-based payment method
in this method, remuneration depends upon the
quality and quantity of work.
Advantages:
 It may result in motivation of employees to improve
more performance.
Disadvantage:
 It may result in scarifying quality of work for
quantity
 The administration of incentive system is also
problematic because employees are motivated to
“beat the dame” by keeping standards low so that
they can maximize their pay with a minimum effort
 C. Combination of the two methods
it involves:
o paying salaries to employees and
o adding other output related payments
(like bonus or commissions) to create a
financial incentive for employees.
 Types of Employee Benefits and Service

 Medical and safety benefits

 Education and training benefits
 Payment for time not worked
 Employee service related benefits
 Other benefits like: loan benefits,
o pension or provident fund,
o employee allowance, funeral benefits,
 These benefits are usually known as fringe
benefits
 1.Employee Medical and Insurance Benefits

o accidents,
o unhealthy working conditions and
o to protect the worker’s productive capacity
 Ethiopian Labour Proclamation No. 377/2003
• Article 92 of this proclamation obliges an employer
to take the necessary measure to safeguard
adequately the health and safety requirements.
• Article 93 of the proclamations obligate a worker
for proper use of all safeguards safety devices and
other appliance furnished for the protection of his
health or safety of others.
 Article 99 of 377/2003 states

 disablement as “any employment

injury as a consequence of which there
is a decrease or loss of capacity to
work”.
o The effects of such disablement are:
• Temporary disablement
• Permanent partial disablement
• Permanent total disablement, and
• Death
 Types of Medical Benefits

 Proclamation No. 377/2003 Article 105 deals

comprehensively with the medical benefits to
be provided to employees by their employers
• It includes the ff where worker sustains
employment injury:
o General and specialized medical and surgical
care
o Hospital and pharmaceutical care
o Any necessary prosthetic or orthopaedic
appliances
 Cont…

Medical benefit shall be provided in the

following :
First- aid- facility
Medical service given by organization owned
health centres
Refund of employee pharmaceutical expenses
Coverage of medical expenses(Full versus
partial coverage of medical expense, in
patient versus out patient, local versus
overseas
 2. Education and Training Benefits
Its benefits include:
 sponsorship for off duty courses,
 educational leave, tuition fee,
 refunds and scholarship,
 setting up of schools, hostels, providing
grants - aid to the other schools
 provision of reading rooms and libraries for
the benefits of employees etc.
 3. Employee Paid Leaves
Means payment for time not worked
It includes :
 Sick leave with pay,
 vacation pay, paid rest and relief time,
 paid lunch periods,
 pay for religious holidays
 pay for the time spent in offering evidence in
a court of law or other statutory bodies;
 payment for the time spent on casting one’s
vote at election time
 Annual Leave (Paid Vacations):

 Federal Civil Servants Proclamation No.

515/2007
 Article 37, specifies that a civil servant shall
be entitled to annual leave of 20 working days
for his first year of service and
 additional leave of one working day for every
additional year of service
 duration of annual leave shall not exceed 30
working days.
 Sick leave:
 providing full pay for an employee when:
 A physician’s written excuse is available
 is no longer than three consecutive days
 Article 85 of Proclamation No. 377/2003, worker shall
be entitled to sick leave when he or she is incapable of
work owing to sickness other than resulting form
employment injury and the leave shall not be more
than six months .
 Payment for such leave shall be granted in the
following manner:
• The first one month with 100% of his wage;
• The next two month with 50% of his wage;
  Maternity and Parental Leave
 Proclamation (No. 515/2007, Article 41) and Labour
Proclamation (377/2003, Article 88) states a pregnant
civil servant
 has a period of 30 consecutive days of maternity leave
with pay preceding &
 Has a period of 60 consecutive days of maternity leave
after her confinement.
Paid holidays:
 Typical paid holidays are New Year’s Day, Labour Day,
Christmas, Mauled, Id Al Adaha (Arafa), etc.
 Proclamation No. 515/2007 and 377/2003 specify that
any civil servant or employee shall incur pay no
reduction
 Service Related Employee Benefits

 Housing service
 Transportation service
 Cafeteria/canteen services
 Sports and Recreation Services
 Legal aid and Employee Counselling
 Loan benefits (Credit Societies)
 Funeral Benefits
 Child-Care Facilities
 Retirement Benefits
 CHAPTER 8: INTEGRATION AND MAINTENANCE

Industrial Relations:
 refers to r/ship b/n management and
labor or among employees and their
organizations that characterize or
grow out of employment .
 Theoretically speaking, there are two
parties in the ‘employment’ relationship
-labor and management.
 Features of industrial relation
• are born out of employment relationship in an
industrial setting
• characterized by both conflict and co-operation
• labor and management do not operate in isolation
• Involve the study of conditions conducive to the
labor, management co-operation
• Study the laws, rules, regulations, agreements, as
well as policy framework laid down by the
government for eliciting co-operation between labor
and management
 Objectives of industrial relations

• To enhance the economic status of the worker;

• To regulate the production by minimizing
industrial conflicts
• To provide opportunity to the workers to have
a say in the management and decision-making
• To solve worker’s problems through mutual
negotiations and consultation with the mgt.
• To avoid industrial conflict and their
consequences;
• To extend and maintain industrial democracy.
 Collective Bargaining

 is a procedure by which the terms and conditions

of workers are regulated by agreements between
their bargaining agents and employers
• to the negotiation, administration and
interpretation of a written agreement between two
parties that covers a specific period of time.
o This agreement or contract lays out in specific:
terms the conditions of employment
o what is expected of employees and employers
o what limits there are in management authority
 Trade union

are voluntary organizations of workers formed to

promote and protect their interest through
collective action.
 It is an organization of workers, acting
collectively, seeking to promote and protect its
mutual interests through collective bargaining
reasons individuals join unions are:
 Higher wages and benefits
 Greater job security
 Influence work rules
 Compulsory membership
 Employee Discipline

• considered as a force that promotes individuals or

groups to observe the rules, regulations and
procedures
• is a form of training that enforces organizational
rules.
• The goal of preventive discipline is to heighten
employee awareness of organizational policies and
rules.
• Knowledge of disciplinary actions may prevent
violations.
• The emphasis on preventive discipline is similar to
the emphasis on preventing accidents.
 Discipline procedures include
First offence verbal caution
Second offence written reprimands
Third offence suspension
Fourth offence demotion
Fifth Dismissal
Effective Discipline
helps to set limits and informs people
requires accurate written record keeping
is immediate
is handled impersonally
 Grievance Management

 Any real or imagined feeling of personal

injustice which an employee has
concerning his employment relationship.”
 It is a written complaint filed by an
employee and claiming unfair treatment.”
 “It is a type of discontent which must be
expressed.
 Grievance is usually more formal in
character than a complaint
 CHAPTER9: EMPLOYEE PROMOTION, TRANSFER AND SEPARATION

Promotion: means an improvement in pay, prestige,

position and responsibilities of an employee within
his/her organization
– Purposes of Promotion
 To motivate employees to higher productivity
 To attract and retain qualified and competent
employees
 To recognize and reward the efficiency of an
employee
 To fill up higher vacancies from within the orgn
 To build loyalty, morale, and sense of belongingness
 Types of Promotion

Horizontal Promotion
 involves an increase in responsibilities and pay, and a
change in designation.
 the employee concerned does not transgress (go beyond the
limit) the job classification. For e.g. lower division clerk
will be promoted to upper division clerk.
Vertical Promotion
This type of promotion results in greater responsibility,
prestige and pay, together with a change in the nature of the
job.
Dry Promotion
 are sometimes given in lieu of increases in remuneration.
Designations are different but no change in responsibilities.
The promotee may be given one or two annual increments.
 Transfers

 involves a change in the job(accompanied

by a change in the place of the job) of an
employee without a change in
responsibilities or remuneration
 responsibility, status, and income occurs
stagnant
 transfers are regular or frequent, but
promotions are infrequent, not regular
 Types of transfers

• Production transfers: Transfers effected to avoid

imminent lay-offs are called production transfers.
• Replacement Transfers: Replacement transfers,
too, are intended to avoid imminent lay-offs,
particularly, of senior employees
• Versatility transfer
are effected to make employees versatile and
competent in more than one skill
• Shift transfers
Generally speaking, industrial establishments operate
more than one shift.
• Is being made mostly on a rotation basis
 Contd…
Remedial Transfer…called personal transfers.
• It takes place because the initial
placement of an employee may have
been faulty
• type of job or working conditions may
not be well-adapted to his or her present
health or accident record.
• If the job is repetitive, the worker may
stagnate and would benefit by transfer to
a different kind of work.
 Reasons for Transfer
 Reasons for transfer may be:
 surplus department to another department
 Removal of the incompatibilities of employees
 Correction of faulty initial placement of an
employee.
 in the interests and capacity of an individual,
 To break employee monotony, employee is
transferred
 The climate may be unsatisfactory for an
employee’s health.
 Family related issues especially when female
 Separations

refers to employee leaving the organization

Simply it means exit
 it is end of relationship of an organization
with an employee
It may take the form of:
Retirement( either compulsory or voluntary)
 resignation,
 Dismissal/discharge
 lay-off or retrenchment.
 Lay-offs

• is a temporary separation of the employee from his

or her employer
• it refers to separation of employees for an indefinite
period due to reasons, much beyond the control of
employer.
• As the employees are laid off at the instance of the
employer, they have to be paid compensation for
the period they are laid off.
• to be laid down… by and large “last in first out
(LIFO)” principle
• when they are recalled and reemployed, last out
first in (LOFI) principle is used
 Resignations
 refers to the termination of employment
at the instance of the employee.
 This is a manner of separation taken up
by the employee.
An employee resigns when:
 he or she secures a better job elsewhere,
or
 when an employee suffers from ill health,
and for other reasons
 Dismissal or discharge

 is the termination of services as a

punishment for some major offences done by
the employee
 lead to the dismissal of an employee:
o Excessive absenteeism;
o Serious misconduct;
o False statement of qualification at the time of
employment and
o Theft of company’s property
 Unfair Reasons for dismissal

 Dismissal for reason relating to pregnancy

 Dismissal because of a spent conviction

 Dismissal for a health and safety reason

 Dismissal for refusing to work on Sunday

 Dismissal for reason relating to political or trade unio

 Retrenchment
• It refers to the termination of the services of
employees because of the replacement of
labor by machines
• it is the termination of the services of an
employee, permanently due to any reason,
which is economical but not discipline
• differs from lay-off in that, in the latter, the
employee continues to be in the employment
of the organization and is sure to be recalled
after the end of the period of lay-off
 Retirement
 Is a type of separation method applies to persons
working in an organization who have reached a
particular age
o There are two types of retirement
A. Compulsory retirement schemes
B. Voluntary Retirement Scheme (VRS