HRM strategies

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View with images and charts A Report on Strategies of HRM & Recruitment INTRODUCTION “Our people are our most important asset.” Many organizations are using this phrase, or something close to it, to acknowledge the important role that employees play in organizational success. The quality of an organization is, to a large degree, simply the summation of the quality of people it hires and keeps. Acquiring and retaining competent employees are significant to the success of every organization, whether the organization is just starting or has been in business for years. Acquiring skilled, talented, and motivated employees is an important part of Human Resource Management (HRM). The acquisition phase involves recruiting, screening, selecting, and properly placing personnel. Human resource (HR) strategy represents key decisions that have been made to shape and guide HR programs, including staffing. HR strategies are both derived from and contribute to the formulation of the organization’s strategy. Organization and HR strategy work together to fulfill a mission and accompanying goals and objectives for the organization. HR strategy focuses on decisions about how the organization’s workforce will be acquired, trained, managed, rewarded, and retained. Staffing strategy is an outgrowth of organization and HR strategy. It focuses on key decisions regarding the acquisition and deployment of the workforce. Human resource (HR) planning is described as a process and set of activities undertaken to forecast future HR requirements and availabilities, resulting in the identification of likely employment gaps (shortages and surpluses). Action staffing plans are then developed for addressing the gaps in ways that are in alignment with the strategy. A variety of statistical and judgmental techniques may be used in forecasting. Those used in forecasting requirements are typically used in conjunction with business and organization planning. For forecasting availabilities, techniques must be used that take into account the movements of people into, within, and out of the organization, on a job-to-job basis. External and internal environmental scanning occurs after forecasting. Their results temper, and aid in interpretation of, identified employment gaps. Analysis of gaps requires determining probable reasons for them. Such reasons can serve as stimuli for and inputs into action planning. Once an organization has an idea of its future human resource needs, the next phase is usually recruiting new employees. Recruiting is the process of identifying and attracting qualified persons to apply for the jobs that are open. Some recruits are found internally; others come from outside of the organization. Internal recruiting means considering present employees as candidates for openings. Promotions from within can help build morale and keep high-quality employees from leaving the firm. There are several methods to identify internal candidates; job posting, skills inventory, nominations, succession plans, in-house temporary pool etc. External recruiting involves attracting persons outside the organization to apply for jobs. External recruiting methods include unsolicited, employee referrals, advertisements, Internet, colleges and placement offices, employment agencies, executive search firms, job fairs, internships etc.


The organization must also keep in mind that recruiting decisions often go both ways— the organization is recruiting an employee, but the prospective employee is also selecting a job. Thus the organization wants to put its best foot forward, treat all applicants with dignity, and strive for a good person-job fit. HUMAN RESOURCES MANAGEMENT POLICY & RECRUITMENT STRATEGIC ISSUES HR strategies are both derived from and contribute to the formulation of the organization’s strategy. Embedded within and flowing out of HR strategy is staffing strategy. Staffing strategy reflects several key decisions about how to acquire and deploy the organization’s workforces. These decisions then guide more specific HR and staffing planning. HR Strategy Organizations formulate strategy to express an overall purpose or mission and to establish board goals and objectives that will guide the organization toward fulfillment of its mission. Primarily these objectives are certain assumptions about the size and types of workforces that will need to be acquired, trained, managed, rewarded and retained. HR strategy represents the key decisions about how these workforce assumptions will be handled. Such HR strategy may not only flow from the organization strategy but also may actually contribute directly to the formulation of the organization’s strategy. Staffing Strategy Staffing is defined as filling and keeping filled position in the organization structure. This is done by identifying work force requirements, inventorying the people available, and recruiting, selecting, placing, promoting, appraising, planning the careers of, compensating, and training or otherwise developing both candidates and current jobholders so that they can accomplish their tasks effectively and efficiently. It is clear that staffing must be closely linked to organizing, that is the setting up of intentional structures of roles and positions. HRM also a staff function through which managers recruit, select, train, and develop organization members. The HRM process is an ongoing procedure that tries to keep the organization supplied with the right people in the right positions, when they are needed. HRM is a part of or a form of staffing. HRM and staffing follows almost same process: planning, recruitment selection, socialization, training and development, performance appraisal and promotions, transfers, demotion, and separations. The basic difference between staffing and HRM is that staffing filled the empty places of an organization with people whether they are suited for the job or not and the HRM tries to fill the positions with skilled people that is the right people in the right positions. The HRM and staffing is un-separable. HUMAN RESOURCE PLANNING Planning is the most important and primary function of management. It is a process of selecting the organizational objectives and taking action to achieve those objectives. Planning must be realistic and workable. Planning of human resources is a major managerial


responsibility. It is important because human resources provide a firm the competitive advantage. In the age of competition, firms are focusing their attention on employee knowledge and skill. Obviously, human resources are going to occupy the central stage of human activities, especially in the field of industry and business. In view of its importance in the organizational effectiveness, separate HRP departments have been set up in most of the important business organizations. Certainly, many organizations have voiced the idea that their human resources differentiated them from their competitors. The significance of human resources as a core competency was confirmed in a study of 293 U.S. firms. The study found that HR management effectiveness positively affected organizational productivity, financial performance and stock value (Huselid 1997). Human resource planning is the major task of HRM because it is concerned with utilizing manpower resources. An organization does not own person as it does capital and physical assets; this resource is seldom given proper attention. Many managers gave failed because they have taken their human resources for granted. It is one of the most critical management undertakings of this decade. Some popular definitions of HRP are given below. Robbins(1998) defines HRP as “ the process by which an organization ensures that it has the right number and kinds of people at the right places, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives�. In the words of Coleman Bruce (1997), HRP is the process of determining manpower requirements and the means of meeting those requirements in order to carry out the integrated plan of the organization. It, then, translates the organization’s objectives and plans into the number of people needed to meet those activities. Through planning management makes a balance between demand for and supply of right number and kinds of people at the right time. It is a supply and demand calculation. Manpower is an asset, it is an asset which appreciates-which grows over time. Machines depreciate as time goes on. According to the above definitions, HRP consists of the following elements: -

Establishing and recognizing the future job requirements, Identifying deficiency in terms of quantity, Identifying deficiency in terms of quality and specification, Identifying the sources of right type of man, Developing the available manpower and Ensuring the effective utilization of work force.

A manpower plan must be a set of two plans: a manpower demand plan and a manpower supply plan.


Human resources planning methods Four methods are used to determine the requirements of personnel: - Annual estimate of expected vacancies, - Long range estimate of expected vacancies, - Man specification requirements, - Job requirements. Personnel manager will examine the organizational structure regularly to anticipate its manpower requirements. A job analysis must be made to know the requirements of a particular job. What does the job analysis mean? Job Analysis Employee turnover is a very serious problem in most of the industries. Turnover is harmful because causes serious inconveniences, high costs, wastage of trained manpower, reduces morale and motivation. It occurs mainly due to frustration on the following: • Mismatch between expectation and reality in the nature of work, • Mismatch between requirements in the job and capabilities, • Mismatch between responsibility and compensation. This mismatch has arisen because the actual work has not been properly defined, designed and disclosed. This leads to the concept of job analysis. Job analysis defines the jobs within the organization and the behaviors necessary to perform these jobs. Mathis and Jackson (1999) view job analysis as a systematic way to gather and analyze information about the content and human requirement of jobs, and the context in which jobs are performed. Dale Yoder (1983) defines job analysis as “ a process in which jobs are studied to determine what tasks and responsibilities they include their relationships to other jobs, the conditions under which work is performed, and the personnel capabilities required for satisfactory performance”. In the opinion of Strauss and Sales, Job analysis consists of two parts, a statement of work to be done (Job description), and the skills and knowledge which must be possessed by anyone filling the job (Job Specification)”. It involves developing a detailed description of the tasks involved in a job, determining the relationship of a given job to other jobs, and ascertaining the knowledge, skills and abilities necessary for an employee to successfully perform the job. Job analysis includes the following information: • Work activities and behaviors, • Interaction with others. • Performance standards. • Job relationships. • Personal attributes. • Machines and equipment used, • Working conditions. • Work methods. • Supervision given and received,


Knowledge, skills and abilities needed.

Job Analysis Methods Job analysis information can be gathered in a variety of ways. Common job analysis methods are: • Observation Method. The job analyst observes the individual performing the job and takes notes to describe the tasks and duties performed. He keenly observes the work connected with a job. It is a direct method. Its main limitation is that when the work of employee is being observed, the employee becomes conscious. In certain job like managerial, observation method is impossible. • Work sampling. Under this method, a manager can determine the content and pace of a typical workday through statistical sampling of certain actions rather than through continuous observation and timing of all actions. • Individual interview. Here a manager or job analyst visits each job site and talk with employees performing each job. A standardized interview form is used most often to record the information. Frequently, both the employee and the employee’s supervisor must be interviewed to obtain a complete understanding of the job. • Structured questionnaire. A survey instrument is developed and given to employees and managers to complete. The main advantage of this method is that information on a large number of jobs can be collected inexpensively in a relatively short period of time. • Diary method. Under this method, the employees observe their own performance by keeping a diary of their job duties, noting how frequently they are performed and the time needed for each duty. Uses of job analysis Job analysis obtains information about the jobs and it uses that information to• Develop job description, • Job specification, • Conduct job evaluation, • Design compensation program. These, in turn, are valuable in helping managers identify the kinds of employees they should recruit, select, and develop, as well as providing guidance for decisions about training and career development, performance appraisal and compensation administration. Job Description The record that keeps all the relevant information about a job is called job description. It is a written statement of what a jobholder does how it is done, and why it is done. It should accurately portray job content, environment and conditions of employment. A common format for a job description includes • • • •

the job title, the duties to be done, the main features of the job, the authority and responsibilities of the jobholder.

It must be kept in mind that working environment changes because of changes in production technology, market demand and customer choices and competitors strategies. So job


description needs to be reviewed and updated. HR managers must appraise the changes that are likely to occur over time. Job Evaluation The final use of job analysis is job evaluation. Job analysis is valuable in providing information that makes comparison of jobs possible. Job evaluation is the process of finding and specifying the relative value or worth of each job in the organization. Job evaluation is an important part of compensation administration. Compensation is one of the important elements in the condition of employment. Compensation must be fair and equitable. In the meantime we should keep in mind that job evaluation is made possible by the data generated from job analysis. We cannot over-emphasize the importance of job analysis as it permeates most of the organization’s activities. Steps of HR planning Human resource planning is a process involving few stages. Thee are as follows: • •

HR planning process begins with considering organizational objectives and strategies. The first stage of HR planning is to integrate it with corporate planning. All manpower planning stems from business plans in relation to a corporate strategy. The second stage in the HR planning is to forecast or assess the internal and external environmental factors that affect demand and supply of labor. Some of the more significant environmental factors include government influences; economic, geographic and competitive conditions; technological factor, workforce composition, management philosophy, and work patterns. There are a number of techniques now available for doing HR forecast. Among the important these are : Delphi technique, Brain Storming. Committee board, expert opinion. Constancy, Trend analysis, Regression and correlation analysis, PERT and CPM. The next stage is the preparation and analysis of internal inventory of HR capabilities. Assessment of internal strengths and weaknesses as a part of HR planning requires that current jobs and employees capabilities are audited and organizational capabilities are inventoried. The information gathered from external environmental scanning and assessment of internal strengths and weaknesses is used to predict or forecast HR supply and demand in light of organizational objectives and strategies. Forecasting periods may be short (less than one year), intermediate (one to five years), and long range (beyond five years). Forecasts of demand may be either judgmental or mathematical. The HR forecast is concerned with anticipating the number of replacements required due to resignations, retirements, death, dismissals, transfer and promotions, and technological changes resulting in increased productivity. This will highlight shortage and overstaff positions. Once the demand for HR has been forecasted, then their availability must be identified. The fourth stage of HR planning is to locate the sources from where personnel required will be available. The source may be internal and external. Although the internal supply may be easier to calculate, it is important to calculate the external supply as accurately as possible. The final stage of HRP is concerned with allocation of human resources within an organization over time.

Benefits of Human resource planning


If HR planning is done well, the following benefits should result: •

Upper management has a better view of the human resource dimensions of business decisions. – • HR costs may be lower because management can anticipate imbalances before they become unmanageable and expensive. • More time is available to locate talent because needs are anticipated and identified before the actual staffing is required. • Development of managers can be better developed. • Improving the utilization of human resources, • Achieving economies in hiring new employees, • Expanding the personnel management information base to assist other personnel activities and other organizational units, • Coordinating different personnel program. • Rapid technological changes makes manpower planning more important as the demand for new skills is increasing. • Proper manpower policy will reduce wastage rate. There are two types of wastagevoluntary (marriage, pregnancy, immigration, early retirement and involuntary (death, retirement and dismissal). • Manpower planning stresses the value of human resources as corporate assets. • Interest in manpower planning is increasing because the size of the organization is gradually increasing. FORECASTING HR REQUIREMENTS Future HR requirements represent the number and types (in terms of qualities or KSAOs) of employees that the organization will need in the future to produce its goods and services. The requirements represent the organization’s desired workforce of the future. These projections are derived from knowledge of the overall business plan of the organization, as well as accompanying organizational plans regarding structure and hierarchy. Business and organizational plans thus drive the future HR requirements of the organization. In many organizations, however, the process is reciprocal; tentative projections about HR requirements help shape the establishment of business and organizational plans. Thus forecasting HR requirements is a direct derivative of business and organizational planning. It becomes a reflection of projections about a variety of factors, such as sales, production, technological change, productivity improvement, and the regulatory environment. Many specific techniques may be used to forecast HR requirements; these are either statistical or judgmental in nature, and are usually tailor-made by the organization. Statistical Techniques A wide array of statistical techniques is available for use in HR forecasting. Prominent among these are trend analysis, ratio analysis, scatter plot, and computerized forecast. Brief descriptions of these techniques are given as below.  Trend Analysis : Trend analysis means studying of a firm’s past employment needs over a period of years to predict future needs.


 Ratio Analysis : A forecasting technique for determining future staff needs by using ratios between, some casual factor (like sales volume) and the number of employees required (for instance, number of sales people).  The Scatter Plot : A scatter plot shows graphically how two variables, such as a measure of business activity and the firm’s staffing levels, are related. If they are, then if can forecast the level of business activity, should also be able to estimate personnel requirements.  Computerized Forecast : Determination of future staff needs by projecting sales, volume of production, and personnel required to maintain this volume of output, using software packages. Statistical techniques have certain limitations, some of which stated as below;  First, their very complexity would lead away from a staffing focus.  Second, all of these techniques are designed simply to project the past into the future. These techniques thus have limited applicability in organizations whose immediate past and/or future forecast are characterized by significant alternations in products and services, technologies, organizational structure. Obviously, this includes a large percentage of organizations of varying size today.  Third, as they are dependent on the discovery of historical relationships between certain so-called leading indicators (e.g., sales or production volume) and head count, often these relationships are different to find, if found, they may not hold up in the future. Judgmental Techniques Judgmental techniques represent human decision-making models that are used for forecasting HR requirements. Unlike statistical techniques, it is the decision maker who collects and weighs the information subjectively and then turns it into forecasts of HR requirements. The decision maker’s forecasts may or may not agree very closely with those derived from statistical techniques. Implementation of judgmental forecasting can proceed from either a “top-down” or “bottom-up” approach. In the former case, top managers of the organization, organizational units, or functions rely on their knowledge of business and organizational plans to make predictions about what future head counts will be. At times, these projections may, in fact, be dictates rather than estimates necessitated by strict adherence to the business plan. Such dictates are common in organizations undergoing significant change, such as restructuring, mergers, and cost-cutting actions. In the bottom-up approach, lower-level managers make initial estimates for their unit (e.g., department, office, or plan) based on what they have been told or presume are the business and organizational plans. These estimates are then consolidated and aggregated upward through successively higher levels of management. Then, top management establishes the HR requirements in terms of numbers. FORECASTING HR AVAILABILITIES Availability projections focus on the organization’s current internal workforce. Their concern is with estimating the number and types of current employees that will be


available in the future. More specifically, these estimates are concerned with the loss or exit of employees from the organization, the resulting distribution of employees who remain within the organization’s internal labor market (promotions, transfers and demotions), and the number or accessions (new hires) during the planning time frame. For forecasting availabilities, techniques must be used that take into account the movements of people into, within, and out of the organizations, on a job-by-job basis. As with HR requirements, these techniques can be classified as statistical or judgmental. Statistical Techniques Statistical techniques seek to predict availabilities on the basis of historical patterns of job stability and movement among employees. Between any two time periods, the following possibilities exist for each employee in the internal labor market.  Job stability (remain in present position)  Promotion (move to a higher level)  Transfer (move at the same level)  Demotion (move to a lower level)  Exit (move to another organizational unit or leave the organization) These possibilities may be thought of in terms of flows and rates of flow or movement rates. Past flows and rates may be measured and then used to forecast the future availability of current employees, based on assumptions about the extent to which past rates will continue unchanged in the future. Markov analysis is a statistical technique that accomplishes this, and the process involves, mathematical modeling of the organization, analysis of staff level, developing a matrix to show probability. While other possible techniques include renewal and goal programming. Judgmental Techniques There are three judgmental techniques for forecasting availabilities that enjoy widespread acceptance; executive reviews, succession planning, and vacancy analysis. In this context, the main difference between statistical and judgmental technique is that the former treat employees as numbers and forecast their movements based on probabilities. The latter treat them as individuals and forecast their movements person by person.  Executive Reviews : Executive reviews focus on small and unique groups of employees, most commonly top executives and other managers and professionals judged to have the potential to be top executives. Thus, executive reviews are a form of population-based HRP. The actual reviews are carried out through a series of meetings at which the top executives in a given unit consider anticipated HR requirements and then thoroughly discuss each person under review to determine who is likely to be, or should be, promoted, reassigned, developed for future assignments, or dismissed from the organization. Determinations are made based on judgments about performance, promotability, and potential, taking into account the long-term career interests of the employee being considered. The process produces a clear indication of where the organization can expect to have managerial shortages or surpluses. It also provides career and development plans for individuals.  Succession Planning : This planning is often an adjunct to executive reviews. It helps identify backup candidates who are, or soon will be, qualified to replace current executives or upper-level managers. Succession planning results are typically


summarized on charts. These greatly facilitate the planning of likely retirements, terminations, promotions, and transfers within and across organizational units. These charts also show which managers are in need of future development to become ready to fill job(s) for which they are (or might be) considered as replacements.  Vacancy Analysis : In vacancy analysis, judgments are made about likely employee movement on an individual basis, as in executive reviews and succession planning. Because large numbers of employees are usually involved, the results may be aggregated and summarized statistically. Vacancy analysis is akin to judgmental Markov Analysis; employee movement is “guesstimated” through managerial judgment rather than estimated statistically through calculation and use of transition probabilities. EXTERNAL AND INTERNAL ENVIRONMENTAL SCANNING The external portion of scanning involves tracking trends and developments in the external environment, discerning implications of these trends for HRP, and ensuring that these implications receive attention during the HRP process. External scanning focuses on the external forces of economic conditions, labor markets, labor unions, and laws and regulations. Internal scanning involves assessing the organization’s internal environment as it relates to the workforce and the conduct of HR activities. It is important to be aware of the composition and diversity of the organization’s workforce and the types of HR policies and programs that have been developed or need to be developed, to accommodate and encourage diversity. Also important is awareness of employees’ changing preferences for certain job rewards (e.g., parental leave, flexible work schedules) and their likely responses to such new rewards. In both of these examples, knowledge derived from internal scanning could be useful in the prediction of losses, internal moves, and accessions. RECONCILIATION AND GAPS Armed with estimates of future requirements and availabilities—estimates tempered with assessments based on external and internal environmental scanning—the organization must reconcile all of the data it has collected in order to arrive at predicted employment gaps. Gaps represent shortages and surpluses of employees, primarily in terms of numbers of employees. Gaps may also be thought of in more qualitative terms pertaining to shortages or surpluses of KSAOs. Identification of, and agreement on, gap estimates are the “bottom-line” objective of forecasting activities. With some sense of impending shortages and surpluses, the organization has the opportunity to begin planning how best to cope with them. In this way, the organization can be proactive in its HR policies and programs and can avoid a reactive approach to HR problems involving shortages (e.g., “Rahim just quit; find me a replacement immediately!”) and surpluses (e.g., “Sales keep falling; we have no choice but to lay off some employees.”). ACTION PLANS Action planning involves four basic sequential steps; set objectives, generate alternative activities, assess alternative activities, and choose alternative activities. Movement through these steps is a logical outgrowth of HRP and is greatly enhanced by its occurrence. Action plans spring forth and begins to take shape from identified employment gaps. They represent careful, intentional responses to likely future events.


Many of these responses involve staffing activities. Shortages, for example, usually lead to the development and implementation of external staffing activities that yield sufficient numbers and types of new employees to meet the shortage challenge. As another example, shortages may be met by implementing a productive improvement program involving current employees, rather than hiring new employees.

STAFFING PLANNING The four stages of action planning translate directly into a general staffing planning. After discussing this general process, staffing planning is divided into planning for the core and the flexible workforces. STAFFING PLANNING PROCESS  Staffing Objectives : Staffing objectives are derived from identified gaps between requirements and availabilities. As such, they involve objectives responding to both shortages and surpluses. They may require the establishment of quantitative and qualitative targets. Quantitative targets should be expressed in head count or FTE form for each job category/level and will be very close in magnitude to the identified gaps. Qualitative staffing objectives refer to the types or qualities of people in KSAOtype terms.  Generating Alternative Staffing Activities : With quantitative and, possibly, qualitative objectives established, it is necessary to begin identifying possible ways of achieving them. This requires an identification of the fullest possible range of alternative activities, which if pursued, might lead to achievement of the objectives.  Assessing and Choosing Alternatives : As should be apparent, there is a veritable smorgasbord of alternative staffing activities available to address staffing gaps. Each of these alternatives needs to be assessed systematically to help decision makers choose from among the alternatives. The goal of such assessment is to identify one or more preferred activities. A preferred activity is one offering the highest likelihood of attaining the staffing objective, within the time limit established, at the least cost or tolerable cost, and with the fewest negative side effects. A fundamental alternative involves use of core or flexible workforces, as identified in staffing strategy. Plans must be developed for acquiring both types of workforces. Advantages and disadvantages of each type are provided; these should first be reviewed to reaffirm strategic choices about their use. Following that, planning can begin. Core Workforce A core workforce, defined as regular full-time and part-time employees of the organization, forms the bulk of most organization’s workforces. The key advantages of a core workforce are stability, continuity, and predictability. The organization can depend on its core workforce and build strategic plans based on it. Several disadvantages of a core workforce also exist. The implied permanence of the employment relationship “locks in” the organization’s workforce, with a potential loss of staffing flexibility to rapidly


increase, reduce, or re-deploy its workforce in response to changing market conditions and project life cycles. The labor costs of the core workforce may be greater than that of the flexible workforce due to (a) higher wages, salaries, and benefits for the core workforce; and (b) the fixed nature of these labor costs, relative to the more variable costs associated with a flexible workforce. Consideration of these advantages and disadvantages needs to occur separately for various jobs and organizational units covered by the human resource plan. In this way, usage of a core workforce proceeds along selective, strategic lines. For the core workforce, this first involves matters of staffing philosophy and staffing flowcharts; this will guide the planning of recruitment, selection, and employment activities.  Staffing Philosophy : In conjunction with the staffing planning process, the organization’s staffing philosophy should be reviewed. Results of this review help shape the direction and character of the specific staffing systems implemented. The review should focus on the issues; internal verses external staffing, EEO/AA practices, and applicant reactions. The relative importance to the organization of external or internal staffing is a critical matter because it directly shapes the nature of the staffing system, as well as sends signals to applicants and employees alike about the organization as an employer.

 Staffing Flows : Staffing an organization requires not only decisions about discrete staffing system characteristics (for example, which recruitment source to use and what type of interviews to conduct) but also decisions about the overall flow of events that comprise a staffing system. This flow may be described in general terms or specific terms. Organizations may use flowcharts to plan and designate the precise nature of the staffing system There are several discrete but sequential phases that comprise a general staffing flow —a flow that involves an applicant reduction process and consists of, eligible labor force, potential applicant population, applicants, candidates, finalists, offer receiver and new hire(s). Flexible Workforce The two major components of the flexible workforce will be temporary employees provided by a temporary employment agency and independent contractors. Planning for usage of the flexible workforce must occur in tandem with core workforce planning; hence it should begin with a review of the advantages and disadvantages of a flexible workforce. The key advantage is staffing flexibility. The flexible workforce may be used for adjusting staffing levels quickly in response to changing technological or consumer demand conditions and to ebbs and flows of orders of products and services. Usage of a flexible workforce relives the organization of the need to design and manage its own staffing systems, since this is done by the flexible workforce provider. An added advantage here is that the organization might use flexible workers on a “try out” basis, much like a probationary period, and then hire into its core workforce those who turn out to be a solid person/job match.


These advantages must be weighed against potential disadvantages. Most important is the legal loss of control over flexible workers because they are not employees of the organization. Thus, although the organization has great flexibility in initial job assignments for flexible workers, it is very limited in the amount of supervision and performance management it can conduct for them. It should also be reminded that the quality of the flexible workforce will depend heavily on the quality of the staffing and training systems used by the provider of the flexible workers. The organization may end up with flexible but poorly qualified workers. If the review of advantages and disadvantages of flexible workers confirms the strategic choice to use them in staffing, plans must be developed for the organization units and jobs in which they will be used, and for how they will be acquired. Acquisition plans normally involve the use of (a) Temporary help agencies and (b) Independent contractors, both of which form the traditional staffing activities for the organization. Recruitment: Successful human resource planning should identify human resource needs. Once these needs are identified, we are able to do something to meet them. The next step is the acquisition function of human resource management. Recruitment forms the first stage of acquisition function. This is the process of locating potential candidate for selection. Recruitment is the process of finding and attracting capable applicants for employment. It is the discovering of potential candidates for actual or anticipated organizational vacancies. Dale Yoder (1986) defines recruitment as a process of searching for prospective employees and stimulating and encouraging them to apply for jobs in an organization. The process begins when new recruits are sought and ends when their applications are submitted. The result is pool of qualified applicants from which new employees are selected. Recruitment functions Responsibility for recruitment usually belongs to the HR department. This department works to find and attract capable applicants. Job descriptions and specifications provide the needed information upon which the recruitment process rests. Line and staff cooperation in recruitment is essential. The HR manager who recruits and initially screens for the vacant job is seldom the one responsible for supervising its performance. So he needs the help of line personnel. Functions of the recruitment office are given below: • Assessing recruitment • Fixing standards. • Advertisement and publicity • Making initial contact with prospective candidates. • Preliminary perusal and assessment of applications. • Short-listing of probable candidates for selection. • Selection Process like interviewing or testing. • Recording and documentation. Objectives of recruitment policy Objectives are targets and goals. According to Yoder, following are the main objectives of recruitment policy: • To find and employ the best qualified person for each job.


• • • • •

To retain the best and most promising ones. To offer promising careers and security. To provide facilities for growth and development. To minimize the cost of recruitment. To reduce scope of favoritism and malpractice.

Factors affecting recruitment There are many factors affecting recruitment. These factors may be considered into two broad groups: Internal factors: These are the factors within an organization. These factors are listed down here: • Image of the organization. An organization with poor image cannot attract a large number of applicants. • Image of job or attractiveness of the job. If the job to be filled is unattractive, recruiting a large and qualified pool of applicants will be difficult. • Size and growth potential of the organization. Higher the size and growth potentials, higher the advancement opportunities. • Internal polices. Internal organizational policies such as promote from within will give priority to individuals inside the organization. Such a policy will usually ensure that all positions will be filled from within the ranks. • Trade union requirements. • Recruiting budgets. External factors: These are the factors over which organization has little or no control. Some of these are given below. • Demographic factors: Gender ratio, age group, and educational level. Economic condition of people and their per capita income, proximity of other organizations offering employment. • Government requirements. • Industrialization: Industrialization within the geographical area and geographical concentration will have influence on employment market in recruitment. • Labor market: Supply of labor may be plenty or shortage. In Bangladesh, supply of labor of unskilled labor is abundant but there is shortage of skilled labor. The right type is difficult to find. The recruitment process involves several steps. Personnel managers or specialists known as recruiters identify job openings through human resource planning or requests by managers. They make a through analysis of job information, particularly job descriptions and specifications. This information tells the human resource specialist the features of both the jobs and the people who will fill them. They may also collect information from the concerned managers. Sources of Recruitment There are basically two sources of supply from where potential employees can be drawn. These are internal sources and external sources. Internal sources indicate recruiting qualified people from within the organization itself (from the present working force). When reference is made to the number of employees already employed by the organization we speak of the


internal supply. Whenever any vacancy occurs, someone from within the organization is upgraded, promoted or transferred to another department. Advantages and disadvantages are associated with promoting from within the organization and hiring from outside the organization to fill openings. Advantages of Internal Recruiting • The people responsible for selecting internal candidates for vacant positions have access to more comprehensive information relating to their abilities, track record and potential achievement than they would have if they were selecting people originating from the external labor market. • It is motivating to employees, as they are preferred over outsiders when the vacancies occur. Employees tend to be committed to firms that are committed to them. • It provides an opportunity for advancement. • It is economical in terms of time and money. • It improves employee morale. • It improves image of the organization. • It improves the probability of better performance as the candidate is in a better position in knowing the objectives and expectations of the organization. The demerits of the internal source are the following: • The promotion may be biased in nature and may be based on seniority rather than merit. Promotion from within should be aided by careful employee selection. The employment process should favors those applicants who have potentials for promotion. • Possible morale problems of those who are not promoted. • Political infighting for promotions. • Option may be limited in locating right talents. • This channel of recruitment discourages new blood from entering the organization. • Inhibits innovation and creativity. • Subjectivity in promotion. Promotion from within should be aided by careful employee selection. The employment process should favors those applicants who have potentials for promotion. Effective promotion from within also depends on other HR actions. It depends on providing the education and training needed to help employees identify and develop their promotion potential. It also requires career-oriented appraisals. External sources Recruiting from outside the organization is known as external source. All firms more or less rely on external sources. Advantages of external sources are: • Bringing some new and fresh ideas into the organization. It offers the organization the opportunity to inject new ideas into its operations by utilizing the skills of external candidates. • Improving the knowledge and skill of the organization by recruiting from outside sources. • Improving and sustaining competitive advantage. • Economical in the long run. • External recruitment is a form of communication, whereby the organization projects its image to potential employees, customers, and others outside the organization.


Recruitment from internal source creates vacancy at the lower level, and these positions need to be filled by the outsiders.

Disadvantages of external sources are as follows: • Costly. • Cause brain drain due to fear of lack of growth potential. • Higher probability of employee turnover. • Demoralization of existing employee for alleged double standard and favor shown towards new recruitment from outside by offering better position and pay. The most widely used channels by applicants and recruiters are: Walks-ins and write-ins: Walk-ins are job seekers who arrive at the personnel department in search of a job. Write-ins are those who send a written inquiry. Both groups are asked to complete an application blank to determine their interests and abilities. Employee referrals: Employees may refer job seekers to the personnel department. Advertising: it is the most widely used method as it can reach a wider audience. It describes the jobs and the benefits, identify the employer and tell those who are interested how to apply. Various media are used for advertisement such as newspapers, journal, TV, Radio, etc. The construction of ad is important. Experienced advertisers use four-point guide called AIDA to construct their ads: • Attraction of interest to the ad, • Development of interest in the job, • Creation of desire by amplifying the job’s interest factors plus extra such as job satisfaction and career development and other advantages. • Prompt action. Proper design of advertisement will have the following merits: • Encourage right persons to apply. • Discourage unsuitable persons from applying. The advertisement copy must contain such information as • Job description, • Job specification, • Job pricing. Blind advertisement is another technique used by some organization. The blind ad is a want ad that does not identify the employer. Interested applicants are told to send their resume to a mailbox number at the post office or to newspaper. Reputed and well-known organization seldom uses blind advertisement. Want ads have some severe limitations. • They may lead to thousands of job seekers for one popular job opening. • Many suitable candidates may not apply because they feel that the company may be of poor reputation in withholding their identification. • Many consider such advertisement is regularization action in which recruitment has already been made. • Very few may apply for less attractive jobs. State employment agencies: Every government has a state employment security agency often called the employment service or employment exchange. It is designed to help job


seekers to find suitable employment. This agency matches job seekers with job openings. When an employer has a job opening, the personnel department voluntarily notifies the employment service of the job and its requirements. Private placement agencies: Private employment agencies developed in the vacuum created by the poor image of the public employment service. They do charge fees either from potential employee, or from employers, or from both for their services. Placement firms take an employer’s request for recruits and then solicit job seekers, usually through advertising or among walk-ins. Candidates are matched with employer’s request and then told to report to the employer’s personnel department for an interview. Some of the agencies become specialized in certain categories of employment like the following: • Security guards, • Clerical or computer operators. • Engineers • Salesmen. • Accountants. Professional or executive Search Firms: Professional search firms are much more specialized than placement agencies. Certain firms have built up good reputation on efficiency, productivity an industrial peace. Many firms attempt to locate suitable candidates from such firms for filling up vacancies. Search firms usually recruit only specific types of human resources for a fee paid by the employer. Search firms actively seek out recruits among the employees of other companies. These search firms are also called headhunters. Educational institutions: Schools and vocational training institutes are another common sources of recruits for many organizations. Many universities, colleges and vocational schools offer their current students and alumni placement assistance. This assistance helps employer and graduates to meet and discuss employment opportunities and the applicant’s qualifications. The placement cells of educational institutions collect data regarding potential vacancies and call for students who are interested in such positions. Thereafter placement cells do preliminary screening and recommend those candidates who have done well in their studies. There is no charges or fees for such services in majority of institutions. Professional associations: Recruiters find that professional associations can also be a source of job seekers. Many associations conduct placement activities to help new and experienced professionals get jobs, especially at job fairs during meeting and conventions. Labor Unions: Labor unions are a source of certain types of workers. When recruiters want people with trade skills such as construction, the recruiters can contact local labor organizations, which maintain rosters of members who are looking for employment. The local union of plumbers, for example, keeps a list of plumbers who are seeking jobs. Voluntary organization: Certain voluntary organizations can assist in recruitment. Examples are schools for handicaps like deaf dump and blind. Departing employees: Two often-overlooked sources of recruits are retirees and departing employees. In both cases, there is a time saving advantage, because something is already known about the potential employee.


Internet recruiting: Some employers are conducting employment interviews on-line. Employers often begin the Internet search process by establishing an organization website and listing jobs on it. Advantages for such Internet recruiting by employers include: • Reaching more applicants. • Having lower costs and faster response time frames. • Tapping an applicant pool conversant with the Net. Open house A relatively unusual technique of recruiting involves holding an open house. People in the adjacent community are invited to see the company facilities, have refreshments, and maybe view a film about the company. Thus it clear from the above discussion that there are mainly two sources of recruitment. Both sources have merits and demerits. Criteria for adopting a given source depends on cost and effectiveness, A source is effective it is capable of attracting maximum number of potential candidates. In addition, it must involve minimum cost. A recruitment policy • Should be well defined • Should have a proper organization structure. • Should have a well -known procedure for locating potential candidates. Selection The selection process ideally involves mutual decision. The organization decides whether to make a job offer and how attractive the offer should be, and the job candidate decides whether the organization and the job offer fit his or her needs and goals. Selection Process Selection is a decision making process. A process is a number of interrelated activities. The selection process is a series of steps through which applicants pass. For example, a candidate who fails to qualify for a particular step is not eligible for appearing for the subsequent step. Result of each step is crucial. Failure of any step disqualifies the candidate from attempting the next step. Because of this characteristic, Yoder (1972) has termed this process as succession of hurdles. It is designed to determine the most likely candidates to be successful at fulfilling the job requirements by eliminating those candidates least likely to succeed. A well-designed selection process involves the following steps: • Reception of application • Screening • Application Blank • Employment tests • Interview • References • Medical examination • Hiring decision or employment These steps are briefly discussed in subsequent paragraphs.


Preliminary reception of applicants: The selection process is a two way street. The organization selects employees and the applicants select employers. Selection starts with a visit to the personnel office or with a written request for an application. On the basis of how this initial reception is handled, the applicants begin to form opinion of the employer. Screening: This step may involve two activities: screening applications and screening interviews. Screening applications is the verification of applications against the predetermined requirements of job given in job description and job specification. Based on such comparison, many applicants can be screened out for their inability to meet the criteria specified in job specification. Screening interviews is conducted in which the candidate is asked to present himself for clarifying certain points, which are not explicit from his application.

Job Application Blank: The job application blank collects information about recruits in a uniform manner. The application blank usually contains such information as: • Personal data (name, address, phone number, place of birth, sex, race, religion, national origin, health, height, weight). • Employment status (type of employment sought, position sought, date available for work, salary desired). • Education qualification and training. • work history or past experience, • Expectation of salary. • Memberships. • Awards and hobbies. • References. • Signature line, etc. All these information are useful from the point of view of management. Even though the individual may lie in giving this information, most of it can be checked independently and verified. It is a source of data bank to the organization of their employees. It helps draw conclusion about applicant‘s performance or achievement in his previous job. Employment tests: These tests are devices that assess the probable match between applicants and job requirements. These tests are conducted in order to improve the selection decisions. Tests are a screening device. Some are paper-and –pencil tests; others are exercises that stimulate work conditions. Tests should be valid. Validity means that the test scores significantly relate to job performance. It measures how successful is selection technique is in predicting the future performance of the job occupant. When scores and performance are unrelated, the test is invalid and should not be used for selection. There are five variations of validity. These are: • Content validity • Predictive validity • Concurrent validity • Construct validity • Criterion validity


A test should be reliable. Reliability means that a test should yield consistent results each time an individual takes it. Tests are fair because they prevent corruption and favoritism in the selection and promotion of people. Tests data can be referred to again at a later stage to see how how good it was in predicting actual success in the job ( Furnham, 1997). There are many tests used to select employees. Among the important of these tests are: • Psychological (for example, psychological tests are those that measure personality or temperament. • Knowledge, • Performance, • Interest, • Attitude, • Medical. Those who argue that tests have disadvantages are likely to cite the following: • Those tested may lack the ability to give responses that reflect their true feelings, so their responses are meaningless. • Questions in the test booklet could be misinterpreted due to lack of understanding on the part of some subjects and this affects the accuracy of the responses. • There could be some persons who try to confuse the situation by giving irrelevant and stupid responses. • Test fails to measure certain personality characteristics such as trustworthiness. • Tests are invalid because they do not measure what they are supposed to measure, and test scores are not good at predicting the testee’s work performance over time. Selection interview: Interviews are most widely used device for selection. It summarizes and integrates all information concerned with the candidate. Strauss and Sayles (1989) define an interview as a purposeful exchange of ideas, the answering of questions and communication between two or more persons. The interviewer’s goal in selection is to match human characteristics and abilities with the demands of the jobs. This objective can be expressed as to “ find the right man for the right job”. The main objective objectives of selection interview are to: • Get an opportunity to judge an applicant’s qualifications and characteristics • Establish a rapport between organizational personnel and applicant, • Promote good will towards the company, and • Get first- hand information about the candidate. The selection interview is formal, in-depth conversation conducted to evaluate the applicant’s acceptability. The interview is a face –to- face, oral, observational and personal appraisal method of evaluating the applicant. The interviewer seeks to answer three broad questions: can the applicant do the job? Will the applicant do the job? How does the applicant compare with others who are being considered for the job? Selection interviews allow two way exchange of information: interviewers learn about the applicant, and the applicant learns about the employer. Interview may be in the form of individual and group. One form of group interviews is to have applicants meet with two or more interviewers. They are given a certain problem and asked to discuss among themselves and come up with an agreed plan of action for solving the problem. The interviewers are watching the proceedings without actually taking part or interfering. This allows all interviewers to evaluate the individual on the same questions and


answers. This saves time. It also permits the answers of different applicants to be compared immediately. Types of Interview: There are different interview formats. Following are the types: • Structured (questions are predetermined and sequenced). • Unstructured ( un-planned and non-formatted). • Mixed ( a combination of structured and unstructured). • Problem solving or stress producing. Limitations of interview: Many research findings indicate the limitations of interview. The main limitations are: • Interview is costly • Inefficient • Invalid. • Biased • Stereotyping • Subjective • Unreliable • Time consuming • Lack of standard for selection • Halo effect • Projection error • Central tendency error. Towards more an effective interview In spite of the limitations as pointed out above, the usefulness of interview cannot be ignored. It is a valuable device for relaying information to prospective employees and can provide reasonably valid data for selection decisions. Decenzo and Robbins (1999) have offered the following suggestions in order to r improve interview: • Structure the interview so that the interviewer follows a set of procedure. A fixed set of questions should be presented to every applicant. • Provide the interviewer with training so that they can follow a similar pattern in their questioning and evaluate responses using a common standard. • Interviewers should have detailed information about the job for which applicants are interviewing. • Keep other information of the interviewee away from the interviewer. • Standardize evaluation forms so that all interviewers can use the same frame of reference to each applicant. • Interviewers should take more notes during the interview. This will lead to increased accuracy in evaluation. • Avoid short interviews. Handling the interview The interviewee must make a plan in order to succeed in interview. What does he have to do to excel in the interview? Here are some suggestions made by Gary Dessler (1999): • Preparation is essential. Before the interview, learn all you can about the employer, the job, and the people doing the interview.


• • • • •

Uncover the interviewer’s needs. Spend as little time as possible answering your interviewer’s first questions and as much time as possible getting the person to describe his needs. Relate yourself to the person’s needs. Think before answering. Understand, think and speak. Make a good appearance and show enthusiasm. First impression count

Interview Process: The interview is a process involving five steps. • Interview preparation: The interviewer needs to prepare before beginning the interview. Better preparation and pre-planning exercise will improve effectiveness of selection interview. He should develop objectives, criteria and standards. He should develop necessary questions to be asked. A review of job specification and employee specification may help the interviewer prepare specific questions. • Creation of rapport: The burden to establish rapport falls on the interviewer. Ask easy question to make the applicant feel comfortable. Starting with non-threatening questions such as, “ did you have any parking problems?” Necessary noting, recording and grading are done. • Information exchange: The interview process is a conversation that exchanges information. To help establish rapport while learning about the candidate, some interviewers begin by asking the interviewee if he or she has any questions. This establishes two way communications and allows the interviewer to begin to judge the recruit by the type of questions asked. The interviewer may say, “ Let us start with any questions you may have”. • Termination: The interviewer must close the interview. The parting of candidates must be as friendly as their reception. Once again, nonverbal communication is useful. Sitting erect, turning toward the door or glancing at a watch-all clue the applicant that the end is near. Some interviewers terminate the interview by asking,” do you have any final questions? The applicant should not be given an indication of his prospects for getting the job. • Final evaluation: Immediately after the interview ends, the interviewer should record specific answers and general impressions about the candidate. Interviewer may commit some errors that may lower the effectiveness of the interview. He may judge the applicant according to halo effect or personal biases. Leading questions and domination do not allow the interviewer to learn of the applicant’s potential. Example of a leading question: Do you agree that profits are necessary? I prefer sales personnel who are tall. Evaluation of interview and final scoring be done as objective as possible by using standard format and statistical means. Reference and background checks: What type of person is the applicant? Is the applicant s good, reliable worker? To answer these questions employment specialists use references and background checks. Bio-data submitted by applicants are scrutinized for verification with primary and secondary data. Discrepancies are found in the following areas: • Reasons for leaving previous job. • Date of employment • Salary • Job title.


Tendency is more on over-stating job title, salary and duration of employment. Common method is to contact the previous employers and get the correct position. In many cases, candidates are asked to produce letters of recommendations of referees. There are two type of references: • Character references • Experience reference Letters of references are of two types: specific and general. References from ex-employers are not always effective due to: • • •

Reluctance to pass on negative information about the ex-employees. Employee quote persons who are well known and familiar. Exaggerated allegation against ex-employers who quit their firm.

References should be reliable. Reliability can be increased by • Getting opinion from three to four persons and comparing them. • Contacting referees in person or on telephone and getting their views. • Making attempts to contact previous teachers and head of educational institution as references. • Assuring confidentiality of information disclosed during personal discussion. Medical evaluation: The selection process may include a medical evaluation of the applicant before the hiring decision is made. The criteria for medical examination vary with the nature of job and type of organization. For example, high standard of health is specified for defense services. Normally the evaluation is a health checklist that asks the applicant to indicate the health and accident information. A Company nurses or physician sometimes supplements the questionnaire with a physical examination. Hiring decision: The final hiring decision marks the end of the selection process, assuming that the candidate accepts the job offer. Candidate who has successfully completed the various hurdles of selection process is offered the job. Employment is complete when the successful candidate accepts the offer and joins the firm. To maintain good public relations, employers should notify applicants who were not selected. Employment specialists may want to consider rejected applicants for other openings since these recruits already have gone through various stages of the selection process. Retaining these applications can be useful if the employer is charged with employment discrimination. The applications of those hired should also be retained. The application blank begins the employee’s personnel file and contains useful information for studies that the personnel department may conduct to learn about the source of its applicants- such as age, sex, race, or other work-force characteristics. If some recruits prove unsatisfactory after they are hired, for example, personnel experts may be able to reconstruct the selection process beginning with the application.

Socialization or Orientation HR is much more than just recruiting people. Once employee selection is completed, a proactive HR department helps the new hire become a productive and satisfied employee. The process of becoming a productive and satisfied employee is important to the organization and to the employee. This initial turnover is common. The new comer often wants to know, “ Will I be able to do the job? Will I fit in around here? Will the boss like me? Employees are


likely to quit during their first few months than any other time in their employment. Orientation program familiarizes new employees with their roles, the organization, its policies, and other employees. It is a process of helping new employees adapt to their new organizations and work responsibilities. It is a process of adaptation. New employees suffer from anxiety. Anxiety is high at entry and new employees want to reduce that anxiety very quickly. Stress is high because the new member feels a lack of identification. Loneliness and a feeling of isolation are not unusual response. New employees need special attention to put them at ease. This means providing an adequate amount of information to reduce uncertainties and ambiguities. Through this program, personnel department can reduce employee turnover. It can reduce turnover by meeting personal objectives of employees. Cost of turnover is very high. Costs are associated with recruiting, training and developing new employees. When employees quit, the loss may be high because of training, skills that they take with them. The orientation of the new employees can be done either by the new employee’s supervisor or by the people in the personnel department. Formal orientation programs usually depend on the personnel department and the supervisor. In many medium and large organizations, the personnel department takes charge of explaining such matters as overall organizational policies and employee benefits. In most small firms, new employees will receive their entire orientation from their supervisor. The orientation program may be formal and informal. New employees may be put directly into their job, with not effort made to differentiate them from those who have been doing the job for a long period of time. Such cases represent examples of informal orientation- it takes place on the job and the new employee gets little or no special attention. The issues covered in an orientation program fall into two broad categories: general topics of interest to most new employee and specific, job-related issues of concern only to specific jobholders. Topics covered in employee orientation programs are as follows: Organizational issues: It includes such items as: • Organizational background, history and market standing. • Organizational mission, objectives and philosophies. • Organizational policies and practices. • Names and titles of key executives, • Employees’ titles and department • Lay out of physical facilities • Probationary period, • Product line or service provided, • Overview of production process, • Company policies and rules, • Safety procedures and enforcement. Employee benefits: • Pay scales, • Vacation and holidays, • Rest breaks, • Training and education benefits, counseling, • Insurance benefits, retirement benefits, employer provided services to employees, rehabilitation programs.


Benefits of orientation programs: Flippo (1990) and Davis (1996), have pointed out the benefits of a good orientation program: • Reducing the employees’ anxieties • Reducing cultural shocks. • Providing opportunity to develop favorable attitudes of new employees toward their new employment and surroundings. • Increasing employee commitment. • Higher self-confidence and satisfaction • Convincing the new employee that what is good for the company is also good for the employee. • Improving performance as well oriented workers need less attention from coworkers and supervisors • Reducing employee turnover. • Helping the new employee understand the social, technical and cultural aspects of the workplace. Training and Development Every organization needs well-trained people to perform the activities that have to be done. If current or potential job occupants can meet this requirement, training is not important. At the time of recruitment employees possess a certain amount of knowledge and skill. As time passes their knowledge becomes obsolete unless it is updated by proper training. When this is not the case, it is necessary to raise the skill levels and increase the versatility and adaptability of employee. As jobs are become more complex, the importance of employee training gas increased. Competent employees do not remain competent forever. Skills deteriorate and can become obsolete. Skilled and knowledgeable people are always short in supply. This is why, organizations spend billions of dollars each year on formal training. Intensified competition, technological change and the search for improved productivity are motivating management to enhance expenditures for training. Competitive advantage of a firm depends on the knowledge and skills possessed by the employees. Meaning of training The term training is used here to indicate any process by which the aptitudes, skills and abilities of employees to perform specific job are increased. Flippo defines training as the act of enhancing the knowledge and skill of an employee for accomplishing a specific behavior. Training is a systematic process of changing the behavior, knowledge and motivation of present employees to improve the match between employee characteristics and employee requirements. It is the art of increasing the knowledge and skill of an employee for doing a particular job. Training, education and development: A comparison Training is different from education. The purpose of education is to increase the attitude, understanding and knowledge of employees so that they are better adjusted to their working environment. Education is the understanding and interpretation of knowledge ( Memoria, 1997). Teaching a worker how to operate a drill press is training whereas giving a course in economics is education. Education is know- why and training is know-how. Education is person oriented while training is job oriented. Educational program contains theoretical and conceptual material aimed at stimulating an individual'’ analytical and critical faculties. Education is concerned with increasing the general knowledge and understanding of the employee’s total environment (Tripathy, 1989). The two may go hand in hand.


Development is defined as preparing the individual for a future job. It refers to long term, future oriented programs and the progress a person makes in learning how to manage. Development is the process of transition of an employee from lower level of ability, skill and knowledge to that of higher level. Education, training, work experience and environment influence this transition. This will improve value of individual employee in terms of his selfdevelopment, career growth, and contribution to the organization. Training is mostly a shortterm activity to help people do their jobs better. Training refers to instruction in technical and mechanical operations, while development refers to philosophical and theoretical educational concepts. Despite differences both training and development are concerned with the development of human potential or talent. They are complementary parts of the same process and it is difficult to imagine any training, which does not have some educational effect and vice versa. Benefits of training: The value of training cannot be over emphasized. Training is an investment in people so it follows that systematic training is a sound business investment. Training produces such benefits as: • • • • • •

To improve employee skills which in turn, increases the quality and quantity of output. To decrease the relative amount of input needed to produce a unit of output. To improve quality of life of employees. To attain and sustain competitive advantage To bridge the gap between existing performance and desired performance. To increase the ability of an employee to learn from experience.

McGregor identified three different purposes of training: • Acquiring intellectual knowledge. • Acquiring manual skills. • Acquiring problem solving skills. Identification of training needs Identification of training need is the most important step in designing a training program. This involves a through analysis of entire organization, all operations and all employees. Identification of training needs of an employee Methods of determining training needs Methods of training Performance Appraisal and Compensation Although helping others improve their performance is one of the manager’s most important tasks, most managers freely admit performance appraisal and improvement coaching gives them difficulty. Judging an employee’s performance accurately is not always easy. Often it is even harder to convey that judgment to the employee in a constructive and painless manner and to translate feedback on past performance into future improvement. Determining appropriate compensation is a related task of great importance.


Informal Appraisals The term informal performance appraisal mean the continual process of feeding back to employees information about how well they are doing their work for the organization. Informal appraisal can be conducted on a day-to-day basis. The manager spontaneously mentions that a particular piece of work was performed will or poorly, or the employee stops by the manager’s office to find out how a particular piece of work was received. Because of the close connection between the behavior and the feedback on it, informal appraisal is an excellent way to encourage desirable performance and discourage undesirable performance before it becomes ingrained. An organization’s employees must perceive informal appraisal not merely as a casual occurrence but as an important activity, an integral part of the organization’s culture. Formal Systematic Appraisals Formal systematic appraisal usually occurs semiannually or annually. Formal appraisal has four major purposes: (1) to let employees known formally how their current performance is being rated; (2) to identify employees who deserve merit raises; (3) to locate employees who need additional training; and (4) to identify candidates for promotion. It is important for managers to differentiate between the current performance and the promotability (potential performance) of employees. Managers in many organizations fail to make this distinction because they assume that a person who the sills and ability to perform well in one job will automatically perform well in a different or more responsible position. This is why people are often promoted to positions in which they cannot perform adequately. Four basic appraisal approaches have evolved in organizations. The first approach, a manager’s rating of an employee, is by far the most common. A group of managers rating an employee is the second most frequently used appraisal approach. Employees are rated by a managerial committee or by a series of managers who fill out separate rating forms. Because it relies on a number of views, this approach is often more effective than appraisal by a single manager. However, it is time-consuming and often dilutes employees feelings of accountability to their immediate supervisor. The third appraisal approach is a group of peers rating a colleague. The individual is rated separately and on paper by co-workers on the same organizational level. The fourth approach is employees’ rating of basses. This approach is used in some colleges, where faculty are asked to evaluate their dean on a number of performance measures. Compensation Compensation has traditionally been linked to a particular job or job description. The general idea is that the more responsibility a manager has, the more compensation he or she should earn. Oftentimes jobs are rated by a job evaluation system which measures such variables as the number of subordinates, level in the organizational hierarchy, and the complexity and importance of the job function. Promotions, Transfers, Demotions, and Separations The movement of personnel within an organization- their promotion, transfer, demotion and separation- is a major aspect of human resource management. The actual decisions about


whom to promote and whom to fire can also be among the most difficult, and important, a manager has to make. Effective utilization of employees involves allocation of additional authority and responsibility, as and when they acquire adequate expertise and competence. Secondly, good work of an employee is to be recognized and rewarded. Thirdly, career development involves vertical movement of employees. Finally, higher vacancies in the organization are to be filled up progressively. Promotion serves the above purposes. Promotion: A promotion occurs when an employee is moved from one job to another that is higher in pay, responsibility and status. It is a vertical move in rank and responsibility. Strauss and Sayles define promotion as a movement to a position in which responsibility and prestige are increased. It is a job with more prestige and income. Promotion is different from upgrading. It means advancement of an employee to a higher status while upgrading means an increase of pay on the same job or moving to a higher scale without changing the job. Some regard it as a limited promotion. Open and closed promotional systems: A company is said to have an open promotion policy if it considers all employees within the organization as potential candidates and also announces internally such vacancies. When an organization does not announce vacancies or where the openings are not open to all employees within the organization for the promotion, the company has a closed promotion policy. Basis of promotion: There is a controversy as to what should be the criteria for promotionthe seniority or merit. Trade unions prefer seniority while management prefers ability or merit. Promotions usually are based on merit and \ or seniority. Seniority basis of promotion: Unions demand seniority as a basis of promotion because layoff and discharges are frequently based on seniority. Seniority refers to the relative length of service of employees. The seniority promotion plan is as old as civilization. The oldest son succeeded his father as king. The method of calculating seniority or length of service is an important part of a seniority plan. It should provide for the following factors: a) when seniority starts to accumulate b) effects of various interruptions to employment and c) the effect of promotions upon seniority calculation. Seniority begins to accumulate as soon as an employee is hired. In the case of union contracts, it is important to note whether or not new employees have seniority rights during their period of probation and whether or not the probationary period will be included in the calculation of seniority. Again, when a large numbers of employees are hired on the same date, a question of seniority may arise unless a basis for priority is established. In such cases, priority may be established upon such an arbitrary basis as alphabetical listing. There are merits as well demerits of considering seniority as the sole criteria for promotion. The merits are: • Easy and simple. • Focus on individual career prospects and security. • Avoid favoritism and arbitrariness by management. • Risk is reduced. • Policy is more acceptable to majority of employees ad unions.


Reduce employee turnover.

Demerits are: • Merit is devalued. Capable young people are likely to become impatient about waiting –for- dead- man’s shoes” and will quit to look for better prospects elsewhere. • Promote mediocre performance and inefficiency. Consequently this may mean that the company comes to be managed by second-grade people who have stated because they have no enough caliber to make a move. • Limit the influence of manager as their evaluation of performance of individual employee has little effect on their performance. • There is no guarantee that past experience or length of service increase ability. • No incentive for training and development by employees. • Inability to attract talented hands from outside. • Ability to learn reduces as age catches up. • Goes against obtaining and sustaining competitive advantage. Merit as a sole basis for promotion: In principle, it is agreed by all that promotion should be based on merit. Merit-based promotion occurs when an employee is promoted because of superior performance in the present job. The use of merit as a basis for promotion causes difficulties because what management regards as merit union may consider as favoritism and can distrust the sincerity of management when it claims the right to promote solely on merit. When management adopts merit as a basis for promotion, it must evolve controls to recognize merit objectively, which will refute the allegations of favoritism. As far as possible, merit rating or employee evaluation should be based on operating facts. The plan of employee evaluation should include an arrangement for consultation and perhaps vocational guidance. By discussing a person’s strong and weak points before vacancies occur, a twoedged weapon is employed. Those who are ambitious can get suggestions on how to improve themselves. And a record of such discussions can be cited to those who did not get a desired job because they failed to follow suggestions. What is important is to discuss the standards before as well as after application. Seniority and merit bases: Seniority cum merit should be the basis of promotions where merit can be objectively tested. Merit is term, which includes efficiency, skill, aptitude etc. When a combination of merit and seniority is desirable, the play of discretion in the matter of selection cannot be overlooked. A sound management will pursue a policy of properly balancing these factors. The policy can derive strength if worked in consultation with the workers. The policy works in the following manner: • • • • •

As between two employees with equal merit, the one with the greater seniority will be given preference. If two employees are of same seniority, give weightage to ability in promotion. A set of job and employee specifications should be carefully prepared so that claimant for jobs can be shown that requirements are objective and not capricious. A complete and thoroughly understood promotion plan should be promulgated. A good system of merit rating should be installed. Performance standards should be set as objectively as possible so that measurement of employee productivity and cooperation may be more readily acceptable by all.


Promotion Policy: A policy is guidelines for action. It varies with organization. Promotion polices must be clearly stated and widely circulated and explained to all employees since it is a sensitive issue. A comprehensive and realistic promotion policy should be evolved covering the following points: • Lines and ladder of promotion should be made clear to all employees so that the employee know where the possibility of promotion lies. • Policy must specify rules regarding the proportion of internal and external recruitment for each grade. • Prescribing training and development programs prior to promotion. • Promotion from within the organization should be encouraged. • Top management must clearly lay down their policy regarding weightage given to seniority and merit. Both merit and seniority should be considered. • Weightage given to the recommendation of immediate superior is very important policy. • A method of assessing the potentials of employee must be introduced. • It must be fair and equitable. • It must be consistent. • Promotional plans require follow up. • Service records must be maintained to avoid confusion and misunderstanding. Benefits of having a promotion policy Generally the following reasons for promoting employees are advanced: • Promotion from within fosters inbreeding. • Promotion may increase the effectiveness of the organization in attaining its service and profit objectives. • It creates an inside market for talent and experience which is sheltered from competition and readily available as a resource to the company. • It increases interest in training and in self-development as necessary preparation for promotion. • It creates a feeling of content with the present conditions and encourages ambition to succeed within the company. • It promotes employee morale and stimulates efficiency. • It increases job satisfaction Transfer Transfer occurs when an employee is moved from one job to another that is relatively equal in pay, responsibility and status. A transfer is a lateral movement of an employee, not involving promotion or demotion. A transfer may require an employee to change his work group, workplace, or organizational unit. Personnel department must be able to reallocate their human resources to meet internal and external challenges. Transfer may be beneficial to jobholders. The main benefits are • The broadening experience of a transfer may provide a person with new skills and a different perspective that makes him a better candidate for future promotions.


• •

By moving people into jobs, managers may be able to improve the utilization of their human resources. Transfer may even improve an individual’s motivation and satisfaction, especially when a person finds little challenge in the old job. The new position may offer new technical and interpersonal challenges. In turn, these challenges may prove to be a growth oriented opportunity for the transferee.

Objectives of transfer: Transfers are generally effected to achieve the following objectives: a. To satisfy the needs of an organization arising out of change. b. To meet the request of an employee. c. To suit the age and health of an employee. d. To train the employee for lateral advancement and promotion. e. To supply creative opportunities to deserving employees. f. To correct erroneous placement. g. To replace an employee. h. To utilize the service of an employee in a better manner. i. To incase versatility of employee. j. To adjust the workforce of one plant or department with that of another when one is closed down. Transfer policy: A good transfer policy should have the following features: • Specify the types of transfers and the conditions under which these will be made. • Locate the authority in some officer who may initiate and implement transfers. • Indicate the basis for transfer-whether it is based on seniority or any other factor. • Transfers should be in writing and duly communicated to all employees. • Transfers should not be made frequently. Demotion: Demotion occurs when an employee is moved from one job to another that is lower in pay, responsibility and status. Demotion seldom holds positive outcomes for the individual. Usually they are associated with discipline; the individual is demoted for poor job performance or inappropriate behavior such as excessive absenteeism or incompetence. Demotion may also be due organizational factors: • Reduction of workforce due to market condition. • Change of technology and production method. • Change of product mix. One problem with demotion is that demoted employee may be become de-motivated or worse, openly antagonistic toward those responsible for the demotion decision. Sometimes, demotions are intended to be kindly alternative to firing an employee who cannot do his present job. Rather than severe the employment relationship, a decision is made to retain the employee but at a lower level of responsibility. All rules and regulations are to be clearly laid down in writing which include a clause that violation of the same may result in demotion. Separations: A separation is a decision for the individual and the organization part. Separations are choices made by the employers and \ or employees to terminate employment relationship. Disciplinary, economic, business or personal reasons may motivate it. Regardless of the reasons behind the decision, the personnel department’s


role is to find the most satisfactory method of conducting the separation in a way that minimizes the harm to the organization and to the individual. Separations may take different forms such as attrition, layoffs, and termination. Attrition is the normal separation of people from an organization as a result of resignation, retirement, or death. It is initiated by the individual worker and not by the company. Resignations are separation decisions initiated by the employee. They include quits and retirements. Quits occur when employees choose to leave the organization for reasons other than retirement. Many researchers and professional use the term turnover to signify employee quits. The Four C’s model for evaluating human resources: To evaluate the effectiveness of the HRM process within an organization, the Harvard researchers have proposed a “four C’s” model: competence, commitment, congruence, and cost effectiveness. Examples of questions related to each of the four C’s, and some methods for measuring them, are given in the following list. 1. Competence. How competent are employees in their work? Do they need additional training? Performance evaluations by managers can help a company determine what talent it has available. To what extent do HRM policies attract, keep and develop employees with skills and knowledge needed now and in the future? 2. Commitment. How committed are employees to their work and organization? Surveys can be conducted through interviews and questionnaires to find answers to this question. Additional information can be gained from personnel records about voluntary separation, absenteeism, and grievances. To what extent do HRM policies enhance the commitment of employees to their work and organization? 3. Congruence. Is there congruence, or agreement, between the basic philosophy and goals of the company and its employees? Incongruence can be detected in the frequency of strikes, conflicts between managers and subordinates, and grievances. A low level of congruence results in low levels of trust and common purpose; tension and stress between employees and managers may increase. What levels of congruence between management and employees do HRM policies and practices enhance or retain? 4. Cost effectiveness. Are HRM policies cost-effective in terms of wages, benefits, turnover, absenteeism, strikes, and similar factors? In final analysis, managers need the participation of a broad range of stakeholders to obtain the data needed to evaluate the impact of HRM practices and policies. By shaping HRM policies to enhance commitment, competence, congruence, and cost effectiveness, an organization increases its capacity to adapt to changes in its environment. High commitment, for example, means better communication between employees and managers. Mutual trust is enhanced, and all stakeholders are responsive to one another’s needs and concerns whenever changes in environmental demands occur. High competence means that employees are versatile in their skills and can take on new roles and jobs as needed. They are better able to respond to changes in environmental demands. Cost effectiveness means that human resource costs, such as wages, benefits, and strikes, are kept equal to or less than those of competitors. Finally, higher congruence means that all stakeholders share a common purpose and collaborate in solving problems brought about by changes in environmental demands. This capacity to collaborate is crucial in an everchanging environment.


CONCLUSION As from the study of theoretical overview and practices in a business firm Leading Edge Technologies Ltd., we can finally conclude that human resource planning takes organizational objectives and plans as a given, and is concerned with the staffing process needed for carrying out those plans. It is also being observed that a firm’s internal and external environment may affect the degree to which it’s HR planning activities are integrated with strategic planning. Organizations that exist in unstable environments–face tough competitions and experience staffing difficulties–are more likely to involve its HR planners in the corporate strategic planning process. It is also studied HR planning involves forecasting personnel needs that estimate the number of employees who will be needed in each job in the short-term as well as longterm. Planners forecast the supplier’s of labor–the internal supply of the employees and their skills and promo ability, as well as the probable availability of various types of people in the external labor market. Further it is also observed, once the organization has an idea of its future human resource needs, the next phase is usually recruiting new employees by identifying and attracting qualified persons to apply for the jobs that are open. Some recruits come internally while others come from outside of the organization. BIBLIOGRAPHY 1) Garry Dessler, 2005, “Human Resource Management” (10th Edition) Pearson Education Ltd, New Delhi. 2) Herbert G. Heneman III, Timothy A. Judge, Robert L. Heneman, 1999, “Staffing Organizations, Mc Grah Hill publication. 3) S. P. Robbins and Mary Coulter, 2002, “Management” (7 th Edition) Pearson Education Ltd, New Delhi. 4) Ricky W. Griffin, Management.


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