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FULL-LENGTH QUESTIONS (10 MARKS EACH)

Q 1. Describe the HRP process? Or What do you understand by manpower

planning? Explain the steps in manpower planning?

The objectives of HR plan must be derived from organizational objectives. Specific

requirements in terms of number and characteristics of employees should be derived from

the organizational objectives.

Organizational objectives are defined by the top management and the role of HRP is to

sub serve the overall objectives by ensuring availability and utilization of human

resources.

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Once the organizational objectives are defined by the top management and the role of

HRP is to sub serve the overall objectives by ensuring availability and utilization of

human resources.

Once the organizational objectives are specified, communicated and understood by all

concerned, the HR department must specify its objectives with regard to HR utilization in

the organization.

HR Demand Forecast

Demand forecasting is the process of estimating the future quantity and quality of people

required. The basis of forecast must be annual budget and long-term corporate plan,

translated into activity levels for each function and department.There are several good reasons to conduct demand forecasting

- Quantify the jobs necessary for producing a given number of goods

- Determine what staff-mix is required

- Asses appropriate staffing levels in different parts of the organization

- Prevent shortages of people

- Monitor compliance with legal requirements with regard to reservation of jobs

HR Supply Forecast

Personnel demand analysis provides the manager with the means of estimating the

number and kind of employees that will be required. The next logical step for the

management is to determine whether it will be able to procure the required number of

personnel and the sources for such procurement. This information is provided by supply

forecasting. Supply forecasting measures the number of people likely to be available from

within and outside an organization, after making allowance for absenteeism, internalmovements and promotions, wastage and changes in hours, and other conditions of work.

reasons for supply forecast are

- Helps quantify number of people and positions expected to be available

- Helps clarify staff mixes that will exist in the future

- Assess existing staffing levels in different parts of the organization

- Prevents shortage of people

- Monitors expected future compliance with legal requirements of job reservations

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HR Programming

Once an organization’s personnel and supply are forecast, the two must be reconciled or

balanced in order that vacancies can be filled by the right employees at the right time.

HR Plan Implementation

Implementation requires converting an HR plan into action. A series of action

programmes are initiated as apart of HR plan implementation.

- Recruitment, Selection and Placement – after the job vacancies are known, efforts

must be made to identify sources and search for suitable candidates. The selection

programme should be professionally designed.- Training and Development – The training and development programme should

cover the number of trainees required and programmes necessary for existing staff

- Retraining and Redeployment – new skills are to be imparted to existing staff

when technology changes

- Retention Plan – retention plan covers actions which would help reduce avoidable

separations of employees.

- Downsizing – where there is surplus employee, trimming of labour force will be

necessary

Control and Evaluation

Control and evaluation represents the fifth and the final phase in the HRP process. The Hr

plan should include budgets, targets and standards. It should also clarify responsibilities

for implementation and control, and establish reporting procedures, which will enable

achievements to be monitored against the plan.

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Q 2. What is personnel manual and how is it designed?

MEANING AND DEFINITIONS OF PERSONNEL POLICIES:

Personnel policies are the principles and rules of conduct which "formulate, redefine,

break into details and decide a number of actions" that govern the relationship with

employees in the attainment of the organization objectives. The scope of personnel

policies is vast arid employees from all departments are covered by personnel policies.

(1) According. to Edwin B. Flippo, "A policy is a man-made rule: or pre-determined

course of action that is established to guide the performance of work toward the

organization objectives. It is a type of standing plan that serves to guide

subordinates in the execution of their tasks. "

(2) According to Calhoon, "Personnel policies constitute guides to action. They furnish the gei1eral standards or bases on which decisions are reached. Their

genesis lies in an organization’s values, philosophy, concepts and principles."

HOW TO PREPARE A PERSONNEL POLICY MANUAL?

Preparation of personnel policy manual is a lengthy, costly and time-consuming activity.

It involves lot of administrative work. Many persons are involved in this joint/collective

activity.

(1) Lengthy procedure involved: The steps to be taken for the preparation of

personnel policy manual depend on the material on policy manual already

available. If personnel policies on various aspects of personnel management have

already been written, the task consists of gathering the policies together, arranging

them in a logical order and writing them according to some acceptable format.

Each policy needs to be placed properly so that the manager using the manual will

understand all aspects (objectives, application, etc.) of the policy easily, quickly

and correctly.

(2) Firm decision to prepare policy manual: The decision to prepare a manual is to be

taken by the top management of the company. It also has to decide who is going

to be in charge of its preparation. It is desirable to make one person responsible

for the drafting of the manual.

(3) Giving suitable authority to In charge, Personnel Policy Manual: The person

appointed for the preparation of the manual should be given authority to set up asmall committee which will assist in gathering the data necessary for the

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preparation of complete and comprehensive manual. The major sources of

information should also be decided. In some cases, manual preparation is the

revision and updating of the old manual or preparation of new manual.

(4) Appointing of a small committee for manual preparation: The committee set upfor the preparation of manual should be small and functional. The initial task of

the committee is to collect data from individual departments. There should be

time limit for the preparation of final draft of the manual.

(5) Interviewing supervisors for information collection: The supervisors are mainly

responsible for administering company policies and practices. The supervisors

should be interviewed for understanding what is going on in the company at

present. They (supervisors) will be useful in finding out whether the present

policies (written or unwritten) are working and where they are not working.

Association of supervisors is important as it gives them opportunity to participate

in the preparation or in the revision of the personnel manual.

(6) Preparing first draft of policy manual: After collecting the required data, views of

supervisors, etc, the first draft of personnel policy manual should be prepared. The

language of the draft should be clear. The first draft of the manual should be

flexible and open to additions and changes.

(7) Circulating first draft for review and recommendations: Copies of the first draft

should be taken and circulated among the supervisors and others directly

concerned with the use of the manual. Their opinions should be collected for the

preparation of final draft of the manual.

(8) Final printing of manual: The manual maybe large in the case of a large

organization manufacturing and marketing wide product line.. A manual should

have printed pages with proper binding so as to make it available in a book form.

Sometimes, it is prepared in a loose-leaf form. A printed manual in book form can

be used for a longer period of three to five years. Thereafter, new updated and

revised manual can be introduced by discarding the old one.

(9) Periodical revision and updating of the manual: Periodical revision and updating

of personnel policy manual is necessary due to organizational and other changes.

The jobs of manual preparation are never finished as conditions inevitably and

continuously change.

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A personnel manager /HR manager or a manual coordinator should be appointed for this

job Here, he can draft the manual by using the steps noted above. The steps serve as

guidelines for manual drafting.

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Q 3. Why and how does job rotation take place? (Concept question)

Job rotation implies movement of employees from one job to another.

With job rotation, a given employee performs different jobs, but more or less of the same

nature.

When an activity is no longer challenging, the employee would be rotated to another job

at the same level that has similar skill requirements.

Advantages of Job Rotation-

• Job rotation is a way to overcome boredom and monotony.

• It is likely to increase intrinsic reward potential of a job because of different skills

and abilities needed to perform it.

• Workers become competent in several jobs rather than only one, which in turn

benefits the organization.

• Knowing a variety of jobs improve the worker’s self-image, provides personal

growth and makes the worker more valuable to the organization.

• Periodic job changing can also improve interdepartmental co-operation,

employees become more understanding of each other’s problems.

Disadvantages of Job Rotation

• An employee does not gain a particular specialization.

• Moving from one job to another also gets irritating because the normal routine

of an employee is disturbed and also time is wasted in adjusting to the new

job. The employee may feel alienated when he/she is rotated from job to job.

• Training costs are increased

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Q 4. Why and how does a transfer take place?

Firstly what is a transfer? A transfer involves a change in the job (accompanied by a

change in the place of the job) of an employee without a change in responsibilities or

remuneration. A transfer differs from a promotion in that the latter involves a change in

which a significant increase in responsibility, status and income occurs, but all these

elements are stagnant in case of a transfer. Another difference is that transfers are regular

and frequent, as in banks and other government establishments, but promotions are

infrequent.

Reasons for transfers

The reasons for transfers vary from organization to organization and from individual toindividual within an organization. Broadly speaking, the following are the reasons for

transfers:

There is a shortage of employees in one department or plant because of a

heavy demand, which necessitates a requirement of more employees. In

another department or plant, employees may be surplus because of

slackened demand for the products manufactured by the company. This

will lead to workers being idle and wastage of manpower. Workers arethus transferred from the surplus department to another department or

plant where there is shortage of staff.

Incompatibilities between the worker and his or her boss or between one

worker and another worker.

Correction of a wrong initial placement of an employee.

A change has taken place in the interests and capacities of an individual,

compelling him to transfer to a different job. Over a period of time, the productivity of an employee may decline

because of the monotony of his or her job. To break this monotony, the

employee is transferred.

The climate may be unsatisfactory for an employee’s health. He or she

may request a transfer to a different place where his or her health will not

be affected by the climate.

Family related issues cause transfers, especially among female employeeslike when they get married and want to join their husbands.

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Types of transfers

1) Production transfers – as mentioned earlier, a shortage or surplus of the labour

force is common in different departments in a plant or several plants in an

organization. Surplus employees in a department have to be laid off, unless they

are transferred to another department. Transfers effected to avoid such imminent

lay-offs are called production transfers.

2) Replacement transfers – replacement transfers are too intended to avoid imminent

lay-offs, especially of senior employees. A junior employee may be replaced by a

senior employee to avoid laying off the senior one. A replacement transfer usually

takes place when all the operations are declining and it is carried out to retain

long-service employees as long as possible.

3) Versatility transfers – versatility transfers are done to make employees versatile

and competent in more than one skill. Clerical employees in banks, for example

are transferred from one section to another so that they acquire the necessary skills

to attend to the various activities of the bank. Versatile transfers may be used as a

preparation for production or replacement transfers.

4) Shift transfers – generally speaking, industrial establishments operate more than

one shift. Transfers between shifts are common, such transfers being made mostly

on a rotation basis. Transfers may also be effected on special requests from

employees. Some request a transfer to the second shift or the night shift in order to

avail the free time during the day to take up part time jobs.

5) Remedial transfers – remedial transfers are effected at the request of employees

and are therefore called personal transfers. Remedial transfers take place in

instances like

the initial placement of an employee may have been faulty or

the worker may not get along with his or her supervisor or with other

workers in the department

he or she may be getting too old to continue in his or her regular job or

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the type of job or working conditions may not be well adapted to his or her

personal health

if the job is repetitive, the worker may stagnate and in all such instances

the employee would benefit by transfer to a different kind of work.

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organizational goals. There is another variable in the model – environment. It may be

stated that the HR function does not operate in vacuum. It is influenced by several

internal and external forces like economic, technological, political, legal, organizational,

and professional conditions.

HRM: is a management function that helps manager’s recruit, select, train, and develop

members for an organization.

Human Resource Planning: is understood as the process of forecasting an organizations

future demand for, and supply of, the right type of people in the right number.

Job Analysis: is the process of studying and collecting information relating to the

operations and responsibilities of a specific job. The immediate products of this analysis

are job descriptions and job specification.

Recruitment: is the process of finding and attracting capable applicants for employment.

The process begins when new recruits are sought and ends when their applications are

submitted. The result is a pool of applicants from which new employees are selected.

Selection: is the process of differentiating between applicants in order to identify (and

hire) those with greater likelihood of success in a job.

Placement: is understood as the allocation of people to jobs. It is the assignment or re-

assignment of an employee to a new or different job.

Training and development: it is an attempt to improve current or future employee

performance by increasing an employee’s ability to perform through learning, usually by

changing the employee’s attitude or increasing his or her skills and knowledge. The need

for training and development is determined by employee’s performance deficiency,

computed as follows:

Training and development need = Standard performance – Actual performance

Remuneration: is the compensation an employee receives in return for his or her

contribution to the organization.

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Motivation: is a process that starts with a psychological or physiological deficiency or

need that activates behavior or a drive that is aimed at a goal or an incentive.

Participative management: Workers participation may broadly be taken to cover all

terms of association of workers and their representatives with the decision making

process, ranging from exchange of information, consultations, decisions and negotiations

to more institutionalized forms such as the presence of workers members on management

or supervisory boards or even management by workers themselves as practiced in

Yugoslavia. ((ILO)

Communication: may be understood as the process of exchanging information, and

understanding among people.

Safety and health: Safety means freedom from the occurrence or risk of injury or loss. In

order to ensure the continuing good health of their employees, the HRM focuses on the

need for healthy workers and health services.

Welfare: as defined by ILO at its Asian Regional Conference, defined labour welfare as a

term which is understood to include such services, facilities, and amenities as may be

established in or in the vicinity of undertakings to enable the person employed in them to

perform their work in healthy, congenial surroundings and to provide them with amenities

conducive to good health and high morale.

Promotions: means an improvement in pay, prestige, position and responsibilities of an

employee within his or her organization.

Transfer: involves a change in the job (accompanied by a change in the place of the job)

of an employee without a change in the responsibilities or remuneration.

Separations: Lay-offs, resignations and dismissals separate employees from the

employers.

Industrial relations: is concerned with the systems, rules and procedures used by unions

and employers to determine the reward for effort and other conditions of employment, to

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protect the interests of the employed and their employers, and to regulate the ways in

which employers treat their employees.

Trade Unions: are voluntary organizations of workers or employers formed to promote

and protect their interests through collective action.

Disputes and their settlement: Industrial disputes mean any dispute or difference

between employers and employers, or between employers and workmen, or between

workmen and workmen, which is connected with the employment or non-employment or

terms of employment or with the conditions of labour of any person.

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CONCEPT TESTING QUESTIONS

Q 1. Meaning and Definition (of all concepts for every chapter)

Q 2. Difference between: personnel management and HRM

Dimension Personnel Management HRM

1. Employment contract Careful delineation of

written contracts

Aims to go ‘beyond’

contract.

2. Rules Importance of devising clear

rules

Can do, outlook, impatience

with rule

3. Guide to management

action

Procedures Business need

4. Behaviour referent Norms/ customs and

practices

Values/mission

5. Managerial task vis-à-vis

labour

Monitoring Nurturing

6. Key relations Labour management Customer

7. Initiatives Piecemeal Integrated

8. Speed of decision Slow Fast

9. Management role Transactional Transformational leadership

10. Communication Indirect Direct

11. Prized management

skills

Negotiation Facilitation

12. Selection Separate, marginal task Integrated, key task

13. Pay Job evaluation Performance related

14. Conditions Separately negotiated Harmonization

15. Labour management Collective-bargaining

contracts

Individual contracts

16. Job categories and

grades

Many Few

17. Job design Division of labour Team work

18. Conflict handling Reach temporary truce Manage climate and culture

19. Training and

development

Controlled access to courses Learning companies

20. Focus of attention for

interventions

Personnel procedures Wide ranging cultural,

structural and personnel

strategies

21. Respect for employees Labour is treated as a tool

which is expendable and

replaceable

People are treated as assets

to be used for the benefit of

an organization, its

employees and the society

as a whole

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GROUP 1 (TOPICS COVERED)

Personnel management

Human resource management

Strategic HRM

New trends in HRM

1] PERSONNEL MANAGEMENT

DEFINITIONS OF PERSONNEL MANAGEMENT/ HRM

The term personnel management is defined in different ways. The following definitions

are worth noting:

(1) According to Edwin Flippo" Personnel management is the planning, organizing,

directing, and controlling of the procurement, development, compensation, integration,

maintenance, and separation of human resources to the end that individual,organizational and societal objectives are accomplished".

(2) According to George R. Terry, "Personnel management is concerned with the

obtaining and maintaining of a satisfactory and satisfied, work force".

(3) According to Walter D. Scott, "Personnel management is concerned with the

attaining of maximum individual development; desirable working relationship between

employer and employees, and an effective moulding of human resources as contrasted

with physical resources".

(4) According to British Institute of Personnel Management, London, "Personnel

Management is that part of management which is concerned with the people at work

and with their relationship within an enterprise".

OBJECTIVES/PURPOSES OF PERSONNEL MANAGEMENT / HUMAN

RESOURCE MANAGEMENT:

The basic objective of personnel management is to maintain efficient team of workers

for the benefit of the organization. In addition, to provide opportunities of self-

development to employees and finally to maintain congenial work atmosphere and

inter-personnel relations are the objectives of personnel management. Personnel

management aims at giving fair treatment to employees as regard wages, 'welfare

facilities, non-monetary benefits, working conditions and so on.

The objectives of HRM are derived from the basic objectives of an organization. In

order to achieve organizational objectives, integration of employer's interest and

employee interests is necessary.

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The objectives of personnel management/HRM in any industrial organization can be

summarized as under.

(1) To attain maximum individual development (self-development) of the members of

an organization and also to utilize available human resources (with the organization)

fully and effectively.

(2) To mould effectively the human resources.

(3) To establish desirable working relationships between employer and employees and

between groups of employees.

(4) To ensure satisfaction to the workers so that they are freely ready to work.

(5) To improve the service rendered by the enterprise to the society through better

employee morale, which leads to more efficient individual and group performance.

(6) To establish and maintain a productive and self respecting relationship among all the

members of an organization.

(7) To ensure the availability of a competent and willing workforce to the organization

for its progress and prosperity.

(8) To help organization to achieve its goals by providing well trained, efficient and

properly motivated employees.

(9) To maintain high morale and good human relations within the organization for the

benefit of employer and employees.

(10) To secure the integration of all the individuals and groups with the organization by

reconciling individual/group goals with those of an organization.

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2] HUMAN RESOURCE MANAGEMENT

MEANING AND DEFINITION

Personnel refers to the employees working in an organization at different levels.

Personnel management (also called human resource management) is that aspect of total

business management, which deals with human relationships within an organization.

Personnel represent human resource, which is different from material resources.

Human resource is the most productive and most versatile. In addition, the manpower in

an organization needs human treatment. Employees have a capacity to feel, think and

even to react. Management has to deal with the employees in a careful and tactful

manner. Material resources such as land, machines, raw materials, equipment, etc. are

easy to manage. This is because they have no capacity to feel or think or react. This is not

the case with human resource i.e. manpower. Man and machines are not on par and must

not be treated in the same manner. This is because of all the resources manpower is the

only resource, which does not depreciate, with the passage of time. According to Peter F.

Druckert UtIle prosperity, if not the survival of any business depend on the performance

of its managers of tomorrow." The material resources alone will not help the organization

to achieve its objectives. For this, effective co-ordination and utilization of material and

human resources are required. This suggests the importance of human resources.

The human resource is very important and useful. It should be nurtured and used for the

benefit of the organization. This is a challenging job before personnel

manager/management. The organization can make rapid progress only when the

employees are satisfied and co-operative. On the other hand, the organization will have to

face various problems and difficulties, if the employees are not co-operative but hostile.

This indicates that human resource is most strategic and critical determinant of growth of

a business unit. Every organization needs loyal, efficient and satisfied labour force. For

this, adequate attention should be given to personnel management.

OBJECTIVES OF HRM

Same as objectives of personnel management (given above)

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compensation (in monetary form) to employees for the services rendered. For

this, a fair system of remuneration payment (wages and salaries) needs to be

introduced. Remuneration to employees should be attractive so that the labour

force will be satisfied and disputes, etc. will be minimized. Fair wage payment

acts as a motivating factor.

(4) Integration of interests of manpower and the organization: Manpower is

interested in wage payment while organization is interested in higher profits,

consumer loyalty, market reputation and so on. HRM has to reconcile the interests

of the individual members of the organization with those of the organization.

(5) Maintenance of manpower: This manpower function relating to maintaining

satisfied manpower in the organization through the provision of welfare facilities.

For this, attention needs to be given to health and safety measures, maintenance

of proper working conditions at the work place, provision of welfare facilities and

other non-monetary benefits so as to create efficient and satisfied labour force

with high morale. Even collective bargaining and workers participation come

within this broad personnel function.

(6) Provision of welfare facilities: Employees are offered various welfare facilities.

They include medical, educational, recreation, housing, transport and so on.

(7) Misc. functions: Misc functions under HRM include maintenance of service

records of employees (which are used for promotions/transfers performance

appraisal, etc.), promotions and transfers of employees, maintaining cordial

industrial relations, introduction of rational grievance procedure, performance

evaluation of employees, career planning of employees, maintenance of

discipline, administering the policies with regard to disciplinary action and

compliance of various labour laws.

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EVOLUTION OF HRM IN INDIA

The importance of personnel/human resources management is now universally accepted

and India is not an exception to this rule. In India, large business enterprises, public sector

enterprises and even medium and small enterprises appoint personnel manager or human

resources development (HRD) manager to look after the personnel functions such as

recruitment, promotions and transfers, training and manpower development, provision of

welfare facilities, compensation management and so on. The term HRM is a relatively

new term emerged during the 1970s. It is now used as a better and meaningful substitute

to personnel management. HRM is wider in scope and has its distinct philosophy.

The process of industrial development started in India rather late. It was during the British

Rule and that too after the First World War that textile, jute, iron and steel and other

organised industries started in India. Recruitment, wage payment, welfare facilities and

other personnel problems were noted only when labour class was employed on a large

scale in the industrial sector. This is the starting period for personnel management in

India. In the early British period and prior to that personnel management and personnel

functions were absent, (Reference to some personnel functions and systematic

management of resources was made in Kautilya's Arthashastra during the 4th century

Be.) as industrial activities were extremely limited. They were also conducted on a small

scale. As compared to India, the industrial growth was rapid in Europe. As a result, the

concept of personnel functions and personnel management made rapid progress. The

concept of personnel management function in India is based on similar concept developed

in Europe much earlier.

The personnel function in India has been the product(outcome) of various factors such as

industrial growth, labour, legislation, exploitation of workers in the early period and their

demand for certain basic necessities of life. (e.g. fair wage, weekly, holiday, essential

facilities at the work place)The need for labour officers in Indian industry was

felt/realized as early as 1929 for the protection of labour force in industrial units.

In 1931, the members of Bombay Mill owners' Association appointed Labour Officers in

their textile mills (on voluntary basis) for the settlement of grievances and disputes of

employees. Similar arrangement was introduced in the jute mills in Bengal (under the

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leadership of Jute Mills Association). The labour welfare officers were given the

responsibility to promote sports and welfare activities and provide food shops (canteen

facility) to workers.

After Independence, many pro labour legislations were made for the protection and

welfare of workers. The scope of personnel management function was made more broad

and liberal. Many provisions regarding recruitment, salary payment and conditions of

service were laid down. This gave recognition to the personnel management function in

the industrial establishments.

Gradually, the need of personnel management and its role in cordial labour relations and

fair treatment to employees need were recognized by industrial organizations. Personnel

departments under the leadership of personnel managers were started in the companies.

Liberal welfare facilities were introduced for the benefit of employees. Such measures

taken for the protection and welfare of employees enlarged the scope of personnel

management. Even training and manpower development programmes added new

dimensions to the activities of personnel management. Many companies have now,

prepared well-defined personnel policies, grievance and other procedures and liberal

package of welfare facilities. Such additional activities/functions under personnel

management raised the importance and popularity of personnel department.

HRM ACTIVITIES/MODEL

Explained above in the full length questions

DIFFERENCE BETWEEN HRM AND PERSONNEL MANAGEMENT

Explained above in the concept testing question

CHALLENGES FACING HRM IN INDIA

With organizations achieving a HRD climate, a basic source of human motivation to

perform higher, human wastage has been reduced. So, whereas personnel management

regarded wages and salaries as the main source of motivation, Human Resource

Management (HRM) regards creation of a congenial work climate (HRD climate), jobchallenges, creativity and opportunity for development as the motivating forces.

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The challenges in HR that would be very critical are staffing. The biggest fear that

such big corporate have is, if two or three wrong people get together, they can

bring down the company. So, one is hiring the right kind of people, then right kind

of values and the right kind of professional competencies. The other challenge is to continuously allow people to develop and grow so that

they have very high energy and the ability to energize others with the edge to

resolve conflicts, and the ability to execute. You will also have to bear in mind

that they also have aspirations. So managing the aspirations and rewarding them

timely and accurately become critical in such organizations.

A lot of companies expect their problems to disappear the moment HR is

implemented. "HRM is a means to an end, not the end ".

The other reasons why HR implementations often fail include lack of preparation,

lack of top management involvement, faulty selection process, improper use of the

HRM policies/department/funds, too high expectations.

Cost is an important factor while considering the implementation of HR activities.

The companies are trying to cut costs while conducting HR programmes and are

exorbitantly spending on other unimportant activities of the organization.

HRM is still in its stage of infancy, it yet has to evolve and become more a way of

doing business or managing the organization.

It shouldn’t be used as a tool or remedial measure when the problem/ crisis arises.

Nowadays, the employees are being forced to attend self-improvement and overall

development programmes compulsorily without the staff’s knowledge/interest and

companies are spending huge amounts on such welfare activities, which are

absolutely redundant and should be eliminated from the system.

Pay packages and incentives have to be supplemented with some supplementary

packages but the company tries to replace the monetary benefits by some

workshops or seminars or presentations or training courses which demotivate the

workers because their expectations are being ignored in the bargain. We look at

the career development of people very strongly. We do not believe that we should

be the highest paymasters.

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3] STRATEGIC HRM

Strategic Management is defined as ‘ the set of managerial decisions and actions that

determine the long-term performance of a corporation. It includes environmental scanning,

strategy formulation, strategy implementation and evaluation and control. The study of

strategic management, therefore, emphasizes monitoring and evaluating environmental

opportunities and threats in the light of a corporation’s strengths and weaknesses.’

The strategic management process involves the following four processes.

The advent of HRM has brought the linkage between employer-employee relationship and

strategic management to sharp focus.

Since Environmental Scanning helps identify threats and opportunities prevailing in the

external and internal environment, HRM is of great help in locating opportunities and

threats.

HRM is in a unique position to supply competitive intelligence that may be useful in

Strategy Formulation. Details regarding advanced incentive plans being used by

competitors, opinion-survey data from employees that elicit information about customer

complaints, and information about pending legislation like labour laws or mandatory healthinsurance are some examples. The strengths and weaknesses of a company’s human

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resources can have a determining effect on the viability of a company’s strategic options.

Unique HR capabilities serve as a driving force in strategy formulation. A company may

build it’s new strategy around a competitive, advantage stemming from it’s human

resource. The well known accounting and consultancy firm, Arthur Anderson, developed

unique HR capabilities in training, which provides the firm with a competitive advantage

enabling it to provide fast and uniform in-house training.

HRM supplies a company with a competent and willing workforce which is responsible for

executing strategies i.e Strategy Implementation. For example Maruti Udyog and

Hindustan Motors are manufacturing cars, essentially using identical technology. The secret

behind the meteoric rise of Maruti is its workforce.

HRM supports strategy implementation in other ways too. For example human resource

today is heavily involved in the execution of a company’s restructuring and downsizing

strategies, through outplacing employees, instituting performance linked pay plans,

reducing health care costs and retraining employees. And in an increasingly competitive

global market place, instituting HR practices that build employee commitment can help

improve an organization’s responsiveness.

Lastly Human Resource Management must be continuously evaluated to make strategic

management highly effective by supplying human resources who are competent and

committed. Thus Strategic Human resource Management today is given due importance

and offers several financial and non-financial benefits to a company.

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4] NEW TRENDS IN HRM

MAINSTREAM economists perceive voluntary retirement as a measure to shed the

workforce whose marginal productivity is zero. Further, it is argued that this could be

introduced in an industrial organization for maintaining its cost effectiveness in an

increasingly competitive world. Moreover, voluntary retirement is accompanied by

technological modernization that warrants the replacement of labor with capital.

Technological modernization improves the productivity of existing workforce so much so

that a section of the existing workforce becomes again redundant even as modernization

enhances the installed capacity of the technology. The workforce that becomes redundant

in this process has to retire or be retrenched.

The rationale behind the introduction of voluntary retirement scheme (VRS) in India is

that any organized industrial organization has to operate within the existing legislative

framework, which does not allow the organization to shed the redundant workforce

without adequate compensation

Employers refer to VRS as 'golden handshake', trade unions call it 'voluntary

retrenchment scheme', and for the government, it is 'unstated exit policy' which means

that an exit policy which may not exist on paper. VRS is one of the strategies introduced

in the early 1980s in central public sector undertakings (PSUs) to reduce the so-called

surplus or redundant workforce. It gained publicity after the introduction of new

economic policy in 1991. In India, the government employs more than 70 per cent of the

organized workforce; it uses all its channels to reduce the organized sector of the

workforce without antagonizing the trade unions. It is envisaged in the new economic

policy that VRS can provide minimum sustenance security to the retired individual and

his family.

Trade unions play a crucial role in introducing the VRS in any organized sector firm.

The main objective behind the scheme is to send out those who cannot be retrained in

new skills. The premise of the argument appears to be weak. The liberalization policy, in

its anxiety to modernize, restructure and globalize the products of Indian industry, is

wasting precious labor force that could have been modernized through retraining and on-

the-job training. Precious skills and abilities of the retrenched workforce are equated with

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worn out physical capital that may not be susceptible to repair or modernization. Are

human beings not capable of learning and modifying their knowledge, skills and applying

the same to produce higher output? The current emphasis on restructuring does not allow

such questions.

The free economy and trade liberalization have ushered in the need for the enterprises to

have a competitive edge. Economic forces have led to organizational cost cutting,

changes in production processes, exploration of new markets, plant relocations,

modernizations, downsizing and structural changes.

Organizational adjustment at all levels has become extremely imperative. Over manning

has crept into almost all industrial units on account of the inability of the enterprises toreduce or adjust workforce as per the business needs. The sort of cuts that only happened

in heavy industries has now become widespread. The days of nibbling away deadwood

have long gone. It's time for the organizations to realign and focus on the core

competencies.

THE GOLDEN HANDSHAKE

Voluntary Retirement Scheme (VRS) is the latest mantra of many a corporate and Public

sector units. The company may decide to declare a VRS based on their HR plan and

suitability. For a common salaried individual this becomes a major decision.

The company as per their human resource policy declares VRS or the Voluntary

Retirement Scheme. VRS is a scheme whereby the employee is offered to voluntarily

retire from his services before his retirement date. Subject to certain conditions the

company offers VRS to its employees It is the golden route to cut the excess flab. The

most humane technique to retrench the employees in the company today is the voluntary

retirement scheme. It is the golden handshake for the employees and the only option

today for the companies to downsize their headcount. The scheme which is formally

permitted by the Department of Public Enterprises and which provides the lucrative way

for the employees to terminate their services and accept VRS.

This process should convince them that the posts in the organization have become

redundant and not the person and the organization still values the person. Since this

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process involves emotions and feelings, every care must be taken by the management that

the process must be carried out in such a manner that it keeps the dignity of the

employees but at the same time achieves the objective in a tactful manner.

PINK SLIP

A "pink slip" is a notice of dismissal or termination from one's job, also known as one's

"walking papers." The term "pink slip" dates from the early 20th century, and originally

referred to the practice of including a pink-colored slip of paper in an employee's weekly

pay envelope notifying the worker of his or her termination. There does not seem to be

any particular significance to the use of the color pink aside from the fact that it made the

notice stand out from any other papers that might be in the envelope.

Though the "pink slip" in the pay envelope has probably been superseded by e-mail these

days, "to be pink slipped" is still very much in use as shorthand for "to be fired."

INFORMATION GATHERED FROM :

Human resource and personnel management-2nd edition -Aswathappa

Human Resources management-Kale & Ahmed

Internet

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