Employment Tests

I.  Administration of selection tests: 
A personnel testing is a valuable way to measure individual characteristics. Hundreds of tests have been
developed to measure various dimensions of behavior. The tests measure mantel abilities, knowledge, physical abilities, personality, interest, temperament, and other attitudes and behaviors. Evidence suggests that the use of tests is becoming more prevalent for assessing an applicant’s qualifications and potential for success. Tests are
used more in the public sector than in the private sector and in medium-sized and large companies than in small
companies. Large organizations are likely to have trained specialists to run their testing programs.

•  Advantages and disadvantages of using tests:
Selection testing can be a reliable and accurate means of selecting qualified candidates from a pool of applicants.
As with all selection procedures, it is important to identify the essential functions of each job and determine the skills needed to perform them. 

•  Potential Problems Using Selection Tests
Selection tests may accurately predict an applicant’s ability to perform the job, but they are less successful in
indicating the extent to which the individual will want to perform it. Another potential problem, related
primarily to personality tests and interest inventories, has to do with applicants’ honesty. Also there is the
problem of test anxiety. Applicants often become quite anxious when confronting yet another hurdle that might
eliminate them from consideration. 


II.  Characteristics of Properly Designed Selection Tests
Properly designed selection tests are standardized, objective, based on sound norms, reliable and—of utmost
importance—valid.

1. Standardization: Refers to the uniformity of the procedures and conditions related to
administering tests. It is necessary for all to take the test under conditions that are as
close to identical as possible.

2. Objectivity: Achieved when all individuals scoring a given test obtain the same results.

3. Norms: Provide a frame of reference for comparing applicants’ performance with that
of others. A norm reflects the distribution of scores obtained by many people similar
to the applicant being tested. The prospective employee’s test score is compared to the
norm, and the significance of the test score is determined.

4. Reliability: The extent to which a selection test provides consistent results. If a test
has low reliability, its validity as a predictor will also be low. To validate reliability, a test
must be verified. 

5. Validity: The extent to which a test measures what it purports to measure. If a test
cannot indicate ability to perform the job, it has no value as a predictor.



 

SELECTION PROCESS

We begin the chapter with a discussion of the significance of employee selection and the environmental factors that affect it. Then, we describe the selection process,  the preliminary interview, and review of the application for employment. 

Selection Process an Overview
Selection is the process of choosing from a group of applicants those individuals best suited for a particular
position. Most managers recognize that employee selection is one of their most difficult, and most important,
business decisions. This process involves making a judgment -not about the applicant, but about the fit between
the applicant and the job by considering knowledge, skills and abilities and other characteristics required to
perform the job Selection procedures are not carried out through standard pattern and steps in this. Process can vary from organization to organization some steps performed and considered important by one organization can be skipped by other organization.

B. ENVIRONMENTAL FACTORS AFFECTING THE SELECTION
PROCESS
A permanent, standardized screening process could greatly simplify the selection process. However,
development of such a process—even if it were possible and desirable—would not eliminate deviations to meet
the unique needs of particular situation.

•  Legal Considerations 
Legislation, executive orders, and court decisions have a major impact on human resource management. It is
important for hiring managers to see the relationship between useful and legally defensible selection tools.

•  Speed Of Decision Making
The time available to make the selection decision can have a major effect on the selection process. Closely
following selection policies and procedures can provide greater protection against legal problems; however, there
are times when the pressure of business will dictate that exceptions be made.

•  Organizational Hierarchy
Different approaches to selection are generally taken for filling positions at different levels in the organization.

•  Applicant Pool
The number of applicants for a particular job can also  affect the selection process. The process can be truly
selective only if there are several qualified applicants for a particular position. The number of people hired for a
particular job compared to the individuals in the applicant pool is often expressed as a selection ratio.

•  Type of Organization
The sector of the economy in which individuals are to be employed—private, governmental, or not-for-profit—can also affect the selection process.

 

SOURCES OF RECRUITMENT

A.  Explain Recruitment
B.  Describe Sources of Recruitment
C.  Identify alternatives to recruitment
D.  Understand Recruitment – an applicant’s perspective
E.  Evaluate the Recruitment Process

LESSON OVERVIEW
Today we will discuss about the first step of staffing function which is Recruitment. We begin this lecture by
presenting the recruitment process. This section is  followed by internal recruitment methods, external
recruitment sources, and external recruitment methods. Finally, recruitment evaluation will be discussed. 


A. Recruitment:
Recruiting refers to the process of attracting potential job applicants from the available labor force. Every
organization must be able to attract a sufficient number of the job candidates who have the abilities and
aptitudes needed to help the organization to achieve its objectives. An effective employee selection procedure is
limited by the effectiveness of recruiting process.  Outstanding job candidates cannot be selected if they are not included in the applicant pool.
The recruitment process also interacts with other personnel functions, especially performance evaluation
compensation training and development and employee relations. Recruiting is typically a human resource function.
In planning recruiting activities, an organization needs to know how many applicants must be recruited. Since
some applicants may not be satisfactory an others may not accept the job offers, an organization must recruit
more applicants than it expects to hire. Yield Ratios help organizations decide how many employees to recruit
for each job opening. These ratios express the relationship between the number of people at one step of the
recruitment process relative to the number of people who will move to the next step.
Now we will discuss the different sources of recruitment that are available to organization:
 

Steps in Job Analysis

The job analysis process has the following steps:
1. Identify how the information will be used because that will determine what data will be collected and
how it should be collected. Interviewing and position analysis questionnaire are some examples of data
collection techniques.
2. Review relevant background information, such as organization charts, process charts, and job
descriptions.
3. Select representative positions to analyze because there may be too many similar jobs to analyze, and it
may not be necessary to analyze them all.
4. Analyze the job by collecting data on job activities, required employee behaviors, working conditions,
and human traits and abilities needed to perform the job.
5. Review and verify the job analysis information with job incumbents to confirm that it is factually correct
and complete.
6. Develop a job description and job specification from the job analysis information.
  a.  Job description
 A job description is a written statement of what the jobholder actually does, how he or she does it, and under
what conditions the job is performed.  There is no standard format for writing job descriptions, but most
descriptions include sections on: 
•  job identification
•  job summary
•  relationships, responsibilities, and duties
•  authority of incumbent
•  standards of performance
•  working conditions
•  job specifications


b.  Job specification
A job specification is a document containing the minimum acceptable qualifications that a person should
possess in order to perform a particular job. Items typically included in the job specification are educational
requirements, experience, personality traits, and physical abilities. 


c.  Job evaluation
In Job Evaluation process the worth of job is identified based upon job comparability and according to worth,
importance of job and relative value Compensation is designed and selected.

 

When Job analysis is performed?

Job analysis is conducted under following situations.
•  When the organization is founded
When organizations are created complete information about jobs to be performed is collected through job
analysis.
•  When new jobs are created
When jobs are changed significantly as a result of new technologies, methods, procedures, or systems for
analyzing them job analysis is conducted.

VI.  Uses of Job Analysis Information
1. Recruitment and Selection – Job descriptions and job specifications are formed from the information
gathered from a job analysis, which help management decide what sort of people to recruit and hire.
2. Compensation – The estimated value and the appropriate compensation for  each job is determined
from the information gathered from a job analysis.
3. Performance Appraisal – Managers use job analysis to determine a job’s specific activities and
performance standards.
4. Training – Based on the job analysis, the job description should show the job’s required activities and
skills.
5. Discovering Unassigned Duties – Job analysis can help reveal unassigned duties.
6. EEO Compliance – The Uniform Guidelines on Employee Selection stipulate that job analysis is a
crucial step in validating all major personnel activities.
 

JOB ANALYSIS

A. Job Analysis: 
Studying and under-standing jobs through the process known as job analysis is a vital part of any HRM program

I.  Purposes of the job Analysis
Job analysis is used to acquire the information in following areas
1.  Major duties or activities required
2.  Conditions under which the job is performed
So this process helps us to learn the following concepts:
•  Job: A group of tasks that must be performed in an organization to achieve its goals.
•  Position: The tasks and responsibilities performed by one person; there is a position for every
individual in an organization. 
•  Task: A distinct, identifiable work activity composed of motions 
•  Duty: A larger work segment composed of several tasks that are performed by an individual. 
•  Responsibility: An obligation to perform certain tasks and duties. 

II.  Job Analysis Defined:
Job Analysis is the SYSTEMATIC process of collecting and making judgments about all the important
information related to a job. Job analysis is the procedure through which you determine the duties and nature of
the jobs and the kinds of people who should be hired for them.  You can utilize the information it provides to
write job descriptions and job specifications that are  utilized in recruitment and selection, compensation,
performance appraisal, and training.

Relationship of HRIS with overall MIS

Information is the backbone of healthy and efficient business management. An information system allows the
collection and processing of data to produce useful  information for designated users at each level of
management. Information management must conform to well-defined principles, run on appropriate software,
and be completely adapted to your organization within an integrated system usually known as Management
Information System (MIS). Management Information System  is the entire set of systems and activities required to manage, process, and use information as a resource in the organization. Stated slightly differently, MIS is the management and use of computer-based systems, computer-resident data, and telecommunications for the support of business decision processes. HRIS is the part of MIS that provides the information regarding
workforce in the organization and facilitates the decision makers in decision making process in this regard.
 

Human Resource Information System

HRISs are systems used to collect, record, and store, analyze, and retrieve data concerning an organization's human resources. The collection of information on aspects of work life as diverse as salary and payroll, compensation, leave, accidents, superannuating and employee benefits has always been part of the human resource manager's function. In the early history of personnel management, administrative aspects, includingdata collection, took up a great deal of time. Reviews of employee salary and leave entitlements often dominated the activities of earlier personnel officers, reflecting both management priorities and their own clerical backgrounds. Such early information systems were manual, and were mainly used to notify employees of leave entitlements, to ensure accurate salary and wage payments and to process workers' compensation and superannuating claims. The data was seldom used to predict trends, identify problem areas and, or aid in the longer-term staffing process.


I.  The development of human resource information systems (HRIS)
In the early development of human resource management, information systems, although often accurate
and comprehensive, were mainly used for administrative and operational purposes.  Forms were used to
collect leave requests, workers compensation and accident data, and salary variation and superannuation
entitlements. During the 1970s and 1980s, several  factors radically changed attitudes towards human
resource information systems. The increasing complexity of payroll systems in this period demanded
more flexibility in, and access to information system. These needs happily coincided' with the
development of increasingly sophisticated computer hardware and software systems. In large
organizations, centralized payroll processing sections began to be separated from other human resource
functions. Some organizations contracted their payroll responsibilities to external payroll bureaus with
greater technological expertise, and for reduced costs.


II.  Nature and benefits of HRIS
Modern human resource information systems are comprehensive, accurate and accessible systems for
recording employee and work data relevant to HRM, HR and organizational planning. 
An HRIS is:
The system used to acquire, store. Manipulate, analyze, retrieve and distribute pertinent information
regarding an organization’s human resources. Its purpose is to facilitate, or support, straight, tactical and
operational decision making, to avoid litigation, to  evaluate programs, policies, or practice and daily
operations
Specific benefits of such systems include:
i.  Improved planning and program development using decision support software. Faster
information processing and improved response times
ii.  Decreased administrative and HR costs
iii.  Accuracy of information
iv.  Enhanced Communication at all levels.
Not all systems fulfill all these requirements, nor is such a complete system suitable for all organizations.
Essentially however all HRIS contain information on:
•  Employees 
•  Jobs and work conditions
•  Positions
•  HR events (e.g. recruitment. training and  development, performance appraisals, and
terminations).
 

HR’s Strategic Role

a.  HR’s Evolving Role – It’s the firm’s workforce that provides the competitive advantage for the firm.  HR’s role is shifting from protector and screener to strategic partner and change agent.
b.  Strategic Human Resource Management refers to improving business performance and developing an organizational culture that fosters innovation and flexibility by linking HRM with the strategic goals and
objectives of the firm.

c.  HR’s Role As a Strategic Partner can be seen as either adapting individual HR practices to fit specific corporate and competitive strategies or as an equal partner in the strategic planning process.

     1. HR’s Role in Executing Strategy – Execution has been HR’s traditional strategic role.
     2. HR and Value Chain Analysis – Strategy execution usually involves identifying and reducing costs, and 
          therefore value chain analysis.
 3. HR’s Role in Formulating Strategy – HR management can play a role in environmental scanning by assisting in identifying and analyzing external opportunities and threats that may be crucial to the company’s success.

STRATEGIC PLANNING AND HRIS

ƒ  Strategic Planning
ƒ  Human Resource Information Systems (HRIS) 
ƒ  Relationship of HRIS with overall MIS 


A. Strategic planning:
It  is the process by which top management determines overall organizational purposes and objectives
and how they are to be achieved. The linking of HRM with strategic goals and objectives in order to
improve business performance and develop organizational cultures that foster innovation and flexibility.
The role of HR in the strategic planning process depends on the organization's view of HR.  There are
three views detailed in the text which involve HR as an operational function, HR as a "fitting" function,
and HR as an equal partner in the strategic planning process.  Obviously, it is our contention that the
latter is the appropriate view.   In this view, HR's role would  include environmental scanning,
competitive intelligence, internal strengths and weaknesses analysis, and the implementation of the
strategies.  HR process involves following activities or steps.

 
I.  HR Planning Process:

a.  Determine the organizational mission:
It states Organization’s overall purpose and basic business scope and operations it provides
information like, why does our organization exist? What unique contributions can it make?
b.  Scan the organizational environment.
This is also known as SWOT analysis through this process organizations identify different
opportunities available in the market and the threats that can be faced by the organization, and
the weaknesses and strengths possessed by organizations are also measured and identified
through this process.

c.  Set strategic goals:
To achieve the overall mission or purpose of the organization it is required to set specific long-
term and short term objectives and goals. The goal can be defined as desired outcomes to
accomplish mission. Following are the characteristics of effective goals.
•  Specific
•  Challenging
•  Measurable

d.  Formulate a strategic plan: 
Courses of action is designed to meet strategic goals, also specifies functional or departmental
goals are selected at this step.

EXECUTIVE ORDER 11246

An executive order (EO) is a directive issued by the president and has the force and effect of laws enacted
by Congress. A major provision of EO 11246 is that every executive department and agency that
administers a program involving federal financial assistance will require adherence to a policy of
nondiscrimination in employment as a condition for the approval of a grant, contract, loan, insurance, or
guarantee. Affirmative action, stipulated by EO 11246, requires employers to take positive steps to ensure
employment of applicants and treatment of employees during employment without regard to race, creed,
color, or national origin
 
Affirmative Action
An approach that an organization with government contracts develops to demonstrate that women or
minorities are employed in proportion to their representation in the firm’s relevant labor market Executive
Orders 11246 & 11375 require companies with federal contracts to develop affirmative action plans (AAPs)
it provides preferential treatment to minority group members in functions like Recruiting and Hiring
The three steps involved in developing an affirmative action program are (1) conducting a utilization
analysis, (2) establishing goals and timetables, and (3) determining action options.  In the first phase,
organizations need to consider different pieces of information, which constitute an availability analysis after
they have conducted a utilization analysis. Rather, the employer should take into consideration the size of
the underutilization, how fast the work force turns over, and whether the work force is growing or
contracting.  In the third phase, the companies recruit protected-class members, redesign jobs, provide
specialized training, and remove unnecessary employment barriers.


 

LEGAL CONTEXT OF HR DECISIONS

A. Legal context of HR decisions
Legal considerations are significant external force affecting human resource management relates to federal,
state, and local legislation and the many court decisions interpreting this legislation. In addition, many
presidential executive orders have had a major impact on human resource management. If company is
having compliance with the  legal considerations it will be contribution towards enhancement of good will
reputation as well as fair operations of the organization that will be leading towards attaining competitive
advantage.  Keeping in view the importance of legal considerations mangers must understand the legal issues that affect the practices of HRM Like Which employee to hire?
How to compensate employees?
What benefits to offer?
How to handle conflicts?
How and when to fire employees? etc.
Legal
Compliance
Competitive
Advantage

Important? 
Understanding and complying with HR law is important for three reasons.  It helps the company to do the
right thing, to realize the limitations of the HR and legal departments, and it limits potential liability.


Doing the Right Thing
Compliance with the law is the right thing to do.  The primary requirement of these laws is to mandate good
management practice.  Operating within these laws has benefits beyond simple legal compliance. 
Discriminatory practices not only create potential legal  liability, but also lead to poor employee morale and
low job satisfaction, which can lead to poor job performance.


Realizing the Limitations of the HR and Legal Departments
If managers make poor decisions, the HR department neither always be able to resolve the situation nor can
a firm’s legal department solve problems created by managers.  The function of the legal department is to
try to limit damage after it has already occurred.Limiting Potential Liability
Considerable financial liabilities can occur when HR laws are broken or perceived to be broken.

Legal regulation of HRM
Legal environment and considerations can influence potential and prospective as well as current employees
of the organization to Prospective Employees. It provides Protection from discrimination in selection, initial
job placement, and initial compensation While to Current Employees Protection from discrimination in all dimensions of work in the organization.

Fair employment
A situation in which employment decisions are not affected by discrimination is termed as Fair employment.


Employment discrimination
To make an employment decision, not on the basis of legitimate job-related factors...Any employment
decision: hiring, promotions, pay, discipline, etc fail to use job-related factors (e.g., essential job
qualifications, job performance, etc.), and for employment decisions Instead, of legitimate factors employer
uses false stereotypes and prejudices. Law Prohibits Discrimination in Hiring, Compensation, terms,
conditions or privileges of employment based on Race, religion, color, sex, national origin and  Physical
Disability.
 Laws affecting HRM:
The laws affecting HRM can be divided into two broad categories:  equal employment opportunity (EEO)
laws and other laws.  The major EEO laws cut across nearly every aspect of managing human resources.  
 
Equal Employment Opportunity (EEO)
The concept of equal employment opportunity has undergone much modification and fine-tuning since the
passage of the Civil Rights Act in 1964. Congress has passed numerous amendments to that act and has
passed other legislation, as oversights in the initial act surfaced. Major Supreme Court decisions interpreting
the provisions of the act have also been handed down. Executive orders were signed into law that further
strengthened equal employment opportunity. EEO is a combination of legislative and judicial policy set
forth by federal, state, and local governments that  ensures fair and equal treatment of all persons. Job
applicants may not be rejected based on discriminatory practices


Affirmative action
A strategy intended to achieve fair employment by urging employers to hire certain groups of people who
were discriminated against in the past Steps that are taken for the purpose of eliminating the present effects
of past discrimination
 Major Federal Laws (USA)
There have been many laws passed and court decisions rendered that affect the everyday actions of human
resource management. Human resource decisions that were made in the past may no longer be feasible.
Human resource managers have a responsibility to ensure that actions affecting human resource
management adhere to both the letter and intent of the law. Unfortunately, not everyone may share this
view, and that is when problems occur. 



 

Line versus Staff Authority

      1.  Line VS Staff Authority – Authority is the right to make decisions, to direct the work
of others, and to give orders.  Line managers are authorized to direct the work of subordinates.  Staff managers are authorized to assist and advise line managers in accomplishing their basic goals. HR managers are generally staff managers.
      2.  Line Managers’ HRM Responsibilities – Most line managers are responsible for
line functions, coordinative functions, and some staff functions.


III.  Cooperative line and staff hr management:
 In recruiting and hiring, it’s generally the line manager’s responsibility to specify the qualifications employees
need to fill specific positions.  Then the HR staff takes over.  They develop sources of qualified applicants and conduct initial screening interviews.  They administer the appropriate test.  Then they refer the best applicants to the supervisor (line manager), who interviews and selects the ones he/she wants.

IV.  Line Manager
Authorized to direct the work of subordinates—they’re always someone’s boss.  In addition, line managers are in charge of accomplishing the organization’s basic goals. 
Line Managers’ Human Resource Management Responsibilities
1. Placement
2. Orientation
3. Training
4. Improving job performance
5. Gaining creative cooperation
6. Interpreting policies and procedures
7. Controlling labor costs
8. Developing employee abilities
9. Creating and maintaining departmental morale
10. Protecting employees’ health and physical condition

V.  Staff Manager 
Authorized to assist and advise line managers in accomplishing these basic goals.  HR managers are generally staff managers.  
 
Responsibilities Of Staff Managers
Staff managers assist and advise line managers in accomplishing these basic goals.   They do, however, need to work in partnership with each other to be successful.  Some examples of the HR responsibilities of staff
managers include assistance in hiring, training, evaluating, rewarding, counseling, promoting, and firing of
employees, and the administering of various benefits programs. 
 

LINE AND STAFF ASPECTS OF HRM

A.  Line and Staff Aspects

LESSON OVERVIEW
After reading this chapter student should know the basic concept of authority, different types of the authority
and difference between the line and staff managers. Although most firms have a human resource department
with its own manager, all other managers tend to get involved in activities like recruiting, interviewing, selecting,
and training.

A. Line and staff aspects of HRM

I.  Authority

Authority is the right to make decisions, to direct the work of others, and to give orders.
Authority refers to the rights inherent in a managerial position to give orders and expect the orders to be
obeyed. Authority was a major tenet of the early management writers, the glue that held the organization
together. It was to be delegated downward to lower-level managers. Each management position has specific
inherent rights that incumbents acquire from the position's rank or title. 
Authority is related to one's position and ignores personal characteristics. When a position of authority is
vacated, the authority remains with the position.
The early management writers distinguished between two forms of authority.

a.  Line Authority
b.  Staff Authority
c.  Functional Authority

Let’s have brief view about the different types of authorities.

a.  Line Authority
Line authority entitles a manager to direct the work of an employee. It is the employer-employee authority
relationship that extends from top to bottom. A line manager directs the work of employees and makes certain decisions without consulting anyone. Sometimes the term  line is used to differentiate line managers from staff managers. Line emphasizes managers whose organizational function contributes directly to the achievement of organizational objectives. 

b.  Staff Mangers and Staff Authority
Staff managers have staff authority. A manager's function is classified as line or staff based on the organization's objectives. As organizations get larger and more complex, line managers find that they do not have the time, expertise, or resources to get their jobs done effectively. They create staff authority functions to support, assist, advice, and generally reduce some of the informational burdens they have. 

c.  Functional control
The authority exerted by a personnel manager as a coordinator of personnel activities.  Here the manager acts as “the right arm of the top executive.” 
 

B. The Dynamic Human Resource Management Environment

Many interrelated factors affect human resource management. Such factors are part of either the firm’s external environment or its internal environment. The firm often has little, if any, control over how the external environment affects management of its human resources. In  addition, there are certain interrelationships that complicate the management of human resources. 

 
I.  External Environmental Factors
External Environmental factors Comprised of those factors that affect a firm’s human resources from outside
the organization’s boundaries.

a.  The Labor Force
The labor force is a pool of individuals external to the firm from which the organization obtains its workers. The capability of a firm’s employees determines to a large extent how well an organization can perform its mission.

b.  Legal Considerations
Another significant external force affecting human resource management relates to federal, state, and local
legislation and the many court decisions interpreting this legislation. In addition, many presidential executive
orders have had a major impact on human resource management.

c.  Society
Society may also exert pressure on human resource management. If a firm is to remain acceptable to the general
public, it must be capable of accomplishing its purpose in line with societal norms. Social responsibility is an
implied, enforced, or felt obligation of managers, acting in their official capacities, to serve or protect the
interests of groups other than themselves. 

d.  Unions
Union is a group of employees who have joined together for the purpose of dealing collectively with their
employer. Although unions remain a powerful force, union membership as a percentage of the nonagricultural workforce slipped from 33 percent in 1955 to 9.5 percent today.

e.  Shareholders
The owners of a corporation are concerned about shareholders. Because shareholders have invested money in a firm, they may at times challenge programs considered by management to be beneficial to the organization.


f.  Competition
For a firm to succeed, grow, and prosper, it must be able to maintain a supply of competent employees. Other
organizations are also striving toward that objective.


g.  Customers
Because sales are critical to the firm’s survival, management has the task of ensuring that its employment
practices do not antagonize the members of the market it serves.

h.  Technology
As technological changes occur, certain skills are no longer required. This necessitates some retraining of the
current workforce. The trend toward a service economy also affects the type and amount of technology needed. 

i.  The Economy
The economy of the nation—on the whole—and of its various segments is a major environmental factor
affecting human resource management. As a generalization, when the economy is booming, it is often more
difficult to recruit qualified workers. On the other hand, when a downturn is experienced, more applicants are typically available. 
 

A. Functions of HRM department

a.  Staffing
An organization must have qualified individuals, in specific jobs at specific places and times, in order to accomplish its goals. Obtaining such people involves job analysis, human resource planning, recruitment, and selection.  Job analysis is the systematic process of determining the skills, duties, and knowledge required for performing specific jobs in an organization. Human resource planning (HRP) is the process of
systematically reviewing human resource requirements to ensure that the required numbers of employees, with the required skills, are available when needed. Recruitment is the
process of attracting such individuals in sufficient numbers and encouraging them to apply for jobs with the organization.  Selection is the process through which the organization chooses, from a group of applicants, those individuals best suited both for open positions and for the company. 

b.  Human Resource Development
A major HRM function that consists not only of training and development but also individual career planning
and development activities and performance appraisal, an activity that emphasizes T&D needs.  Training is
designed to provide learners with the knowledge and skills needed for their present jobs. Development  involves learning that goes beyond today’s job; it has a more long-term focus. Human resource development (HRD) helps individuals, groups, and the entire organization become more effective. It is essential because people, technology, jobs, and organizations are always changing. 


Career planning is an ongoing process whereby an individual sets career goals and identifies the means to
achieve them. Career development is a formal approach used by the organization to ensure that people with the
proper qualifications and experiences are available when needed. Through performance appraisal, employees and
teams are evaluated to determine how well they are performing their assigned tasks. 

c.  Compensation and Benefits
The term compensation includes all rewards that individuals receive as a result of their employment. The reward may be one or a combination of the following:
„  Pay: The money that a person receives for performing a job.
„  Benefits: Additional financial rewards other than base pay include paid vacations, sick leave, holidays, and
medical insurance.
„  Non financial rewards: Non monetary rewards, such as enjoyment of the work performed or a pleasant
working environment.

d.  Safety And Health
Safety involves protecting employees from injuries caused by work-related accidents. Health refers to the
employees’ freedom from illness and their general physical and mental well-being. These aspects of the job are important because employees who work in a safe environment and enjoy good health are more likely to be productive and yield long-term benefits to the organization. 
 

FUNCTIONS AND ENVIRONMENT OF HRM

A.  Functions of Human Resource Management Department
B.  Environmental Factors influencing HRM operations

Human Resource Functions in Small Businesses
Some aspects of the human resource function may actually be more significant in smaller firms than in larger
ones. 
 
Human Resource Management Functions in Medium-Sized Firms
As firms grow and become more complex, the human resource function becomes more complex, and its
function achieves greater importance. The basic purpose of human resource management remains the same, but the approach followed in accomplishing its objectives changes.
As a firm grows, a separate staff function may be required to coordinate human resource activities. In a larger firm, the person chosen to do so will be expected to handle most of the human resource activities. For a medium-sized firm, there is little specialization. 

Traditional Human Resource Functions in a Large Firm
When the firm’s human resource function becomes too complex for one person, separate sections are often
created and placed under a human resource manager. These sections will typically perform tasks involving
training and development, compensation and benefits, employment, safety and health, and labor relations.
 
AN EVOLVING HR ORGANIZATION FOR LARGE FIRMS
The HR organizational structure of large-sized firms changes as firms outsource, use company service centers, and evolve in other ways to make HR more strategic. Regardless of an organization’s design, the five functional areas must still be accomplished. The organizational mission and corporate culture have a major impact in determining an appropriate HR organization. 
 

Challenges in Managing Employee Diversity

Diversity offers opportunities as well as challenges.  The challenges include appropriately valuing diversity,
balancing individual needs and group fairness, dealing with resistance to change, ensuring group cohesiveness
and open communication, avoiding employee resentment, keeping the focus on performance, retaining valued
performers, and maximizing opportunity for all employees.

a.  Resistance to Change:  Although employee diversity is a fact of life, the dominant groups in
organizations are still composed of white men.

b.  Segmented Communication Networks:  One study found that most communication within
organizations occurs between members of the same sex and race. Therefore diversified workforce
organization may face the challenge of segmented communication networks.

c.  Resentment: Equal employment opportunity that can be defined as fairness of employment that is free
from all sort of discrimination in majority of organizations was a forced change rather than a voluntary
one.

d.  Backlash: While women and minorities may view a firm's “cultural diversity policy” as a commitment
to improving their chances for advancement, white men may see it as a threat.

ƒ  How to avoid Backlash: Many organizations that have instituted diversity programs have
experienced adverse reactions from employee groups, particularly white men. Here are some guidelines
for HR professionals and company managers who are attempting to manage diversity without adversity.
i.  Adopt an inclusive definition of diversity that addresses all kinds of differences among
employees, including (but not limited to) race and gender.
ii.  Make sure that top management is not only committed to establishing a diversity program but
also communicates that commitment directly to all employees
iii.  Involve everyone, including white men, in designing the diversity program.
iv.  Avoid stereotyping groups of employees, such as white men, when explaining cultural or ethnic
differences
v.  Recognize and reward white men who are part of the solution rather than blaming men who are
part of the problem.
vi.  Avoid one-time training efforts that stir up emotions without channeling them in productive
directions. Use ongoing training that encompasses diversity as only one facet of needed change
in the corporate culture.


e.  Retention: The job satisfaction levels of women and minorities are often lower than those of white
men.

f.  Competition for Opportunities: As minority populations grow in the U.S., competition for jobs and
opportunities is likely to become much stronger.

g.  Lower Cohesiveness: Diversity can create a lack of cohesiveness. Cohesiveness’ refers to how tightly
knit the group is and the degree to which group members perceive, interpret and act on their
environment in similar or mutually agreed upon ways. Because of their lack of similarities language,
culture, and/ or experience, diverse workforce typically are less cohesive than homogeneous groups.
Often mistrust, miscommunication, stress and attitudinal differences cohesiveness, which inurn can
diminish productivity.

h.  Communication problem: Perhaps the most common negative effect of diversity is communication
problems. These difficulties include misunderstanding, inaccuracies, and slowness. speed is lost when not
all group members are fluent in the same language or when additional time is required to explain things.

i.  Diversity also increases errors and misunderstandings. Group members may assume they interpret
things similarly when in fact they do not ,or they may disagree because of their different frames of
references .

j.  Mistrust and tension: People prefer to associate with others who are like themselves. This tendency
often leads to mistrust and misunderstanding of those who are different because of lack of contact and
low familiarity. it also causes stress and tension ,and reaching agreement on problems can be difficult.
 
k.  Stereotyping: We learn to see the world in a certain way based on our backgrounds and experience
Our interests, values and cultures act as filters and distort, block and select what we see and hear. We se
and hear what we expect to see and hear. Group members often inappropriately stereotype the
“different” colleagues rather than accurately perceiving and evaluating those individual’s contribution
capabilities aspirations and motivations. Such stereotypes inurn affect how people employee stereotype
as unmotivated or emotional will be given less -stress – provoking jobs than their coworkers. Those jo
assignments will create frustrated employees, perhaps resulting in low commitment, higher turnover, an
underused skills.

STEPS TOWARD MANAGEMENT OF DIVERSITY

a.  Managing Diversity means taking steps to maximize diversity’s potential advantages while minimizing
the potential barriers, such as prejudices and bias that can undermine the functioning of a diverse workforce. 
b.  Boosting Workforce Diversity – Employers use various means to boost workforce diversity: start diversity programs; have departmental diversity meetings; form special  networking and mentoring groups;
and/or direct recruiting ads to one or more of the online minority-oriented job markets 

c.  Equal Employment Opportunity Versus Affirmative Action – Equal employment opportunity aims to ensure that anyone, regardless of race, color, sex, religion, national origin, or age, has an equal chance for a job based on his/her qualifications. Affirmative action goes beyond equal employment opportunity by requiring the employer to make an extra effort to recruit, hire, promote, and compensate those in protected groups to eliminate the present effects of past discrimination.

d.  Affirmative Action: Two Basic Strategies – The good faith effort strategy is aimed at
changing the practices that contributed to  minority groups’ or females’ exclusion or
underutilization. The quota strategy mandates bottom-line results through hiring and promotion
restrictions. 

 

WORK PLACE DIVERSITY

A.  Work Force Diversity 
B.  Sources of work force diversity
C.  Managing the diversified work force


OVERVIEW
One of the greatest challenges facing organizations today is managing workforce diversity in a way that both
respects the employees' unique attitudes and promotes  a shared sense of corporate identity. This chapter
explores the issues that are intrinsic to diversity management. In the United States, as abroad, the design and
implementation of HR programs cannot ignore the diverse nature of the work force. Thus, by the end of this
chapter the reader should have a better grasp of diversity issues and how to handle them successfully

  A. Work Force Diversity Any perceived difference among people: age, functional specialty, profession, sexual orientation, geographic origin, life style, tenure with the organization, or position. Diversity simply refers to human characteristics that make people different. The sources of individual variations are complex, but they can generally be grouped into two categories: those over which individuals have
little or no control and those over which individuals have more control. Unless effectively managed, diversity among employees may have a negative impact on productive teamwork. Affirmative action is not diversity management. Affirmative action emerged from government pressure on business to provide greater opportunities for women and minorities. Managing diversity is an outgrowth of natural or environmental trends such as demographic.

B. Sources of work force Diversity
Today diversity refers to far more than skin color and gender. It is a broad term used to refer to all kinds of
differences. These differences include women in business, dual-career families, workers of color, older workers persons with disabilities, immigrants, young persons with limited education or skills, educational level of employees. 
i.  Racial & Ethnical Groups
ii.  Older Workers
iii.  Gender
iv.  Education
v.  Dual-career Families
vi.  Religions & Culture
vii.  Persons with Disabilities
viii. Immigrants
ix.  Young persons with limited education or skills
x.  Competitive advantage though work force diversity
xi.  Marketing
xii.  Creativity, innovation, and problem solving
xiii. Flexibility
 
changes and international competition. Moreover, diversity is
considered an asset in terms of improving organizational
functioning and reflecting the customer market.
 

ii.  Organizational Challenges 
Organizational challenges refer to concerns that are internal to the firm.  However, they are often a byproduct of
environmental forces because no firm operates in a vacuum.  These issues include:  competitive position (cost,
quality, and distinctive capability), decentralization, downsizing, organizational restructuring, self-managed work
teams, small businesses, organizational culture, technology, and outsourcing.
Organizational challenges are concerns or problems internal to a firm. They are often a byproduct of
environmental forces because no firm operates in a vacuum. Still, managers can usually exert much more control
over organizational challenges than over environmental challenges. Effective managers spot organizational issues
and deal with them before they become major problems. One of the themes of this text is proactively: the need for firms to take action before problems get out of hand. Only managers who are well informed about important
HR issues and organizational challenges can do this. These challenges include the need for a competitive
position and flexibility, the problems of downsizing and organizational restructuring, the use of self-managed
work teams, the rise of small businesses, the need to create a strong organizational culture, the role of tech-
nology, and the rise of outsourcing. 

An organization will outperform its competitors if it effectively utilizes its work force's unique combination of
skills and abilities to exploit environmental opportunities and neutralize threats. HR policies can influence an
organization's competitive position by 
a)  Controlling costs, 
b)  Improving quality, and 
c)  Creating distinctive capabilities
d)  Restructuring

HRM IN A CHANGING ENVIRONMENT

A.  HRM in a Changing Environment
B.  New trends at work place

LESSON OVERVIEW
This lecture will primarily help students who intend to  be managers, deal effectively with the challenges of
managing people. Firms that deal with these challenges effectively are likely to outperform those that do not.
These challenges may be categorized according to their primary focus: the environment, the organization, or the individual.

A. HRM in a Changing Environment: The Challenges
Today’s organizations are facing challenges upon following levels:
i.  Environmental Challenges
ii.  Organizational Challenges
iii.  Individual Challenges
 
i.  Environmental Challenges 
Environmental challenges refer to forces external to the firm that are largely beyond management’s control but influence organizational performance.  They include:  rapid change, the internet revolution, workforce diversity, globalization, legislation, evolving work and family roles, and skill shortages and the rise of the service sector.

Six important environmental challenges today are:
a)  Rapid change,
b)  Work force diversity,
c)  Globalization, 
d)  Legislation,
e)  Technology
f)  Evolving work and family roles,
g)  Skill shortages and the rise of the service sector

a)  Rapid Change
Many organizations face a volatile environment in which change is nearly constant. If they are to survive and
prosper, they need to adapt to change quickly and effectively. Human resources are almost always at the heart of an effective response system. Here are a few examples of how HR policies can help or hinder a firm grappling with external change:

b)  Work Force Diversity. 
All these trends present both a significant challenge and a real opportunity for managers. Firms that formulate
and implement HR strategies that capitalize on employee diversity are more likely to survive and prosper.


c)  Globalization.
One of the most dramatic challenges facing as they enter the twenty-first century is how to compete against
foreign firms, both domestically and abroad. Many companies are already being compelled to think globally,
something that doesn't come easily to firms long accustomed to doing business in a large and expanding
domestic market with minimal foreign competition.Weak response to international competition may be resulting in upwards layoffs in every year. Human resources can play a critical role in a business's ability to compete head-to-head with foreign producers. The implications
of a global economy on human resource management are many. Here are a few examples: Worldwide company culture Some firms try to develop a global company identity to smooth over cultural differences between domestic employees and those in international operations. Minimizing these differences increases cooperation and can have a strong impact on the bottom line. For instance, the head of human resources at the European division of Colgate Palmolive notes, "We try to build a common corporate culture. We want them all to be Colgate’s." 

Shift of personnel management to HRM took place in three stages

1.  Records and Administration
2.  Accountability Regulations
3.  Competitive Advantage

1.  Records and Administration
In first stage the primary activities, which were carried out by personnel department, were, Planning Comp
picnics Scheduling vacations, Enrolling workers for health-are coverage, Planning retirement parties Th
concerns include how to mange layoffs, address reduced employee loyalty, create a well trained highly motivawork force that can deliver higher quality and productivity, mange and increase diverse workforce and con health care cost.

2.  Accountability Regulations
During this stage primary framework of rules and regulations started emerging tin the organization. In 1970s,
job of the HR manger was to keep their companies out of court and in compliance with the increasing num
of regulations governing the work place. In the 1980s HR mangers had to address staffing costs related
mergers and acquisitions and downsizing. The economic issues related to an increasingly global and comple
workplace characterize the 1990s. Beside these concerns.


3.  Competitive Advantage
The aim of this shift stage is from merely securing compliance to the more ambitious one of winning
commitment. The employee resource, therefore, becomes worth investing in, and training and development thus assume a higher profile. These initiatives are associated with, and maybe are even predicated upon, a tendency to shift from a collective orientation to  the management of the workforce to an individualistic one. Accordingly management looks for 'flexibility' and seeks to reward differential performance in a differential way. Communication of managerial objectives and aspirations takes on a whole new importance. What separates or distinguishes HRM from the traditional personnel function is the integration of HRM into strategic management and the pre-occupation of HRM with utilizing the human resource to achieve strategic management objectives. HRM "seeks to eliminate the mediation role and adopts a generally unitary perspective. It emphasizes strategy and planning rather than problem solving and mediation, so that employee cooperation is delivered by programme of corporate culture, remuneration packaging, and team building and management development for core employees, while peripheral employees are kept at arm's length.
 HRM strategies may be influenced by the decisions taken on strategy (the nature of the business currently and in the future) and by the structure of the enterprise (the manner in which the enterprise is structured or organized to meet is objectives). In an enterprise with effective HRM polices and practices, the decisions on HRM are also strategic decisions influenced by strategy and structure, and by external factors such as trade unions, the labor market situation and the legal system. In reality most firms do not have such a well thought out sequential HRM model. But we are considering here is also effective HRM, and thus a model where HRM decisions are as strategic as the decisions on the type of business and structure. 
  

HRM has three basic goals, which contribute to achieving management objectives.

The first is integration of HRM in two senses: integrating HRM into an organization's corporate strategy, and
ensuring an HRM view in the decisions and actions of line managers. Integration in the first sense involves
selecting the HRM options consistent with (and which promote) the particular corporate strategy. The option is determined by the type of employee behavior expected (e.g. innovation) needed to further the corporate
strategy. For instance, the HRM policies in relation to recruitment, appraisal, compensation, training, etc. differ according to whether the business strategy is one of  innovation, quality enhancement or cost reduction. A strategy of innovation may require a pay system less influenced by market rates but which rewards creativity, and the pay rates would even be low so long as there are ways of making up the earnings package.
A cost reduction strategy may lead to pay rates being strongly influenced by market levels. Similarly, training and development would receive less emphasis in a cost reduction strategy than in one where the objective is innovation or quality. But such integration is difficult without securing the inclusion of a HRM view in the decisions and practices of line managers. This requires that HRM should not be a centralized function. 

A second goal of HRM is securing commitment through building strong cultures. This involves promoting
organizational goals by uniting employees through a shared set of values (quality, service, innovation, etc.) based on a convergence of employee and enterprise interests, which the larger Japanese enterprises have been particularly adept at. A third goal of HRM is to achieve flexibility and adaptability to manage change and innovation in response to rapid changes consequent upon globalization. Relevant  to HRM policies in this regard are training and multi-skilling, re-organization of work and removal of narrow job classifications. Appropriate HRM policies are designed, for instance, to recruit,  develop and retain quality staff,  to formulate and implement agreed performance goals and measures, and to build a unified organizational culture.

History of Personnel Management

A group of people becomes an organization when they cooperate with each other to achieve common goals.
Communication among them is therefore important. But people have individual motivations, which often differ, from the corporate goals. An effective organization is one which succeeds in getting people to accept that cooperating to achieve organizational  goals also helps them to achieve their own goals provided they are adequately rewarded through extrinsic and intrinsic rewards. This is achieved primarily through leadership and motivation. 

Employers therefore increasingly view human resource management from a strategic perspective, and as an
appropriate means through which the chasm between organizational and individual goals can be narrowed. As it has been aptly observed: 
"Part of the problem is that we have split off human resource management from the general management
problem, as if there were some other kind of management other than human resource management. As long as organizations are based upon the coordinated action of two or more people, management is by definition human resource management.
Despite the proliferation of writings and studies on HRM, there is a wide gap between the rhetoric and the
reality, though the gap has been narrowing in the 1990s. There is as yet inadequate research to ascertain the
extent to which practice matches corporate policy statements, and the impact of HRM policies and practices on employee behavior and morale. To have a major impact on enterprises, HRM has to be diffused across an economy, rather than remain islands of excellence. Nevertheless, promoting excellent models of HRM
stimulates interest in better people management.

Concept of Personnel Management

The term personnel management and human resource management refer to the same processes. Human resouces management is a moden term that emerged during the 1970s and won final acceptance in 1989. Both terms however referred to the same thing, the personnel who work for a company represend that company's human resources.

Although human resource management department as we know them did not generally exit until the 1940's the activities performed by these departments wer not all brand new, in fact, many of the human resource practices programs that we see today ace roots in the earlier times.

Individual Vs Group Behavior

In this topic we will look at individuals, groups, and team in organizations. We will explore ther role and functioning of groups within organizations and factor effecting the behavior.

Individual
individual are important units of any organization. If we understand the behavior of individuals, we can predict the outcomes, it will become easy to manage the behaviors of individuals in desirable directions.
We have to look at three individual variables biographical characteristics, ability, and learning. The most important conclusions are that, age seems to have no relationship to productivity, older workers and those with longer tenure are less likely to resign, and married employees have fewer absences, less turnover, and report higher job satisfaction than do unmarried employees.But what value can this information have for managers? the obvious answer is that it can help in making choices among job applicants.

Groups
A group is defined as two or more interacting and interdependent individuals who come together to achieve particular objectives.

Types of Groups
Formal Groups
Formal groups are wok groups established by the organization and have designated work assignments and established tasks. The behaviors in which one should engage are stipulated by and directed toward organizatoinal goals.

Informal Groups
infromal groups are of a social nature and are formations. they tend to form around friendships and common interests.

Manager's Roles

There are three roles of the manager's
Interpersonal roles
Informational roles
Decisional roles

All managers are mostly concerned with following activities.
Staffing
Retention
Development
Adjustment
Managing change

Types of Managers

The member of the organization who participates in the management process by planning organizing, leading or controlling the organization's resources.
There are three types of managers

Strategic Manager
Strategic manager are the senior executives of an organization and are responsible for its overall management.Major activities include developing the company goals and plans.

Tactical Managers
Tactical managers are responsible for translating the general goals and plans developed by strategic managers into objectives that are more specific and activities.

Operational Managers
Operational managers are lower-level managers who supervise the operations of the organization. These managers often have titles such as supervisor or sales manager.

What is Management?

Management is the process of working with different resources to accomplish organizational goals. Good managers do those things both effectively and efficiently.To be effective is to achieve organizational goals. To be efficient is to achieve goals with minimum waste of resources, that is to make the best possible use of money, time, materials and people.

Function of Management
What can managers do to be effective and efficient? the management  process, properly executed, involves a wide variety of activities including planning, organizing, leading and controlling.

Planning
Planning is specifying the goals to be achieved and deciding in advance the appropriate actions taken to achieve those goals. planning activities include analysing current situations, anticipating the future, determining objectives, deciding what types of activities the company will engage in, choosing corporate and business strategies, and determining the resources needed to achieve the organization's goals. The outcome of the planning process is the organization's strategy.

Organizing
Organizing is assembling and coordinating the human, financial, physical, informational, and other resources needed to achieve goals. Activities include attracting people to the organization, specifying job responsibilities, grouping jobs into work units, marshalling and allocating resources, and crating conditions so that people and things work together to achieve maximum success.

Leading
Leading is stimulating people to be high performers. It is directing, motivating, and communicating with employees, individually and in groups. Leading involves close day-to-day contact with people, helping to guide and inspire them toward achieving team and organizational goals.

Controlling
Comprehensive plans; solid organization, and outstanding leaders do not guarantee success. the fourth functional controlling, monitors progress and implements necessary changes.When managers implement their plans, the often find the things are not working out as planned.

Function of HRM

Basic Function that all managers perform panning, organizing, staffing, leading, and controlling. HR management involves the policies and practices needed to carry out the staffing function of management.
HRM department regardless of the organization's size must perform following human resource management functions.

Staffing
Human resource development
Compensation and benefits
safety and health
Employee and labour relations
Records maintaining
HR research
Interrelationship of HR functions

Introduction

Basic Concept of management states that manager works in organization. Organisation has three basic components, people, purpose, and structure. HRM is the study of activates regarding people working in an organization. It is a managerial unction that tries to match an organizations needs to the skills and abilities of its employees. Lets see what is meant by the three key terms...human, resource, and the management.

Human  .......Homo-sapiens-Social animal

Resources..... Human, physical, Financial, Technical, Informational

Management.... Function of planning, organizing, leading and controlling of organizational resources to accomplish goals efficiently and effectively.