Chapter 1Nature of Personnel Management 1 2 Personnel Management Chapter 1 P ERSONNE L M ANAGEMENT (Text and Cases) DR. C.B. MAMORIA Ex. Prof. and Head of Department, Faculty of Commerce and Management Studies, University of Udaipur, Udaipur. DR. V.S.P. RAO Associate Professor, Sri Venkateswara College, University of Delhi, Delhi. Thirtieth Revised Edition : 2011 MUMBAI NEW DELHI LUCKNOW AHMEDABAD NAGPUR BENGALURU HYDERABAD CHENNAI PUNE ERNAKULAM BHUBANESWAR INDORE KOLKATA GUWAHATI Chapter 1 Nature of Personnel Management 3 © Authors No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording and/or otherwise without the prior written permission of the publishers. First Edition Second Edition Third Edition Fourth Edition Fifth Edition Sixth Edition Seventh Edition Eighth Edition Ninth Edition Tenth Edition Eleventh Edition Twelfth Edition Thirteenth Edition Fourteenth Edition Fifteenth Edition : : : : : : : : : : : : : : : 1980 1982 1984 1985 1987 1988 1989 1990 1991 1992 1993 1994 1995 1995 1996 Sixteenth Edition Seventeenth Edition Eighteenth Edition Nineteenth Edition Twentieth Edition Twentyfirst Revised & Enlarge Edition Twentysecond Edition Twentythird Edition Twentyfourth Edition Twentyfifth Edition Twentysixth Edition Twentyseventh Edition Twentyeight Edition Twentyninth Edition Thirtieth Revised Edition : : : : : : : : : : : : : : : 1997 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2011 Published by : Mrs. Meena Pandey for Himalaya Publishing House Pvt. Ltd., “Ramdoot”, Dr. Bhalerao Marg, Girgaon, Mumbai - 400 004. Phone: 022-23860170/23863863, Fax: 022-23877178 E-mail:
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Branch Offices New Delhi Nagpur Bengaluru Hyderabad Chennai Pune Lucknow Ahmedabad Ernakulam Bhubaneswar Indore Kolkata Guwahati DTP by Printed at Personnel positions were pushed to a corner and they were not part of the ‘core’ team of an organization deciding crucial issues. The present text. researchers and teachers may be catalogued thus: Textual Matter While trying to revise the textual content. over the years. Companies. To live up to the expectations of a growing number of students. latest developments in the field. researchers and teachers who make use of the text in various platforms. wanted private participation in almost all sectors. And they had to show promise and potential to survive in the economic jungle where survival of the fittest is the rule and not an exception. researchers. no doubt. a refreshingly fresh approach has been adopted. development-oriented performance appraisal plans. everywhere. they want people with drive. Those companies enjoying a kind of monopoly in national markets — especially companies in the public sector — are made to run a race with global majors. ‘strategy partners’ and ‘employee champions’ — in short. putting the talents of people at their command to best advantage. work culture and corporate ethics. Not any more. in the past. had to scale up their operations in order to realize the economies of scale. Some of the key developments that make the text a compelling choice for students. The personnel manager. Personnel Management. They want people who are ready to confront challenges head on and deliver superior results — continually. interesting and contemporary. therefore. Originally developed by Prof. They are asked to bring about radical change in corporate culture. The war for talent. enthusiasm and commitment.4 Personnel Management Chapter 1 Preface During the past four decades. and current trends have been presented well supported by . They are. They want people who are willing to go that extra mile and run ahead of competition. They are invited to occupy the most coveted positions at the top level so that they can oversee everything from close quarters. the new corporate heroes of the world. intensified. It was more or less a policing activity. as a result. personnel people nowaday’s talk about linkages with corporate planning. Governments. restructuring and reengineering exercises of various kinds. Companies nowadays want career race horses. was bombarded with record keeping activities of various kinds. and important assignments. personnel people have acquired a unique status almost overnight. day in and day out. — is precisely the subject matter of the book. Most parts of the text have undergone a radical surgery. thanks to the era of liberalization. teachers. consultants and corporate chiefs — all over India. They had to get the best people to deliver results. Not surprisingly. The subject matter has been updated so as to make it lively. Emerging issues. The personnel executives are being asked to handle interesting. HRD approach to industrial relations. the Personnel Function has witnessed dramatic changes. trying to find out where things have gone wrong and putting everything back on track. this has changed the rules of the game for everyone in the marketplace. made to shift gears and wear new hats in quick succession during the last five decades or so. They are being looked at as ‘change agents’. the book has enjoyed phenomenal popularity for over three decades now and still enjoys the blessings of students. recent experiences. multiple reward mechanisms. as a result of these changes. Mamoria. In this charged atmosphere. is a humble attempt to present the above changes in a concise form. challenging. began with a bang in early 80s and 90s and is still continuing to haunt corporate houses. How companies are trying to make use of human resources in the best possible manner. Competition. an attempt is now being made now to revise the contents and bring them uptodate. The scenario has changed dramatically. privatization and globalization (LPG) — and. Nearly 40 cases — mostly reflecting contemporary events and trends in the corporate world — have been used to help the student understand the theoretical concepts in a better way. Legal evidence has been fully updated and in some cases the latest amendments to various pieces of labour legislation in 2010 have also been included. It has exposure to the newest thinking in the field. 7 cases have been put to a critical analysis (thanks to the permission given by www. newspapers and magazines have been extensively put to use in order to convey the excitement and dynamism of the discipline. digestible form. is research based and has got adequate exposure to the latest thinking in the subject. The contents of each chapter have been summarized in a capsule form so that they leave an ‘indelible impression’ on the mind of the reader. emerging ideas. HRM in Practice The book is well supported by contemporary examples from companies operating in different parts of the world. Each chapter is also supported by carefully selected references — including articles. Insights. books. thus. newspaper items. exhibits. Information and data from global websites have been sourced in support of theoretical arguments proposed in the text. Every attempt has been made to intermesh theoretical concepts with practical insights and present the textual matter in an objective and thought-provoking manner. corporate insights — for the benefit of readers who might be interested in exploring a topic further. latest techniques and fast changing procedures and practices in the field of Personnel/Human Resource Management in a comprehensive manner. Experiences from Corporate World Contemporary examples from journals. tables and exercises have been extensively used in order to explain a topic in an uncomplicated manner. and motivation and increase their keenness to learn things quickly. Wherever required. The quizzes provided at the end of each chapter are designed to tap the students’ curiosity. The various topics have been presented in a simple. Examples. research reports. charts. so that the student would have a ‘feel‘ of how to approach a case with a fresh mind. Quizzes.com) by at least two experts from the industry. Study Aids Study aids such as figures. basic concepts. The test thus offers a rich fund of contemporary knowledge. time-tested principles. Following the terminology and chapter summary. Cases with Analyses Each chapter is well supported by a quiz testing the knowledge of the student. the student is compelled to take a look at review and discussion questions and find out where he or she stands in terms of understanding the concepts presented therein. Terminology. evolving theories. Important terms that have been widely used in the text have been explained briefly at the end of each chapter so as to serve as a ready reckoner to students whenever needed. The book. a new section called HRM in Practice has been added to highlight how certain concepts have actually been interpreted and implemented. Every attempt has been made to maintain easy readability and quick comprehension. The whole attempt is to present the contents in an easy to understand. Authors . interest. concise and interesting way.Chapter 1 Nature of Personnel Management 5 multimyriad cross references and evidence from multifarious sources — both Indian as well as global.humancapitalonline. 12. Health and Welfare Collective Bargaining Trade Unions Industrial Relations Industrial Conflict Human Resource Records. 31. 28. 15. 26. 16. 14. Nature of Personnel Management Personnel Management: Functions. 19. 17. Research Accounting and HR Informations System International Human Resource Management Appendix: Contemporary Issues in HRM Subject Index 1 – 17 18 – 38 39 – 55 56 – 81 82 – 101 102 – 118 119 – 137 138 – 153 154 – 171 172 – 192 193 – 225 226 – 249 250 – 269 270 – 306 307 – 331 332 – 368 369 – 389 390 – 419 420 – 454 455 – 474 475 – 510 511 – 556 557 – 590 591 – 621 622 – 656 657 – 688 689 – 723 724 – 741 742 – 761 762 – 786 787 – 808 809 – 848 849 – 852 . Audit. 30. 8. 24. 2. 13. 7. Absenteeism and Turnover Employee Training Executive Development Performance Appraisal Job Evaluation Managing Compensation Rewards. Induction. 9. 5. 27. 21. Roles and Challenges Personnel Policies. 29. 10. 3. 20.6 Personnel Management Chapter 1 Contents Preface Acknowledgements 1. Philosophy and Principles The Strategic Role of HRM in 21st Century Personnel Management in India Job Analysis Human Resource Planning Recruitment Selection Employee Testing and Interview Placement. 4. 6. Incentives and Pay for Performance Systems Employee Benefits and Services Human Relations and Group Dynamics Motivation and Morale Employee Grievances and Discipline Workers’ Participation in Management Employee Safety. 25. 22. Procedures and Programmes Growth. 18. 23. Promotions and Transfers Managing Employee Separations. 11. PROCEDURES AND PROGRAMMES Introduction Needs and Importance Objectives of Personnel Policies Principles of Personnel Policy Essentials Characteristics of a Sound Personnel Policies Origin and Sources of Personnel Policies Types of Personnel Policies Coverage of the Personnel Policies Responsibility for Policy-making Policy Administration Mechanism of Policy Formulation 39 – 55 .Chapter 1 Nature of Personnel Management 7 Detailed Contents PREFACE ACKNOWLEDGEMENTS Chapter 1 NATURE OF PERSONNEL MANAGEMENT Managing People is an Important Job Definition Objectives of Personnel Management Prerequisites for the achievements of the Objectives Tools. Techniques and Methods Needed to Achieve Objectives Key Terms Summary References Review Questions Personnel Management Quiz 1 Case Study: Common Men Doing Uncommon Things! 1 – 17 Chapter 2 PERSONNEL MANAGEMENT: FUNCTIONS. ROLES AND CHALLENGES Personnel Managers Wear Many Hats! Classification of Functions Changing Scope of Personnel Administration Emerging Role of Personnel Management Role of the Personnel Managers of Tomorrow Organisational Structure of the Personnel Department Responsibility of Personnel Specialist Key Terms Summary References Review Questions Personnel Management Quiz 2 Case Study: Rules and Regulations Still Guide Actions at UPS! 18 – 38 Chapter 3 PERSONNEL POLICIES. PHILOSOPHY AND PRINCIPLES Evolution of Personnel Management The Era of Industrial Revolution The Era of Trade Unionism The Era of Social Responsibility The Scientific Management Era The Human Relations Movement The Behavioural Era Personnel Specialist and Welfare Era Human Resource Management: The 1980s and 1990s Factors Responsible for the Development of Personnel Management Professionalism in Personnel Management Personnel Administration as a Discipline Philosophy of Personnel Management Principles of Personnel Management Key Terms Summary References Review Questions Personnel Management Quiz 4 Case Study: A Dirty Game 56 – 81 Chapter 5 THE STRATEGIC ROLE OF HRM IN 21ST CENTURY Introduction Human Resource Management Strategic Human Resource Management Roots of Human Resource Management Components of Human Resource Management Human Resource Development (HRD) Human Resource Relationships Human Resource Management in the Indian Context How HRM and SHRM could help Firms? HRM in the New Millennium Key Terms Summary References Review Questions Personnel Management Quiz 5 Case Study: Sometimes Your “Attitude” Might Spoil the Show? 82 – 101 .8 Personnel Management Chapter 1 Personnel Policies should be in Writing Conclusion Procedures and Programmes Key Terms Summary References Review Questions Personnel Management Quiz 3 Case Study: HR Policies and Practices at LG Electronics India Chapter 4 GROWTH. Chapter 1 Nature of Personnel Management 9 Chapter 6 PERSONNEL MANAGEMENT IN INDIA Introduction Qualification of Labour Welfare Officer Qualities and Qualifications of a Personnel Manager Personnel People Play Many Roles? Future Status of a Personnel Manager in India Progress of Personnel Profession in India Key Terms Summary References Review Questions Personnel Management Quiz 6 Case Study: Fish Out of the Pond 102 – 118 Chapter 7 JOB ANALYSIS Introduction Meaning of Job Analysis Purposes and Uses of Job Analysis Contents of Job Analysis The Steps in Job Analysis Techniques of Job Analysis Data Job Description (JD) Job Specification Competency Approach to Job Analysis Job Analysis and Competitive Advantage Key Terms Summary References Review Questions Personnel Management Quiz 7 Case Study: Madness at Fortune Business School 119 – 137 Chapter 8 HUMAN RESOURCE PLANNING Relationship between Job Analysis and Human Resource Planning Human Resource Planning Defined Human Resource Planning Model Prepare HR Plans Responsibility for Human Resources Planning Effective HR Planning Key Terms Summary References Review Questions Personnel Management Quiz 8 Case Study: Engineering Graduates for Gas Mechanic Jobs? 138 – 153 Chapter 9 RECRUITMENT Vital Function Meaning and Objectives Recruitment vs. Selection 154 – 171 . PROMOTIONS AND TRANSFERS Placement Orientation. Induction or Indoctrination Promotion Demotion Transfer Key Terms Summary References 226 – 249 . INDUCTION.10 Personnel Management Chapter 1 Factors Affecting Recruitment Theories Regarding Recruitment Constraints and Challenges in Recruitment Steps on Recruitment Process Recruitment Policy Recruitment Organisation Sources of Recruitment Methods or Techniques of Recruitment Recruitment Practices in India Recent Trends in Recruitment in India Key Terms Summary References Review Questions Personnel Management Quiz 9 Case Study: Microsoft Hires the Best by Going that Extra Mile! Chapter 10 SELECTION Nature and Importance Steps in Selection Procedure Key Terms Summary References Review Questions Personnel Management Quiz 10 Case Study: The Case of the Risky Recruit 172 –192 Chapter 11 EMPLOYEE TESTING AND INTERVIEW Introduction Purposes of Tests Characteristics of Tests Types of Psychological Tests Developing a Test Programme Basic Testing Guidelines Interviews Key Terms Summary References Review Questions Personnel Management Quiz 11 Case Study: Selection Testing at Toyota Corporation 193 – 225 Chapter 12 PLACEMENT. Chapter 1 Nature of Personnel Management 11 Review Questions Personnel Management Quiz 12 Case Study: The Curious Case of an Employee Refusing Promotion Chapter 13 MANAGING EMPLOYEE SEPARATIONS. Development and Education Training vs. Development Purpose of Training Importance of Training Responsibility for Training Principles of Training Learning and Learning Thories Steps in Training Programmes On-the-job Training (OJT) Off-the-job Training Methods Relative Effectiveness of Different Training Methods Key Terms Summary References Review Questions Personnel Management Quiz 14 Case Study: HR Express 270 – 306 Chapter 15 EXECUTIVE DEVELOPMENT Introduction Need for Executive Development Executive Development: Process and Climate Possible Hurdles Requisites for Success Techniques of Management Development HRM in Practice: How Training and Development Supports Growth at TESCO? Conclusion Key Terms Summary References Review Questions Personnel Management Quiz 15 Case Study: The Coca-Cola Way of Developing People 307 – 331 . ABSENTEEISM AND TURNOVER Separations Temping or Temporary Staffing Gaining Popularity Absenteeism Labour Turnover Key Terms Summary References Review Questions Personnel Management Quiz 13 Case Study: Grass Looks Greener from a Distance! 250 – 269 Chapter 14 EMPLOYEE TRAINING Introduction Training. 12 Personnel Management Chapter 1 Chapter 16 PERFORMANCE APPRAISAL Introduction Performance Appraisal Defined The Performance Appraisal Process Methods of Appraising Employee Performance Components of Appraisal Evaluation Problems with Performance Appraisal Key Terms Summary References Review Questions Personnel Management Quiz 16 Case Study: Performance Appraisal at KEC 332 – 368 Chapter 17 JOB EVALUATION Introduction Definition of Job Evaluation Objectives of Job Evaluation Principles of Job Evaluation Basic Procedure of Job Evaluation Advantages and Limitations of Job Evaluation Job Evaluation Methods Essentials of Success of Job Evaluation Programmes Pricing Managerial and Professional Jobs Key Terms Summary References Review Questions Personnel Management Quiz 17 Case Study: Work can be Fun at Systime 369 – 389 Chapter 18 MANAGING COMPENSATION Introduction Objectives Terminology The Wage Determination Process Alternatives to Traditional Pay Structures Factors Influencing Compensation Structure Principles of Compensation Management Wages Executive Compensation Key Terms Summary References Review Questions Personnel Management Quiz 18 Case Study: Nurturing Young Talent 390 – 419 . Chapter 1 Nature of Personnel Management 13 Chapter 19 REWARDS. INCENTIVES AND PAY FOR PERFORMANCE SYSTEMS Introduction Pay for Performance Systems Pros and Cons of the Pay for Performance Systems Meeting the Pay for Performance Challenges Types of Rewards Nature and Importance of Incentive Schemes Cafeteria Style Compensation The Problem of Equity Key Terms Summary References Review Questions Personnel Management Quiz 19 Case Study: Commission on Sales: The Bone of Contention 420 – 454 Chapter 20 EMPLOYEE BENEFITS AND SERVICES Expenditure on Employee Benefits is Rapidly Rising Everywhere! Nature of ‘Employee Benefits’ Coverage of Benefits and Services Benefits Under the New Pension Scheme. 1995 Administering Benefit Programmes: Problems Employee Engagement Programmes Key Terms Summary References Review Questions Personnel Management Quiz 20 Case Study: Creating a High Performance Work Culture: The Siemens’ Way 455 – 474 Chapter 21 HUMAN RELATIONS AND GROUP DYNAMICS Competitive Advantage through People Defining Human Relations Brief History of Human Relations Movement Improvement in Human Relations Group Dynamics and Group Behaviour Key Terms Summary References Review Questions Personnel Management Quiz 21 Case Study: Happy Employees can Move Mountains! 475 – 510 Chapter 22 MOTIVATION AND MORALE Introduction Types of Motivation Theories of Work Motivation Reinforcement Theory and Behaviour Modification Job Design for Motivation Innovative Ways of Motivating Employees 511 – 556 . “It’s Not Easy to Punish Tardiness” 2. “It Pays to be Tough and Nice” 557 – 590 Chapter 24 WORKERS’ PARTICIPATION IN MANAGEMENT Introduction Forms of Participation Levels of Participation The Indian Scene Forms of Workers’ Participation in India Key Terms Summary References Review Questions Personnel Management Quiz 24 Case Study: Mentoring Management 591 – 621 Chapter 25 EMPLOYEE SAFETY. HEALTH AND WELFARE Introduction Industrial Accident and Industrial Injury Safety Programme Industrial Health Labour Welfare Work Key Terms Summary References Review Questions Personnel Management Quiz 25 Case Study: A Better Future 622 – 656 Chapter 26 COLLECTIVE BARGAINING Introduction Nature of Collective Bargaining Process of Negotiation during Bargaining 657 – 688 .14 Personnel Management Chapter 1 Employee Morale Key Terms Summary References Review Questions Personnel Management Quiz 22 Case Study: Work can be Fun at Google? Chapter 23 EMPLOYEE GRIEVANCES AND DISCIPLINE Introduction Causes of Grievances Need for a Grievance Procedure Discipline and Disciplinary Action Key Terms Summary References Review Questions Personnel Management Quiz 23 Case Study: 1. Chapter 1 Nature of Personnel Management 15 Collective Bargaining in India Recent Trends in Collective Bargaining Key Terms Summary References Review Questions Personnel Management Quiz 26 Case Study: Who is to be Blamed? Chapter 27 TRADE UNIONS Introduction Features of Trade Union Functions of Trade Unions The Structure of Trade Unions Growth of Trade Union Movement in India Weaknesses and Problems of Trade Unions in India Verification of Trade Union Membership Suggestions to Strengthen the Trade Union Movement Essentials for Success of a Trade Union Latest Trends in Trade Unionism Key Terms Summary References Review Questions Personnel Management Quiz 27 Case Study: Let Us Get Back to Work 689 – 723 Chapter 28 INDUSTRIAL RELATIONS The Need for Healthy Labour-Management Relations Industrial Relations: Concept Objectives of Industrial Relations Importance of Industrial Relations Factors Affecting Industrial Relations Approaches to Industrial Relations Pre-requisite for Successful Industrial Relations Programmme Key Terms Summary References Review Questions Personnel Management Quiz 28 Case Study: 1. Shunning Status is Easy for Sasken 724 – 741 Chapter 29 INDUSTRIAL CONFLICT Introduction Impacts and Consequences of Disputes Industrial Relations Scenario: Current Issues and Future Challenges The Industrial Disputes Amendment Bill. Organisations and Unions Working as Partners 2. 2010 Key Terms Summary 742 – 761 . RESEARCH ACCOUNTING AND HR INFORMATION SYSTEM Introduction Personnel Records Personnel Reports Human Resource Audit Human Resource Research Human Resource Accounting Human Resource Information System (HRIS) Key Terms Summary References Review Questions Personnel Management Quiz 30 Case Study: What’s Gone Wrong? 762 – 786 Chapter 31 INTERNATIONAL HUMAN RESOURCE MANAGEMENT HR and the Globalization of Business The Global Challenges What is International HRM? (IHRM) International Recruitment Policy International Selection International Compensation and Performance Appraisal International Labour-Management Relations Key Terms Summary References Review Questions Personnel Management Quiz 31 Case Study: High Global Pressure 787 – 808 Appendix CONTEMPORARY ISSUES IN HRM Introduction Sexual Harassment Employee Engagement Employer as a Brand Talent Management Career Planning and Management Work-life Balance E-HRM and E-Learning in India Electronic HRM Functions E-Learning References 809 – 848 SUBJECT INDEX 849 – 852 .16 Personnel Management Chapter 1 References Review Questions Personnel Management Quiz 29 Case Study: 1. AUDIT. Stop the Shouting Game Please! 2. Trouble from Nowhere? Chapter 30 HUMAN RESOURCE RECORDS. They are idea factories in a way. Here is the story of what an employee at RitzCarlton did to live up to the reputation of delivering unmatched service to customers – based on his own interpretation of the situation and instantaneously acting on his own. overcome every hurdle that comes their way and come out with wonderful. The input-output ratio is somewhat mathematical over there but not with human beings. February 13. Put them on a challenging job and they meet the problems head on. They can produce results that are stunningly better than others. Other resources such as physical. The manager and dining staff couldn’t find replacements in town. Of the resources that are entrusted to managers. but the food had spoiled. so the executive chef called his mother-in-law in Singapore and asked her to buy the necessary products and fly with them to Bali! (Carmine Gallo. of ten. 2007. A family arrived at the Bali RitzCarlton with special eggs and milk because of their son’s allergies. . Give them a chance to explore their potential and they rise to the occasion. “How Ritz-Carlton maintains its Mystique. human beings are the most important. ordinary people can deliver extraordinary results.” Business Week. They can think and act. unbelievable results. They do everything possible to convert resources into useful products.CHAPTER 1 Chapter 1 Nature of Personnel Management 17 NATURE OF PERSONNEL MANAGEMENT CHAPTER OUTLINE 1 2 3 4 5 Managing People is an Important Job Definition Objectives of Personnel Management Prerequisites for the Achievement of Objectives Tools. They can make or break a company. most useful and most critical. financial and material resources have clear limitations to go beyond the obvious. most valuable. The reasons are fairly obvious. And that is why every manager is rather compelled to pay close attention to the ‘people management’ question more closely. unmindful of consequences. If properly motivated. Employees are the Most Productive Assets of a Company? M Human beings are imbued with fertile minds. Techniques and Methods Needed to Achieve Objectives 6 7 8 9 10 11 Key Terms Summary References Review Questions Personnel Management Quiz 1 Case Study MANAGING PEOPLE IS AN IMPORTANT JOB anagers utilise scarce organisational resources in order to produce results. Involve. Peter Drucker. Do You Encourage Your Employees Like This? Consider how 3M encourages its employees to experiment. In fact. empower. challenging goals. which included the 3M’s first blockbuster success: waterproof sandpaper. The idea failed but rather than being punished for the failure. And see how your people would run ahead of others. enthusiasm and commitment. Excellent organisations are no different from their counterparts. treat them with dignity. innovate and come out with better ways of doing things. A culture that permits failure is crucial for fostering the creative thinking and risk taking needed for innovation — and of course. can grow and develop”. How your employees press the right buttons through innovative and useful ideas. They can also pull it down to levels unheard of in the annals of history — that too. growing and succeeding. loaded it into the truck. even common men can do uncommon things. Francis G. employee growth and development. There. . The aim was to reduce the risk of nicks and avoid sharp instruments. of all the resource available to man. the famous inventor. Give love and get love. could take an organisation to commanding heights of an economy. and trust people and they put their heart and soul into everything and take the company to Himalayan heights! Why Managing People is Not Easy? You need not be a rocket scientist to unravel the mystery surrounding efficient people management. therefore. The only differentiating element between a successful and an unsuccessful organisation is the “people factor”. the delivery man unbolted the drop box from its base. A company is Known by its Employees Only? FedEx stands for overnight delivery of packages entrusted to it. Okie was encouraged to champion other ideas.18 Personnel Management Chapter 1 As far as human beings are concerned. How your employees are able to work with zeal. Okie. the box was pried open and the content removed and sped on their way for on time arrival. Ignore the human element and you will pay the price almost instantaneously. efficiently and effectively.) People. the harsh realities of the industrial world are really challenging and even back-breaking. dreamed up the idea of using sandpaper instead of razor blades for shaving. But when it comes to practice. Failure is the essence of learning. Pick the right man for the right job and motivate people with clear-cut. In fact. at electrify speed. Instead of leaving the packages in the drop box until the next day when the right key was available. Let’s see why it is so difficult to create the fire in the belly. capable of producing an output that is greater than the sum of parts. and learn from mistakes and get ahead with confidence without any fear of failure or criticism. and took it back to the station. these prescriptions may look so easy. that is. commented: “man. The will and the skill of employees is most essential to put the corporate wheel on track. 1 plus one could be 10 or even 100! Human beings are capable of enlargement. the efficient use of physical as well as financial resources is totally dependent on how human beings put them to best effect. Once they are motivated. On paper. They can help an organisation achieve results quickly. One of the folktales at FedEx is about a delivery man who had been given the wrong key to a FedEx drop box. Leave them free and allow them to experiment. in short. managing people could be so easy. How your employees outwit competitors. Show them respect. (Thompson et al. Offer them appropriate rewards. personnel people are working in an environment where people seek answer to every question. every one is forced to go that extra mile in order to attract talent. benefits. for example. They have to pay competitive pay and benefits to keep the employees happy. This is possible only when you begin to treat them differently. Commoditisation does not work as far as human beings are concerned. Textbookish solutions may not produce results. the whole problem starts. merely picked up the watchman’s pugree as proof. So. they may not show aggressive behaviour. poor finances of the company and so on. In one of Burmah-Shell’s up-country divisional offices. the personnel executive must be careful not to take things for granted. etc. The company’s depot superintendent conducted an inquiry on the spot. goals. love. You may have to learn everything from the school of hard-knocks. Unpredictable Behaviour Patterns: Human beings exhibit perplexing behaviour patterns at various points of time. You have to go beyond books. plead that Difficult to Predict Human Behaviour! . you need to have a flexible approach as far as human beings are concerned. almost difficult to understand and predict kind of wild and even crazy reactions from employees. So. they may react violently. challenging work. He was back at the depot the next morning before the watchman had handed over charge. journals. if you begin to treat them like commodities. especially when you explain why some people have to be shown the door due to recession. You have to virtually perform a tight rope walk almost on a monthly basis. resources and results is a reasonably tough job but not insurmountable. incentives. he found the watchman fast asleep. Revolution of Rising Expectations: Unfortunately. Striking a harmonious balance between people. They come to the work spot with feelings. When you are able to strike rapport between these diverse elements. as required under the law before disciplinary action could be taken. The tidal wave of expectations. He decided not to create a fuss at that late hour. He decided to stop at the depot without notice after a dinner party. One day. fall in demand. Not unexpectedly. The moment they come to know that their counterparts are paid well and are being treated well in a competing entity. to find you way through the jungle and to get past competition and produce outstanding results. As long as they are not aware of what others are getting or are getting paid they are quite happy with what they have and what they get. In the race to get past competition. sooner or later. In a competitive terrain. At other times. when a worker is being slapped by a supervisor in front of colleagues. therefore. You need excellent qualities of head and heart to put out fires. In one situation. the watchman would confess guilt. You will be committing the biggest mistake of your life. the pay-offs are going to be immense and highly satisfying in terms of doing a great service to society apart from meeting challenging personal goals. At the end of the day. an expatriate with a military background was in charge as divisional manager. They have to be treated with respect. Bschool curriculum and cross many more hurdles in order to excel and emerge as a winner. It was expected that. As a personnel manager. They want to get the best out of everything — in terms of pay. dealing with human beings is quite a challenging job. one should be aware of these peculiar. Equity in Terms what Others are Getting: Human beings compare themselves with others constantly. you cannot push the company to the wall beyond a point. would eat away the vitals of a company. emotions and ideas.Chapter 1 Nature of Personnel Management 19 Commoditisation does not Work: Modern organisations have to realise the fact that employees are unique in their own way. he received an anonymous letter that the night watchman at the company’s local petroleum storage depot in the railway yard was habitually asleep on duty. articles. attention and affection. having been caught red-handed. you need to balance company interests with employee demands on a constant basis. directing and controlling of the procurement. functions and activities aimed at achieving both personal and organisational goals. thus attaining maximum efficiency for themselves and their group. organising. and thereby giving to the enterprise of which they are a part of its determining competitive advantage and its optimum results. compensation. it lays out the rules relating to working conditions. imaginative and competent people. He then persuaded Sahib to get into his car and go home. for want of corroborative evidence! DEFINITION The job of a personnel manager has undergone a dramatic change in recent years. Prof. He told the depot superintendent. In this new avatar. he is compelled by circumstances to look at the big picture. demanding and challenging. the personnel man is supposed to wear many hats — that of being a recruiter. Its objective is to understand what has happened and is happening and to be prepared for what will happen in the area of working relationships between the managers and the managed. He is forced to strike a rapport between organisational demands and employee expectations — precisely in sync with trends in the labour market. organising. Personnel Management: Important Definitions Dale Yoder: It is that phase of management which deals with the effective control and use of manpower as distinguished from other sources of power. Spates: “Personnel administration is a code of the ways of organising and treating individuals at work so that they will each get the greatest possible realisation of their intrinsic abilities. His interrogators were stunned by this defence and acquitted the watchman. maintenance and separation of . To this end. The watchman came up with an ingenious defence instead. (b) objectives of all levels of personnel are served to the highest possible degree. To complicate the matters further. It involves the establishment of various policies to deal with employees and to retain them. The management of human resources is viewed as a system in which participants seek to attain both individual and group goals. such that the: (a) objectives. developer and motivator. these roles are being looked at with critical attention by one and all. as a result. keeping a very straight face. From being a record keeper and a welfare man trying to administer policies to keep workforce happy. It may be defined as a set of programmes. that Sahib was drunk as a lord when he arrived at the depot and for some reason demanded his pugree. It ensures that the organisation attracts and hires qualified.” Edward Flippo: “Personnel Management is the planning. He could not understand what had caused the strange command but he decided that it was a harmless order and it would be wise under the circumstances to hand over without much ado. integration. maintaining and utilising a labour force. and (c) objectives of the community are duly considered and served. trainer. The personnel man is supposed to bring about change initiatives that help people grow and realise their potential fully and also act as a strategic partner translating management rhetoric and philosophy into concrete actions plans. mediator and more importantly act as an employee champion. development.20 Personnel Management Chapter 1 this was his first offence (possible claiming that he had little sleep in the previous couple of days as a result of sickness in the family or a similar excuse) and seek mercy in the form of a warning rather than a harsh penalty. The demands of 21st century have manifested themselves long ago — forcing personnel people to switch gears. co-ordinator. designs suitable compensation plans and strengthens employer-employee relations.” Prof. developing. for which the company is established are attained economically and effectively. change hats and assume roles that have become quite complex. Personnel management is concerned with people at work and their relationships with each other. The definition of personnel management. Thomas G. Jucius: “The field of management which has to do with planning. has been suitably refined — keeping these background factors in mind. directing and controlling various operative functions of procuring. placement of employees. holding and motivating people involving all managers — line and staff.: It is that branch of management which is responsible. development. incentives. Features Personnel management aims at getting the best out of people. who are engaged in any of the organisation’s activities. utilisation of and accommodation to human resources by organisations. London: “Personnel Management is that part of management concerned with people at work and with their relationship within an organisation. philosophical. Incentives and rewards are put in place in order to boost up performance from time to time. spiritual and physical.” The development and utilisation of human resources is not by any means an ancillary activity but a central element in the operation of a business. productivity. It is concerned with getting results through people. Academically. Its aim is to bring together and develop into an effective organisation the men and women who make up an enterprise and having regard for the well-being of the individual and of working groups. It is a major subsystems of all organisations. The human resources of an organisation consist of all individuals regardless of their role. organisational and social objectives are accomplished. desirable working relationship between employers and employees and employees and employees. organisational and societal goals. the three aspects of Personnel Management are: (i) the welfare aspect concerned with working conditions and amenities such as canteens. joint consultation and collective bargaining. Personnel management is a major component of the broader managerial function and has roots and branches extending throughout and beyond each organisation. The principle of equity — that is every one getting paid in a fair and equitable manner. All these aspects are concerned with human element in industry as distinct from the mechanical. Let us look into these aspects closely: . The objective is to attain maximum individual development. “all management is personnel management as it deals with human beings.” French: “Personnel Management is the recruitment.Chapter 1 Nature of Personnel Management 21 human resources to the end that individual. remuneration.” The National Institute of Personnel Management: “Personnel Management. creches. (iii) the industrial relations aspects concerned with trade union negotiation. etc. (ii) the labour or personnel aspect concerned with recruitment. when compared to their counterparts working inside and outside the company — is also taken care of. selection. personal problems of workers. on a staff basis for concentrating on those aspects of operations which are primarily concerned with the relationship of management to employees and employees to employees and with the development of the individual and group. and recreation. promotion. psychological. its development can best be discussed in terms of human development. Keeping the concerns and aspirations of people at work. and effective moulding of human resources as contrasted with physical resources. Former President of the American Management Association: “It is a function of guiding human resources into a dynamic organisation that attains its objectives with a high degree of morale and to the satisfaction of those concerned. to enable them to make their best contribution to its success. schools. Labour Management or Staff Management means quite simply the task of dealing with human relationships within an organisation. personnel people generally design strategies aimed at meeting the individual.” Lawrence Appley.” Scott et al. settlement of industrial disputes.” According to him. The emphasis is on creating a healthy work climate where people can work with freedom and autonomy.” The Institute of Personnel Management. housing.” Dunn and Stephens: “The personnel management is the process of attracting. Personality — the sum total of a workers’ reaction to his experiences and environment. Personnel Management helps people to grow and realise their potentialities to the extent possible. it tries to put people on the right job and encourage them to give their best to the organisation. Interests — not only an individual’s desires and ambitions. possessing different characteristics in various work situations. vague yearnings. written procedures. Personnel management is concerned with helping the employees to develop their potentialities and capacities to the maximum possible extent. Status and Recognition Opportunity for growth Organisational goals Survival and Growth Development Profitability Productivity Innovation Excellence Societal goals Equal opportunity Protect the disadvantaged Minimise wage differentials Fair and equitable policies and programmes Ethical and socially acceptable actions Model employer Focus on people at work The focus is always on people at work — both as individuals and as a group — and their relationships with each other. It is an input-output concept. The work similarly affords the opportunity for exercising these capacities. so that they may derive great satisfaction from their job. therefore. emotional and social aspects of personnel. inherited or acquired. It puts the emphasis on action — rather than on record keeping. Since the employee is both a social and economic entity. Opportunities — not only opportunities for advancement.22 Personnel Management Chapter 1 Achievement of goals Personnel Management aims at achieving organisational goals through the effective and efficient use of human resources. The multifarious problems of employees are solved through actions that are in sync with employee expectations and aspirations. there can be a perfect adjustment of the worker in his work unit if the worker possesses the exact capacities required for the work. The best or ideal personnel management. Capacities — referring to those abilities or attainments. Development-oriented Nature of Personnel Management . This task takes into consideration four basic elements. methods and rules. and a lack of balance forms one of the major causes of waste in production. recognises the individual differences involving these elements and tries to eliminate or reduce them. but also his instinctive impulsive tendencies. Managers who are able to minimise the cost of the resources needed to achieve the goals are acting efficiently. the capacities. but opportunities to exercise his capacities and satisfy his interests. Efficiency is the ability to do things right. opportunities and personality of the employees. namely. a happy combination of the four elements is seldom achieved in actual practice. More importantly. interests. The workers’ personality has great influence upon his opportunities. However. personality is manifest by an individuals’ reception by others. and the worker’s interests are generally satisfied in the performance of his job. Effectiveness involves choosing the right goal. is capable of and must to a certain degree at lease exercise in his work. Through fair and equitable policies. It is also concerned with the behavioural. it is actionoriented. that a worker has. and ill-defined cravings that may or may not stir him to his fullest action in performing his duties. Goals of Personnel Management Individual goals Job security Attractive salary and benefits Job satisfaction Challenging work Pride. therefore. appraising and advisory roles have also been pushed to a corner. the personnel function looks quite jaded and redundant. Strategic Human Resource Management (SHRM). the personnel function has undergone tremendous amount of change. Due to rapid changes in the environment. This integrative aspect of personnel management is. personnel people are compelled to switch gears and change hats quickly. a counsellor or even a mentor on a continuous basis. Tata Steel shall strive to be the employer of choice by attracting the best available talent and ensuring a cosmopolitan workforce. Personnel management. Tata Steel recognises that its people are the primary source of its competitiveness. It will aim at ensuring transparency. therefore. the emergence of a growing body of literature emphasising the emerging nature of a growing discipline called. It will pursue management practices designed to enrich the quality of life of its employees. It cannot be practised only one hour each day or one day in a week. mutual trust and teamwork. for work cannot be effectively performed in isolation without the promotion and development of an esprit de corps. Human Resource Policy of Tata Steel Source: www. in corporate policies. Tata Steel shall strive continuously to foster a climate of openness. mediating. is a continuous process demanding frequent reviewing. . SHRM is built around three important propositions. The firefighting. legal.Chapter 1 Nature of Personnel Management 23 Tata Steel is an equal opportunity employer. of vital importance. in the systems. Healthy climate Another important task of personnel management is to take care of the man at the wheel through welfare programmes and pave the way for healthy relations between trade union(s) and management. Personnel management attempts at getting the willing co-operation of the people for the attainment of the desired goals. trainers and educators. personnel people are expected to play more developmental roles in sync with the expectations of employees as well as the environment. integrators. upgradation and integration. The clerical and administrative roles of a personnel man have been put on the back burner.com Fair policies and programmes to take care of talent Attracting talent and putting the same to best use through fair and equitable policies and programmes is the principal job of a personnel man. develop their potential and maximise their productivity. They have to assume additional roles in the form of a coach. Without a proactive stance and a developmental role. Hence. As change agents. modified and put in place on a continuous basis — in sync with trends in the labour market. Most organisations have also realised the importance of the personnel function in the overall scheme of things and have started accepting personnel people as capable of bringing about strategic change. Personnel management requires a constant alertness and awareness of human relations and their importance in everyday operations. Integrative and continuous in nature Personnel management is not a one shot deal.tatasteel. etc. Current Scenario: Strategic Human Resource Management Over the years. These policies are reviewed. procedures and in employment practices. In the process. fairness and equality in all its dealings with its employees. Personnel management can be of full value to an organisation only when it is consistently thought out and applied at all levels and to all management functions. Strategic HR offers three critical outcomes: increased performance. Above all. In the final analysis. The Personnel Manager’s job is to secure the best out of people by utilising resources in an effective and efficient manner. people are the organisation’s only sustainable competitive advantage. Strategic HR is transformational in nature. it involves the development of a consistent. more dynamic organisation. Successful organisational performance depends on a close fit between business and human resource strategy (vertical fit). “It will make sure that change initiatives that are focused on creating high performance teams. regardless of the technical area in which he or she works.24 Personnel Management Chapter 1 The human resources of a firm are a major source of competitive advantage.” Strategic HR is proactive and considers various timeframes in a flexible manner. learn and act quickly. encouraging autonomy at various levels. as against the traditional HR’s focus on employee relations. For the sake of clarity. Job design is organic. strategic HR. In short. Rather than being enveloped by tight controls and excessive regulations. Likewise. and tighter focus on customer needs. strategic HR believes that the organisation’s key assets are its people. selection of employees that fit with both the organisational strategy and culture. people can make or break an organisation. While running the show. Personnel Management could be defined as a process of bringing people and organisations together so that the goals of each are met. specialization is replaced by cross training and independent tasks are replaced by teams. in a way. programmes and policies to facilitate the achievement of the organisation’s strategic objectives. and control systems are modified as needed to meet changing conditions. It realises that an organisation can have competitive edge over its rivals if it is able to attract and retain knowledge workers who can optimally utilise and manage the organisation’s critical resources. programmes and policies to facilitate the achievement of the organisation’s strategic goals. These outcomes are accomplished through effective management of staffing. of course. Personnel Management could be a . cost-effective utilisation of employees through investment in identified human capital with the potential for higher return. argues that any individual in an organisation that has responsibility for people is an HR manager. operations are controlled by whatever is necessary to succeed. it permits employees to process work and carry out job responsibilities in a free-flowing way. therefore. emerging markets and quality. facilitation of change and adaptation through a flexible. When the resources are put to best use by winning the wholehearted co-operation of all employees. integrated HR programmes and policies that clearly follow from corporate strategy. developed and delivered in a timely way. The focus on managing people is more systemic with an understanding of the myriad factors that impact employees and the organisation and how to manage multiple relationships to ensure satisfaction at all levels of the organisation. retention and turnover processes. Strategic HR shifts attention. aligned collection of practices. SHRM tries to develop a consistent. aligned collection of practices. in that it helps the people and the organisation to adapt. The subject matter of Personnel Management. has been presented in a broad and comprehensive manner in this text — keeping all these emerging trends in the mind. to partnerships with internal and external groups. reducing cycle time for innovation. Individual HR strategic should cohere by being linked to each other to offer mutual support (horizontal fit). enhanced customer and employee satisfaction and increased shareholder value. or implementing new technology are defined. to get more members or to bargain more effectively for members in a labour union. the terms Personnel Management and Human Resource Management have been used interchangeably at various places in the book). under conditions which provide for the maximum conservation of human and material resources over a continuing period. owners and members of the organisation. It says: “The purpose of a business enterprise is the profitable production of goods and services to fulfil economic needs in such a way as to provide satisfactory returns to both economic and social suppliers. The environment should provide a healthful. personnel administration or industrial relations in an organisation are to obtain maximum individual development. to maximise profit or increase the firm’s share of the market in business enterprises. The manager should create a healthy environment wherein all subordinates can contribute to the best of their capacities.” Pigors and Myers observed.” Dirks stated that “the objectives of personnel administration include the utilisation of human resources effectively. If they have helped establish objectives. and one of its central tasks is effective co-ordination and utilisation of available human and nonhuman resources to achieve the objectives of the organisation. they will want to achieve them. OBJECTIVES OF PERSONNEL MANAGEMENT The principal job of a personnel manager is to manage human resources effectively and efficiently. safe. Most people can exercise a great deal more self-direction. “Managing is organisational leadership. Clothier and Spriegel. or to improve the quality of instruction. desirable working relationships between employers and employees. Work satisfaction may improve as a ‘by-product’ of subordinates making full use of their potential. “The objectives of personnel management. for example. He must encourage people to give their best without rubbing others on the wrong side. comfortable and convenient place to work.Chapter 1 Nature of Personnel Management 25 source of competitive advantage as well! (For the sake of convenience.” The American Management Association has very succinctly summarised the objectives of personnel administration. and to effect the moulding of human resources as contrasted with physical resources. expand facilities for training and undertake research.1: BASIC PHILOSOPHY OF HUMAN RESOURCES APPROACH (i) (ii) (iii) (iv) (v) (vi) (vii) People do not inherently dislike work.” What the Experts Say? . Maintaining peace and harmony inside an organisation is equally important while realising goals. and employees and employees. The individual employee must become the focal point of attention and given all incentives. Expanding subordinate influence. self-control and creativity than are required in their current jobs (Theory Y). to improve efficiency or expand the scope of services provided by a governmental department. The manager should provide for self-direction by the subordinates and they must be encouraged to participate fully in all important matters. self-direction and self-control will lead to direct improvements in operating efficiency. benefits in line with competition. BOX 1. establishment and maintenance of productive and self-respecting working relationships among the participants and attainment of maximum individual development of the members in the organisation. Scott. These objectives may be. The manager’s basic job is to use the untapped human potential in the service of the organisations. 6. In the absence of such an integration. growth. The concept of integration of employee-management interests. .26 Personnel Management Chapter 1 On the personnel men lies the responsibility for ensuring a satisfactory accomplishment of the objectives of an organisation and of its employees. from difficulties in communication. 4. innovation. It is for this reason that. 5. and by defining clearly the responsibility. friction may develop in an organisation which may lead to its total failure. 3. cliques and factions. High organisational morale. Economic security. Fair and efficient leadership. Availability and stability of employees. and from faults inherent in a particular organisational structure. Lowest unit personnel cost. Co-operation of employees. 7. CHART 1. personality conflicts. Loyalty of employees. Recognition as an individual. commitment and loyalty towards it. jobs. The declared goals could be in the form of profitability. and the relationship between objectives and programmes. Friction produces inefficiency. The behaviour of individuals and groups in any organisation also involves frictions — personal jealousies and rivalries. prejudices and idiosyncrasies. productivity. Meet the Expectations of People in a Harmonious Manner: To secure the integration of the individuals and groups with an organisation. This is done by integrating the employee interests and the management interests with a view to achieving the objectives of the entire organisation. Healthy Relations between People: To establish and maintain an adequate organisational structure and a desirable working relationship among all the members of an organisation by dividing of organisation tasks into functions. 2. accountability. have been illustrated in the following chart after Mee. 1. Maximum productivity of employees. Safety. 5. 6. favouritism and nepotism. for if they are not reasonably achieved. Friction may result from political aspirations. authority for each job and its relation with other jobs/personnel in the organisation.1 Integration of Interests of Employees and Management Employee’s Interests Management’s Interests 1. care is taken to consider the interests and needs of the employees and of employee goals. by reconciling individual/group with those of an organisation in such a manner that the employees feel a sense of involvement. healthy working conditions. 3. Opportunity for expression or development. Interest in work. 4. Human effort is guided along desired lines keeping the above objectives in the background. etc. survival. while framing company personnel objectives. the basic objectives of the organisation will suffer. Acceptable hours of work and adequate wages. 7. positions. Intelligent initiative of employees. excellence. 2. The important objectives of personnel management may be listed thus: Achievement of Goals: Personnel management tries to put resources to best use while trying to meet the objectives. as well as more frequent informal reviews. however. To have a more engaged workforce. and of the operations of the organisation in an environment of high morale and vitality consistent with profitability and social milieu. Clearing prospects for immediate on-the-job growth is another significant factor leading to higher retention A Strategy for Boosting Talent Retention . Provide development opportunities for all employees. the objectives of an organisation may be: the fullest contribution of human resources for the achievement of the organisational goal. it is a mosaic of reflexes and instincts. To achieve these objectives. ranging from training leaders in basic management skills to creating structured career paths. of individual and group traditions. or by effecting transfers or by offering retraining facilities. 2008). kills and experience. unemployment. by having senior management define how each senior team member will move the organisation forward. Particular attention should be paid to managers’ ability to give feedback. with the ethical values of society and with the policies and regulations established by the country’s legislature. the following prerequisites must be satisfied: Get Talent: Do everything possible to get talented people into the organisation. Four Key HR Practices that Drive Retention: Insights from India. The reason: Many managers are resistant to provide criticism. And. But.” PREREQUISITES FOR THE ACHIEVEMENTS OF THE OBJECTIVES In brief. Then. Personnel management tries to improve morale by giving adequate training to workers and by achieving for itself a knowledge of human nature which is “the totality of motives that cause human actions. ensuring that employees feel ownership of the process. Keep the Morale High: To maintain a high morale and better human relations inside an organisation by sustaining and improving the conditions which have been established so that employees may stick to their jobs for a longer period. fearing their employees will leave the company. Here are specific steps for each practice: (Michael Haid. of long and short-term plans. Implement effective performance management systems. old age. those objectives and goals should be cascaded throughout the business. multinationals need to be sensitive to the local culture when setting up their performance management systems.. the effort needs to start at the top.Chapter 1 Nature of Personnel Management 27 Provide Opportunities for Growth: To generate maximum individual/group development within an organisation by offering opportunities for advancement to employees through training and job education. so that the employees may work willingly and co-operate to achieve an organisation’s goals. of inherited and acquired habits. To be successful. death. putting the right steps in place requires a comprehensive process. and protection against such hazards of life as illness. Organisations need to provide their managers with training in how to provide feedback that is direct and developmental. economic and social security in the form of monetary compensation. energy and resources to pick people possessing relevant qualifications. recognises and rewards employees. Incentives and Rewards for Performance: To recognise and satisfy individual needs and group goals by offering an adequate and equitable remuneration. They can also use a more inclusive process. etc. Invest your time. with a joint setting of goals. At the same time. ensuring that everyone is working toward the same goals. managers have to put their best foot forward. disability. these systems should be designed to drive accountability throughout the company. based on the organisation’s overall vision and mission. More-engaged employees place a great deal of importance on having a performance management process that effectively assesses. Duplication of effort. Jobs with Stretch. In these cases. the principal job of a personnel man is to orchestrate the various instruments in a harmonious way and produce mellifluous music. It is vital that managers have the skills needed to motivate. guide. because many new and even moreexperienced managers lack certain basic skills. For example. the expectation often is that the individual employee is accountable and responsible for his or her career progression. Any confusion will compel people to work at cross purposes. In Western cultures. In addition. Of course. spending time on trivial jobs. including mentoring. Due to the urgent need for managerial level personnel. organisations need to focus on accelerating the ability to manage others using coaching that covers a wide range of issues and competencies. keep in mind that. But. As with performance management systems. conducting performance reviews. Without that knowledge. But. the manager needs to play a more hands-on role in development. and assess their teams. That means providing employees with structured career paths. organizations should provide opportunities for employees to participate in initiatives and special interest groups around such issues as hunger and poverty. In India. that entice people. In addition. managing expectations. After all. opportunities for development should go beyond the Western career path. companies also have to understand cultural differences that may exist. Instead. reaching team objectives and providing effective feedback. it is not always possible to find such meaningful opportunities in the industrial world. Offer manager support. Employees place a high value on commitment to the community. you must try to enrich their working lives by giving meaningful opportunities to people to explore their talents and realise their true potential. Make sure there’s an organisational commitment to a larger social purpose. there is a special problem. For that reason. that help people to stretch themselves. do project-based work. which typically involves climbing a career ladder and mastering a set of skills before moving to the next rung. Pull and Challenge: You need to find ways and means to enrich jobs — jobs that excite people. they often aren’t effective leaders. challenging and exciting. multinationals need to understand the role of the manager in an individual’s career progression. . incompetent handling of important jobs — are the most frustrating elements of this reckless and careless job. Such activities should also be highlighted in annual reports. Clarify Goals and sell your Dream: Goal clarity is essential to get results from people. and take on greater responsibilities. as well as implementing a development centre through which coaches and mentors can provide feedback and identify areas of strength. and mentoring. The answer: Provide coaching and do so at each level. those opportunities need to be for everyone.28 Personnel Management Chapter 1 and engagement. and create forums and communities on company websites for individuals involved in these efforts to share information. based on an understanding of the skills needed in various roles throughout the organisation and the status of talent currently employed. that enable people to rise to the occasion and cross even seemingly insurmountable barriers. To the extent possible. it is impossible to foster an employee’s sense of career success. coaching. People give their best when they are put on jobs that are interesting. for novices. not just “A” players. employees in India are often promoted to supervisory roles before they’re ready to assume such responsibilities. Best practices include providing stretch assignments. companies should provide a less linear progression by giving employees opportunities to move laterally. At Tata Steel. it is necessary to develop an appropriate organisation and an administrative system. Valuing its people as a great asset. Tata Steel has put into practice many initiatives. in the end. is a just a matter of common men doing things in an uncommon way! The Personnel Manager must try to make people realise that they are the respected members of a co-operative group striving to achieve goals. Management. Development of Employees the Tata Steel Way . Organisational excellence.Chapter 1 Nature of Personnel Management 29 Recognise and Reward Performance: People have a genuine hunger for recognition. When you recognise good performance. TECHNIQUES AND METHODS NEEDED TO ACHIEVE OBJECTIVES To achieve the objectives of an organisation. events and programmes that have helped to create not only an enduring loyalty amongst employees but also enabled them to have a more fulfilled life. Appropriate rewards and incentives must greet employees whenever they are able to show superior performance and do an ordinary job in an extraordinary manner. there is a continuous effort of staying in touch with employees to ensure that there is the right culture to engage them in consistent performance improvement. the company recognises that enrichment of people will help retain a motivated workforce in a competitive environment. The management should have a well thought-out. the personnel manager should assume the responsibility of attaining the requirements of his enterprise and those imposed upon it by environmental changes. the company has always registered steady quality improvement and productivity enhancement through dedicated efforts of the company’s Performance Improvement teams. it gives a kick in the belly and everyone would be motivated to put the best foot forward. on its part. must be willing to join the mainstream and say in a chorus that employees are the most valuable. focused on technical best practice transfer and the value of knowledge networks. It is the responsibility of the personnel department to develop or help managers to evolve tools. irreplaceable. In order to leverage maximum potential of human resource to achieve business objectives. TOOLS. whenever necessary. Tata Steel is committed to their development. The one big happy family feeling enthuses people to give their best. There are well-established and effective arrangements at each business location for transparent communication and consultation with Works Councils and Trade Union representatives. comprehensive and flexible personnel policy. Perspiration does not go too far without a little bit of inspiration. techniques or systems in the operating organisation to achieve the goals set for it by its top management. there must be a periodic review of administrative practices in the organisation and of the changes made. This requires that systematic data should be collected both from within the organisation and from external sources (such as the universities and other enterprises). in the first place. both in order to benefit the individual and to benefit the company through increased knowledge and skills. They begin to move in sync with the expectations of management. In the third place. for the implementation of which programmes and procedures should be well established. In the second place. Towards the well-being of employees. and most important assets of their organisation. Further. A. 5 6 To achieve the important goals of personnel management. Strategic human resource management tries to develop a consistent. 2008. Important objectives of personnel management include: achievement of goals. Wright. Recruitment: It is the process of locating. Tata McGraw-Hill. Organisations every where are having a tough time dealing with the tidal wave of employee expectations. 2. “Human Resources and the Resource-based View of the Firm. identifying and attracting capable applicants for employment. It is a way of inspiring people to give their best to the organisation. functions and activities aimed at achieving both personal and organisational goals. SUMMARY 1 2 3 4 Managers utilise organisational resources to produce results. New Delhi. Irwin McGraw-Hill.E. 27. create jobs that are intrinsically challenging and recognise and reward performance in a suitable way. REFERENCES 1. New Delhi. 2008. B. following fair and equitable personnel policies. Ivancevich. Snell. Delhi. “Human Resource Management”. Human Resource Management: It is the most effective and efficient use of human resources to achieve organisational and individual goals. clear the hurdles on the way.B. 4. Personnel Policies: A set of proposals and actions that act as a reference point for managers in their dealings with employees.M. managers must clarify goals. G. Strategic Human Management. Outstanding organisational effort could come. 1987. aligned collection of practices. Armstrong. Competitive Advantage: Ability of an organisation to perform activities exceptionally well and gaining an edge over rivals when competing. “Linking Competitive Strategies and Human Resource Management”. making people realise their potential and creating opportunities for employee growth and development. “Human Resources Management”. Practices Academy of Management Executive. M. New York. Human beings behave in highly unpredictable ways. Journal of Management. PrenticeHall.30 Personnel Management Chapter 1 Y KE TERMS Personnel Management: A set of programmes. H. offering incentives and rewards for performance and keeping the employee morale at a high level. “Human Resource Management”.M. Schuler and S. 6. 3. J. Dessler. Globalisation: The ability and freedom to connect to almost anyone. when managers are able to put people on track and inspire them to give their best. Kogan Page. 2001. It is concerned with people at work and their relationships with each other.S. Resource R. anytime and anywhere. programmes and policies to facilitate the achievement of the organisation’s strategic objectives. 2008. Personnel management is concerned with people at work and their relationships with each other. Strategic Management: The process of identifying and executing the organisation’s mission by matching its capabilities with the demands of its environment. Strategic Human Resource Management: Formulating and executing human resource policies and practices that produce the employee competencies and behaviours the company needs to achieve its strategic aims. and keeping a healthy organisational climate so that people could work with a high degree of freedom and autonomy. Human Resource Planning: It is the process by which managers ensure that they have the right number and kinds of capable people in the right places and at the right times. Bernardin.J. 2009. 5. Jackson. Dunford and S. P. Managing people is a tough job. . Job Description: A written statement that describes a job. 2. 13. 2. Rhetoric and Manipulation. C. 17. 1. “Evaluation of Concept and Practice in Personnel Administration/HRM”. 9. Why is it important for a company to make its human resources into a competitive advantage? How can HR professionals contribute to doing so? PERSONNEL MANAGEMENT QUIZ 1 State whether the following statements are true or false. 1977. Tata McGraw-Hill. False. Explain why managing human resources is not an easy job? Outline the challenges faced by personnel people while running the show. 5. 1979. Traditional personnel managers had high status when compared to managers in other business functions. False. False. 9. Personnel Management is of a continuous nature. 3. REVIEW QUESTIONS 1. Cully et al. (1. 18. A. Macmillan. 1985. Dave Ulrich. Personnel management is a matter of record keeping only. Vikas.” In R. 215-223. “The Personnel Manger in India”. 4. Dale Yoder. “Personnel Management and Industrial Relations”. Personnel management is mainly concerned with employees working in an office. 8. 1988. 6. Rudrabasavaraj. N. 7. 1999. March-April 1973. 4. 5. “Human Resources Champions”. 7. al. New Delhi. 15. 11.D.) . Harvard Business School Press. Boston. R. 10. Yearly Review of the Journal of Management. Personnel Management is concerned with employees both as individuals as well as a group. New Delhi. False.M. and J.. “Personnel and HRM: Can you tell the Difference?”. “Objectives of the personnel management always contradict the objectives of the personnel”. 10. J. The 1999 Workplace Employee Relations Survey. 3. M. 9. False. Jan 1989. Padaki. 14. 1997. False. New York. Elucidate the statement. New Delhi. Outline the important objectives of personnel management. Storey (Ed. “Personnel”. 2008. Balaji and G.A. D. Beach. 2. True. “Linking Corporate Strategy and HR Strategy: Implications for HR Professionals. True. “Personnel Management and Industrial Relations”.N. New Delhi: Tata McGraw-Hill. 16. 5. 8. pp. Nature of Personnel Management 12. Human resource management is nothing but old wine in a new bottle. Routledge. Mahapatra (Eds. S. 1986. Himalaya.) Emerging Asia: An HR Agenda. 31 M. HRM is simply another name for highly redundant management. Crafting and Executing Strategy. Rishikesha T. First Findings. Write short notes on: — Strategic human resource management — Objectives of personnel management — Strategies to boost talent retention 4. “Dynamic Personnel Administration”. 2005. DTI. 8. False. 3. Define Personnel Management. New Delhi.D. Thompson et.M. 6. Prentice-Hall. Industrial Relations. Deckop. TMP.. S. 1995. Davar. HRM sometimes seems to mean Hypocrisy. Agrawal. Punekar. HRM is a systematic approach to people management.. Personnel Management. 10.Guest.) Human Resource Management. True.Chapter 1 7.S. Thomas A. Dale. The fundamental concepts of HRM are generally agreed and easy to implement. Krishnan. every attempt is made to get young girls from nearby villages. To this end. lenses. The business model is somewhat unique. In a twelve-hour routine — 7 am to 7 pm — there will not be anything coming from top management in the form of instructions and dictation. AEH’s mission — right from inception — is very clear: put an end to this kind of unnecessary blindness caused by factors which are within the control of medical professionals. no yelling. All operations are being carried out silently. Some of the initiatives undertaken by AEH are well documented in the annals of corporate history. treating nearly 2. (mostly fresh from school with 10th standard qualification) almost always report for work on time. It makes money by generating enormous volumes — or simply carry out more operations per day and plough back profits to generate more numbers. India. lack of trained hands. There is no room for supervision either — since AEH aims to save every rupee that’s contributed by patients. repeatedly. There are over 25 million blind in the world. They generally pick up people with common sense rather than intelligence. overturn established practices and rewrite the rule book. love. V) gave shape to his dream of ending cataract induced blindness in India — with help from his sister-and brother-in-law. Everything proceeds with clockwork precision in a silent. making it by far the largest ophthalmological institution in the world. McDonaldisation of Procedures: Standardisation of systems. both from Harvard — by setting up a thirty bed hospital in Madurai. implying blindness which could be cured through medical intervention. Common men had to do uncommon things in order to put AEH on the road to success. Nurses . They have to carry out everything with clockwork precision and certainty. when to do. It tried to achieve this with a single-minded focus on improving the productivity levels of its own employees — the doctors and nurses.32 Personnel Management Chapter 1 CASE STUDY: COMMON MEN DOING UNCOMMON THINGS! Aravind Eye Hospital (AEH) is a three decade old eye care institution situated in a tiny place — known as Madurai in Tamil Nadu. Certain things that present a mirror image of the Aravind way of life definitely merit our attention at this stage: Get the Right People: To ensure quality patient care at affordable prices. Quality of service at dirt cheap rates characterises Aravind’s operations at every stage. It takes the cues from STD booth owners and Xerox machine operators. how to do and where to report and how long to stay. V pushed himself to the extreme and made others also run that extra mile while trying to covert the dream into a concrete reality. Factors such as having a right mental attitude and willingness to learn and work with passion and dedication are also looked at closely. Doctors also seem to work putting their heart and soul into every operation — with absolutely no failures occurring at any stage. In an atmosphere of all pervasive calmness (no rush. passion and commitment. Dr. Intensive training helps these girls to understand the importance of patient care. it had to come out with what is known as an assembly line technique of surgery that increases this productivity by a factor of ten. The journey in the beginning was quite tough and challenging — in the form of chronic shortage of funds. AEH had to hire the right talent. The top management would usually spend hours trying to observe and understand the new hires closely. mechanical and almost boring manner — most activities done in the same way. Most operations at AEH — over 70 per cent are carried out without charging anything from the patient — these are carried out for a pittance. apart from learning the basics of patient care. and no last minute hurdles) everything proceeds in a mechanical and systematic manner. The nurses and doctors must understand the culture of AEH and work to preserve the prevailing value system rather than using the position as a spring board to jump out at the first available opportunity. he had to break the cake of custom. Nearly one-third of these are unnecessarily blind. To this end. Do it Silently: Three thousand people carry out operations on three hundred — almost on a daily basis with frustrating regularity — without any noise anywhere. therefore. Govindappa Venkataswamy (or simply Dr. In order to make things happen. There is no one to let any one know what to do. procedures. There is no supervision. The Aravind Way of Life At Aravind. Working in such an environment AEH is able to generate profits in excess of 35 per cent. methods and practices would separate the AEH model from other eye hospitals in The Impossible Dream! At the age of 56. The revenues. etc. are miniscule — especially from the patients paying a fee (only 30 per cent) for the services availed. Dr.5 million patients till date! It does nearly 3 lakh cataract surgeries every year. every one seems to carry out assigned tasks with utmost care. instruments. Teach the Culture: Fit with AEH’s culture and ability to get along with people and serve the patients with warmth and friendliness are being stressed at all times. absence of latest medical equipment. smoothly and in quick succession. no chaos. he went back to medical school to become an ophthalmologist where surgical work is not that heavy. The doctors are also pushed to the limits. It invented a new business model of healthcare delivery through a series of mind numbing experiments and innovations.2 million lenses a year supplying the lens to patients at affordable prices ranging between $4 and $8. The amazing. V wanted to be a gynaecologist but due to a crippling rheumatoid arthritis. over the years. corporate excellence is nothing but common men doing uncommon things! Questions for Discussion 1. show of anger or resentment. Trained ophthalmologists perform over 2000 operations per year (as against an average of 250 to 400 performed by a trained ophthalmologist in other hospitals). and spend rest of the time on outpatients or research. V importing these and making them available to patients at affordable prices presented the biggest challenge. keep the microscope focused on the eye in each case and help the doctor run through the operation quickly. Is it possible to put people on the task — ensuring world-class service — without offering incentives of any kind. Do you think human resource managers have to lead from the front. Aravind is doing nearly 3 lakh operations per year and the hospital talks about one million operations by 2015 and then stretch the number to a billion! Cost Cutting to Bare Bone Levels: The Intraocular Lens (IOL) used by patients used to cost nearly $100 each when AEH began its journey. he started it all over again. You just have to rekindle their spirits. The lofty goals and the unbelievable personal sacrifices made by Dr. culture and value system of AEH for fairly longer periods before being asked to take up the job. Instead of thinking of retirement after a glorious career as Professor at Madurai Medical College. Yes. determination and an iron will to succeed. John Hopkins. Aravind hospital has.Chapter 1 Nature of Personnel Management 33 the world — like what you find in a typical McDonald’s restaurant turning out thousands of burgers per day in exactly the same manner. What do you think are the background factors that have led to the phenomenal success of Aravind model of delivering world-class patient care at rock bottom prices? 3. consider an internship at AEH as one of the best opportunities in their lifetime to enhance their skills and competencies in the field. They are also trained to understand the philosophy. The nurses put everything in place. Instead of losing heart. competition and unhealthy competition to succeed at the cost of others? Why? Why not? 4. in a world marked by greed. Dr. doctors perform over 30 operations without designated breaks of any kind! Little wonder. After the near fatal illness. changed the rules of the game completely. To cut costs further and to take care of medicines needed in eye surgeries. report for work by 7 am and follow a back-breaking routine upto 1 pm daily. In about 6 hours. Aravind now manufactures around 1. unbelievable results of such dedicated efforts are there for every one to see. plant that lofty purpose in the brains of ordinary people. the third one waiting in the queue on the adjoining table with the microscope focused on the eye is being pushed forward. The Aurolab was set up in 1992 to make these lenses locally ensuring technology transfer from an American company by paying a one-time fee. It made everyone realise that people can be pushed to limits without offering enticing carrots. Make People Understand the Lofty Purpose: Purification of the heart and soul seems to be the mantra behind the success of AEH. V and his team seem to cast a magic spell on the staff working therein. Explain how Dr. V and his team decided to manufacture these indigenously. exhibiting outstanding qualities of head and heart in order to motivate people to give their best? Why? Why not? . 2. Without any further thought. The patient on the adjacent table is waiting to be operated upon — following an identical process and after the operation. Dr. Govindappa Venkataswamy is able to build a world-class eye care institution post-retirement through grit. students from Harvard. AEH also set up a pharmaceutical division at around the same time. assisted by one nurse — due to the fear of infection) assisted by two nurses — one helping the doctor and the other bringing surgical instruments. They need to work full time and private practice is disallowed. Yale et al. and inspire them to give their best and leave them free to do things in a fairly independent manner. For Dr. one day Dr. The system tests the strength of character and converts everyone to embrace procedures silently without any protest. Currently. V was left with crippled fingers and holding surgical instruments was ruled out. using every rupee earned for converting his dream of building a world-class eye care hospital into a concrete action plan. Two patients are placed in the operation theatre on adjacent tables (against the traditional practice of only one at a time. he had to consign this idea to flames.