186499050156477511113$5 1REFNOPCH 143 Personnel Management C.B. Mamoria, V.S.P. Rao Chapter Preview

Chapter 1
Nature of Personnel Management
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
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: himpub@vsnl.com; Website: www.himpub.com : : Pooja Apartments, 4-B, Murari Lal Street, Ansari Road, Darya Ganj, New Delhi - 110 002. Phone: 011-23270392, 23278631; Fax: 011-23256286 : Kundanlal Chandak Industrial Estate, Ghat Road, Nagpur - 440 018. Phone: 0712-2738731, 3296733; Telefax: 0712-2721215 : No. 16/1 (Old 12/1), 1st Floor, Next to Hotel Highlands, Madhava Nagar, Race Course Road, Bengaluru - 560 001. Phone: 080-32919385; Telefax: 080-22286611 : No. 3-4-184, Lingampally, Besides Raghavendra Swamy Matham, Kachiguda, Hyderabad - 500 027. Phone: 040-27560041, 27550139; Mobile: 09848130433 : No. 85/50, Bazullah Road, T. Nagar, Chennai - 600 017. Phone: 044-28144004/28144005 : First Floor, "Laksha" Apartment, No. 527, Mehunpura, Shaniwarpeth (Near Prabhat Theatre), Pune - 411 030. Phone: 020-24496323/24496333 : Jai Baba Bhavan, Church Road, Near Manas Complex and Dr. Awasthi Clinic, Aliganj, Lucknow - 226 024. Phone: 0522-2339329, 4068914; Mobile: 09305302158, 09415349385, 09389593752 : 114, SHAIL, 1st Floor, Opp. Madhu Sudan House, C.G. Road, Navrang Pura, Ahmedabad - 380 009. Phone: 079-26560126; Mobile: 09327324149, 09377088847 : 39/104 A, Lakshmi Apartment, Karikkamuri Cross Rd., Ernakulam, Cochin - 622011, Kerala. Phone: 0484-2378012, 2378016; Mobile: 09344199799 : 5 Station Square, Bhubaneswar - 751 001 (Odisha). Phone: 0674-2532129, Mobile: 09861046007 : Kesardeep Avenue Extension, 73, Narayan Bagh, Flat No. 302, IIIrd Floor, Near Humpty Dumpty School, Indore - 452 007 (M.P.). Mobile: 09301386468 : 108/4, Beliaghata Main Road, Near ID Hospital, Opp. SBI Bank, Kolkata - 700 010, Phone: 033-32449649, Mobile: 09910440956 : House No. 15, Behind Pragjyotish College, Near Sharma Printing Press, P.O. Bharalumukh, Guwahati - 781009 (Assam). Mobile: 09883055590, 09883055536 : HPH, Bhandup Editorial Office, (Kalpana). : Geetanjali Press Pvt. Ltd., Nagpur., On behalf of HPH, Mumbai.
Branch Offices New Delhi Nagpur Bengaluru Hyderabad Chennai Pune Lucknow Ahmedabad Ernakulam Bhubaneswar Indore Kolkata Guwahati DTP by Printed at
Chapter 1
Preface
During the past four decades, the Personnel Function has witnessed dramatic changes. The personnel manager, in the past, was bombarded with record keeping activities of various kinds. It was more or less a policing activity, trying to find out where things have gone wrong and putting everything back on track. Personnel positions were pushed to a corner and they were not part of the core team of an organization deciding crucial issues. Not any more, thanks to the era of liberalization, privatization and globalization (LPG) and, this has changed the rules of the game for everyone in the marketplace. Competition, as a result, intensified. 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. Governments, everywhere, wanted private participation in almost all sectors. Companies, as a result of these changes, had to scale up their operations in order to realize the economies of scale. They had to get the best people to deliver results. 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. The war for talent, therefore, began with a bang in early 80s and 90s and is still continuing to haunt corporate houses. Companies nowadays want career race horses; they want people with drive, enthusiasm and commitment. They want people who are ready to confront challenges head on and deliver superior results continually, day in and day out. They want people who are willing to go that extra mile and run ahead of competition. In this charged atmosphere, personnel people have acquired a unique status almost overnight. The scenario has changed dramatically. The personnel executives are being asked to handle interesting, challenging, and important assignments. They are asked to bring about radical change in corporate culture, putting the talents of people at their command to best advantage. They are invited to occupy the most coveted positions at the top level so that they can oversee everything from close quarters. They are being looked at as change agents, strategy partners and employee champions in short, the new corporate heroes of the world. Not surprisingly, personnel people nowadays talk about linkages with corporate planning, HRD approach to industrial relations, development-oriented performance appraisal plans, multiple reward mechanisms, restructuring and reengineering exercises of various kinds, work culture and corporate ethics. They are, no doubt, made to shift gears and wear new hats in quick succession during the last five decades or so. The present text, Personnel Management, is a humble attempt to present the above changes in a concise form. How companies are trying to make use of human resources in the best possible manner, over the years, is precisely the subject matter of the book. Originally developed by Prof. Mamoria, the book has enjoyed phenomenal popularity for over three decades now and still enjoys the blessings of students, researchers, teachers, consultants and corporate chiefs all over India. To live up to the expectations of a growing number of students, researchers and teachers who make use of the text in various platforms, an attempt is now being made now to revise the contents and bring them uptodate. Some of the key developments that make the text a compelling choice for students, researchers and teachers may be catalogued thus:
Textual Matter
While trying to revise the textual content, a refreshingly fresh approach has been adopted. Most parts of the text have undergone a radical surgery. The subject matter has been updated so as to make it lively, interesting and contemporary. Emerging issues, latest developments in the field, recent experiences, and current trends have been presented well supported by
Chapter 1
multimyriad cross references and evidence from multifarious sources both Indian as well as global. The test thus offers a rich fund of contemporary knowledge, time-tested principles, basic concepts, emerging ideas, evolving theories, latest techniques and fast changing procedures and practices in the field of Personnel/Human Resource Management in a comprehensive manner. The various topics have been presented in a simple, concise and interesting way. Every attempt has been made to maintain easy readability and quick comprehension.
Examples, Insights, Experiences from Corporate World

Contemporary examples from journals, newspapers and magazines have been extensively put to use in order to convey the excitement and dynamism of the discipline. Information and data from global websites have been sourced in support of theoretical arguments proposed in the text. The book, thus, is research based and has got adequate exposure to the latest thinking in the subject. Every attempt has been made to intermesh theoretical concepts with practical insights and present the textual matter in an objective and thought-provoking manner.
Study Aids
Study aids such as figures, exhibits, charts, tables and exercises have been extensively used in order to explain a topic in an uncomplicated manner. The whole attempt is to present the contents in an easy to understand, digestible form. 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. Each chapter is also supported by carefully selected references including articles, books, research reports, newspaper items, corporate insights for the benefit of readers who might be interested in exploring a topic further. 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. Following the terminology and chapter summary, 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.
Quizzes, Terminology, Cases with Analyses

Each chapter is well supported by a quiz testing the knowledge of the student. 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. 7 cases have been put to a critical analysis (thanks to the permission given by www.humancapitalonline.com) by at least two experts from the industry, so that the student would have a feel of how to approach a case with a fresh mind.
HRM in Practice
The book is well supported by contemporary examples from companies operating in different parts of the world. It has exposure to the newest thinking in the field. Wherever required, a new section called HRM in Practice has been added to highlight how certain concepts have actually been interpreted and implemented. The quizzes provided at the end of each chapter are designed to tap the students curiosity, interest, and motivation and increase their keenness to learn things quickly. 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.
Authors
Chapter 1
Contents
Preface Acknowledgements 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. Nature of Personnel Management Personnel Management: Functions, Roles and Challenges Personnel Policies, Procedures and Programmes Growth, 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, Induction, Promotions and Transfers Managing Employee Separations, Absenteeism and Turnover Employee Training Executive Development Performance Appraisal Job Evaluation Managing Compensation Rewards, 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, Health and Welfare Collective Bargaining Trade Unions Industrial Relations Industrial Conflict Human Resource Records, Audit, 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
Chapter 1
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, 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
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, 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
Chapter 1
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
10
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, INDUCTION, PROMOTIONS AND TRANSFERS

Placement Orientation, Induction or Indoctrination Promotion Demotion Transfer Key Terms Summary References
226 249
Chapter 1
11
Review Questions Personnel Management Quiz 12 Case Study: The Curious Case of an Employee Refusing Promotion
Chapter 13 MANAGING EMPLOYEE SEPARATIONS, 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, 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
12
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
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
14
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. Its 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
Chapter 1
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. Organisations and Unions Working as Partners 2. 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, 2010 Key Terms Summary
742 761
16
Chapter 1
References Review Questions Personnel Management Quiz 29 Case Study: 1. Stop the Shouting Game Please! 2. Trouble from Nowhere?
Chapter 30 HUMAN RESOURCE RECORDS, AUDIT, 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: Whats 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
CHAPTER
Chapter 1
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, 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. They do everything possible to convert resources into useful products. Of the resources that are entrusted to managers, human beings are the most important, most valuable, most useful and most critical. The reasons are fairly obvious. They can make or break a company. They can produce results that are stunningly better than others. If properly motivated, ordinary people can deliver extraordinary results. And that is why every manager is rather compelled to pay close attention to the people management question more closely. Other resources such as physical, financial and material resources have clear limitations to go beyond the obvious. The input-output ratio is somewhat mathematical over there but not with human beings.
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, unmindful of consequences. A family arrived at the Bali RitzCarlton with special eggs and milk because of their sons allergies, but the food had spoiled. The manager and dining staff couldnt find replacements in town, 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, How Ritz-Carlton maintains its Mystique. Business Week, February 13, 2007. Employees are the Most Productive Assets of a Company?
Human beings are imbued with fertile minds. They can think and act. They are idea factories in a way. Give them a chance to explore their potential and they rise to the occasion. Put them on a challenging job and they meet the problems head on, overcome every hurdle that comes their way and come out with wonderful, of ten, unbelievable results.
18
Chapter 1
As far as human beings are concerned, 1 plus one could be 10 or even 100! Human beings are capable of enlargement, that is, capable of producing an output that is greater than the sum of parts. Once they are motivated, even common men can do uncommon things. They can help an organisation achieve results quickly, efficiently and effectively. In fact, the efficient use of physical as well as financial resources is totally dependent on how human beings put them to best effect. The will and the skill of employees is most essential to put the corporate wheel on track. Peter Drucker, therefore, commented: man, of all the resource available to man, can grow and develop.
A company is Known by its Employees Only? FedEx stands for overnight delivery of packages entrusted to it. One of the folktales at FedEx is about a delivery man who had been given the wrong key to a FedEx drop box. Instead of leaving the packages in the drop box until the next day when the right key was available, the delivery man unbolted the drop box from its base, loaded it into the truck, and took it back to the station. There, the box was pried open and the content removed and sped on their way for on time arrival. (Thompson et al.)
People, in short, could take an organisation to commanding heights of an economy. They can also pull it down to levels unheard of in the annals of history that too, at electrify speed. Excellent organisations are no different from their counterparts. The only differentiating element between a successful and an unsuccessful organisation is the people factor. Ignore the human element and you will pay the price almost instantaneously. Involve, empower, 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. In fact, managing people could be so easy. Give love and get love. Show them respect, treat them with dignity. Pick the right man for the right job and motivate people with clear-cut, challenging goals. Offer them appropriate rewards. Leave them free and allow them to experiment, innovate and come out with better ways of doing things.
Do You Encourage Your Employees Like This? Consider how 3M encourages its employees to experiment, and learn from mistakes and get ahead with confidence without any fear of failure or criticism. Francis G. Okie, the famous inventor, dreamed up the idea of using sandpaper instead of razor blades for shaving. The aim was to reduce the risk of nicks and avoid sharp instruments. The idea failed but rather than being punished for the failure, Okie was encouraged to champion other ideas, which included the 3Ms first blockbuster success: waterproof sandpaper. A culture that permits failure is crucial for fostering the creative thinking and risk taking needed for innovation and of course, employee growth and development. Failure is the essence of learning, growing and succeeding.
And see how your people would run ahead of others. How your employees outwit competitors. How your employees press the right buttons through innovative and useful ideas. How your employees are able to work with zeal, enthusiasm and commitment. On paper, these prescriptions may look so easy. But when it comes to practice, the harsh realities of the industrial world are really challenging and even back-breaking. Lets see why it is so difficult to create the fire in the belly.
Chapter 1
19
Commoditisation does not Work: Modern organisations have to realise the fact that employees are unique in their own way. They come to the work spot with feelings, emotions and ideas. You will be committing the biggest mistake of your life, if you begin to treat them like commodities. Commoditisation does not work as far as human beings are concerned. They have to be treated with respect, love, attention and affection. This is possible only when you begin to treat them differently. Unpredictable Behaviour Patterns: Human beings exhibit perplexing behaviour patterns at various points of time. In one situation, they may react violently, for example, when a worker is being slapped by a supervisor in front of colleagues. At other times, they may not show aggressive behaviour, especially when you explain why some people have to be shown the door due to recession, fall in demand, poor finances of the company and so on. As a personnel manager, one should be aware of these peculiar, almost difficult to understand and predict kind of wild and even crazy reactions from employees, you need to have a flexible approach as far as human beings are concerned. Textbookish solutions may not produce results. You may have to learn everything from the school of hard-knocks. Equity in Terms what Others are Getting: Human beings compare themselves with others constantly. 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. The moment they come to know that their counterparts are paid well and are being treated well in a competing entity, the whole problem starts. So, the personnel executive must be careful not to take things for granted. They have to pay competitive pay and benefits to keep the employees happy. Revolution of Rising Expectations: Unfortunately, personnel people are working in an environment where people seek answer to every question. They want to get the best out of everything in terms of pay, benefits, incentives, challenging work, etc. In a competitive terrain, every one is forced to go that extra mile in order to attract talent. In the race to get past competition, you cannot push the company to the wall beyond a point. The tidal wave of expectations, sooner or later, would eat away the vitals of a company. So, you need to balance company interests with employee demands on a constant basis. You have to virtually perform a tight rope walk almost on a monthly basis. At the end of the day, therefore, dealing with human beings is quite a challenging job. You need excellent qualities of head and heart to put out fires, to find you way through the jungle and to get past competition and produce outstanding results. You have to go beyond books, journals, articles, Bschool curriculum and cross many more hurdles in order to excel and emerge as a winner. Striking a harmonious balance between people, goals, resources and results is a reasonably tough job but not insurmountable. When you are able to strike rapport between these diverse elements, 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.
In one of Burmah-Shells up-country divisional offices, an expatriate with a military background was in charge as divisional manager. One day, he received an anonymous letter that the night watchman at the companys local petroleum storage depot in the railway yard was habitually asleep on duty. He decided to stop at the depot without notice after a dinner party. Not unexpectedly, he found the watchman fast asleep. He decided not to create a fuss at that late hour, merely picked up the watchmans pugree as proof. He was back at the depot the next morning before the watchman had handed over charge. The companys depot superintendent conducted an inquiry on the spot, as required under the law before disciplinary action could be taken. It was expected that, having been caught red-handed, the watchman would confess guilt, plead that Difficult to Predict Human Behaviour!
20
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 watchman came up with an ingenious defence instead. He told the depot superintendent, keeping a very straight face, that Sahib was drunk as a lord when he arrived at the depot and for
some reason demanded his pugree. 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. He then persuaded Sahib to get into his car and go home. His interrogators were stunned by this defence and acquitted the watchman, for want of corroborative evidence!
DEFINITION
The job of a personnel manager has undergone a dramatic change in recent years. From being a record keeper and a welfare man trying to administer policies to keep workforce happy, he is compelled by circumstances to look at the big picture. He is forced to strike a rapport between organisational demands and employee expectations precisely in sync with trends in the labour market. In this new avatar, the personnel man is supposed to wear many hats that of being a recruiter; trainer, developer and motivator; co-ordinator; mediator and more importantly act as an employee champion. To complicate the matters further, these roles are being looked at with critical attention by one and all. The demands of 21st century have manifested themselves long ago forcing personnel people to switch gears, change hats and assume roles that have become quite complex, demanding and challenging. 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. The definition of personnel management, as a result, has been suitably refined keeping these background factors in mind. Personnel management is concerned with people at work and their relationships with each other. It may be defined as a set of programmes, functions and activities aimed at achieving both personal and organisational goals. It ensures that the organisation attracts and hires qualified, imaginative and competent people. It involves the establishment of various policies to deal with employees and to retain them. To this end, it lays out the rules relating to working conditions, designs suitable compensation plans and strengthens employer-employee relations.
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. The management of human resources is viewed as a system in which participants seek to attain both individual and group goals. 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. Prof. Jucius: The field of management which has to do with planning, organising, directing and controlling various operative functions of procuring, developing, maintaining and utilising a labour force, such that the: (a) objectives, for which the company is established are attained economically and effectively; (b) objectives of all levels of personnel are served to the highest possible degree; and (c) objectives of the community are duly considered and served. Prof. Thomas G. 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, thus attaining maximum efficiency for themselves and their group, and thereby giving to the enterprise of which they are a part of its determining competitive advantage and its optimum results. Edward Flippo: Personnel Management is the planning, organising, directing and controlling of the procurement, development, compensation, integration, maintenance and separation of
Chapter 1
21
human resources to the end that individual, organisational and social objectives are accomplished. French: Personnel Management is the recruitment, selection, development, utilisation of and accommodation to human resources by organisations. The human resources of an organisation consist of all individuals regardless of their role, who are engaged in any of the organisations activities. Personnel management is a major component of the broader managerial function and has roots and branches extending throughout and beyond each organisation. It is a major subsystems of all organisations. Scott et al.: It is that branch of management which is responsible, 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. The objective is to attain maximum individual development, desirable working relationship between employers and employees and employees and employees, and effective moulding of human resources as contrasted with physical resources. Dunn and Stephens: The personnel management is the process of attracting, holding and motivating people involving all managers line and staff. The Institute of Personnel Management, London: Personnel Management is that part of management concerned with people at work and with their relationship within an organisation. 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, to enable them to make their best contribution to its success. The National Institute of Personnel Management: Personnel Management, Labour Management or Staff Management means quite simply the task of dealing with human relationships within an organisation. Academically, the three aspects of Personnel Management are: (i) the welfare aspect concerned with working conditions and amenities such as canteens, creches, housing, personal problems of workers, schools, and recreation; (ii) the labour or personnel aspect concerned with recruitment, placement of employees, remuneration, promotion, incentives, productivity, etc. (iii) the industrial relations aspects concerned with trade union negotiation, settlement of industrial disputes, joint consultation and collective bargaining. All these aspects are concerned with human element in industry as distinct from the mechanical. Lawrence Appley, 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. It is concerned with getting results through people. According to him, all management is personnel management as it deals with human beings, its development can best be discussed in terms of human development, philosophical, psychological, 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.
Features
Personnel management aims at getting the best out of people. Keeping the concerns and aspirations of people at work, personnel people generally design strategies aimed at meeting the individual, organisational and societal goals. Incentives and rewards are put in place in order to boost up performance from time to time. The principle of equity that is every one getting paid in a fair and equitable manner, when compared to their counterparts working inside and outside the company is also taken care of. The emphasis is on creating a healthy work climate where people can work with freedom and autonomy. Let us look into these aspects closely:
22
Chapter 1
Achievement of goals Personnel Management aims at achieving organisational goals through the effective and efficient use of human resources. Effectiveness involves choosing the right goal. Efficiency is the ability to do things right. It is an input-output concept. Managers who are able to minimise the cost of the resources needed to achieve the goals are acting efficiently.
Goals of Personnel Management
Individual goals Job security Attractive salary and benefits Job satisfaction Challenging work Pride, 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. Personnel Management helps people to grow and realise their potentialities to the extent possible. Through fair and equitable policies, it tries to put people on the right job and encourage them to give their best to the organisation. It is also concerned with the behavioural, emotional and social aspects of personnel. More importantly, it is actionoriented. It puts the emphasis on action rather than on record keeping, written procedures, methods and rules. The multifarious problems of employees are solved through actions that are in sync with employee expectations and aspirations.
Personnel management is concerned with helping the employees to develop their potentialities and capacities to the maximum possible extent, so that they may derive great satisfaction from their job. This task takes into consideration four basic elements, namely, the capacities, interests, opportunities and personality of the employees. Capacities referring to those abilities or attainments, inherited or acquired, that a worker has, is capable of and must to a certain degree at lease exercise in his work. Interests not only an individuals desires and ambitions, but also his instinctive impulsive tendencies, vague yearnings, and ill-defined cravings that may or may not stir him to his fullest action in performing his duties. Opportunities not only opportunities for advancement, but opportunities to exercise his capacities and satisfy his interests. Personality the sum total of a workers reaction to his experiences and environment, personality is manifest by an individuals reception by others. The workers personality has great influence upon his opportunities. Since the employee is both a social and economic entity, possessing different characteristics in various work situations; 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 work similarly affords the opportunity for exercising these capacities, and the workers interests are generally satisfied in the performance of his job. However, a happy combination of the four elements is seldom achieved in actual practice; and a lack of balance forms one of the major causes of waste in production. The best or ideal personnel management, therefore, recognises the individual differences involving these elements and tries to eliminate or reduce them.
Development-oriented Nature of Personnel Management
Chapter 1
23
Tata Steel is an equal opportunity employer. Tata Steel recognises that its people are the primary source of its competitiveness. It will pursue management practices designed to enrich the quality of life of its employees, develop their potential and maximise their productivity.
It will aim at ensuring transparency, fairness and equality in all its dealings with its employees. Tata Steel shall strive continuously to foster a climate of openness, mutual trust and teamwork. In the process, Tata Steel shall strive to be the employer of choice by attracting the best available talent and ensuring a cosmopolitan workforce.
Human Resource Policy of Tata Steel
Source: www.tatasteel.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. These policies are reviewed, modified and put in place on a continuous basis in sync with trends in the labour market. Personnel management, therefore, is a continuous process demanding frequent reviewing, upgradation and integration. 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, for work cannot be effectively performed in isolation without the promotion and development of an esprit de corps. Integrative and continuous in nature Personnel management is not a one shot deal. It cannot be practised only one hour each day or one day in a week. Personnel management requires a constant alertness and awareness of human relations and their importance in everyday operations. 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; in corporate policies, in the systems, procedures and in employment practices, etc. This integrative aspect of personnel management is, therefore, of vital importance.
Current Scenario: Strategic Human Resource Management

Over the years, the personnel function has undergone tremendous amount of change. The clerical and administrative roles of a personnel man have been put on the back burner. The firefighting, mediating, legal, appraising and advisory roles have also been pushed to a corner. Due to rapid changes in the environment, personnel people are compelled to switch gears and change hats quickly. Without a proactive stance and a developmental role, the personnel function looks quite jaded and redundant. As change agents, integrators, trainers and educators, personnel people are expected to play more developmental roles in sync with the expectations of employees as well as the environment. They have to assume additional roles in the form of a coach, a counsellor or even a mentor on a continuous basis. 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. Hence, the emergence of a growing body of literature emphasising the emerging nature of a growing discipline called, Strategic Human Resource Management (SHRM). SHRM is built around three important propositions.
24
Chapter 1
The human resources of a firm are a major source of competitive advantage; in a way, people can make or break an organisation. Successful organisational performance depends on a close fit between business and human resource strategy (vertical fit). Individual HR strategic should cohere by being linked to each other to offer mutual support (horizontal fit). In short, it involves the development of a consistent, aligned collection of practices, programmes and policies to facilitate the achievement of the organisations strategic goals. SHRM tries to develop a consistent, aligned collection of practices, programmes and policies to facilitate the achievement of the organisations strategic objectives. Strategic HR shifts attention, as against the traditional HRs focus on employee relations, to partnerships with internal and external groups. 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. Strategic HR is transformational in nature, in that it helps the people and the organisation to adapt, learn and act quickly. It will make sure that change initiatives that are focused on creating high performance teams, reducing cycle time for innovation, or implementing new technology are defined, developed and delivered in a timely way. Strategic HR is proactive and considers various timeframes in a flexible manner. Likewise, it permits employees to process work and carry out job responsibilities in a free-flowing way. Rather than being enveloped by tight controls and excessive regulations, operations are controlled by whatever is necessary to succeed, and control systems are modified as needed to meet changing conditions. Job design is organic, specialization is replaced by cross training and independent tasks are replaced by teams, encouraging autonomy at various levels. Above all, strategic HR believes that the organisations key assets are its people. 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 organisations critical resources. In the final analysis, people are the organisations only sustainable competitive advantage. While running the show, strategic HR, of course, argues that any individual in an organisation that has responsibility for people is an HR manager, regardless of the technical area in which he or she works. Strategic HR offers three critical outcomes: increased performance, enhanced customer and employee satisfaction and increased shareholder value. These outcomes are accomplished through effective management of staffing, retention and turnover processes, selection of employees that fit with both the organisational strategy and culture, cost-effective utilisation of employees through investment in identified human capital with the potential for higher return; integrated HR programmes and policies that clearly follow from corporate strategy; facilitation of change and adaptation through a flexible, more dynamic organisation; and tighter focus on customer needs, emerging markets and quality. The subject matter of Personnel Management, therefore, has been presented in a broad and comprehensive manner in this text keeping all these emerging trends in the mind. For the sake of clarity, Personnel Management could be defined as a process of bringing people and organisations together so that the goals of each are met. The Personnel Managers job is to secure the best out of people by utilising resources in an effective and efficient manner. When the resources are put to best use by winning the wholehearted co-operation of all employees, Personnel Management could be a
Chapter 1
25
source of competitive advantage as well! (For the sake of convenience, the terms Personnel Management and Human Resource Management have been used interchangeably at various places in the book). BOX 1.1: BASIC PHILOSOPHY OF HUMAN RESOURCES APPROACH
(i) (ii) (iii) (iv) (v) (vi) (vii) People do not inherently dislike work. If they have helped establish objectives, they will want to achieve them. Most people can exercise a great deal more self-direction, self-control and creativity than are required in their current jobs (Theory Y). The managers basic job is to use the untapped human potential in the service of the organisations. The manager should create a healthy environment wherein all subordinates can contribute to the best of their capacities. The environment should provide a healthful, safe, comfortable and convenient place to work. The manager should provide for self-direction by the subordinates and they must be encouraged to participate fully in all important matters. Expanding subordinate influence, self-direction and self-control will lead to direct improvements in operating efficiency. Work satisfaction may improve as a by-product of subordinates making full use of their potential.
OBJECTIVES OF PERSONNEL MANAGEMENT

The principal job of a personnel manager is to manage human resources effectively and efficiently. He must encourage people to give their best without rubbing others on the wrong side. Maintaining peace and harmony inside an organisation is equally important while realising goals. The individual employee must become the focal point of attention and given all incentives, benefits in line with competition.
Scott, Clothier and Spriegel, The objectives of personnel management, personnel administration or industrial relations in an organisation are to obtain maximum individual development, desirable working relationships between employers and employees, and employees and employees, and to effect the moulding of human resources as contrasted with physical resources. Dirks stated that the objectives of personnel administration include the utilisation of human resources effectively, 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. Pigors and Myers observed, Managing is organisational leadership, 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. These objectives may be, for example, to maximise profit or increase the firms share of the market in business enterprises; to improve efficiency or expand the scope of services provided by a governmental department; to get more members or to bargain more effectively for members in a labour union; or to improve the quality of instruction, expand facilities for training and undertake research. The American Management Association has very succinctly summarised the objectives of personnel administration. 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, owners and members of the organisation, under conditions which provide for the maximum conservation of human and material resources over a continuing period. What the Experts Say?
26
Chapter 1
On the personnel men lies the responsibility for ensuring a satisfactory accomplishment of the objectives of an organisation and of its employees, for if they are not reasonably achieved, the basic objectives of the organisation will suffer. It is for this reason that, while framing company personnel objectives, care is taken to consider the interests and needs of the employees and of employee goals. This is done by integrating the employee interests and the management interests with a view to achieving the objectives of the entire organisation. The concept of integration of employee-management interests, and the relationship between objectives and programmes, have been illustrated in the following chart after Mee. CHART 1.1
Integration of Interests of Employees and Management
Employees Interests
Managements Interests
1. 2. 3. 4. 5. 6. 7.
Recognition as an individual. Opportunity for expression or development. Economic security. Interest in work. Safety, healthy working conditions. Acceptable hours of work and adequate wages. Fair and efficient leadership.
1. 2. 3. 4. 5. 6. 7.
Lowest unit personnel cost. Maximum productivity of employees. Availability and stability of employees. Loyalty of employees. Co-operation of employees. High organisational morale. Intelligent initiative of employees.
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. The declared goals could be in the form of profitability, productivity, innovation, excellence, growth, survival, etc. Human effort is guided along desired lines keeping the above objectives in the background. 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, positions, jobs, and by defining clearly the responsibility, accountability, authority for each job and its relation with other jobs/personnel in the organisation. Meet the Expectations of People in a Harmonious Manner: To secure the integration of the individuals and groups with an organisation, by reconciling individual/group with those of an organisation in such a manner that the employees feel a sense of involvement, commitment and loyalty towards it. In the absence of such an integration, friction may develop in an organisation which may lead to its total failure. Friction produces inefficiency. Friction may result from political aspirations, from difficulties in communication, and from faults inherent in a particular organisational structure. The behaviour of individuals and groups in any organisation also involves frictions personal jealousies and rivalries, prejudices and idiosyncrasies, personality conflicts, cliques and factions, favouritism and nepotism.
Chapter 1
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, or by effecting transfers or by offering retraining facilities. Incentives and Rewards for Performance: To recognise and satisfy individual needs and group goals by offering an adequate and equitable remuneration, economic and social security in the form of monetary compensation, and protection against such hazards of life as illness, old age, disability, death, unemployment, etc., so that the employees may work willingly and co-operate to achieve an organisations goals. 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. 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; it is a mosaic of reflexes and instincts, of inherited and acquired habits, of individual and group traditions.
PREREQUISITES FOR THE ACHIEVEMENTS OF THE OBJECTIVES

In brief, the objectives of an organisation may be: the fullest contribution of human resources for the achievement of the organisational goal, of long and short-term plans, and of the operations of the organisation in an environment of high morale and vitality consistent with profitability and social milieu, with the ethical values of society and with the policies and regulations established by the countrys legislature. To achieve these objectives, the following prerequisites must be satisfied: Get Talent: Do everything possible to get talented people into the organisation. Invest your time, energy and resources to pick people possessing relevant qualifications, kills and experience.
To have a more engaged workforce, managers have to put their best foot forward. But, putting the right steps in place requires a comprehensive process, ranging from training leaders in basic management skills to creating structured career paths. Here are specific steps for each practice: (Michael Haid, Four Key HR Practices that Drive Retention: Insights from India, 2008). Implement effective performance management systems. More-engaged employees place a great deal of importance on having a performance management process that effectively assesses, recognises and rewards employees. To be successful, however, these systems should be designed to drive accountability throughout the company, based on the organisations overall vision and mission. And, the effort needs to start at the top, by having senior management define how each senior team member will move the organisation forward. Then, those objectives and goals should be cascaded throughout the business, ensuring that everyone is working toward the same goals. At the same time, multinationals need to be sensitive to the local culture when setting up their performance management systems. Particular attention should be paid to managers ability to give feedback. The reason: Many managers are resistant to provide criticism, fearing their employees will leave the company. Organisations need to provide their managers with training in how to provide feedback that is direct and developmental. They can also use a more inclusive process, with a joint setting of goals, ensuring that employees feel ownership of the process, as well as more frequent informal reviews. Provide development opportunities for all employees. Clearing prospects for immediate on-the-job growth is another significant factor leading to higher retention A Strategy for Boosting Talent Retention
28
Chapter 1
and engagement. That means providing employees with structured career paths, based on an understanding of the skills needed in various roles throughout the organisation and the status of talent currently employed. Without that knowledge, it is impossible to foster an employees sense of career success. In addition, those opportunities need to be for everyone, not just A players. Best practices include providing stretch assignments, as well as implementing a development centre through which coaches and mentors can provide feedback and identify areas of strength. As with performance management systems, companies also have to understand cultural differences that may exist. For example, opportunities for development should go beyond the Western career path, which typically involves climbing a career ladder and mastering a set of skills before moving to the next rung. Instead, companies should provide a less linear progression by giving employees opportunities to move laterally, do project-based work, and take on greater responsibilities. In addition, multinationals need to understand the role of the manager in an individuals career progression. In Western cultures, the expectation often is that the individual employee is accountable and responsible for his or her career progression. In India, the manager needs to play a more hands-on role in development, coaching, and mentoring.
Offer manager support. It is vital that managers have the skills needed to motivate, guide, and assess their teams. But, because many new and even moreexperienced managers lack certain basic skills, they often arent effective leaders. The answer: Provide coaching and do so at each level. But, keep in mind that, for novices, there is a special problem. Due to the urgent need for managerial level personnel, employees in India are often promoted to supervisory roles before theyre ready to assume such responsibilities. In these cases, organisations need to focus on accelerating the ability to manage others using coaching that covers a wide range of issues and competencies, including mentoring, managing expectations, conducting performance reviews, reaching team objectives and providing effective feedback. Make sure theres an organisational commitment to a larger social purpose. Employees place a high value on commitment to the community. For that reason, organizations should provide opportunities for employees to participate in initiatives and special interest groups around such issues as hunger and poverty, and create forums and communities on company websites for individuals involved in these efforts to share information. Such activities should also be highlighted in annual reports.
Clarify Goals and sell your Dream: Goal clarity is essential to get results from people. Any confusion will compel people to work at cross purposes. Duplication of effort, spending time on trivial jobs, incompetent handling of important jobs are the most frustrating elements of this reckless and careless job. After all, the principal job of a personnel man is to orchestrate the various instruments in a harmonious way and produce mellifluous music. Jobs with Stretch, Pull and Challenge: You need to find ways and means to enrich jobs jobs that excite people, that entice people, that help people to stretch themselves, that enable people to rise to the occasion and cross even seemingly insurmountable barriers. People give their best when they are put on jobs that are interesting, challenging and exciting. Of course, it is not always possible to find such meaningful opportunities in the industrial world. To the extent possible, you must try to enrich their working lives by giving meaningful opportunities to people to explore their talents and realise their true potential.
Chapter 1
29
Recognise and Reward Performance: People have a genuine hunger for recognition. When you recognise good performance, it gives a kick in the belly and everyone would be motivated to put the best foot forward. Perspiration does not go too far without a little bit of inspiration. Appropriate rewards and incentives must greet employees whenever they are able to show superior performance and do an ordinary job in an extraordinary manner. Organisational excellence, 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. The one big happy family feeling enthuses people to give their best. They begin to move in sync with the expectations of management. Management, on its part, must be willing to join the mainstream and say in a chorus that employees are the most valuable, irreplaceable, and most important assets of their organisation.
TOOLS, TECHNIQUES AND METHODS NEEDED TO ACHIEVE OBJECTIVES

To achieve the objectives of an organisation, in the first place, it is necessary to develop an appropriate organisation and an administrative system. 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 second place, there must be a periodic review of administrative practices in the organisation and of the changes made, whenever necessary. In the third place, the personnel manager should assume the responsibility of attaining the requirements of his enterprise and those imposed upon it by environmental changes. It is the responsibility of the personnel department to develop or help managers to evolve tools, techniques or systems in the operating organisation to achieve the goals set for it by its top management. The management should have a well thought-out, comprehensive and flexible personnel policy, for the implementation of which programmes and procedures should be well established.
At Tata Steel, 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. There are well-established and effective arrangements at each business location for transparent communication and consultation with Works Councils and Trade Union representatives. Further, the company has always registered steady quality improvement and productivity enhancement through dedicated efforts of the companys Performance Improvement teams, focused on technical best practice transfer and the value of knowledge networks. Towards the well-being of employees, Tata Steel has put into practice many initiatives, 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. Valuing its people as a great asset, Tata Steel is committed to their development, both in order to benefit the individual and to benefit the company through increased knowledge and skills. In order to leverage maximum potential of human resource to achieve business objectives, the company recognises that enrichment of people will help retain a motivated workforce in a competitive environment. Development of Employees the Tata Steel Way
30
Chapter 1
Y KE
TERMS
Personnel Management: A set of programmes, functions and activities aimed at achieving both personal
and organisational goals.
Personnel Policies: A set of proposals and actions that act as a reference point for managers in their
dealings with employees.
Human Resource Management: It is the most effective and efficient use of human resources to achieve
organisational and individual goals. It is a way of inspiring people to give their best to the organisation. It is concerned with people at work and their relationships with each other.
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.
Recruitment: It is the process of locating, identifying and attracting capable applicants for employment. Job Description: A written statement that describes a job. Competitive Advantage: Ability of an organisation to perform activities exceptionally well and gaining an
edge over rivals when competing.
Globalisation: The ability and freedom to connect to almost anyone, anytime and anywhere. 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.
Strategic Management: The process of identifying and executing the organisations mission by matching
its capabilities with the demands of its environment.
SUMMARY
1 2 3 4
Managers utilise organisational resources to produce results. Outstanding organisational effort could come, when managers are able to put people on track and inspire them to give their best. Managing people is a tough job. Human beings behave in highly unpredictable ways. Organisations every where are having a tough time dealing with the tidal wave of employee expectations. Personnel management is concerned with people at work and their relationships with each other. Important objectives of personnel management include: achievement of goals, making people realise their potential and creating opportunities for employee growth and development, following fair and equitable
personnel policies, and keeping a healthy organisational climate so that people could work with a high degree of freedom and autonomy, offering incentives and rewards for performance and keeping the employee morale at a high level.
5 6
To achieve the important goals of personnel management, managers must clarify goals, clear the hurdles on the way, create jobs that are intrinsically challenging and recognise and reward performance in a suitable way. Strategic human resource management tries to develop a consistent, aligned collection of practices, programmes and policies to facilitate the achievement of the organisations strategic objectives.
REFERENCES
1. G. Dessler, Human Resource Management, PrenticeHall, New Delhi, 2008. 2. J.M. Ivancevich, Human Resources Management, Irwin McGraw-Hill, New York, 2008. 3. H.J. Bernardin, Human Resource Management, Tata McGraw-Hill, New Delhi, 2008. 4. 5. M. Armstrong, Strategic Human Management, Delhi, Kogan Page, 2009. Resource R.S. Schuler and S.E. Jackson, Linking Competitive Strategies and Human Resource Management, Practices Academy of Management Executive, 1987. P.M. Wright, B.B. Dunford and S.A. Snell, Human Resources and the Resource-based View of the Firm, Journal of Management, 27, 2001.
6.
Chapter 1 7. Krishnan, Rishikesha T., Linking Corporate Strategy and HR Strategy: Implications for HR Professionals, In R. Padaki, N.M. Agrawal, C. Balaji and G. Mahapatra (Eds.) Emerging Asia: An HR Agenda, New Delhi: Tata McGraw-Hill, 2005, pp. 215-223. S.D. Punekar, The Personnel Manger in India, Industrial Relations, March-April 1973. Thomas A.M. and J.D. Deckop, Evaluation of Concept and Practice in Personnel Administration/HRM, Yearly Review of the Journal of Management, 1986. Dale Yoder, Personnel Management and Industrial Relations, Prentice-Hall, New Delhi, 1977. Dale, S. Beach, Personnel, Macmillan, New York, 1985.
Nature of Personnel Management 12. 13. 14. 15. 16. 17. 18.
31
M. Cully et al., The 1999 Workplace Employee Relations Survey, First Findings, DTI, 1999. D.Guest, Personnel and HRM: Can you tell the Difference?, Personnel Management, Jan 1989. J. Storey (Ed.) Human Resource Management, Routledge, TMP, 1995. Dave Ulrich, Human Resources Champions, Boston, Harvard Business School Press, 1997. M.N. Rudrabasavaraj, Dynamic Personnel Administration, Himalaya, New Delhi, 1979. R.S. Davar, Personnel Management and Industrial Relations, Vikas, New Delhi, 1988. A.A. Thompson et. al., Crafting and Executing Strategy, New Delhi, Tata McGraw-Hill, 2008.
8. 9.
10. 11.
REVIEW QUESTIONS
1. 2. 3. Explain why managing human resources is not an easy job? Outline the challenges faced by personnel people while running the show. Define Personnel Management. Outline the important objectives of personnel management. Write short notes on: Strategic human resource management Objectives of personnel management Strategies to boost talent retention 4. 5. Objectives of the personnel management always contradict the objectives of the personnel. Elucidate the statement. 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. 1. Personnel management is mainly concerned with employees working in an office. 2. Personnel management is a matter of record keeping only. 3. Traditional personnel managers had high status when compared to managers in other business functions. 4. Human resource management is nothing but old wine in a new bottle. 5. The fundamental concepts of HRM are generally agreed and easy to implement. 6. HRM is a systematic approach to people management. 7. HRM sometimes seems to mean Hypocrisy, Rhetoric and Manipulation. 8. HRM is simply another name for highly redundant management. 9. Personnel Management is of a continuous nature. 10. Personnel Management is concerned with employees both as individuals as well as a group. (1. False, 2. False, 3. False, 4. False, 5. False, 6. True, 7. False, 8. False, 9. True, 10. True.)
32
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, India. There are over 25 million blind in the world. Nearly one-third of these are unnecessarily blind, implying blindness which could be cured through medical intervention. AEHs 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. It tried to achieve this with a single-minded focus on improving the productivity levels of its own employees the doctors and nurses. To this end, 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. Most operations at AEH over 70 per cent are carried out without charging anything from the patient these are carried out for a pittance. The revenues, therefore, are miniscule especially from the patients paying a fee (only 30 per cent) for the services availed. Working in such an environment AEH is able to generate profits in excess of 35 per cent, treating nearly 2.5 million patients till date! It does nearly 3 lakh cataract surgeries every year, making it by far the largest ophthalmological institution in the world. The business model is somewhat unique. It takes the cues from STD booth owners and Xerox machine operators. It makes money by generating enormous volumes or simply carry out more operations per day and plough back profits to generate more numbers. (mostly fresh from school with 10th standard qualification) almost always report for work on time. There is no supervision. There is no one to let any one know what to do, when to do, how to do and where to report and how long to stay. Everything proceeds with clockwork precision in a silent, mechanical and almost boring manner most activities done in the same way, repeatedly. Doctors also seem to work putting their heart and soul into every operation with absolutely no failures occurring at any stage. Quality of service at dirt cheap rates characterises Aravinds operations at every stage. 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, AEH had to hire the right talent. To this end, every attempt is made to get young girls from nearby villages. Intensive training helps these girls to understand the importance of patient care, apart from learning the basics of patient care. The top management would usually spend hours trying to observe and understand the new hires closely. They generally pick up people with common sense rather than intelligence. Factors such as having a right mental attitude and willingness to learn and work with passion and dedication are also looked at closely. Teach the Culture: Fit with AEHs culture and ability to get along with people and serve the patients with warmth and friendliness are being stressed at all times. 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. 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. They have to carry out everything with clockwork precision and certainty. There is no room for supervision either since AEH aims to save every rupee thats contributed by patients. Do it Silently: Three thousand people carry out operations on three hundred almost on a daily basis with frustrating regularity without any noise anywhere. All operations are being carried out silently, smoothly and in quick succession. In an atmosphere of all pervasive calmness (no rush, no chaos, no yelling, and no last minute hurdles) everything proceeds in a mechanical and systematic manner. McDonaldisation of Procedures: Standardisation of systems, procedures, methods and practices would separate the AEH model from other eye hospitals in
The Impossible Dream!

At the age of 56, Dr. Govindappa Venkataswamy (or simply Dr. V) gave shape to his dream of ending cataract induced blindness in India with help from his sister-and brother-in-law, both from Harvard by setting up a thirty bed hospital in Madurai. The journey in the beginning was quite tough and challenging in the form of chronic shortage of funds, lack of trained hands, absence of latest medical equipment, lenses, instruments, etc. Dr. V pushed himself to the extreme and made others also run that extra mile while trying to covert the dream into a concrete reality. In order to make things happen, he had to break the cake of custom, overturn established practices and rewrite the rule book. Common men had to do uncommon things in order to put AEH on the road to success. Some of the initiatives undertaken by AEH are well documented in the annals of corporate history.
The Aravind Way of Life

At Aravind, every one seems to carry out assigned tasks with utmost care, love, passion and commitment. Nurses
Chapter 1
33
the world like what you find in a typical McDonalds restaurant turning out thousands of burgers per day in exactly the same manner. The doctors are also pushed to the limits. They need to work full time and private practice is disallowed. They are also trained to understand the philosophy, culture and value system of AEH for fairly longer periods before being asked to take up the job. Trained ophthalmologists perform over 2000 operations per year (as against an average of 250 to 400 performed by a trained ophthalmologist in other hospitals), report for work by 7 am and follow a back-breaking routine upto 1 pm daily; and spend rest of the time on outpatients or research. Two patients are placed in the operation theatre on adjacent tables (against the traditional practice of only one at a 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. The nurses put everything in place, keep the microscope focused on the eye in each case and help the doctor run through the operation quickly. The patient on the adjacent table is waiting to be operated upon following an identical process and after the operation; the third one waiting in the queue on the adjoining table with the microscope focused on the eye is being pushed forward. In about 6 hours, doctors perform over 30 operations without designated breaks of any kind! Little wonder, students from Harvard, John Hopkins, Yale et al. consider an internship at AEH as one of the best opportunities in their lifetime to enhance their skills and competencies in the field. Currently, 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. For Dr. V importing these and making them available to patients at affordable prices presented the biggest challenge. Without any further thought, one day Dr. V and his team decided to manufacture these indigenously.
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. Aravind now manufactures around 1.2 million lenses a year supplying the lens to patients at affordable prices ranging between $4 and $8. To cut costs further and to take care of medicines needed in eye surgeries, AEH also set up a pharmaceutical division at around the same time. Make People Understand the Lofty Purpose: Purification of the heart and soul seems to be the mantra behind the success of AEH. The system tests the strength of character and converts everyone to embrace procedures silently without any protest, show of anger or resentment. The lofty goals and the unbelievable personal sacrifices made by Dr. V and his team seem to cast a magic spell on the staff working therein. Dr. V wanted to be a gynaecologist but due to a crippling rheumatoid arthritis, he had to consign this idea to flames. After the near fatal illness, Dr. V was left with crippled fingers and holding surgical instruments was ruled out. Instead of losing heart, he went back to medical school to become an ophthalmologist where surgical work is not that heavy. Instead of thinking of retirement after a glorious career as Professor at Madurai Medical College, he started it all over again, using every rupee earned for converting his dream of building a world-class eye care hospital into a concrete action plan. Aravind hospital has, over the years, changed the rules of the game completely. It invented a new business model of healthcare delivery through a series of mind numbing experiments and innovations. It made everyone realise that people can be pushed to limits without offering enticing carrots. You just have to rekindle their spirits, plant that lofty purpose in the brains of ordinary people, and inspire them to give their best and leave them free to do things in a fairly independent manner. The amazing, unbelievable results of such dedicated efforts are there for every one to see. Yes, corporate excellence is nothing but common men doing uncommon things!
Questions for Discussion

1. Explain how Dr. Govindappa Venkataswamy is able to build a world-class eye care institution post-retirement through grit, determination and an iron will to succeed. 2. 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. Is it possible to put people on the task ensuring world-class service without offering incentives of any kind, in a world marked by greed, competition and unhealthy competition to succeed at the cost of others? Why? Why not? 4. Do you think human resource managers have to lead from the front, exhibiting outstanding qualities of head and heart in order to motivate people to give their best? Why? Why not?

186499050156477511113$5 1REFNOPCH 143 Personnel Management C.B. Mamoria, V.S.P. Rao Chapter Preview

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

186499050156477511113$5 1REFNOPCH 143 Personnel Management C.B. Mamoria, V.S.P. Rao Chapter Preview

Uploaded by

Copyright:

Available Formats

Chapter 1

Nature of Personnel Management

DR. V.S.P. RAO

Thirtieth Revised Edition : 2011

MUMBAI NEW DELHI LUCKNOW AHMEDABAD

Nature of Personnel Management

Nature of Personnel Management

Examples, Insights, Experiences from Corporate World

Quizzes, Terminology, Cases with Analyses

Nature of Personnel Management

PERSONNEL MANAGEMENT: FUNCTIONS, ROLES AND CHALLENGES

PERSONNEL POLICIES, PROCEDURES AND PROGRAMMES

GROWTH, PHILOSOPHY AND PRINCIPLES

THE STRATEGIC ROLE OF HRM IN 21ST CENTURY

Nature of Personnel Management

PERSONNEL MANAGEMENT IN INDIA

HUMAN RESOURCE PLANNING

Chapter 11 EMPLOYEE TESTING AND INTERVIEW

Chapter 12 PLACEMENT, INDUCTION, PROMOTIONS AND TRANSFERS

Nature of Personnel Management

Chapter 13 MANAGING EMPLOYEE SEPARATIONS, ABSENTEEISM AND TURNOVER

Chapter 17 JOB EVALUATION

Chapter 18 MANAGING COMPENSATION

Nature of Personnel Management

REWARDS, INCENTIVES AND PAY FOR PERFORMANCE SYSTEMS

Chapter 20 EMPLOYEE BENEFITS AND SERVICES

Chapter 21 HUMAN RELATIONS AND GROUP DYNAMICS

MOTIVATION AND MORALE

EMPLOYEE GRIEVANCES AND DISCIPLINE

Chapter 24 WORKERS PARTICIPATION IN MANAGEMENT

EMPLOYEE SAFETY, HEALTH AND WELFARE

Chapter 26 COLLECTIVE BARGAINING

Nature of Personnel Management

Chapter 27 TRADE UNIONS

Chapter 28 INDUSTRIAL RELATIONS

Chapter 29 INDUSTRIAL CONFLICT

INTERNATIONAL HUMAN RESOURCE MANAGEMENT

CONTEMPORARY ISSUES IN HRM

Nature of Personnel Management

NATURE OF PERSONNEL MANAGEMENT

MANAGING PEOPLE IS AN IMPORTANT JOB

Why Managing People is Not Easy?

Nature of Personnel Management

Nature of Personnel Management

Development-oriented Nature of Personnel Management

Nature of Personnel Management

Human Resource Policy of Tata Steel

Current Scenario: Strategic Human Resource Management

Nature of Personnel Management

OBJECTIVES OF PERSONNEL MANAGEMENT

Nature of Personnel Management

PREREQUISITES FOR THE ACHIEVEMENTS OF THE OBJECTIVES

Nature of Personnel Management

TOOLS, TECHNIQUES AND METHODS NEEDED TO ACHIEVE OBJECTIVES

PERSONNEL MANAGEMENT QUIZ 1

CASE STUDY: COMMON MEN DOING UNCOMMON THINGS!

The Impossible Dream!

The Aravind Way of Life

Nature of Personnel Management

Questions for Discussion

You might also like