Human Resource Management – Business Management Ethics and Entrepreneurship Notes

Chapter At A Glance:
Leon C. Megginson, “from the national point of view, human resource may be defined as knowledge, skills, creative abilities, talents and aptitudes obtained in the population; whereas from the viewpoint of the individual enterprise, they represent the total of the inherent abilities, acquired knowledge and skills as exemplified in the talents and aptitudes of its employees.”

Julius Micheal, “calls these resources, ‘human factors, which refer to, “a whole consisting of inter-related, inter-dependent, and interacting physiological, psychological, sociological, and ethical components.”

Edwin B.’Flippo, “Personnel management is the planning, organising, directing and controlling of the procurement, development, resources to the end that individual and societal objectives are accomplished.”

Concept of Human Resource:
All the activities of any enterprise are determined by the people who make up that organization.
Thus, motivation of human resource is of utmost importance.
Thus, HRM is the process of management that is directly concerned with the human resource in the organization.
HRM is that part of management which is concerned with people at work and with their relationship with an enterprise. Its aim is to bring together and develop into effective organisation the man and women who make up an enterprise having regard for the well being of the individual and of working groups, to enable them to make their best combination to its success.

The term human resource can be defined as the skills, knowledge, experience and training that a manager/employee should have in order to manage any organization.

French Wendell defines “Personnel management is the recruitment, selection, development, utilization, compensation and motivation of human resources by the organisation.”

Differences:

Personnel Management	HR Management
1. More administrative in nature, deals with payroll, employment laws.	1. It focuses on the developmental activities.
2. Focuses on operational activities.	2. Focuses on human resource as contributes to the success of an enterprise.
3. Specific in nature.	3. General in nature
4. It seeks to motivate the employees with compensation, rewards etc.	4. It is responsible for managing the workforce by formulating policies and procedures.

similarity between PM and HRM:

Both emphasize on integrating personnel / HRM
Both emphasize on importance of individuals fully developing their ability for their own personal satisfaction.
Both models identify placing right people into right job as important means of integrating personnel/ HAM practice with organizational goals.

Features of Human Resource Management
1. Inherent Part of Management:

This function is performed by all the managers.
Responsibility of every manager to train and motivate the employees working under him.
He undertakes the basic responsibility of selecting people who will work under him.

2. PervasIve Function:
This function is performed on a continuous basis by every manager. It is performed at all various levels across all departments.

3. Based on Human Relations:

Since HRM deals with people working in the organization. The manager should give due regard to the expectations, likes, dislike and needs of his employees.
If the personnel function is performed properly, the human relations in the organization will be cordial.

4. people-centred:

Blue – Collar and White – Collar workers
Managerial and Non-managerial personnel
Professionals and Non-Professionals

5. Personnel ActivIties or Function:

It Includes several functions such as manpower planning, employment placement, training appraisal and compensation employees.
Personnel Department is created to perform these functions.

6. ContInuous Process: G. R. Terry, The personnel function can not be turned on and end off like water from a faucet; it cannot be practised only one hour each day or one day a week. Personnel management requires a constant alertness and awareness of human relations and their importance in everyday operations.

Types of personnel:

Blue-collar workers are workers working on machines and engaged it loading/ unloading.
White-collar workers are derical employees.
Managerial and Non-managerial workers.
Professional and non-professional workers.

Importance of Human Resource Management Objectives:

To ensure optimum utilization of human resources.
To establish and maintain a defined structure of relationship in the organization, and demarcating dearly the authority and responsibility, accountability for each job.
To ensure maximum development of human resource through welfare opportunities and salary hikes.
To ensure coordination of individual / group activity goals with the organization so that the employee feels committed.
Identify and satisfy individuals by offering various monetary & nor monetary rewards.
Ensure respect for human beings by providing services & welfare facilities to personnel.

Steps implanted to achieve the above objectives:

Human Resource or manpower planning.
Recruitment, selection and placement of personnel i.e. employment function.
Training and development of employees.
Appraisal of performance of employees and taking corrective steps.
Motivation of workforce.
Remuneration of employees.
Social security and welfare of employees.

Limitations of HRM:
1. Uncertainty:

Since the business environment changes rapidly it also affects the employment situation. One cannot totally rely on it and do every action according to it.
Thus, the company may have to appoint or remove people.

2. Problem of excess staff:

Most companies feel that the solution of this problem is to remove or terminate the services of such excess staff.
This affects the thinking of other employees and they start feeling insecure.

3. Time Consuming:

For appointment and removal of employees, HR department collects information from various sources.
This takes a lot of time since each job is considered separately.

4. Expensive:
The process of HRM is expensive. The company has to spend a lot of money for each activity.

5. Conservative approach of top management:
Top management adopts a conservative attitude & is not ready to make changes.
Role of Personnel Manager: Personnel manager perform managerial as well as operative function.

He plays multiple roles in an organization some of which are as under:
(a) Policy Formulation: The personnel manager helps the top management in deciding the policies for transfer, appraisal, welfare off employees.

(b) Advisor Role: Managers face day-to-day problems and hence can offer useful advice as he is familiar with labour laws and agreements and problems encountered.

(c) Representative Role: The personnel manager generally acts as a representative of the employees on setting forth the grievances and suggestions to the top management.

(d) Decision-Maker Role: He plays an effective role in decision making that relates to formulating policies, procedures, programmes of Human Resource Management.

(e) Welfare Role: He acts as a welfare officer in the organization. For this purpose, he is concerned with welfare services of employees and his family members.

(f) Researcher: He maintains the records of the employees and on the basis of such records he researches various personnel areas such as labour turnover, absenteeism, etc.

(g) Linking Pin Role: A personnel manager gives information to the trade union leaders regarding the policies, programmes and convey the views of the trade union leaders to the high management.

(h) Mediator Role: Personnel manager acts as mediator between employees, group of employees and between management and employees. He attempts for industrial peace and harmony.

(i) Leadership Role: A personnel manager ensures effective communication, provides leadership, influences for co-operation and acts as a counsellor.

Qualities of HR Manager:
(a) Fayol has put the qualities required by managers into the following categories:

Physical health, vigour, address.
Judgmental, mental vigor and adaptability.
Moral energy, firmness, willingness to accept responsibility, initiative, loyalty, fact, dignity.
Educational general acquaintance with matter not belonging exclusively to the function performed.
Technical peculiar to the function and
Experience arising from the work.

(b) Major qualities are;

He should have human approach to human problems i.e. he should be sympathetic towards their problems. Should not depend upon his formal authority too much and should have sense of social responsibility.
He should be mentally alert and at no time should be caught unaware.
He should be competent to take decisions.
He should be honest in dealing with employees.
He should be patient in listening to the problems of the employees.
He should be a good leader and for that purpose a good communicator.
He should not depend upon his formal authority too much.
He should be good communicator.
He should have a social responsibility so as to help his employee to discharge their social obligations to the south segments of the society.

Functions of Human Resource Manager
1. Managerial Functions: Being a part of the management, he must perform the functions of:
(a) Planning: It has already been discussed in earlier chapters that planning is the process of deciding in advance the policies that will drive the employees towards the achievement of organizational goals. Example, anticipating vacancies, planning jobs, etc.

(b) Organizing: The manager after planning the objectives must organize the resources to meet those objectives. For this, he should carry out the following activities:

Grouping of personnel activity into functions.
Assignment of activities to employees.
Accordingly delegating the authority.
Finally co-ordinating different activities.

It involves encouraging the people to work willingly and effectively.
The HR manager must have the ability to identify the needs of employees and the means and methods to satisfy those needs.

(d) Controlling: It involves performance appraisal of employees, critical examination of employee records and suggesting ways and means to improve the employee performance so that more output can be achieved.

2. Operative Functions: It covers those tasks which are specifically entrusted to the HR department, which are as follows:
Employment: This includes assessing the manpower requirement in an organization and then selecting the right kind of employee fit for that position.

(b) Development:

It is the duty of each manager to carefully train the employee so that he can perform the job better.
Both the old and new employees must be trained so as to update their knowledge in the use of latest techniques.
Develop an employee for higher jobs in the organisation.

The employees must be given a fair amount of salary which is consistent with their volume of work: done.
For fixing the remuneration, ma lager can make use of techniques like job evaluation and performance appraisal.

(d) Motivation: The manager must appraise the employees with good performance through both monetary and non-monetary incentives.

(e) Personnel Records: The HR department must maintain all the records of its employees, such as achievements, training acquired, absenteeism, promotion etc.

(f) Maintenance:

Good working conditions increases the efficiency of the employees.
Health, safety and comfort of the workforce.
The personnel department also provide for various welfare services which relate to the physical and social well-being of the employees.

(g) Industrial Relations:

The personnel manager has the full information relating to personnel and working knowledge of various labour enactments, he helps in collective bargaining, joint consultation and settlements of disputes.
He helps in laying down the grievance procedure to redress the grievances of the employees.

(h) Separation: Since the first function of personnel management is to procure the employees, it is logical that the lost employees should be returned to society.

3. Advisory Functions:
The HR Manager being a specialist in his area can offer his advice to:

Top Management: Personnel manager advises the top management, in formulation and evolution of personnel programme. He may give advice for achieving and maintaining good human relations and high employee morale.
Departmental Heads: He offers advice on various matters like recruitment and selection, placement, training, job analysis, etc.

Recruitment:
Recruitment Process: Definitions
Edwin B. Flippo, “ Recruitment is the process of searching the candidates (or prospective employees) and stimulating them to apply for jobs in the Organisation.”
Dale S. Beach, “Recruitment is the development and maintenance of adequate manpower resources it involves the creation of a pool of available labour upon when the organisation can draw when it needs additional employees.”

Process of identification of different sources of personnel is known as recruitment and linking activity between those offering and those seeking jobs.

It is the process of searching for the right candidate for the job & encouraging them to apply.
“It is a positive function as it results in collection of applicants in response to the vacancy advertised”.

Sources of Recruitment:
Internal Sources: May induce selection of employees through-

(a) Transfer; or
(b) Promotion

Selection of employees in this manner has the following benefits:

It‘s simple and economical.
Improves employee morale as promotions provide an opportunity for advancement.
Employers can appraise the skill and capability of present employees more accurately.
Promotes loyalty among the employees.
Plus time efficient.
Persons already employed can be more easily inducted and trained for new jobs.

External Sources: This include:

Casual applicants
Contractors and jobbers
Open advertisements.
The person recommended by former/present employees.
Telecasting.
Employment exchanges.
Temporary /Badli workers.
Gate hiring of unskilled workers.

Differences:

Internal Sources	External Sources
1. It is a quick process.	It is a lengthy process.
2. It is economical.	It involves cost since vacancies have to be published.
3. Choice of candidates is limited.	The organization can hope for talented candidates from outside.
4. The scope of fresh talent is diminished.	External workers feel dissatisfied if external sources are used.

Selection and Recruitment:

	Selection	Recruitment
Meaning	1. Process of selecting the right candidate for right job.	Process of searching the candidate for vacancies in the company.
Nature	2. It is a negative process.	It is a positive process.
Aim	3. Its Aim is to reject the unsuitable candidates and choose the best.	Aim is to attract more and more candidates for the job.
Contract of Service	4. Contractual relation is created. Since after this stage employees are recruited which creates a contract of service between employer and employee.	No contractual relation is created. Since there is communication of vacancies only.
Procedure	5. The firm makes the candidates pass through a number of stages,.	The term notifies the vacancies through various sources.
Cost	6. It is highly cost-effective.	It is less cost-effective than selection process.

Selection and Recruitment:
Recruitment and selection help in employing the right person for, the right job.

Benefits of Selection:

It builds a stable workforce if the employees are carefully chosen.
Job satisfaction will be higher when employees get jobs of their choice i.e. Higher Morale.
It will keep absenteeism and labour turnover low.
Organization can achieve its objectives effectively with competent employees.
The rate of industrial accidents will be considerably low If suitable employees are placed on various jobs.

Absenteeism and employee turnover are the important problems which are being faced by most of the organisation.

Selection Procedure:
1. PrelIminary Interview:

In this, a brief description of the employee’s knowledge and personality is given.
The most unsuitable candidate are eliminated at this stage.
Candidates who pass this stage are asked to fill up the employment form.

2. Receiving Applications (great value to interviewer):

The applications are received in response to the advertisement the organization makes.
These give a very good idea about the candidate’s likeliness, educational qualification etc.

3. Screening Applications:

After all the applications are received they are screened to shortlist the suitable candidates.
The candidates may then be called again for interviews on some specific criteria like sex, desired age group, experience and qualification.
The screened applications are reviewed by personnel manager and interview letters are dispatched by post.

4. Employment Tests: Before deciding upon the suitable candidate it is necessary to match his abilities with the available vacancy by performing the following tests:

Aptitude
Interests
Proficiency
Personality
Intelligence

These tests bring out the qualities and weaknesses of the shortlisted candidates.

5. Employment Interview:

The main purpose of this interview is to find out suitability of the candidate to seek more information
to give him accurate picture of job.
This interview is necessary for selection of a right person.
It enables to check the factual data of the applicant.
During the interview, the members of selection committee appraise each candidate according to merit.

6. Checking References:
The references that a candidate provides are cross checked and the employee’s past employment details, education, etc. are verified.

7. Medical Examination:
It is important so as to:-

to ascertain the applicant’s physical capability to meet the job requirements.
to protect the organization against unwanted claims under workers compensation laws.
it helps to prevent any communicable disease entering the organization.

8. Final Selection and Appointment letter:

After all the due formalities are completed the candidate is appointed and given the letter of appointment.

Generally, the candidates are appointed on probation basis and after seeing his work pattern and commitment towards the organization, they are made permanent.

If during probation period the candidate is found unsuitable he may either be transferred to other job matching his profile or his services may be terminated.

Training and Development (integral part of HR functions management)

Training implies a systematic procedure in which special training and technical knowledge is imparted to employees for certain specific jobs.

Training and development programmes are of two categories –

On the job programme
Off the job programme

Off the job, programmes include supervisory and managerial training programmes.

Under training and development:
Training of operative and skilled workers are mostly organised by way of-

Training on specific jobs.
Vestibule training with separate set of tools and equipment in a special training centre.
Internship training with the co-operation of vocational training institutions.
Apprenticeship training combining job experience with classroom instruction.
Job rotation involving transfer from job to job on a systematic basis.

Benefits of Training and Development:

It helps is improve the quality of workforce.
Managers are updated with latest skills, techniques and knowledge.
Promising employees can be trained for higher posts hence recruitment becomes easier.
It ensures tong term survival and growth of the organization.
It ensures that resources are properly and fully utilized since trained employees make better use of material/equipment.
It facilitates delegation and decentralization of authority since trained employees are willing to accept new and challenging jobs.
It improves employee morale and job satisfaction.
It enables the organisation to fill manpower needs.
It creates group cohesiveness and encourages teamwork.
It ensure that managerial resources of the organization are properly and fully used.

Training Methods:
A. On-the-job training methods
Under these methods, new or inexperienced employees learn through observing peers or managers performing the job and trying to limitation their behaviour.
These methods are less costlier as employees are always on the jobs.

Some commonly used methods are:
1. Coaching:

Coaching is one-to-one training.
It helps in quickly identifying the weak areas and tries to focus on them.
It also offers the benefits of transferring theory learning to practice.
The biggest problem is that it perpetuates the existing practices and styles.
In India, most of the scooter mechanics are trained only under this controlled.

2. Mentoring:

The focus of this training is on the development of attitude.
It is used for managerial employees.
Mentoring is always done by a senior inside person.
It is one-to-one interaction, like coaching.

3. Job Rotation:

It is the process of training employees by rotating them through a series of related jobs.
Rotation not only makes a person well acquainted with different job, but it also alleviates boredom and allows to develop rapport with a number of people.
Rotation must be logical.

4. Job-instructional Technique (JIT):
It is step by step on the job training method in which a suitable trainer:

prepares a trainee
demonstrates the task or the skill to the trainee.
allows the trainee to show the demonstration on his or her own.
follow up feedback.

The trainees have presented the learning material in written or by learning machines through series called ‘frames’.

5. Apprenticeship:

Apprenticeship is a system of training a new generation of practitioners of a skill.
This type of training is vogue in those trades in which a long period is required for gaining proficiency.
Ex: Crafts and technical fields.
The objective of such training is to make the trainees all-round craftsmen.
It is an expensive method of training.

6. Understudy:

In this method, a superior gives training to a subordinate.
The subordinate learns through experience and observation by participating in handling day-to-day problems.

B. Off-the-job training Method
1. Lectures and conferences:

Lectures and conferences are the traditional and direct method of instruction.
It is a verbal presentation for a large audience.

2. Vestibule Training:

Vestibule training is a term for near-the-job training, as it offers access to something new.
In vestibule training, the workers are trained in a prototype environment on specific job in special part of the plant.

3. Simulation Exercises:
Simulation is any artificial environment exactly similar to the actual situation. There are four basic simulation techniques used for imparting training:

Management games
Case study
Roleplaying
In-basket training.

(a) Management games:

Properly designed games help to ingrain thinking habits, analytical logical and reasoning capabilities, importance of teamwork, time management, to make decisions lacking complete information, communication and leadership capabilities.

Use of management games can encourage novel, innovative mechanisms for coping with stress.
Management games orient a candidate with practice applicability of the subject.

(b)Case Study:
Case study are complex examples which give on insight into the context for a problem as well as illustrating the main point.

(c) Roleplaying:
Each trainee takes the role of a person affected by an issue and studies the impacts of the issues on human life.

(d) in-basket traIning:

It is also known as in-tray training
It consists of set of business papers which may include email, SMS, reports, memos, and other items.

Sensitivity Training:

It is also known as laboratory or T-group training.
This training is about making people understand about themselves and other reasonably, which is done by developing in them social sensitivity and behavioural flexibility.

It comprises of three steps:

Unfreezing the old values.
Development of new values. ‘
Refreezing the new ones.

Performance management:
Performance management can be defined as a set of policies and procedures which alms to improve the achievement of organisational goals through a focus on individual performance.

Objectives of Performance Management:

To mould employees behaviour in order to comply with company norms.
To improve consistency between employee actions and corporate goals.
To improve the quality of HR planning, especially training an succession.
To improve quality of salary reviews
To provide records in cases of dismissal, demotion, grievance appeal.

Performance appraisal:
1. Its basic purpose is to determine the worth of an employee. it can be done by various method such as merit rating or evaluation, progress rating etc.

2. Rating may be done by supervisor or an independent appraiser.

3. The determination can be done by appraising various factors which may be objective or subjective.

4. Dale Yoder quoted, “Performance appraisal includes all formal procedures used to evaluate personalities and contributions and potentials of group members in a working organisation. It is a continuous process to secure information necessary for making correct and objective decisions on employees.” People differ in their abilities and aptitudes.

Advantages and Disadvantages Advantages:

It helps the supervisor to evaluate the performance of his employees systematically and periodically.
Allocation of work can be done on the basis of capabilities.
It helps in guiding and correcting the employees.
It can be used as a basis of sound personnel policy for transfers and promotions.
It provides an opportunity to the employees to improve their rating over the others since they get reward for good performance.
Impartial evaluation will prevent grievances and motivate the employees for higher and better results.
Ratings can be used to evaluate the effectiveness of training programmes.

Limitations:

If the factors of assessment are irrelevant, the results might not be accurate.
It involves rating of different factors like initiative and personality of the employees; so the actual rating may not be done on scientific lines.
Sometimes the supervisors are guided by their emotions and likes while judging an employee.
In certain cases, different qualities have to be rated which may not be given proper weightage.

Methods ot Appraisal:
1. TraditIonal Method:
Unstructured Appraisal: The appraiser has to write down his impression about the person being appraised in an unstructured way. It is highly subjective and has its merits In Its simplicity and is still in uso in small firms.

Ranking Method:

It is the simplest method.
The appraiser ranks all the employees by a comparison of their qualities.
But this method can be easily adopted if number of employees are less and work performance is measurable.
It involves paired comparison method in which employee are compared and ranked in pairs.

3. Forced Distribution Method:

The basic assumption used under this method is that the employees can be distinguished as outstanding, above average, below average and poor average.
The rater is required to distribute the employees in five categories on the basis pl their overall performance.

(4) Graphic Rating Scale:

This method Is similar to Rating Scale method except the qualities or attributes are indicated on a graph or chart.
The scale of attributes may be numerical, alphabetical descriptive adjective.

(5) Checklist:

Under this method, the rater gets a series of questions about the employee’s behaviour and performance.
He has to indicate whether it applies or not to the employee. After this, values are assigned depending upon their relative importance.

(6) Critical Incident Method: It involves appraisal of employees on the basis of events or incidents and employee’s reaction to the same reflecting positive or negative aspects of his behaviour.
It is similar to the Rating scale method but the degrees and qualities of employees are indicated on graph.

(7) Field Review method:

It involves an expert who questions the supervisor to obtain ail the important information for each.
The workers are usually classified into three categories outstanding, satisfactory and unsatisfactory.
Superficial judgement can be eliminated if the appraiser probes deeply.

Modern Methods
(i) Management by Objectives:
1. It is also known as the goal-setting approach as enunciated by Peter F. Drucker further strengthened by Douglas MC Gregor.

2. Steps: The subordinate and superior discuss the job requirement and agree on the contents of job and key result areas.
↓
The employees prepare a list of objectives for a period, e.g. 6 to 12 months.
↓
He discusses with his senior and sets out a final plan.
↓
Progress is measured and further criteria are established for evaluation of progress.
↓
The superior and subordinate again meet to discuss the results and ensure that the targets will be achieved.
3. This approach is widely appreciated by employees and also has led to greater satisfaction, comfort and less tension.

4. It emphasizes on training and development of individuals.

5. It is a problem-solving approach rather than tell and sell approach.

6. Built-in device of self-appraisal by subordinates because they know their goals and standards.

7. Limitations:

It can be applied only when goal setting is possible subordinates. It is doubtful to apply for blue-collar workers.
It involves considerable time and effort.
it is not suitable for operative workers since they do not take initiative in setting their own goals.
It is argued that critical evaluation and modification to improve are incompatible.

(i) Behaviourally Anchored Rating Scales (BARS):

They are designed to identity critical area of performance for a jot for getting results.
Performance is evaluated on pre-decided criteria and their compared with BARS.
As a result of this, the supervisor is in a position to compare the two performances i.e. employees actual behaviour with the behaviour previously determined.
It helps to clarify three major controversies of the appraisal process.
Issue of rating content (trait vs job-related)
Multidimensional nature of performance
The issue of most effective way to anchor the rating scales.

This approach tends to produce more valued and reliable results reducing measurement errors.

7. Limitations:-

It can be applied only when goal setting is possible by subordinates. It is doubtful to apply for blue-collar workers.
It involves considerable time and effort.
It is not suitable for operative workers since they do not take initiative in setting their own goals.
It is argued that critical evaluation and modification to improve are incompatible.

(ii) Behaviourally Anchored Rating Scales (BARS)

They are designed to identify critical area of performance for a job for getting results.
Performance is evaluated on pre-decided criteria and then compared with BARS.
As a result of this, the supervisor is in a position to compare the two performances i.e. employees actual behaviour (/ith the behaviour previously determined.

4. It helps to clarify three major controversies of the appraisal process-

Issue of rating content (trait vs job-related)
Multidimensional nature of performance
The issue of most effective way to anchor the rating scales.

5. This approach tends to produce more valued and reliable results by reducing measurement errors.
Human Resource Planning The meaning of HRP: In simple terms, Human Resource Planning should be viewed, as that part of HRM whereby a determination is made in terms of organization’s human resource needs for it to be able to meet its goals.

Bulla and Scott (1994) cited in Armstrong (2001: 357) defined it as, “The process of ensuring that the human resource requirements of an organization are identified and plans are made for satisfying those requirements”.

HRP: A Qualitative and Quantitative Process: HRP addresses an organization’s human resource needs both in quantitative terms i.e. how many people and qualitative terms i.e. what kind of people and with what skills, knowledge, and aptitudes (SKAs).

The Institute of Personnel Management Zimbabwe (IPMZ), as per that HRP is essentially a 3 step process which involves:

HR forecasting
Inventory and auditing
HR plan

HR Forecasting:
HR forecasting is that part of HRP which involves the estimation of future HR requirements in terms of actual numbers and the skills and competencies they will need. As indicated earlier on, the basis of this estimation is the organization’s strategic plan or long-term business plan. Several techniques (qualitative and quantitative) are used for this purpose.

The following are some of the techniques used:

Zero-based forecasting
Bottom-up approach’
Predictor variable approach
Computer-based simulation

Availability forecast Inventory and Audit: After having determined the H R requirements necessary for the organization to meet its goals, the HR manager then has to engage in the process of inventory analysis and auditing. This essentially means making a “stocktake” of what the organization already has in place. Thus the following question is raised at this stage.

HR Plan:
The questions asked during the inventory and audit stage are answered at the last stage of the HRP process i.e. the plan stage. Here the HR manager basically works on a plan to address the discoveries at the inventory and audit stage- the plan, which becomes the document called the Human Resource Plan.

Operational / Short term HR planning: An operational HR Plan is essentially a document that spells out what the organisation will do in terms of the various HR practices e.g. R – (recruitment) and S – (selection) – in order to achieve organisational objectives.

The Purpose of HRP:
An organization may have its own purpose of engaging in HRP depending on its particular circumstances but the following are the generic aims of HRP. (Armstrong 2001; 362)

Attract and retain the number of people required with the appropriate skills, expertise and competencies.
Anticipate the problems of potential surplus or deficits of people.
Develop a well trained and flexible workforce – thus contributing to the organization’s ability to adapt to uncertain or changing environments.
Reduce dependence of external sources of labour supply by developing appropriate internal ones.
Derive optimum value from an organization’s HR.

Key components of a highly effective talent management process include:

→ A clear understanding of the organization’s current and future business strategies.

→ Identification of the key gaps between the talent in place and the talent required to drive business success.

→ A sound talent management plan designed to close the talent gaps.

→ Accurate hiring and promotion decisions.

→ Connection of individual and team goals to corporate goals and providing clear expectations and feedback to manage performance.

→ Development of talent to enhance performance in current positions as well as readiness for transition to the next level.

→ A focus not just on the talent strategy itself, but the elements required for successful execution.

→ Business impact and workforce effectiveness measurement during and after implementation.

Organization Development:
Organizational development is the process through which an organization develops the internal capacity to be the most effective it can be in its mission work and to sustain itself over the long term. This definition highlights the explicit connection between organizational development work and the achievement of organizational mission. This connection is the rationale for doing OD work.

Nature of Management and its Process MCQ Questions

1. Human Resource Management is administrative In nature and focused on the operational activities.
(a) True
(b) False
(C) Partly True Partly False
(d) none of the above
Answer:
(b) False

2. Human Resource Management provides full-proof results and every activity can be planned according to it?
(a) True
(b) False
(c) Partly True Partly False
(d) None of the above
Answer:
(b) False

3. The HR Manager plays an effective role in decision making on issues relating to ……………. .
(a) Management
(b) Human Resource
(C) Government
(d) None of the above
Answer:
(b) Human Resource.

4. ……………. and …………………… help in employing the right person for the right
(a) Training and Development
(b) Motivation and Training
(c) Compensation and recruitment
(d) Recruitment and Selection
Answer:
(d) Recruitment and Selection.

5. Transfer and Promotion are the two internal sources of recruitment.
(a) True
(b) False
(c) Partly True Partly False
(d) None of the above
Answer:
(a) True.

6. In which of the below methods choice of candidates is limited?
(a) External source of recruitment
(b) Internal sources
(c) Selection
(d) Open advertisements
Answer:
(b) Internal sources

7. Which of these is a negative process?
(a) Recruitment
(b) Selection
(c) Training
(d) Development
Answer:
(b) Selection

8. The selection programme begins with
(a) Receiving applications.
(b) Preliminary Interview
(c) Employment Tests
(d) Employmenl_Interview
Answer:
(b) Preliminary Interview.

9. Training prevents
(a) Group cohesiveness
(b) Job satisfaction
(c) Managerial obsolescence
(d) Long term survival
Answer:
(c) Managerial obsolescence.

10. Performance Appraisal means systematic evaluation of …………………. of each employee by a person trained for merit rating.
(a) Personality/performance
(b) Intelligence
(c) Mental health/vigour
(d) Participation
Answer:
(a) Personality/performance

11. Performance Appráisal is a totally reliable method and always provides good results.
(a) True
(b) False
(c) Partly True Partly False
(d) None of the above
Answer:
(b) False.

12. Ranking Method can only be applied when the number of employees is …………….. .
(a) large
(b) moderate
(c) small
(d) very large
Answer:
(c) small.

13. ……………………. and ………………………. are the traditional methods for appraisal.
(a) Field review method and management by objectives
(b) BARS and graphic rating scales
(c) Critical incident method and BARS
(d) Ranking Method and Checklist
Answer:
(d) Ranking Method and Checklist.

14. ……………….. suggested the method of goal setting approach for performance appraisal which is called Management by Objective’.
(a) Peter Drucker
(b) Douglas Mc. Greger
(c) Newmann and Summer
(d) Henry Fayol
Answer:
(a) Peter Drucker

15. Essential feature of Management By Objective” is …………………. .
(a) Self-appraisal
(b) Mutual establishment of job goals
(c) Behaviour of the subordinates
(d) None of the above
Answer:
(b) Mutual establishment of job goals.

16. Under BARS, the supervisor is in a position to compare the employee’s actual behaviour with the behaviour that has been previously determined to be more or less effective.
(a) True
(b) False
(c) Partly True Partly False
(d) None of the above
Answer:
(a) True

17. ………………… helps to anticipate the problems of potential surplus or deficits of people.
(a) Demand Forecasting
(b) Supply Forecasting
(c) Performance management
(d) HAP
Answer:
(d) HAP.

18. ………………. is the process of forecasting an organisations future demand for, and supply of the right type of people in the right number.
(a) Human Resource Planning
(b) Recruitments
(c) Human Resource Management
(d) Human Capital Management
Answer:
(a) Human Resource Planning.

19. Which of the following factors state the importance of the Human Resource Planning?
(a) Creating highly talented personnel
(b) International strategies
(c) Resistance to change and move
(d) All of the above
Answer:
(d) All of the above.

20. A process that is used for identifying and developing internal people with the potential to fill key business leadership positions in the company is called …………………….. .
(a) Highly talented personnel creation
(b) Investing in human resources
(c) Succession planning
(d) None of the above
Answer:
(c) Succession planning.

21. Which of the following option is not the factor that hinders with the human resource planning process?
(a) Type and quality of forecasting information
(b) Time horizons
(c) Environmental uncertainties
(d) Unite the perspectives of line and staff managers.
Answer:
(d) Unite the perspectives of line and staff managers.

22. Which of these factors is not included in environmental scanning?
(a) Political and legislative issues
(b) Economic factors
(c) Technological changes
(d) None of the above.
Answer:
(d) None of the above.

23. Procedure of analyzing human capital availability and need of human resources for organization is classified as:
(a) human resource planning
(b) recruitment planning
(c) cost planning
(d) differentiation planning
Answer:
(a) human resource planning.

24. HR plans of any organization does not include:
(a) ‘personnel Ian
(b) production plans
(C) compensation plans
(d) training development plans
Answer:
(b) production plans.

25. In which of the following methods of performance appraisal, employees are distinguished as outstanding, above average, average, below average and poor.
(a) Ranking Method
(b) Checklists
(c) Unstructured appraisal
(d) Forced distribution method.
Answer:
(d) The basic assumption under Forced Distribution method is that the employees can be distinguished in five categories as outstanding, above average, average, below average and poor on the basis of their overall performance.

26. Which one of the following is an internal source of recruitment?
(a) Placement Agency
(b) Employment Exchange
(c) Transfer
(d) Educational Institutions.
Answer:
(c) Recruitment from internal sources so as to fill up casual vacancies includes transfer, promotion, or re-hiring of previous employees.

27. Which one of the following is the expanded form of acronym ‘MBO’?
(a) Management of Business Organisation
(b) Management of Business Objectives
(c) Management by Options
(d) Management by Objectives.
Answer:
(d) MBO stands for Management by Objectives. It is also Known as goal-setting approach as enunciated by Peter Drucker. It means that an employee is not appraised by his recognisable traits, but by his performance with respect to the agreed goals or objectives.

28. The act of increasing the knowledge and skill of an employee for doing a particular job, is known as –
(a) Promotion
(b) Selection
(c) Training
(d) Transfer
Answer:
(c) Training implies a systematic procedure whereby employees are imparted technical knowledge and skill for specific job. It emphasises improvements of the ability of employees to handle specific jobs and operations more effectively.

29. Performance appraisal helps in –
(a) Orderly determination of an employee’s worth to an organisation
(b) Meeting manpower needs of the organisation
(c) Improving communication abilities, human relation and managing interaction with subordinates.
(d) None of the above.
Answer:
(a) The basic purpose of performance appraisal is to facilitate orderly determination of an employee worth to the organisation of which he is a part. It can be done by various methods such as merit rating or evaluation, progress rating, etc.

30. Ranking, rating scales and checklists are the method of –
(a) Job description
(b) Promotion method
(c) Performance appraisal
(d) None of the above.
Answer:
(c) Performance appraisal means systematic evaluation of the personality and performance of each employee by his superior or some other person trained in the technique of merit rating. There are various; methods of merit rating which may be classified into:
Traditional Methods Modern Methods

Unstructured Appraisal Management by Objectives.
Employee Ranking
Forced Distribution Behaviourally anchored rating scales
Graphic- Rating Scales
Checklists.
Critical Incidents
Field review

31. Which one of the following refer to the study of individual and group behaviour in an organisation?
(a) Organisational behaviour
(b) Human resource management
(c) Human relations
(d) Group dynamics.
Answer:
(a) Organisation involves both individuals and groups working within it. Organisational behaviour refers to the study of individual and group behaviour in an organisation.

32. The full form of BARS is –
(a) Behaviourally Anchored Ranking Scales
(b) Behaviourally Anchored Rating Scales
(c) Behaviourally Anchored Rollback Scales
(d) None of the above.
Answer:
(b) Behaviourally Anchored Rating Scales (BARS) are designed to identify critical areas of performance for a job for getting results. Performance is evaluated by asking the rates to record specific observable job behaviours of an employee and then to compare these observations with a “behaviorally anchored rating scale.”

33. Performance appraisal means systematic process of measuring and evaluating each employee by a person trained for merit rating.
(a) Personality/Performance
(b) Intelligence
(c) Mental health/vigour
(d) Participation.
Answer:
(a) Performance appraisal means systematic process of measuring and evaluation of personality/performance of each employee by a person trained for merit rating. It employs various rating techniques for comparing individual employees in a workgroup in terms of personal qualities or deficiencies and the requirement of their respective jobs.

34. Ranking Method of performance appraisal can conventionally be applied when the number of employees is:
(a) Large
(b) Small
(c) Both (a) and (b) above
(d) None of the above.
Answer:
(b) Ranking method of performance appraisal can conventionally be applied when the number of employees is small because work personal is measurable. The ranking thus made involves subjective appraisal of employees without any common standard.

35. Who among the following suggested the method of goal setting approach for performance appraisal which is also called ‘management by Objectives’?
(a) Peter F. Drucker
(b) Douglas McGregor
(c) Newmann and Summer
(d) Henry Fayol.
Answer:
(a) It was Peter F. Drucker who proposed goal-setting approach to performance appraisal which he called, “Management by Objective and self-control”.

36. While appraising performance of people, it is assumed that people usually differ in: ‘
(a) Their tasks
(b) Their behaviour
(c) Their abilities and aptitude
(d) Their ways of actions.
Answer:
(c) People usually differ in their abilities and aptitudes. Therefore, it is necessary for management to know these differences so that the employees having better abilities may be awarded and the wrong placements of employees may be rectified through transfers. Thus, while appraising the performance of people, it is assumed that people usually differ in their abilities and aptitudes.

37. Human Resource Management is that part of management which is concerned with and their relationship with an enterprise.
(a) Board of directors
(b) Society at large
(c) Regulators
(d) The employees.
Answer:
(d) HRM is that part of the process of management which is concerned with the people who worked in organisation i.e. employees. Its aim is to bring men and women together who make up an enterprise and having regard for the well-being of an individual and of working groups, to enable them to make their best contribution to its success.

38. “Recruitment is the development and maintenance of adequate manpower resources. It involves the creation of a pool of available labour upon whom the organisation can draw when it needs additional employees”. The given statement is the observation of –
(a) Edwin B. Flippo
(b) Dale S. Beach
(c) Peter Drucker
(d) Douglas McGregor.
Answer:
(b) The given statement is observed by Dale S. Beach.

39. ………………. means systematic evaluation of the personality and performance of each employee by his supervisor or some other person trained in the techniques of merit rating.
(a) Training and development
(b) Performance appraisal
(c) Human Resource Management
(d) Behaviourally Anchored Rating Scales (BARS).
Answer:
(b) Performance appraisal means systematic evaluation of the personality and performance of each employee by his supervisor or some other person trained in the techniques of merit rating. It employs various rating techniques for comparing individual employees in a workgroup, in terms of personal qualities or deficiencies and the requirements of their respective jobs.

40. Management by objectives (M.B.O) is given by –
(a) Peter Drucker
(b) Fredrick Taylor
(c) Hick
(d) Haimann.
Answer:
(a) It was Peter Drucker who proposed a goal-setting approach to performance appraisal which he called “Management by Objectives and Self-Control”.

41. Which of these is not an operative function of Human Resource Manager?
(a) Top Level Management
(b) Employment
(c) Compensation
(d) Development.
Answer:
(a) Operative Functions of Human Resource Manager includes:-

Employment
Development
Remuneration
Motivation
Personnel Records
Maintenance
Industrial Relations
Separation Thus, TOP level Management is not an operative function of Human Resource Manager.

42. “Personnel Management is the recruitment selection development utilisation, compensation, motivation of human resource by the organisation”. This definition is given by:
(a) Peter F Drucker
(b) French Wendell
(c) Edwin B. Flippo
(d) Dirks.
Answer:
(b) French Wendell defines, “Personnel management is the recruitment, selection, development, utilization, compensation and motivation of human resources by the organisation.”

43. Which of the following is the “positive process”:
(a) Recruitment
(b) Selection
(c) Organisation
(d) Operation
Answer:
(a) Recruitment refers to the process of searching the candidates for jobs in the organisation. It is a positive function as it results in collection/pool of applicants in response to the vacancy advertised.

44. ………………. type of performance measurement format would most likely include graphs, tables and other outputs.
(a) MBWA
(b) Written report
(c) Oral report
(d) Graphical Rating Scale.
Answer:
(d) In traditional methods of performance appraisal, Graphical Rating – Scale method is similar to the Rating-Scale method except that the degrees of qualities or attributes on which employees are to be appraised are indicated on a graph or chart. Hence, option (d) is correct answer.

45. Which department deals with the issues related to the absenteeism?
(a) Production
(b) Sales
(c) Marketing
(d) HRM.
Answer:
(d) Human Resource Management is that part of the process of management specifically concerned with the people employed in an organisation. Absenteeism & employee turnover are the important problems which are being faced by most of the organisations in Human Resource Management wherever unsuitable employees are appointed, the efficiency of the organisation will go down.

46. Which of the following terms refers to the background investigations, tests and physical exams that firms use to identify suitable candidates for a job? ‘
(a) Job analysis methods
(b) Personal techniques
(c) Selection tools
(d) Forecasting tools.
Answer:
(c) Selection procedure starts with the screening of applications for various jobs from the interested candidates. The personnel department administers various kinds of tests to the candidates to determine if they would be able to do their jobs efficiently. Those passing this stage are called for employment interviews. The employment process is completed when appointment letters are issued to the candidates clearing all the stages in the selection procedure.

47. Which of the following has a basic purpose of facilitating orderly determination of an employee’s worth to the organisation of which he is a part?
(a) Recruitment
(b) Performance appraisal
(c) Development
(d) Training.
Answer:
(b) Performance appraisal means systematic evaluation of the personality and performance of each employee by his supervisor or some other person trained is the techniques of merit rating. The basic purpose of performance appraisal is to facilitate orderly determination of an employee’s worth to the organisation of which he is part.

48. Which of the following terms refers to the background investigations, tests and physical exams that firms use to identify suitable candidates for a Job?
(a) Forecasting tools
(b) Selection tools
(c) Job analysis methods
(d) Personnel techniques.
Answer:
(b) The main steps in selection procedure or the tools of selection are:

Preliminary interview
Receiving applications
Screening of applications
Employment test
Employment interview
Physical examination
Checking references
Final Selection.

49. Which department deals with the issues related to the absenteeism?
(a) HRM
(b) Sales
(c) Marketing
(d) Production.
Answer:
(a) Absenteeism and employee turnover are the important problems which are being faced by most of the organisation HRM department. The intensity of these problems can be reduced if in the future all selections are made carefully.

50. The operative function of a Human Resource Manager means:
(a) Those tasks or duties which are specifically entrusted to the HR ‘ department under the general supervision of HR Manager
(b) Those tasks that are the functions of strategic planning and organising in relation to HR Department
(c) Specialized work that requires special attention
(d) Advising the managers in their personal matters.
Answer:
(a) The operative functions of a Human Resource Manager are those tasks and duties which are specifically entrusted to the HR Manager i.e.Recruitment, Selection, Training etc.

51. Which one of the following is the external source in recruitment:
(a) Transfer
(b) Casual Vacancy
(c) Promotion
(d) All are applicable
Answer:
(b) External source of recruitment:

Recruitment at factory gate.
Casual callers
Advertisement
Employment agencies
Management Consultants
Educational Consultants
Recommendation
Labour Contractors
Telecasting Thus, option (b) is correct.

52. Programs like, classroom lecture, conferences, group discussion, case studies, role-playing, etc. falls under which of the following category:
(a) Off-the-job programs.
(b) On-the-job programs
(c) Determination of the employees work
(d) Computer training.
Answer:
(a) Off-the-job programs.

53. Which one of the following is the external source in recruitment:
(a) Transfer
(b) Casual Vacancy
(c) Promotion
(d) All are applicable
Answer:
(a) Programs like classroom lecture, conferences, group discussion, case studies, role playing etc. falls under off-the-job programs as they cover supervisory and managerial training programs.

54. Which of the following is (are) designed to identify the critical areas of performance for a job and to describe the more effective and less effective job behaviour for getting results.
(a) Management by objectives.
(b) Checklists
(c) Graphic Rating Scale
(d) Behaviourally anchored rating scale
Answer:
(d) BARS are designed to identify the critical areas of performance for a job and to describe the more effective and less effective job behaviour for getting results. Performance is evaluated by asking the rates to record specific observable job behaviour of an employee and then to compare the observations with a “behaviorally anchored rating scale.” As a result, the supervisor will be in a position to compare the employee’s actual behaviour with the behaviour that has been previously determined to be more or less effective.

55. The development of a vision about where the company wants to be and how it can use human resources to get there is referred to as:
(a) Contingency theory
(b) An affirmative action plan
(c) Strategic HR planning
(d) HR Tactics.
Answer:
(c) The effectiveness with which various kinds of human resources are coordinated and utilised is responsible for the success or failure in achieving organisational objectives.
Therefore, strategic HR planning helps to use human resources to accomplish the vision of the organisation.

56. According to experts, the primary hindrance to a firms productivity is its inability to ………………. .
(a) utilize funds available
(b) use advanced controls
(c) use government subsidy
(d) acquire and maintain human capital.
Answer:
(d) Experts assert that it’s the workforce and the company’s inability to recruit and maintain a good workforce that constitutes a bottleneck for production. Projects backed by good ideas, vigour, and enthusiasm are less likely to be stopped by a shortage of cash than a shortage of human capital, which is the knowledge, education, training, skills and expertise of a firm’s workers.

57. Which of the following terms refers to the background investigations, tests and physical exams that firms use to identify suitable candidates for a job?
(a) Job analysis methods
(b) Forecasting tools
(c) Personnel techniques
(d) Selection tools.
Answer:
(d) The firm makes the candidates pass through a number of stages, such as filling of forms, employment tests, interviews, medical exams etc. It is the process of selection of right type of candidates and offering them the jobs. Hence, option d is correct.

58. According to experts, the primary hindrance to a firms productivity is its inability to
(a) utilize funds available
(b) use advanced controls
(c) use government subsidy
(d) acquire and maintain human capital.
Answer:
(d) The most important of all capital is Human Capital. The Inability of an organisation to maintain the Human Capital is the biggest hindrance in its productivity.

59. The employees contribute a total of …………………. of their basic salary plus dearness allowance to EPF
(a) 10%
(b) 14%
(c) 6%
(d) 12%
Answer:
(d) Employees contribute a total of 12% of basic salary to EPF.

60. The method of appraisal similar to the Rating Scale Method except that the degrees of qualities or attributes on which employees are to be appraised are, indicated on a graph or chart, is known as:
(a) Field Review Method
(b) Ranking Method
(c) Forced Distribution Method
(d) Graphic Rating Method.
Answer:
(d) Graphic Rating is similar to Rating Scale Method.

61. Which of the following is not the characteristics of the process of selection?
(a) Selection is the. process of selecting right candidate
(b) Selection follows recruitment
(c) The aim of selection is to ensure most suitable candidate for the job
(d) Selection is a negative process.
Answer:
(b) Recruitment follows Selection process

62. Ranking method of performance appraisal can conventionally be applied when the number of employees is:
(a) Large
(b) Small
(c) Both (a) and (b) Above
(d) None of the above.
Answer:
(b) Ranking method of performance appraisal is used when the number of employees is small and work is measurable.

63. Who among the following suggested the method of goal setting approach for performance appraisal which is also called ‘management by objectives:
(a) Peter F. Drucker
(b) Douglas Me. Gregor
(c) Newmann and Summer
(d) Henry Fayol.
Answer:
(a) ‘Management by objectives and ‘self-control’ proposed by Peter F.Drucker in which he describes goal setting to performance appraisal.

64. While appraising performance of people. It is assumed that people usually differ in:
(a) Their tasks
(b) Their behaviour
(c) Their abilities and aptitude
(d) Their ways of actions.
Answer:
(c) Each person have different abilities and aptitude so, while appraising performance of people, it is assumed that people usually differ in their abilities and aptitude.

65. HR manager’s work is to:
(a) Motivate employees to make them contribute fully
(b) Directing towards goals
(c) To advise the head of various departments
(d) All of these.
Answer:
(d) HR manager’s function are:

Management function: (Planning, directing, controlling, etc.)
Operational function: (Development, motivation, separation, etc.)
Advisory function: (Top Management, Departmentally) hence, option (d) is correct.

66. Human Resource Management is that part of management which is concerned with and their relationship with an enterprise.
(a) Board of directors
(b) Society at large
(c) Regulators
(d) The employees.
Answer:
(d) Human Resource Management is that part of management which is concerned with ‘the employees’ and their relationship with an enterprise.

67. Recruitment is the development and maintenance of adequate manpower resources. It involves the creation of a pool of available labour upon whom the organisation can draw when it needs additional employees. The given statement is the observation of –
(a) Edwin B. Flippo
(b) Dale S. Beach
(c) Peter Drucker
(d) Douglas Me Gregor.
Answer:
(b) The gÉven statement Is the observation of ‘Dale S. Beach’.

68. ……………………… means systematic evaluation of the personality and performance of each employee by his supervisor or some other person trained in the techniques of merit rating.
(a) Training and development
(b) Performance appraisal
(c) Human Resource Management
(d) Behaviorally Anchored Rating
Answer:
(b) ‘Performance Appraisal’ means systematic evaluation of the personality and performance of each employee by his supervisor or some other person trained in the techniques of merit rating.

69. ‘Management by Objective’ is given by:
(a) Peter Drucker
(b) Mc Gregor
(c) Kriootz O Donna
(d) Hicks
Answer:
(a) It was Peter Drucker” who proposed goal. Setting approach to performance appraisal which is called ‘management by objective and self-control’. This approach was further strengthened by “Douglas Mc. Gregor”.

Human Resource Management – Business Management Ethics and Entrepreneurship Notes

Human Resource Management – Business Management Ethics and Entrepreneurship Notes

CS Foundation Business Management Ethics and Entrepreneurship Notes