Human Resource

Management
MBA - 2
Meaning of Human Resource Management
(HRM)
• Human Resource Management (HRM) refers to the systematic process of managing
people in an organization to achieve its objectives efficiently and effectively. It focuses on
recruitment, development, motivation, and maintenance of human resources.

• Definitions of HRM
• Edwin B. Flippo:
HRM is the planning, organizing, directing, and controlling of the procurement,
development, compensation, integration, maintenance, and separation of human
resources to the end that individual, organizational, and societal objectives are
accomplished.
• Gary Dessler:
HRM is the policies and practices involved in carrying out the “people” or human
resource aspects of a management position.
• Dale Yoder:
HRM is the management of manpower to achieve organizational goals.
Objectives of HRM
1. Organizational Objectives
• Achieve overall business goals
• Improve productivity and profitability
• Ensure effective utilization of human resources
• Maintain competitive advantage
2. Functional Objectives
• Maintain proper balance between HR department and
organizational needs
• Avoid overstaffing or understaffing
• Ensure efficient HR policies and practices
3. Personal Objectives
• Provide job satisfaction
• Offer career development opportunities
• Ensure fair wages and benefits
• Maintain work-life balance
4. Societal Objectives
• Comply with labor laws and ethical standards
• Provide equal employment opportunities
• Contribute to social welfare
• Maintain corporate social responsibility
Scope of Human Resource Management
(HRM)
2. Development of Human 3. Compensation of Human
1. Procurement of Human Resources Resources
Resources
• Training and development • Wage and salary administration
• Human resource planning
• Skill enhancement • Incentives and bonuses
• Recruitment
• Career planning • Employee benefits
• Selection
• Performance appraisal • Job evaluation
• Placement and induction

4. Maintenance of Human 5. Integration of Human Resources

Resources • Motivation
• Employee welfare
• Leadership
• Health and safety • Communication
• Industrial relations • Grievance handling
• Employee engagement
Functions of Human Resource Management
(HRM)
Process of Human Resource Management
(HRM)
 Role HR executives
1. Recruiter 2. Trainer and Developer 3. Performance Manager
• Manpower planning • Identifying training needs • Conducting performance
• appraisal
Conducting interviews • Organizing training programs
• Selecting the right candidate • Setting KPIs
• Career development
• Placement and induction planning • Providing feedback and
evaluation

5. Compensation & Benefits

Administrator 4. Employee Relations Manager

• Salary structure design • Handling grievances

• Maintaining discipline
• Payroll management
• Ensuring industrial peace
• Incentives and benefits
administration • Building healthy work culture

6. Policy Implementer 7. Strategic Partner

• Framing HR policies • Aligning HR strategy with
business goals
• Ensuring compliance with
labor laws • Workforce planning
• Maintaining employee • Supporting organizational
records growth
Qualities of a Good HR Executive

1. Good Communication 2. Leadership Ability 3. Emotional Intelligence 4. Integrity and Confidentiality

Skills
• Ability to guide and • Understanding employee • Handling sensitive
• Clear verbal and written influence employees information responsibly
communication emotions
• Decision-making skills • Fair and ethical behavior
• Active listening ability • Conflict resolution skills
• Empathy

5. Problem-Solving Skills 6. Interpersonal Skills 7. Knowledge of Labor Laws 8. Adaptability

• Quick decision making • Ability to build • Awareness of • Ability to manage change
relationships employment regulations
• Analytical thinking
• Team-building capability • Compliance management • Flexible mindset
Changing environment of HRM in India
• The environment of Human
Resource Management (HRM) in
India has changed significantly due
to globalization,
• technological advancement,
economic reforms, and social
transformation.
• After the 1991 Liberalization
Policy, Indian organizations shifted
from traditional personnel
management to strategic HRM.
 Major Factors Influencing Changing HR
Environment in India
1. Globalization 2. Technological Advancement 3. Changing Workforce Demographics
• Entry of multinational companies (MNCs) • Use of HRIS (Human Resource Information • Rise of Millennials and Gen Z employees
Systems)
• Increased global competition • Increased participation of women in
• AI-based recruitment workforce
• Cross-cultural workforce management
• Online performance appraisal • Diverse and inclusive workplace
• Adoption of global HR practices
• Digital payroll systems • Flexible work expectations

4. Legal and Regulatory Changes 6. Shift from Personnel Management to 7. Work from Home & Hybrid Culture
Strategic HRM
• Implementation of new Labour Codes
(2020) • Earlier focus:
• Post-COVID scenario:
• Focus on employee welfare and compliance • Administrative work • Remote working
• Strengthening of workplace safety norms • Record keeping • Hybrid models
• Wage payment • Virtual training programs
5. Focus on Employee Engagement & Well-being
• Now focus:
• Mental health initiatives • Digital collaboration tools
• Talent management
• Employee wellness programs
• Leadership development
• Performance-based rewards
• Employer branding
• Continuous feedback systems
• Strategic workforce planning
Traditional HR vs. Strategic HRM
Human Resource Management has evolved from Traditional Personnel Management to Strategic Human
Resource Management (SHRM).

•Traditional HR focused mainly on administrative and routine functions.

•Strategic HRM focuses on aligning HR practices with long-term organizational goals.

Features of Traditional HR Features of Strategic HRM

Record keeping •Talent management
Payroll management •Workforce planning
Recruitment & selection •Succession planning
Compliance with labor laws •Leadership development
Discipline and grievance handling •Employer branding
•HR analytics
•Aligning HR strategy with business strategy
Difference Between Traditional HR and
Strategic HRM
Basis Traditional HR Strategic HRM
Approach Reactive Proactive
Focus Administrative tasks Strategic planning
Role of HR Support function Strategic partner
Time Orientation Short-term Long-term
Decision Making Operational level Top management involvement
Employee View Cost to organization Valuable asset
Performance Measurement Attendance & discipline KPIs & business impact
Continuous development &
Training Basic skill training
leadership building
Technology Use Manual record keeping HR analytics & digital HR systems
Creating an HR-Based Competitive Advantage
• HR-based competitive advantage means using people, HR practices, and
organizational culture to create an advantage that competitors find
difficult to imitate.
In today’s knowledge-driven economy, people are the most sustainable
source of competitive advantage.

• Why HR Creates Competitive Advantage

• According to strategic management theory, resources that are valuable,
rare, inimitable, and well-organized (VRIO) can create long-term
competitive advantage.
Human resources meet all these conditions when managed strategically.
Ways to Create HR-Based Competitive
Advantage
1. Talent Acquisition & Retention 2. Performance Management System
• Hiring the right people with unique skills • Goal-oriented performance appraisal
• Employer branding to attract top talent • Linking performance with rewards
• Retention through career growth and • Continuous feedback
engagement

3. Employee Engagement & Motivation 4. Strategic Alignment of HR with Business Goals

• Recognition and rewards • HR involved in strategic planning
• Participation in decision-making • Workforce planning aligned with business needs
• Work-life balance initiatives
• HR as a business partner

5. Continuous Training & Development 6. Strong Organizational Culture

• Skill upgradation • Shared values and beliefs
7. Use of HR Analytics &
• Leadership development Technology • Ethical practices
• Learning culture • Data-driven HR decisions • Teamwork and trust
• Predictive analytics for
attrition
• Digital HR systems
Roles of Line Managers in Creating HR-Based
Competitive Advantage
• Talent Identification & Recruitment Support • Employee Engagement Builder
• Participate in interviews • Motivate employees
• Identify skill gaps • Recognize achievements
• Select candidates aligned with team needs • Encourage participation

• Training & Development Facilitator • Change Management Agent

• Provide on-the-job training • Communicate organizational changes
• Mentor and coach employees • Reduce employee resistance
• Identify development needs • Support implementation of new strategies

• Performance Management Executor • Maintaining Discipline & Industrial Relations

• Set clear goals (KPIs) • Handle grievances
• Maintain team harmony
• Monitor performance
• Ensure compliance with HR policies
• Provide regular feedback
• Conduct performance appraisals
Human Resource System (HRS)
• A Human Resource System (HRS) refers to the structured and
integrated framework through which an organization manages its
human resources effectively.
• It includes policies, procedures, processes, and technologies that
guide the acquisition, development, utilization, and retention of
employees.
• 👉 In simple terms:
Human Resource System = A systematic way of managing people
from recruitment to retirement.
Human Resource System (HRS)
Components of Human Resource System
1. Input 2. Process 3. Output 4. Feedback
• Human resource planning • Training and development • Employee productivity •Performance reviews
•Employee surveys
• Recruitment and selection • Performance appraisal • Job satisfaction •HR audits
• Employee data and qualifications • Compensation management • Organizational growth •Continuous improvement

• Employee relations • Competitive advantage

Sub-Systems of Human Resource System

1. Procurement System 2. Development System 3. Compensation System 4. Maintenance System
• Manpower planning • Training • Wage and salary administration • Employee welfare
• Recruitment & selection • Career planning • Incentives and benefits • Health & safety
• Performance management • Industrial relations
Macro & Micro Dimensions
• Human Resource Management (HRM) operates at
two levels:
• Macro Dimension – Broad, external, and strategic
level
• The Macro Dimension focuses on external factors
and overall strategic aspects that influence HRM.
• It deals with the broader environment in which the
organization operates.

• Micro Dimension – Internal, operational, and

functional level
• The Micro Dimension focuses on internal HR
activities within the organization.
• It deals with day-to-day HR functions and
operational management.
Macro & Micro Dimensions
• Key Elements of Macro • Key Elements of Micro
Dimension Dimension
1. Economic Environment 1. Recruitment & Selection
2. Political & Legal Environment 2. Training & Development
3. Technological Environment 3. Performance Appraisal
4. Social & Cultural Environment 4. Compensation Management
5. Global Environment 5. Employee Relations
6. Motivation & Leadership
Difference Between Macro & Micro
Dimensions
Basis Macro Dimension Micro Dimension

Focus External environment Internal functions

Level Strategic Operational

Scope Broad Specific

Concern Policies & environmental impact HR practices & activities

Objective Long-term adaptation Efficient HR management

Factors Affecting Macro & Micro HR Policy
Factors affecting Macro HR policy Factors affecting Micro HR policy
1. Economic Factors 4. Social & Cultural Factors 1. Organizational Objectives & Strategy • Training programs

• • Expansion plans • Employee benefits

• Economic growth rate Workforce diversity
• Diversification • Welfare activities
• Inflation and wage levels • Changing employee expectations
• Downsizing 6. Management Philosophy
• Unemployment rate • Work-life balance demands
• Innovation focus • Authoritarian or participative style
• Global market competition • Gender equality norms
2. Organizational Structure • Attitude towards employees
2. Political & Legal Factors 5. Globalization • Centralized or decentralized system • Risk-taking ability
• Government policies • Multinational operations • Line and staff relationships 7. Skill Level of Workforce
• Labour laws and industrial • Cross-cultural workforce • Reporting hierarchy • Availability of skilled employees
regulations 3. Organizational Culture • Training requirements
• International labor standards
• Employment standards • Values and beliefs • Learning adaptability
6. Demographic Factors
• Trade union influence • Leadership style 8. Employee Relations Climate
• Age composition of workforce
3. Technological Factors • Communication patterns • Presence of trade unions
• Education levels
• Ethical standards • Level of trust
• Automation and AI
• Urbanization trends 4. Size of the Organization • Industrial disputes
• Digital HR systems
7. Organizational Strategy • Small firms → Informal HR practices 9. Technology Used in Organization
• Remote working technologies
• Business expansion plans • Large firms → Formal HR policies and • Automation level
procedures
• Diversification • HRIS systems
5. Financial Resources
• Digital performance tools
• Budget for recruitment
Difference Between Macro & Micro HR
Factors
Basis Macro HR Policy Factors Micro HR Factors

Nature External Internal

Level Strategic Operational

Scope Broad Specific

Control Less controllable More controllable

Examples Economy, laws, technology Culture, structure, resources

Micro-Level HR Practices
Recruitment & Selection Training & Development Performance Management
• Job analysis • Induction training • Setting goals (KPIs)
• Job description & specification • On-the-job training • Performance appraisal
• Advertising vacancies • Skill enhancement programs • Feedback system
• Conducting interviews • Leadership development • Performance-based
• Final selection and placement rewards

Compensation & Benefits Employee Relations

Employee Engagement
• Wage and salary administration • Grievance handling
• Team-building activities
• Incentives and bonuses • Conflict resolution
• Recognition programs
• Employee benefits (PF, gratuity, • Maintaining discipline
• Employee satisfaction surveys
insurance) • Industrial relations

Health, Safety & Welfare HR Record Management

• Workplace safety measures • Maintaining employee data
• Medical facilities • Attendance management
• Employee welfare • Payroll processing
programs
Human Resource Planning (HRP)
• Human Resource Planning (HRP) is the process of forecasting an
organization’s future human resource requirements and ensuring that the
right number of people with the right skills are available at the right time.

• Definition of HRP
• According to Edwin B. Flippo:
• Human Resource Planning is the process of determining and assuring that
the organization will have an adequate number of qualified persons,
available at the proper times, performing jobs which meet the needs of the
enterprise.
Significance / Importance of HRP
• Ensures Optimum Utilization of Human Resources
• Helps in Forecasting Future Manpower Needs
• Reduces Labor Costs
• Supports Organizational Objectives
• Facilitates Recruitment & Selection
• Promotes Career Planning & Succession Planning
• Improves Industrial Relations
• Adapts to Technological & Environmental Changes
Process of Human Resource Planning (HRP)
Organizational Objectives & Policies
• HR plan should be based upon organizational objectives and policies. Specific
requirements in terms of number and characteristics of employees should be
derived from organizational objective.
• While deriving HR plan from org objectives following pts should be taken into
consideration.
• Downsizing / Expansion
• Acquisition / Merger / Sell-out
• Technology upgradation / Automation
• New Markets & New Products
• External Vs Internal hiring
• Training & Re-training
• Union Constraints
HR Demand Forecast
• HR demand forecast is process of estimating future quantity and quality of manpower required for an organization.
• Demand forecast must consider following factors.
• External factors – competition, laws & regulation, economic climate, changes in technology and social factors
• Internal factors – budget constraints, production levels, new products & services, organisational structure & employee
separations
• FORECASTING TECHNIQUES
• Forecasting techniques vary from simple to sophisticated ones. Before describing each technique, it may be stated that
organisation generally follow more than one technique.
• The techniques are:
• 1. Managerial judgement
• 2. Ratio-trend analysis
• 3. Work study techniques
• 4. Delphi technique
• 5. Flow models
• 6. Others Quantitative method
Managerial Judgement
• In this, managers sit together, discuss and arrive at a figure, which would be the future demand for labour.
• The technique may involve a ‘bottom-up’ or a ‘top-down’ approach.
• In the first, ‘bottom-up’ line managers submit their departmental proposals to top managers who arrive at
the company forecasts.
• In the ‘top-down’ approach, top managers prepare company and departmental forecasts.
• These forecasts are reviewed with departmental heads and agreed upon.
• Neither of these approaches is accurate – a combination of the two could yield positive results.
• In the ‘bottom-up’ and ‘top-down’ approaches, departmental heads are provided with
• broad guidelines.
• Armed with such guidelines, and a consultation with the HRP section in the HRM department, departmental
managers can prepare forecasts for their respective departments. Simultaneously, top HR managers prepare
company forecasts.
• A committee comprising departmental managers and HR managers will review the two sets of forecasts,
arrive at a unanimity, which is then presented to top managers for their approval.
Ratio-trend Analysis
• This is the quickest forecasting technique.
• The technique involves studying past ratios, say, between the
number of workers and sales in an organization and forecasting
future ratios, making some allowance for changes in the
organisation or its methods.
• Demand forecast:- Production : inspectors
Work-study Technique
• Work-study techniques can be used when it is
possible to apply work measurement to calculate
the length of operations and the amount of
labour required.
• The starting point in a manufacturing company is
the production budget, prepared in terms of
volumes of salable products for the company as a
whole, or volumes of output for individual
departments.
• The budgets of productive hours per unit of
output are then multiplied by the planned volume
of units to be produced to give the total number of
planned hours for the period.
• This is then divided by the number of actual
working hours for an individual operator to show
the number of operators required.
• Allowance will have to be made for absenteeism
and idle time.
Delphi Technique
• The Delphi technique is a method of forecasting human resource
needs. It is a decision Making tool.
• It is been used in estimating personnel needs from a group of
experts, usually managers. The HR experts act as intermediaries,
summarises the various responses and reports the findings back to
experts.
• The experts survey again after they get this feedback. Summaries and
surveys are repeated until the experts opinions begin to agree. This
agreement reached is the forecasting of the human resource needs
Flow Models
• Flow models are very frequently associated with forecasting personnel needs. The simplest one is called the Markov model.
• In this technique, the forecasters will
• 1. Determine the time that should be covered. Shorter lengths of time are generally accurate than longer ones. However,
the time horizon depends on the length of the HR plan which, in turn, is determined by the strategic plan of the organisation.
• 2. Establish categories, also called states, to which employees can be assigned.
• These categories must not overlap and must take into account every possible category to which an indivdual can be
assigned. The number of states can neither be too large nor too small.
• 3. Count annual movements (also called ‘flows’) among states for several time periods.
• These states are defined as absorbing (gains or losses to the company) or non-absorbing (change in position levels or employment
status).
• Losses include death or disability, absences, resignations and retirements.
• Gains include hiring, rehiring, transfer and movement by position level.
• 4. Estimate the probability of transitions from one state to another based on past trends.
• Demands are a function of replacing those who make a transition.
HR Supply Forecast
HR Supply Forecast
• HR Supply forecast is process of estimating future quantity and quality of manpower available internally & externally to an
organization.

Reasons for supply forecast are:

(i) helps quantify number of people and positions expected to be available in future to help the organization realize its plans and
meet its objectives;
(ii) helps clarify likely staff mixes that will exist in the future;
(iii) assess existing staffing levels in different parts of the organization;
(iv) prevents shortage of people where and when they are most needed, and
(v) monitors expected future compliance with legal requirements of job reservations.

• Supply Analysis includes following consideration

• Existing Human Resources
• Internal Sources of Supply
• External Sources of Supply
(i)Existing Human Resources
• Capability / Skills Inventory using
HR Information System
• Human Resource Information
System (HRIS)
• A human resource information
system (HRIS) is a systematic
procedure for collecting, storing
maintaining, retrieving and
validating needed by an
organization about its human
resources
(ii) Internal Supply:
• After analysis of existing Human resources planners can proceed
with the analysis of internal supply.
• The techniques generally used for Internal supply are:
• Inflows and outflows
• Turnover rate,
• Absenteeism,
• Productivity level,
• Movement among jobs.
Inflows and outflows:
• The number of losses & gains of staff is estimated for specified
period.
Turnover Rate
• Turnover rate is the traditional and simple method of forecasting
internal supply
• Turnover Rate – refers to rate of employees leaving during specified
period
• Turnover Rate =(No. of separations in a year / Avg no. of employees
during the year ) x 100
Absenteeism
• Absenteeism is understood as unauthorised absence from work.
• it amounts to absenteeism when an employee is scheduled to work
but fails to report for duty
• Absenteeism is calculated as:
• Absenteeism= (Number of persons – days lost)/ (Average number of
persons x number of working days )x 100
• If the absenteeism rate is four per cent, only 96 out of 100 people are
available for work.
Productivity Level
• Any change in productivity would affect the number of persons
required per unit of output
• Increase in productivity will reduce the requirement, and decrease in
it would have the opposite-effect

Movement among Jobs

• Some jobs are sources of personnel for other jobs.
• For example, secretaries may be obtained by the promotion of
typists, and branch managers are obtained from a pool of section
managers
(iii) External Supply
• In addition to internal supply, the • Sources of external supply
organisation needs to look out for • Sources of external supply vary from
prospective employees from external industry to industry, organisation to
Sources. organization, and also from one
• External sources are important for geographical location to another.
specific reasons: • Organizations find their best source
• (i) new blood and new experience will of further employees are :
be available, • Colleges and universities
• (ii) organisation needs to replenish • Consultants
lost personnel
• (iii) organisational growth and • Competitors
diversification create the needs to use • Unsolicited Application
external sources to obtain additional
number and type of employees.
HR Programming
• Once an organization's personnel demand and supply are forecast,
the two must be reconciled or balanced in order that vacancies can
be filled by the right employees at the right time.

HR Plan Implementation
• Implementation requires converting an HR plan into action.
• A series of action programmes are initiated as a part of HR plan implementation.
• Some such programmes are recruitment, selection and placement; training and
development; retraining and redeployment; the retention plan and the succession plan
Shortage & Surplus
Control and Evaluation
• Control and evaluation represents the fifth and the final phase in the HRP
process.
• The HR plan should include budgets, targets and standards.
• It should also clarify responsibilities for implementation and control, and
establish reporting procedures which will enable achievements to be
monitored against the plan.
• These may simply report on the numbers employed against establishment
(identifying both those who are in post and those who are in pipe line) and
on the numbers recruited against the recruitment targets.
• It should also report employment costs against budget, and trends in
wastage and employment ratios.
Recruitment
Definition Key Features of Recruitment
• Recruitment is the process of identifying, • It is a positive process (attracting candidates).
attracting, and encouraging potential
candidates to apply for job vacancies in an • It creates a pool of applicants.
organization. • It precedes the selection process.
• It can be done through internal or external
Edwin B. Flippo: Recruitment is the process of sources.
searching for prospective employees and
stimulating them to apply for jobs in the
organization. Objectives of Recruitment
• Attract qualified candidates
Dale Yoder:Recruitment is a process to discover • Create a talent pool
sources of manpower to meet the requirements • Meet organizational manpower needs
of staffing schedule and to employ effective
measures for attracting manpower in adequate • Reduce hiring time and cost
numbers. • Improve workforce quality
Recruitment Process
Recruitment Process
• As stated earlier, recruitment refers to the process of identifying and attracting job
seekers so as to build a pool of qualified job applicants. The process comprises of five
interrelated stages: (i) planning, (ii) strategy development, (iii) searching, (iv) screening,
and (v) Evaluation and control.
• The ideal recruitment program is the one that attracts a relatively large number of
qualified applicants who will survive the screening process and accept positions with the
organization when offered.
• Recruitment program can miss the ideal in many ways: by failing to attract an adequate
applicant pool, by under/over selling the organization, or by inadequately screening
applicants before they enter the selection process. (Heneman, 1986) Thus, to approach
the ideal, individuals responsible for recruitment process must know how many and
what types of employees are needed, where and how to look for individuals with the
appropriate qualifications and interests, what inducements to use or avoid for various
types of applicants groups, how to distinguish applicants who are underqualified from
those who have a reasonable chance of success, and how to evaluate their work.
Recruitment Planning
• The first stage in recruitment process is planning. Planning involves the translation of likely job
vacancies and information about the nature of these jobs into a set of objectives or targets that
specify the (i) number and (ii) type of applicants to be contacted.
• A) Number of Contacts Organizations, nearly always, plan to attract more applicants than they
will hire. Some of those contacted will be uninterested, unqualified or both. Each time a
recruitment program is contemplated, one task is to estimate the number of applicants necessary
to fill all vacancies with qualified people. (Heneman, 1986)
• Companies calculate yield ratios (yRs) which express the relationship of applicant inputs to
outputs at various decision points. The yRs must be used with circumspection. No yRs will be
available for recruiting employees for the first time, or for recruiting sources or method that have
not yet been tried. Recruiters in such 26 cases have to depend upon their counterparts in other
organizations or make their own guesses. (Heneman, 1986)
• B) Type of Contacts This refers to the type of people to be informed about job openings. The type
of people depends upon the tasks and responsibilities involved and the qualifications and
experience expected. These details are available through job description and job specification.
Strategy Development
• Once it is known how many and what type of recruits are required,
serious considerations need to be given to (i) „make‟ or „buy‟
employees; (ii) technological sophistication of recruitment and
selection devices; (iii) geographic distribution of labour markets
comprising job seekers; (iv) sources of recruitment; and (v)
sequencing the activities in the recruitment process. (Anthony, 1993)
a) ‘Make’ or ‘Buy’ b) Technological Sophistication
• Organizations must decide whether to • Where to Look The second decision in
hire less skilled employees and invest strategy development relates to the
in training and education programs or methods used in recruitment and
they can hire skilled labour and selection. This decision is mainly
professionals. Essentially, this is the influenced by the available
„make‟ (hire less skilled worker) or technology. The advent of computer
„buy‟ (hire skilled workers and has made it possible for employers to
professionals) decision. Organizations scan national and international
that hire skilled labour and applicant qualifications. Although
professionals have to pay more for impersonal, computers have given
these employees. „Buying‟ employers and job seekers a wider
employees has an advantage in the scope of options in the initial
sense that the skilled labour and screening. Technological
professionals can begin the work advancement has made it possible for
immediately and little training may be job seekers to gain better access. They
needed. But the high remuneration have begun sending their CVs by email
that the skilled workers and to number of organizations without
professional demand may outweigh wasting time and without spending
the benefits. money on travel.
Where to Look
• In order to reduce costs, organizations look into labour markets most likely
to offer the required job seekers. Generally, companies look into the
national market for managerial and professional employees, regional or
local markets for technical employees, and local markets for clerical and
blue collar employees. The above pattern will be modified by certain
factors. One such factor is the location of the organization. A company
located in a backward district like Bidar in Karnataka cannot confine itself
to the local market for its requirement of managerial personnel. But the
same company can depend on the local market, if it were located in
Bangalore. Still another consideration is the state of the labour market.
Local shortage of blue collar employees compels organizations to conduct
regional recruiting campaigns for these employees. In the final analysis,
organizations recruit where experience and circumstances dictate likely
success. Recognizing this, many adopt an incremental strategy in which
initial efforts are concentrated in regional or local labour markets and
expanded only if these efforts fail to achieve the desired results.
(Heneman, 1986)
How to Look
• How to look refers to the
methods or sources of
recruitment. There are several
sources and they may be broadly
categorized into (i) internal and
(ii) external.
Internal Source of Recruitment
• Previous Applicants: To fill up the immediate openings, calling up or
emailing the candidates who have previously applied to the organisation is
the cheapest and quickest source of recruitment.
• Present Employees: The recruiter can exercise promotion (to a higher
position) or transfer (inter-department or inter-branch transfer) of the
current employees instead of recruiting the new employees.
• Employee Referrals: Sometimes, the organisation hires the candidates
referred by the existing employees assuming that such candidates are more
trustworthy and reliable.
• Former Employees: Some organisations provide for an option of re-joining
to its ex-employees. They even consider the retired employees who are
willing to give their full time or part-time services to the organisation.
External Source of Recruitment
• Advertisements: The organisation advertises the job openings in the newspaper, media, company’s bulletin, social networking
sites (Facebook, LinkedIn, Twitter), job portals, etc.
• Campus Recruitment: The organisation collaborates with the educational institutes and colleges to hire their students for the
available job vacancies, by conducting the recruitment process in the respective college campus.
• E-Recruitment: The organisation uses the web-based software as a source of recruitment involving electronic screening of
candidates, online skill test, online profile checks and interviews on video-conferencing.
• Employment Exchange: The organisation gets itself registered with the employment exchange, i.e. a government-affiliated agency
who have a database of many prospective candidates. These candidates register with such employment exchanges in search of
better job opportunities.
• Outsourcing Consultancies: Some private consultancies are professionally working to recruit employees on behalf of the
organisation. The organisation hires such consultants on a commission basis to acquire the desired human resource.
• Walk-ins and Write-ins: The organisations without any effort, get random applications when the job seekers submit their CV.
Either by visiting the organisation, posting the letter with CV or mailing the CV on the company’s mail id.
• Contractors: The organisation hires a contractor who provides casual workers temporarily, especially for a particular project, and
such workers have no existence in the company’s records.
• Acquisition and Mergers: At the time of the company’s merger or acquisition of another company; it has to lay off some of its
employees as well as recruit new talents. The company structure changes drastically.
• Professional Associations: Professional associations facilitates the organisation to fill in the vacant position by advertising it in
their journal or magazines. It also offers job opportunities to the highly educated, skilled or experienced resources who are experts
in their fields and hold a membership with such associations.
Factors governing the Recruitment Policy
External Factors Governing • Internal Factors Governing
Recruitment Policy Recruitment Policy
• Labour Market Conditions • Organizational Objectives
• Government Policies & Legal • Size of Organization
Framework • Recruitment Budget
• Economic Conditions • Organizational Image (Employer
• Competition Brand)
• Social & Cultural Factors • Human Resource Planning
• Management Philosophy
 Industry-Specific Strategy
• Manufacturing Industry • IT & Service Industry
• Focus on skilled and semi- • Focus on knowledge workers
skilled labor
• High innovation requirement
• Emphasis on safety training
• Continuous learning culture
• Stable workforce

• Construction & Infrastructure • Healthcare Industry

• Project-based hiring • Requires certified professionals
• Contractual workforce • Strict compliance with
• Skilled technicians and regulations
engineers • High ethical standards
Labour Market Choice
Internal Labour Market External Labour Market
• Promotions • Campus recruitment
• Transfers • Job portals
• Employee referrals • Recruitment agencies
✔ Advantages: • Walk-in interviews
• Motivates employees ✔ Advantages:
• Reduces recruitment cost • Brings fresh talent
• Better cultural fit • New ideas and innovation
• Wider talent pool
Selection:
Meaning of Selection Key Features of Selection
• Selection is the process of choosing • It is a negative process (elimination of
the most suitable candidate from the unsuitable candidates).
pool of applicants recruited for a job. • It involves screening and testing.
👉 In simple words: • It aims to select the best-fit candidate.
Selection means picking the right
candidate from the applicants. • It reduces hiring mistakes.
• Recruitment creates a pool of Objectives of Selection
candidates, and selection chooses the • Choose qualified and competent
best one. candidates
• Definitions of Selection • Ensure job-person fit
• Reduce employee turnover
• Improve organizational performance
Selection Process
• Step – 1:
• Environment factor affecting selection
• Selection is influenced by several factors. More prominent
among them are supply and demand of specific skills in the
labor market, unemployment rate, labor- market conditions,
legal and political considerations, company’s image,
company’s policy, human resources planning and cost of
hiring. The last three constitute the internal environment and
the remaining form the external environment of selection
process.
• Preliminary Interview
• The applicants received from job seekers would be subject to
scrutiny so as to eliminate unqualified applicants. This is
usually followed by a preliminary interview the purpose of
which is more or less the same as scrutiny of application, that
is, eliminate of unqualified applicants. Scrutiny enables the
HR specialists to eliminate unqualified jobseekers based on
the information supplied in their application forms.
Preliminary interview, on the other hand, helps reject misfits
for reason, which did not appear in the application forms.
Besides, preliminary interview, often called ‘courtesy
interview’, is a good public relation exercise.
Selection Process
• STEP – 2 • Ability tests
Selection Test • Assist in determining how well an individual can perform tasks related to the job. An
excellent illustration of this is the typing tests given to a prospective employer for
• Job seekers who pass the screening and the preliminary interview are called for secretarial job which also called as ‘ACHIEVEMENT TESTS’. It is concerned with what
tests. Different types of tests may be administered, depending on the job and the one has accomplished. When applicant claims to know something, an achievement
company. Generally, tests are used to determine the applicant’s ability, aptitude test is taken to measure how well they know it. Trade tests are the most common
and personality. type of achievement test given. Questions have been prepared and tested for such
trades as asbestos worker, punch-press operators, electricians and machinists.
The following are the type of tests taken: There are, of course, many standardized achievement tests given in industries, such
as typing or dictation tests for an applicant for a stenographic position.
• Ability tests
• Aptitude test
• Aptitude test
• Aptitude tests measure whether an individual’s has the capacity or latent ability to
learn a given job if given adequate training. The use of aptitude test is advisable
when an applicant has had little or no experience along the line of the job opening.
Aptitudes tests help determine a person’s potential to learn in a given area. An
example of such test is the general management aptitude tests (GMAT), which
many business students take prior to gaining admission to a graduate business
school program.
• Aptitude test indicates the ability or fitness of an individual to engage successfully in
any number of specialized activities. They cover such areas clerical aptitude,
numerical aptitude, mechanical aptitude, motor co-ordination, finger dexterity and
manual dexterity. These tests help to detect positive negative points in a person’s
sensory or intellectual ability. They focus attention on a particular type of talent
such as learning or reasoning in respect of a particular field of work.
Selection Process
Choosing tests There are three ways of validating a test. They are as follows: –
Reliability • Concurrent Validity: This involves determining the factors that are
characteristics of successful employees and then using these factors as
• It refers to standardization of the procedure of administering and the yardsticks.
scoring the test results. A person who takes tests one day and makes a
certain score should be able to take the same test the next day or the • Predictive Validity: It involves using a selection test during the
next week and make more or less the same score. An individual’s selection process and then identifying the successful candidates. The
intelligence, for example, is generally a stable characteristic. So if we characteristics of both successful and less successful candidates are
administer an intelligence test, a person who scores 110 in March then identified.
would score close to 110 if tested in July. Tests, which produce wide
variations in results, serve little purpose in selection. • Synthetic Validity: It involves taking parts of several similar jobs rather
than one complete job to validate the selection test.
Validity
Objectivity
• It is a test, which helps predict whether a person will be successful in a
given job. A test that has been validated can be helpful in • When two or more people can interpret the result of the same test
differentiating between prospective employees who will be able to and derive the same conclusion(s), the test is said to be objective.
perform the job well and those who will not. Naturally, no test will be Otherwise, the test evaluators’ subjective opinions may render the
100% accurate in predicting job success. A validated test increases test useless.
possibility of success.
Standardization
• A test that is standardized is administered under standard condition to
a large group of person who are representatives of the individuals for
whom it is intended. The purpose of standardization is to obtain
norms or standard, so that a specific test score can be meaningful
when compared to other score in the group.
STEP 3: – Interviews
• The next step in the selection • Objectives of interview:
process is an interview. Interview is • Interview has at least three
formal, in-depth conversation objectives and they are as follows:
conducted to evaluate the –
applicant’s acceptability. It is
considered to be excellent • Helps obtain additional information
selection device. It is face-to-face from the applicants
exchange of view, ideas and • Facilitates giving general
opinion between the candidates information to the applicants such
and interviewers. Basically, as company policies, job, products
interview is nothing but an oral manufactured and the like
examination of candidates.
Interview can be adapted to • Helps build the company’s image
unskilled, skilled, managerial and among the applicants.
profession employees.
STEP 4:Reference Check
• Many employers request names, addresses, and telephone numbers of references for the purpose of
verifying information and perhaps, gaining additional background information on an applicant. Although
listed on the application form, references are not usually checked until an applicant has successfully reached
the fourth stage of a sequential selection process. When the labor market is very tight, organizations
sometimes hire applicants before checking references.
• Previous employers, known as public figures, university professors, neighbors or friends can act as
references. Previous employers are preferable because they are already aware of the applicant’s
performance. But, the problem with this reference is the tendency on the part of the previous employers to
over-rate the applicant’s performance just to get rid of the person.
• Organizations normally seek letters of reference or telephone references. The latter is advantageous because
of its accuracy and low cost. The telephone reference also has the advantage of soliciting immediate,
relatively candid comments and attitude can sometimes be inferred from hesitations and inflections in
speech.
• It may be stated that the information gathered through references hardly influence selection decisions. The
reasons are obvious:
• The candidate approaches only those persons who would speak well about him or her.
• People may write favorably about the candidate in order to get rid of him or her.
• People may not like to divulge the truth about a candidate, lest it might damage or ruin his/her career.
STEP 5: Selection Decision

• After obtaining information through the preceding steps, selection

decision- the most critical of all the steps- must be made. The other
stages in the selection process have been used to narrow the number
of the candidates. The final decision has to be made the pool of
individuals who pas the tests, interviews and reference checks.
• The view of the line manager will be generally considered in the final
selection because it is he/she who is responsible for the performance
of the new employee. The HR manager plays a crucial role in the final
selection.
STEP 6: Physical Examination
• After the selection decision and before the job offer is made, the candidate is
required to undergo a physical fitness test. A job offer is, often, contingent upon
the candidate being declared fit after the physical examination. The results of the
medical fitness test are recorded in a statement and are preserved in the
personnel records. There are several objectives behind a physical test. Obviously,
one reason for a physical test is to detect if the individual carries any infectious
disease. Secondly, the test assists in determining whether an applicant is
physically fit to perform the work. Thirdly, the physical examination information
can be used to determine if there are certain physical capabilities, which
differentiate successful and less successful employees. Fourth, medical check-up
protects applicants with health defects from undertaking work that could be
detrimental to them or might otherwise endanger the employer’s property.
Finally, such an examination will protect the employer from workers
compensation claims that are not valid because the injuries or illness were
present when the employee was hired.
STEP 7: Job Offer
• The next step in the selection process is job offer to those applicants who have crossed
all the previous hurdles. Job offer is made through a letter of appointed. Such a letter
generally contains a date by which the appointee must report on duty. The appointee
must be given reasonable time for reporting. Thos is particularly necessary when he or
she is already in employment, in which case the appointee is required to obtain a
relieving certificate from the previous employer. Again, a new job may require movement
to another city, which means considerable preparation, and movement of property.
• The company may also want the individual to delay the date of reporting on duty. If the
new employee’s first job upon joining the company is to go on company until perhaps a
week before such training begins. Naturally, this practice cannot be abused, especially if
the individual is unemployed and does not have sufficient finances.
• Decency demands that the rejected applicants be informed about their non-selection.
Their applicants may be preserved for future use, if any. It needs no emphasis that the
applications of selected candidates must also be preserved for the future references.
 STEP 8: – Contract of Employment
• After the job offer has been mad and candidates accept the offer, certain documents need to be executed by the employer and the candidate. One such document is the attestation form. This form
contains vital details about the candidate, which are authenticated and attested by him/her. Attestation form will be a valid record for the future reference.
• There is also a need for preparing a contract of employment. The basic information that should be included in a written contract of employment will vary according to the level of the job, but the following
checklist sets out the typical headings:
• Job title
• Duties, including a parse such as “The employee will perform such duties and will be responsible to such a person, as the company may from time to time direct”.
• Date when continuous employment starts and the basis for calculating service.
• Rate of pay, allowance, overtime and shift rates, method of payments.
• Hours of work including lunch break and overtime and shift arrangements.
• Holiday arrangements:
• Paid holidays per year.
• Calculation of holiday pay.
• Qualifying period.
• Accrual of holidays and holiday pay.
• Details of holiday year.
• Dates when holidays can be taken.
• Maximum holiday that can be take at any one time.
• Carryover of holiday entitlement.
• Public holidays.
• Alternatively called employment agreements or simply bonds, contracts of employment serve many useful purposes. Such contracts seek to restrain job-hoppers, to protect knowledge and information
that might be vital to a company’s healthy bottom line and to prevent competitors from poaching highly valued employees.
• Most employers insist on agreements being signed by newly hired employees. But high turnover sectors such as software, advertising and media are more prone to use contracts.
• The drawback with the contracts is that it is almost to enforce them. A determined employee is bound to leave the organization, contract or no contract. The employee is prepared to pay the penalty for
breaching the agreement or the new employer will provide compensations. It is the reason that several companies have scrapped the contracts altogether.
STEP 9: – Concluding the Selection Process
• Contrary to popular perception, the selection process will not end
with executing the employment contract. There is another step –
amore sensitive one reassuring those candidates who have not
selected, not because of any serious deficiencies in their personality,
but because their profile did not match the requirement of the
organization. They must be told that those who were selected were
done purely on relative merit.
STEP 10: – Evaluation of Selection Program
• The broad test of the effectiveness of the selection process is the
quality of the personnel hired. An organization must have competent
and committed personnel. The selection process, if properly done,
will ensure availability of such employees. How to evaluate the
effectiveness of a selection program? A periodic audit is the answer.
People who work independent of HR department must conduct audit.
The table below contains an outline that highlights the areas and
questions to be covered in a systematic evaluation.
Role of Line & HR manager in Selection
• Role of Line Manager in • Role of HR Manager in Selection
Selection • Designing Selection Process
• Identifying Job Requirements • Screening Applications
• Technical Evaluation • Conducting Preliminary
• Final Decision Making Interviews
• Onboarding & Integration • Administering Tests
• Ensuring Legal Compliance
• Final Documentation & Offer
Letter
Induction & Placement
• Meaning of Induction • Meaning of Placement
• Induction (also called Orientation) is the process of • Placement is the process of assigning a selected candidate to
introducing a new employee to the organization, its culture, a specific job or department according to his/her
policies, and work environment. qualifications, skills, and abilities.
• 👉 In simple words: • 👉 In simple words:
Induction means welcoming and guiding the new employee. Placement means putting the right person in the right job.
• Objectives of Induction • Objectives of Placement
• Familiarize employee with organization • Ensure job-person fit
• Reduce anxiety and fear • Reduce employee turnover
• Explain rules and policies • Improve job satisfaction
• Build positive attitude • Increase productivity
• Improve early performance • Minimize adjustment problems
• Contents of Induction Program • Principles of Placement
• Company history and mission • Match job requirements with employee skills
• Organizational structure • Consider employee interests and aptitude
• HR policies and rules • Provide clear job responsibilities
• Compensation and benefits • Ensure fairness and transparency
• Safety measures
• Introduction to colleagues
Induction - Orientation Programme
• Whether the induction training will be Formal or Informal. In
the Informal training, the new joinees are put directly on
their jobs and are required to adjust themselves to the
working [Link], in the formal orientation, the
new hire undergoes the structured programme designed by
the management, that helps them to familiarize with the
organization.
• Whether the Induction training will
be Individual or collective. This means whether the new
joinees will be inducted individually or in groups.
• Whether the training programme will
be Serial or Disjunctive. An induction training is said to be a
serial training when an experienced employee inducts the
new hire, where he acts as a mentor to [Link], training
is said to be disjunctive when no predecessor is there to
induct the new joinee.
• Whether the training programme will follow
an Investiture or Divestiture strategy. In the Investiture
orientation, the formal consent is given to the characteristics
that an individual brings to the organization, especially the
high-level [Link], in the divestiture
orientation, the minor modifications are made in the
characteristics of a new joinee, with respect to what is
acceptable in the organization. Generally, the person is
selected on the basis of his potential for performance.
Assessment – Classification Model and
Employee Placement
• Placement:
• Placement is the determination of the job to which an accepted candidate is to be
assigned.
• It is important aspect of selection process of placing right man on the right job.
• Placement is the actual posting of an employee to a specific job it involves assigning
a specific rank and responsibility to an employee.
• The placement decisions are taken by the line manager after matching the
requirements of job with the qualifications of a candidate. (selection process
feedback)
• Most organizations put new recruits on probation for a given period of time after
which their services are confirmed.
• During this period, the performance of the probation is closely monitored.
• A worker should be place in a position where there is full used of strengths, and
weaknesses become meaningless.

• Classification Placement
• Its objective is to bring match between individual and jobs.
• It is used when jobs are sequential and pooled.
• Assessment classification model and employee placement is used to match
characteristics of individual with those of job subgroups.
• Selected employees are place in a specific sub groups after there is a match
between the characteristic of the individual with those of the subgroups.