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P.G. Diploma in Hospital Administration YTISREVINUALAGAPPA

APPAGALAUNIVERSITY
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’+A’’A+’
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418 24
]CGU-DRHM yb ytisrevinU I–yrogeand
taC Graded
sa dedarasG Category–I
dna University by MHRD-UGC]
300 036 – IDUKIARA
KARAIKUDI
K – 630 003
NOITACUDE ECNATSIDDIRECTORATE
FO ETAROTCEOF
RIDDISTANCE EDUCATION
HUMAN RESOURCE
MANAGEMENT IN HOSPITALS

HUMAN RESOURCE MANAGEMENT IN HOSPITALS

II - Semester

P.G. Diploma in Hospital Administration

418 24

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P.G. Diploma in Hospital Administration

TISREVINUALAGAPPA
APPAGALAUNIVERSITY
HUMAN RESOURCE
yC drihT eht ni )46.3:APGC( CA[Accredited
AN yb edarGwith
’+A’’A+’
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cA[ (CGPA:3.64) in the Third Cycle
]CGU-DRHM yb ytisrevinU I–yrogeand
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dna University by MHRD-UGC]
300 036 – IDUKIARA
KARAIKUDI
K – 630 003
NOITACUDE ECNATSIDDIRECTORATE
FO ETAROTCEOF
RIDDISTANCE EDUCATION MANAGEMENT IN HOSPITALS
II - Semester
 ALAGAPPA UNIVERSITY
[Accredited with ‘A+’ Grade by NAAC (CGPA:3.64) in the Third Cycle
and Graded as Category–I University by MHRD-UGC]
(A State University Established by the Government of Tamil Nadu)

KARAIKUDI – 630 003

Directorate of Distance Education

P.G. Diploma in Hospital Administration

II - Semester
418 24

HUMAN RESOURCE
MANAGEMENT IN HOSPITALS
Authors:
PG Aquinas, Chairman, Post Graduate Department of Studies and Research in Social Work, Mangalore University
Units: (1, 2.3, 3-5, 7.3-7.4, 8, 9)
Dr. Puneeta Ajmera, Head and Assistant Professor in the Department of Hospital Administration, Amity University, Haryana
Sheetal Yadav, Assistant Professor, Amity University Haryana
Units: (2.2, 11.2, 14.4)
Prof S. C. Srivastava, Secretary General of the National Labour Law Association
Units: (6, 7.2, 7.5)
J.S. Chandan, Retd Professor Medgar Evers College, City University of New York
Units: (10.2-10.3, 10.6-10.7, 11.3-11.4, 12, 13.0-13.2, 13.4, 13.6, 14.2, 14.3)
M.N. Mishra, Former Head and Dean, Faculty of Commerce, Banaras Hindu University, Varanasi
Unit: (10.4-10.5)
Kavita Singh, Professor, Faculty of Management Studies, University of Delhi, Delhi
Unit: (13.5)
Vikas® Publishing House, Units (2.0-2.1, 2.4-2.8, 7.0-7.1, 7.6-7.10, 10.0-10.1, 10.8-10.12, 11.0-11.1, 11.5-11.9, 13.3, 13.7-
13.11, 14.0-14.1, 14.5-14.9)

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 SYLLABI-BOOK MAPPING TABLE
Human Resource Management in Hospitals
Syllabi Mapping in Book

BLOCK - I: BASICS OF HUMAN RESOURCE MANAGEMENT Unit 1: Introduction to Human

IN HOSPITALS Resource Management
Unit 1: Human Resource Management: Definition – Nature and Scope – (Pages 1-12);
Objectives Functions Unit 2: Overview of Human
Unit 2: Role of HRM in Hospitals – Human Resource Planning: Nature and Resource Planning in Hospitals
Scope Objectives – Need and Importance
(Pages 13-21);
Unit 3: Human Resource Planning Process – Job Analysis – Job Description
Unit 3: Human Resources
– Job Specification.
Unit 4: Recruitment and Selection of Employees: Recruitment Policy Planning Process
Sources, Methods (Pages 22-34);
Unit 4: Recruitment and Selection
of Employees
(Pages 35-48)

BLOCK - II: SELECTION AND TRAINING Unit 5: Selection Process

Unit 5: Selection Process: Tests, Interviews, Kinds – Placement – Induction. (Pages 49-71);
Unit 6: Training of Employees: Training Needs – Identification Unit 6: Training of Employees
Unit 7: Training Methods and Evaluation of Training –Promotions – Policy (Pages 72-80);
– Transfers Types – Dismissals.
Unit 7: Methods and Evaluation
Unit 8: Wage and Salary Administration: Meaning – Purpose – Developing
of Training
Wage and Salary Structure
(Pages 81-102);
Unit 8: Wage and Salary
Administration
(Pages 103-120)

BLOCK - III: ORGANIZATIONAL BEHAVIOUR AND ABILITY Unit 9: Job Evaluation and
Unit 9: Job Evaluation – Working Conditions – Safety – Welfare – Working Conditions
Employees’ Health Services. (Pages 121-141);
Unit 10: Organisational Behaviour: Individual Behaviour – Personality – Unit 10: Organizational Behaviour
Learning – Attitudes – Perception – Motivation (Pages 142-169);
Unit 11: Ability – The Irrelevance to Organisational Behaviour in Hospital
Unit 11: Ability: Relevance to
Management – Group Behaviour – Group Dynamics
Organizational Behaviour
in Hospital Management
(Pages 170-184)

BLOCK IV: NATURE OF CHANGE RESISTANCE Unit 12: Group Norms, Cohesiveness
Unit 12: Group Norms – Group Cohesiveness – Their Relevance to and Organizational Behaviour
Organisational Behaviour. (Pages 185-192);
Unit 13: Organisational Culture – Meaning, Significance – Organisational Unit 13: Organizational Culture
Climate – Implications on Organisational Behaviour – Organisational (Pages 193-212);
Change Unit 14: Organizational Change
Unit 14: Need and Nature – Causes of Change – Resistance to Change – (Pages 213-230)
Management of Change in Hospitals.
 CONTENTS
INTRODUCTION

BLOCK I: BASICS OF HUMAN RESOURCE MANAGEMENT IN HOSPITALS

UNIT 1 INTRODUCTION TO HUMAN RESOURCE MANAGEMENT 1-12
1.0 Introduction
1.1 Objectives
1.2 Definition of HRM
1.2.1 Nature of HRM
1.2.2 Objectives of HRM
1.2.3 Scope of HRM
1.2.4 Importance of HRM
1.2.5 HRM Functions
1.2.6 HRM Challenges
1.3 Answers to Check Your Progress Questions
1.4 Summary
1.5 Key Words
1.6 Self Assessment Questions and Exercises
1.7 Further Readings
UNIT 2 OVERVIEW OF HUMAN RESOURCE
PLANNING IN HOSPITALS 13-21
2.0 Introduction
2.1 Objectives
2.2 Role of HRM in Hospitals
2.3 Nature and Scope of Human Resource Planning
2.3.1 Objectives of HR Planning
2.3.2 Need and Importance of HR Planning
2.4 Answers to Check Your Progress Questions
2.5 Summary
2.6 Key Words
2.7 Self Assessment Questions and Exercises
2.8 Further Readings
UNIT 3 HUMAN RESOURCES PLANNING PROCESS 22-34
3.0 Introduction
3.1 Objectives
3.2 Process of Human Resource Planning
3.2.1 Advantages of HR Planning Programmes
3.2.2 Limitations of HR Planning
 3.3 Job Analysis
3.4 Job Description
3.4.1 Uses of Job Description
3.4.2 Components or Contents of Job Description
3.4.3 Writing a Job Description
3.4.4 Limitations of Job Description
3.5 Job Specification
3.6 Answers to Check Your Progress Questions
3.7 Summary
3.8 Key Words
3.9 Self Assessment Questions and Exercises
3.10 Further Readings
UNIT 4 RECRUITMENT AND SELECTION OF EMPLOYEES 35-48
4.0 Introduction
4.1 Objectives
4.2 Recruitment: Concept, Factors and Types
4.2.1 Meaning and Definitions
4.2.2 Recruitment Policy Sources and Methods
4.2.3 Recruitment Policy
4.3 Answers to Check Your Progress Questions
4.4 Summary
4.5 Key Words
4.6 Self Assessment Questions and Exercises
4.7 Further Readings

BLOCK II: SELECTION AND TRAINING

UNIT 5 SELECTION PROCESS 49-71
5.0 Introduction
5.1 Objectives
5.2 Concept, Kinds and Methods of Selection
5.2.1 Steps in Selection Procedure
5.2.2 Methods of Selection
5.3 Induction
5.4 Answers to Check Your Progress Questions
5.5 Summary
5.6 Key Words
5.7 Self Assessment Questions and Exercises
5.8 Further Readings
UNIT 6 TRAINING OF EMPLOYEES 72-80
6.0 Introduction
6.1 Objectives
6.2 Training: Meaning and Significance
6.2.1 Training Needs and Objectives
6.2.2 Significance and Benefits of Training
6.3 Answers to Check Your Progress Questions
6.4 Summary
6.5 Key Words
6.6 Self Assessment Questions and Exercises
6.7 Further Readings
UNIT 7 METHODS AND EVALUATION OF TRAINING 81-102
7.0 Introduction
7.1 Objectives
7.2 Training Methods and Evaluation
7.2.1 Systems Approaches to Training
7.2.2 Comparison of On-the-Job and Off-the-Job Training Programmes
7.2.3 Training Methods and their Suitability
7.3 Promotions Policy
7.3.1 Types of Promotion
7.3.2 Basis of Promotion
7.3.3 Promotion Policy
7.4 Transfers and its Types
7.4.1 Types of Transfers
7.4.2 Transfer Policy
7.5 Dismissals
7.6 Answers to Check Your Progress Questions
7.7 Summary
7.8 Key Words
7.9 Self Assessment Questions and Exercises
7.10 Further Readings
UNIT 8 WAGE AND SALARY ADMINISTRATION 103-120
8.0 Introduction
8.1 Objectives
8.2 Meaning and Purpose of Wage and Salary Administration
8.2.1 Theories of Wages
 8.3 Developing Wage and Salary Structure
8.4 Answers to Check Your Progress Questions
8.5 Summary
8.6 Key Words
8.7 Self Assessment Questions and Exercises
8.8 Further Readings

BLOCK III: ORGANIZATIONAL BEHAVIOUR AND ABILITY

UNIT 9 JOB EVALUATION AND WORKING CONDITIONS 121-141
9.0 Introduction
9.1 Objectives
9.2 Overview of Job Evaluation
9.3 Safety, Welfare and Employee Health
9.4 Answers to Check Your Progress Questions
9.5 Summary
9.6 Key Words
9.7 Self Assessment Questions and Exercises
9.8 Further Readings
UNIT 10 ORGANIZATIONAL BEHAVIOUR 142-169
10.0 Introduction
10.1 Objectives
10.2 Individual Behaviour
10.3 Personality
10.4 Perception
10.5 Learning
10.6 Attitude
10.7 Motivation
10.8 Answers to Check Your Progress Questions
10.9 Summary
10.10 Key Words
10.11 Self Assessment Questions and Exercises
10.12 Further Readings
UNIT 11 ABILITY: RELEVANCE TO ORGANIZATIONAL
BEHAVIOUR IN HOSPITAL MANAGEMENT 170-184
11.0 Introduction
11.1 Objectives
11.2 Organizational Behaviour in Health Care Setting
 11.3 Group Behaviour
11.4 Group Dynamics
11.5 Answers to Check Your Progress Questions
11.6 Summary
11.7 Key Words
11.8 Self Assessment Questions and Exercises
11.9 Further Readings

BLOCK IV: NATURE OF CHANGE RESISTANCE

UNIT 12 GROUP NORMS, COHESIVENESS AND
ORGANIZATIONAL BEHAVIOUR 185-192
12.0 Introduction
12.1 Objectives
12.2 Group Norms
12.3 Group Cohesiveness
12.4 Relevance of Norms and Cohesiveness to Organizational Behaviour
12.5 Answers to Check Your Progress Questions
12.6 Summary
12.7 Key Words
12.8 Self Assessment Questions and Exercises
12.9 Further Readings
UNIT 13 ORGANIZATIONAL CULTURE 193-212
13.0 Introduction
13.1 Objectives
13.2 Meaning and Significance of Organizational Culture
13.2.1 Organizational Climate
13.3 Creation and Maintenance of Culture
13.3.1 Sustaining Culture
13.4 Change and Organizational Culture
13.5 Impact of Organizational Culture
13.5.1 Theories
13.5.2 Issues in Organizational Culture
13.6 Organizational CHange
13.7 Answers to Check your Progress Questions
13.8 Summary
13.9 Key Words
13.10 Self Assessment Questions and Exercises
13.11 Further Readings
UNIT 14 ORGANIZATIONAL CHANGE 213-230
14.0 Introduction
14.1 Objectives
14.2 Need and Nature
14.2.1 Causes of Change
14.2.2 Forces that Introduce Change
14.2.3 Managing Change
14.3 Resistance to Change
14.4 Management of Change in Hospitals
14.5 Answers to Check Your Progress Questions
14.6 Summary
14.7 Key Words
14.8 Self Assessment Questions and Exercises
14.9 Further Readings
Introduction
INTRODUCTION

Human Resource Management (HRM) is concerned with the ‘people’

NOTES dimension in management. This term is increasingly used to refer to the
philosophy, policies, procedures and practices relating to the management of
people within organizations. Since every organization is made up of people,
acquiring their services, developing their skills, motivating them to higher
levels of performance, and ensuring that they continue to maintain their
commitment to the organization are essential to achieving organizational
objectives.
Hospital administration relates to the planning, organizing, coordinating
and executing of activities related to the procurement and delivery of services
in hospitals. Hospitals, though are considered to be community and welfare
organizations, need to be on top of their management activities so as to ensure
that proper medical services are delivered to the customers, who in this case
are mostly patients. Their administration activities include coordination
between patients, doctors, trustees, medical staff; recruitment of medical
professionals and other staff; coordinating between different departments
to ensure the vision of the board is met; ensuring proper implementation of
top class services and focusing towards expansion and growth of scientific
research as well as medical services. In this sense, hospitals work like most
other business organizations.
This book, Human Resource Management in Hospitals, is written with
the distance learning student in mind. It is presented in a user-friendly format
using a clear, lucid language. Each unit contains an Introduction and a list of
Objectives to prepare the student for what to expect in the text. At the end
of each unit are a Summary and a list of Key Words, to aid in recollection of
concepts learnt. All units contain Self-Assessment Questions and Exercises,
and strategically placed Check Your Progress questions so the student can
keep track of what has been discussed.

Self-Instructional
Material
 Introduction to Human
BLOCK - I Resource Management

BASICS OF HUMAN RESOURCE

MANAGEMENT IN HOSPITALS
NOTES

UNIT 1 INTRODUCTION TO
HUMAN RESOURCE
MANAGEMENT
Structure
1.0 Introduction
1.1 Objectives
1.2 Definition of HRM
1.2.1 Nature of HRM
1.2.2 Objectives of HRM
1.2.3 Scope of HRM
1.2.4 Importance of HRM
1.2.5 HRM Functions
1.2.6 HRM Challenges
1.3 Answers to Check Your Progress Questions
1.4 Summary
1.5 Key Words
1.6 Self Assessment Questions and Exercises
1.7 Further Readings

1.0 INTRODUCTION

Human resource management (HRM) is the management of an organization’s

workforce or human resources. It is responsible for the selection, training,
assessment, rewarding and retaining of employees. It is also responsible for
overseeing organizational leadership and culture, and ensuring compliance
with employment and labour laws.
In this unit, you will study the objectives and functions of HRM
in organizations. Organizational objectives, individuals and social goals
influence the objectives of HRM. Integration of the interests of both the
employer and the employees is important in order to attain these objectives.
Furthermore, you will learn that the basic functions of HRM involve operative
and managerial functions, each of which cannot function without the other.
The unit will also discuss the role and structure of HRM in organizations.
The role of personnel managers is influenced by factors such as size, nature

Self-Instructional
Material 1
Introduction to Human and location of the business or industry. In terms of the changing environment,
Resource Management
some of the important roles of HR managers are:
• Reactive/proactive roles
NOTES • Business partner role
• Strategist’s role
• Interventionist’s role
• Innovation role
• Internal consultancy role
• Monitoring role

1.1 OBJECTIVES

After going through this unit, you will be able to:

• Understand the nature and scope of Human Resource Management
• Explain the objectives of Human Resource Management
• Discuss the functions of Human Resource Management

1.2 DEFINITION OF HRM

Different experts in the field have defined it differently. It is a task that

facilitates the most effective use of people to achieve organizational and
individual goals. Human Resource Management (HRM) seeks to bring
together and develop an effective organization enabling the employees to
do their best both as an individual and as a member of a working group.
The scope of HRM, on the other hand, is vast. It embraces a wide range of
activities. The importance of HRM lies in the fact that along with financial
and material resources, it contributes to the production of goods and services
in an organization. The functions of human resource management include
operative and managerial functions, personnel management policies and
strategic challenges for HR.
1.2.1 Nature of HRM
According to Ivancevich and Gluck, ‘Human resource management is the
function performed in organizations that facilitates the most effective use of
people (employees) to achieve organizational and individual goals.’
Byars and Rue say: ‘Human resource management encompasses those
activities designed to provide for and coordinate the human resources of an
organization.’

Self-Instructional
2 Material
 According to Dale Yoder, ‘The management of human resources is Introduction to Human
Resource Management
viewed as a system in which participants seeks to attain both individual and
group goals.’
According to Flippo, HRM is ‘the planning, organizing, directing and
NOTES
controlling of the procurement, development, compensation, integration,
maintenance and reproduction of human resources to the end that individual,
organizational and societal objectives are accomplished.’
In the words of Michael J. Jucious, human resource management
‘may be defined as that field of management which has to do with planning,
organizing and controlling the functions of procuring, developing, maintaining
and utilizing a labour force, such that the (i) objectives for which the company
is established are attained economically and effectively, (ii) objectives of all
levels of personnel are served to the highest possible degree; (iii) objectives
of society are duly considered and served.’
1.2.2 Objectives of HRM
Objectives are preset goals towards which all individuals or groups direct
their activities in an organization. The objectives of HRM are affected by
not only organizational objectives but also individual and social goals.
Every organization has certain objectives and each part of it make some
contribution, whether direct or indirect, to achieve these predetermined
objectives. The character of an organization can be judged by its objectives.
These objectives form the basis for voluntary cooperation and coordination
among all employees. Objectives also form the bases for deciding benchmarks
or standards for performance evaluation. The primary aim of HRM is the
promotion of effectiveness of the employees in performance of the duties
assigned to them. This can be done by substituting cooperation instead
of the hostility characteristic employer-employee relations. According to
Indian Institute of Personnel Management, ‘Personnel management (Human
Resource Management) aims to achieve both efficiency and justice, neither
of which can be pursued successfully without the other. It seeks to bring
together and develop an effective organization, enabling men and women who
make up an enterprise to make their best contribution to its success both as an
individual and as a member of a working group. It seeks to provide fair terms
and conditions of employment and satisfying work for all those employed.’
Objectives of human resource management are derived from the basic
objectives of an organization. In order to achieve organizational objectives,
integration of the employer’s and employees’ interests is necessary. The
objectives of human resource management may be summarized as follows:
1. To improve the services rendered by the enterprise by building better
employee morale which leads to more efficient individual and group

Self-Instructional
Material 3
Introduction to Human performance. Thus, HRM seeks to manage change to the mutual
Resource Management
advantage of individuals, groups, organization and society.
2. To establish in the minds of those associated with the enterprise—
employees, shareholders, creditors, customers and the public at large—
NOTES
the fact that the enterprise is rendering the best service it is capable of
and distributing the benefits derived from the fairly and contributing
success of the enterprise.
3. To create and utilize an able and motivated workforce for accomplishing
the basic organizational goals.
4. To understand and satisfy individual and group needs by providing
adequate and equitable wages, employee benefits, status, social security,
incentives, prestige, recognition, challenging work and security. Thus,
an organization can look into and realize the individual and group goals
by offering appropriate monetary and non-monetary incentives.
5. To employ the skills and knowledge of employees efficiently and
effectively, i.e., to utilize human resources effectively in achieving the
organizational goals.
6. To fortify and acknowledge the human assets continuously by providing
training and developmental programmes. These programmes help the
organization in attaining its goals by providing well-trained and well-
motivated employees.
7. To keep the moral of the employees high and maintain sound human
relations by sustaining and improving the various conditions and
facilities.
8. To increase job satisfaction and self-actualization of employees by
encouraging and assisting every employee to realize his full potential.
9. To make available good facilities and working environment and
generate a favourable atmosphere for maintaining the stability of
employment.
10. To identify and satisfy individual needs and group goals by offering
appropriate monetary and non-monetary incentives.
11. To create and enforce a quality of work life (QWL) that makes
employment in organization comfortable.
Maximum development of individual, good working relationship
and optimum utilization of human resources are the primary aims of HRM.
Management has to create a comfortable and suitable environment and provide
necessary preconditions for the attainment of the objectives

Self-Instructional
4 Material
1.2.3 Scope of HRM Introduction to Human
Resource Management
The scope of personnel management is indeed vast. All the major activities in
the working life of an employee from the time of his joining an organization
till he leaves come under the scope of personnel management (Figure 1.1). NOTES

Nature of
human resource
management

Employee
education Employee
selection

PERSONNEL
MANAGEMENT
Industrial
relations Employee
remuneration

Employee
health and Employee
safety motivation

Fig. 1.1 Scope of Personnel Management

HRM embraces a very wide field of activities. Its scope is so wide

and varied that the HR department and the personnel execu­tives perform a
variety of roles in accordance with the needs of a situation. The HR manager
plays multiple roles like that of a researcher, counsellor, bargainer, mediator,
peacemaker, problem solver, and so on. The functional areas of HRM as
outlined by Northcott are:
(i) employment
(ii) selection and training
(iii) employee services
(iv) wages
(v) industrial relations
(vi) health and safety
(vii) education
It has, therefore, been rightly observed by Peter Drucker that ‘man­
agement is a multipurpose organ, which has three jobs, two of which are
directly related to personnel: managing a business; managing manag­ers; and
managing workers and the work.’ The personnel executives play an important
role in a business organization. They not only help in determining the rules
of the organization, but also play a significant role in interpreting and apply­
ing the rules of the system itself. They are expected to enjoy the confidence
of the management which is crucial to the efficient and effec­tive operation
Self-Instructional
Material 5
Introduction to Human of the business organization. The focus of human resource management is
Resource Management
on people at work. It is indeed a wide area and covers a broad spectrum of
activities. A manager, whether he is in charge of production or marketing
func­tion, deals with human beings and gets his job done through people.
NOTES
In the past, a lot of attention has been paid to the significance of HRM
in establishing a firm’s competitive advantage. Randall Schuler have identified
the factors that have caused businesses to focus increased attendance on
HRM. These factors were as follows:
• Rapid change
• High levels of uncertainty about basic business conditions
• Rising costs
• Rapid technological changes
• Changing demographics
• More limited supplies of highly trained labour
• Rapidly changing government legislation and regulations
• Increased globalization of industries
These transformations in the business environment present a number of
competitive trials that differ from those confronted by firms in earlier times.
Several researches have shown that there is a strong connection between the
manner in which firms manage their people and the economic results achieved
by them. Following high-performance work practices can significantly affect
a firm’s economics. High-performance work practices provide important
basis for increased organizational performance. People work more because
they are increasingly involved and committed. This commitment comes from
having more control on their work. They are smarter at work because of the
encouragement they receive to build skills and competence. HR systems have
an important practical effect on the existence and economic performance of
the firms and on the productivity and quality of work of its employees.
1.2.4 Importance of HRM
Human resources, along with financial and material resources, contribute
to the production of goods and services in an organization. Physical and
monetary resources, by themselves, cannot improve efficiency or contribute
to an increased rate of return on investment. It is through the combined and
concerted efforts of people that monetary and material resources are harnessed
to achieve organizational goals. However, these efforts, attitudes and skills
have to be sharpened from time to time to optimize the effectiveness of human
resources and to enable them to meet greater challenges. This is where HRM
plays a crucial role. The significance of HRM can be discussed at four levels:

Self-Instructional
6 Material
 1. Corporate: Good human resource practices help to attract and retain Introduction to Human
Resource Management
the best people in the organization. Planning alerts the company to
the types of people it will need in short, medium and long run. HRM
can aid an enterprise to attain its goals in a more well-organized and
effective way by: NOTES
• Inviting and keeping talent through effective human resource
planning, employment, selection, compensation and promotion
policies
• Developing the necessary talent and right outlook among the
employees through training
• Securing cooperation of employees through motivation
• Effectively utilizing the available human resources
2.  Professional: Optimum management of human resource helps to
further improve the quality of work life. It plays an important role in
the professional growth in the following ways by:
• Making available adequate opportunities for personal development
of each employee
• Allocating work properly and scientifically
• Maintaining healthy relationships between individuals and groups
in the organization
3.  Social: Sound human resource management has a great
significance for society. Society, as a whole is the major beneficiary
of good human resource practices in the following ways:
• Employment opportunities multiply.
• Scarce talents are put to best use.
• Organizations that pay and treat people well are always ahead of
others and deliver excellent results.
• Maintain an equilibrium between the jobs available and job seekers
in terms of numbers, qualifications, needs and aptitudes.
• Provides appropriate employment that ensures social and
psychological contentment to people.
4. National: Human resources and their organization plays an important
role in the development of a nation. There is a wide disparity in
development among countries with similar resources due to qualitative
differences among their peoples. Development of a country depends
primarily on the talent, mental framework and habits of its human
resources. Efficient management of human resources helps to fasten
the process of economic development, which in turn leads to higher
standards of living and fuller employment.
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Introduction to Human 1.2.5 HRM Functions
Resource Management
The basic functions of HRM or personnel management involve two categories
of functions: operative and managerial.
NOTES 1. Operative functions: The operative functions essentially belong to
activities concerned with procurement, development, compensation,
utilization and maintenance of an efficient workforce.
(i) Procurement: The term ‘procurement’ means recruitment of the
required number of employees possessing the right qualifications
and experience, keeping in mind the importance of achieving
the established objectives of the organization. It is primarily
concerned with recruiting the most suitable people to fill positions,
at the right time. Procurement involves activities such as plan­ning,
selecting and placing manpower.
(ii) Development: This term refers to activities aimed at increasing
the efficiency and skills of the workers by educating and training
the employees. Development-related activities include conducting
workshops, training sessions, seminars, group discussions and
educational programmes.
(iii) Compensation: This includes activities dealing with the technique
and standard of remuneration and terms of employment.
(iv) Utilizing: This term refers to the use of employees’ services to
the maximum and in the best possible manner. This includes not
only incentive schemes but also schemes to share the profits from
higher productivity.
(v) Maintaining: This is all about maintaining good, comfortable and
amicable working conditions for the employees. This means not
just preparing but also implementing health and safety schemes,
etc.
2. Managerial functions: These functions include activities such as
planning, organizing, coordinating, directing and controlling the
employees. These functions are performed by all managers. Therefore,
these common functions are referred to as managerial functions. In
other words, they are performed by all types of managers including
personnel managers.
(i) Planning: When the process of management is reviewed, the very
first function that a manager performs is planning. A personnel
manager is responsible for beginning a programme for developing
personnel. This can only be done through planning.  A plan is a
predetermined course of action for the achievement of established
objectives. Planning leads to specification of the whats and hows
for the performance of the personnel functions.
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 (ii) Organizing: You already know that planning helps the Introduction to Human
Resource Management
management decide what to do and how. Organizing is an
effective tool to achieve the plans. Organizing requires grouping
of personnel activities and assigning them to different individuals.
NOTES
(iii) Coordinating: Coordination is concerned with action directed
towards a common goal in a harmonious and unified effort/action.
Coordination makes sure that all groups and persons work in an
efficient, economical and harmonious manner. Inter-personal
communication is very effective in achieving coordination.
(iv) Directing: Directing is a function involving the management of
managers, workers as well as the work by motivating, leading,
communicating effectively and coordinating. A personnel manager
is expected to develop the capability to command as well as direct
others.
(v) Motivating: Motivation is a managerial function to inspire and
encourage people to take required action. Motivation involves
guiding and supervising the personnel. Motivation can help
manage any enterprise successfully and smoothly. A personnel
manager should be able to not only inspire but also persuade
workers to appreciate the policies of the organization and see the
positive side of everything. Motivation can help an individual to
perform certain tasks properly. A personnel manager should guide
employees towards improving perform­ance and motivating the
team to perform with enthusiasm and confidence.
(vi) Controlling: Control is the process of measurement of actual
results with certain standards of performance. It involves
investigation why there are deviations of actual results from
desired ones and taking corrective action whenever neces­sary.
Therefore, controlling facilitates the realization of plans.
These two functions are significant because one cannot work without
the other. The personnel manager has to mix both to an extent desired.
Personnel management policies
A policy is a statement or a general guideline for employees to make decision
with respect to any course of action. Personnel policies provide guidelines
for a variety of employment relationships and identify the organization’s
intentions in recruitment, selection, development, promotion, compensation,
motivation, and so on. According to Armstrong, ‘personnel policies are
continuing guidelines on the approach the organization intends to adopt
in managing its people. They define the philosophies and values of the
organization on how people should be treated and from these are derived
principles upon which managers are expected to act when dealing with
personnel matters.’ Self-Instructional
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Introduction to Human The objectives of HR or personnel policies is described by Peter
Resource Management
Drucker in the following words: ‘The management must gear its policies and
objectives in such a fashion that the employees perform their work and do their
assigned tasks.… It also means a acknowledgement that human resources,
NOTES unlike any other resources, have attributes like personality, citizenship, control
over where they work, how much and how well. … And it is the management
alone, that can satisfy these requirements.’
HR or personnel policies are required in the following areas:
• Acquisition of personnel
• Training and development
• Appraisal and compensation of human resources
• Human resource mobility
• Working conditions and work schedules
• Industrial relations
1.2.6 HRM Challenges
Human resource element works towards the vision, mission and goals of
an organization. The three major roles of HRM in any organization are
transactional, transformational and transitional. The challenges faced by
human resource managers in an organization are naturally evolving with the
ever-transforming scenario in the corporate world.
Organizations face several challenges in human resource management,
some of which are listed as follows:
• Strategic challenges for HR
• Challenges for organizations and HRM professionals
o Changing workforce demographics
o Implications for HRM professionals
o The need for lifelong learning
o Competing in a global economy
o Facilitating organizational learning
o Eliminating the skills gap

Check Your Progress

1. Define human resource management.
2. What are objectives?
3. What is under the scope of personnel management?
4. What do you understand by procurement?

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 Introduction to Human
1.3 ANSWERS TO CHECK YOUR PROGRESS Resource Management

QUESTIONS

1. Human resource management encompasses those activities designed NOTES

to provide for and coordinate the human resources of an organization.
2. Objectives are preset goals towards which all individuals or groups
direct their activities in an organization.
3. All the major activities in the working life of an employee from the
time of his joining an organization till he leaves come under the scope
of personnel management.
4. The term ‘procurement’ means recruitment of the required number of
employees possessing the right qualifications and experience, keeping
in mind the importance of achieving the established objectives of the
organization.

1.4 SUMMARY

• Human resource management (HRM) is the management of an

organization’s workforce or human resources. It is responsible for the
selection, training, assessment, rewarding and retaining of employees.
• The importance of HRM lies in the fact that along with financial and
material resources, it contributes to the production of goods and services
in an organization.
• The functions of human resource management include operative and
managerial functions, personnel management policies and strategic
challenges for HR.
• The objectives of HRM are affected by not only organizational
objectives but also individual and social goals. Every organization has
certain objectives and each part of it make some contribution, whether
direct or indirect, to achieve these predetermined objectives.
• The scope of personnel management is indeed vast. All the major
activities in the working life of an employee from the time of his
joining an organization till he leaves come under the scope of personnel
management.
• Human resources, along with financial and material resources,
contribute to the production of goods and services in an organization.
Physical and monetary resources, by themselves, cannot improve
efficiency or contribute to an increased rate of return on investment.

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Introduction to Human • The challenges faced by human resource managers in an organization
Resource Management
are naturally evolving with the ever-transforming scenario in the
corporate world.

NOTES
1.5 KEY WORDS

• Management: The process of dealing with or controlling things or

people.
• Corporate: Relates to a large company or group.
• Organization: An entity comprising multiple people, such as an
institution or an association that has a collective goal and is linked to
an external environment.

1.6 SELF ASSESSMENT QUESTIONS AND

EXERCISES

Short Answer Questions

1. Briefly explain the scope of HRM.
2. Why is HRM important? Discuss its significance at various levels.
Long Answer Questions
1. Discuss the meaning, purpose and objectives of human resource
management.
2. Explain the operative and managerial functions of HRM in detail.

1.7 FURTHER READINGS

Venkataratman, C.S. and B. K. Srivastava. 1991. Personnel Management and

Human Resources. New York: Tata McGraw Hill Education.
Aquinas, P. G. 2005. Human Resources Management – Principles and
Practice. New Delhi: Vikas Publishing House Pvt Ltd.
Flippo, Edwin B. 1984. Personnel Management, 4th Edition. New York:
McGraw Hill.

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 Overview of Human

UNIT 2 OVERVIEW OF HUMAN Resource Planning in

Hospitals

RESOURCE PLANNING IN
NOTES
HOSPITALS
Structure
2.0 Introduction
2.1 Objectives
2.2 Role of HRM in Hospitals
2.3 Nature and Scope of Human Resource Planning
2.3.1 Objectives of HR Planning
2.3.2 Need and Importance of HR Planning
2.4 Answers to Check Your Progress Questions
2.5 Summary
2.6 Key Words
2.7 Self Assessment Questions and Exercises
2.8 Further Readings

2.0 INTRODUCTION

Since every organization is made up of people, acquiring their services,

developing their skills, motivating them to higher levels of performance and
ensuring that they continue to maintain their commitment to the organization
are essential to achieve organizational objectives. Those organizations that
are able to acquire, develop, stimulate and keep outstanding workers will be
both effective and efficient. On the other hand, those organizations that are
ineffective or inefficient have the risk of stagnating or going out of business.
Human resource thus plays an important role in the hospitals as well, as they
are also organizations. If human resources are neglected or mismanaged,
the hospitals are unlikely to do well. Human resource planning has thus
become a crucial requirement in every hospital. It involves predetermining
the future path of action selected from a number of different courses of
action to acquire, build up, administer, and stimulate the human element of
enterprise. It identifies a deliberate choice of patterns of the humanization
of work milieu in a hospital. In this unit, we will discuss human resource
planning in a detailed manner in the context of hospitals.

2.1 OBJECTIVES

After going through this unit, you will be able to:

• Understand the role of Human Resource Management in hospitals
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Overview of Human • Describe the nature and scope of human resource planning
Resource Planning in
Hospitals • Explain the objectives and importance of human resource planning

NOTES 2.2 ROLE OF HRM IN HOSPITALS

Human resource management is a cornerstone of healthcare setup. A

healthcare provider institute is known by the quality of workforce. It directly
impacts the quality of healthcare services provided by the hospital through
experienced and qualified manpower. Planning of human resource process
starts right with the beginning of the hospital project. In the beginning, a
research study is done to understand the presence of the healthcare personnel
in the chosen area. The different kind of salary slabs and staffing models of
hospital manpower are also reviewed.
HR management begins with recruiting qualified and experienced
staff in different departments of the hospital as per the job profile and
description defined. It is necessary to define roles and responsibilities of
different designations in a detailed manner, depending upon the scope and
establishment of key performance indicators as well as key result areas for
all the staff, so that it can also be used as factors against which the staff
performance can be measured. In modern days, hospitals have to be fierce and
cost effective in order to face today’s tough competition. From the viewpoint
of hospital administration, the main concern is satisfaction of patients. In
order to satisfy patient’s need during their hospital stay, hospital’s employees,
infrastructure, and services are on test all the time. HR management in hospital
applies the functions of general management planning, organizing, directing,
and controlling each one of the tasks of HR management procurement,
development, compensation, integration, maintenance, and separation.
Training of staff is another area, which is mostly overseen by hospital
administrators. It is necessary to be updated and competent in line with the
present vogue. Each staff of hospital should undergo continuous training.
At the onset of every coming year, a training calendar should be generated
to facilitate the training program of hospital staff. The human resource
department of hospital should have policies and procedures related to
human resource planning, recruitment process, credentialing and prevailing,
performance appraisals, grievance handling, sexual harassment, etc. in place
for smooth functioning of each department. Accreditation guidelines like
JCI (Joint Commission International) and NABH (National Accreditation
Board for Hospital and Healthcare Providers) can aid in the organization of
the departmental processes.
The broad objectives of HR management should be contribution towards
achievement of hospital goals. The HR is accountable for the nomination of
the staff to be designated. Verification should be done in a detailed manner
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including individual’s credentials, background, and experience, which Overview of Human
Resource Planning in
should be checked before confirming their job. A mandatory medical check- Hospitals
up is required for all employees recruited by a hospital. There should be a
procedure to conduct police verification of the staff in case it is required.
The hospital management program will conduct an induction training for NOTES
the newly joined staff including deputation to familiarize with the hospital
and its vision, mission, policies, structure, key management personals, and
rights and responsibilities of that employee.
Human Resource Department has six main functions to implement in
the hospital.
An efficiently run HR department can make the hospital meet business
needs via controlling organization’s most precious resources-its workers.
There are various HR subjects, but HR practitioners in each discipline may
execute more than one of the six necessary functions:
(i) Human resource planning: To ensure availability of an adequate
number and mix of employee base in order to meet the care,
treatment, and service needs of the organization and also to fulfil
the future needs of the organization. In order to deliver medical
services of the highest standards, organization ensures that right
talent, in terms of qualification, skill, experience, and attitude is
recruited in the hospital.
(ii) Induction and orientation of newly joined staff: To ensure that
all the employees are conversed and familiar with the hospital
environment, a system to facilitate a smooth transition to achieve
the objective of medical service excellence in delivering patient
care should be there. All new employees on the pay-roll of the
hospital and those on contracts with the organization, shall
attend the new employee training within two weeks of their
joining the organization. Induction program shall be common
for all functional category of employees (Physicians, Nursing,
Paramedical staff, and support function).
(iii) Recruitment process: Every year total number of positions shall
be approved by the senior management team of a hospital before
the start of the next year. Based on requirements, the management
team may decide to create additional and temporary positions
during the coming year to strengthen hospital’s services.
(iv) Training and development: To make sure that the employees of
hospital are appropriately trained on the functional features of the
job. The policy also aims at providing a platform for continuous
learning and development. Once an employee is inducted and
oriented in the organization, it shall be the responsibility of the
respective department heads to impart function-specific training
before allowing an employee to function independently. The Self-Instructional
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Overview of Human duration of training may vary from department to department
Resource Planning in
Hospitals depending on the type of the task, experience, and the learning
potential of the individual.
(v) Performance appraisal: It is essential to ensure a fair and
NOTES
transparent tool to assess the performance of an employee for
further development and reward. A formal performance appraisal
shall take place as per organization’s policy, when required.
The employee shall be informed of the parameters before the
process. An employee’s compensation is normally reviewed
during the appraisal, the review will be based on individual
performance, business performance, and business affordability.
The employees are assessed according to these parameters and
is rated accordingly.
(vi) Grievance redressal: The purpose is to standardize practices
and procedures related to administrating grievance handling
procedure with an aim. It also helps and encourages staff to achieve
and maintain the appropriate standards of conduct which the
organization expects from its staff. It also provides easy accessible
mechanism for resolution of grievances and to adopt steps in
the hospital that would ensure swift resolution of grievances
of employees leading to increase in the satisfaction of staff and
improved productivity and efficiency of the organization.

Check Your Progress

1. Which accreditation guidelines can aid in the organization of the
departmental processes?
2. What should be the broad objectives of HR management?

2.3 NATURE AND SCOPE OF HUMAN

RESOURCE PLANNING

Human resource planning is the predetermination of the future course of

action chosen from a number of alternative courses of action for procuring,
developing, managing, motivating, compensating, career planning, succession
planning and separating the human element of enterprise. It determines a
conscious choice of staffing decisions in an organization.
Characteristics of HR Planning
According to Geisler, ‘HR planning is the process (including forecasting,
developing and controlling) by which a firm ensures that it has the right
number of people and the right kind of people at the right places at the right
Self-Instructional time doing work for which they are economically most useful.’
16 Material
 According to Wendell French, human resource planning may be defined Overview of Human
Resource Planning in
as “the process of assessing the organization’s human resources needs in the Hospitals
light of organizational goals and making plans to ensure that a competent,
stable workforce is employed.”
NOTES
From the above definitions, we can gather some general characteristics
of human resource planning as follows:
1. Human resource planning must incorporate the human resource
needs in the light of organizational goals.
2. A human resource plan must be directed towards well-defined
objectives.
3. Human resource planning must ensure that it has the right number
of people and the right kind of people at the right time doing work
for which they are economically most useful.
4. Human resource planning should pave the way for an effective
motivational process.
5. A human resource plan should take into account the principle of
periodical reconsideration of new developments and extending
the plan to cover the changes during the given long period.
6. Adequate flexibility must be maintained in human resource
planning to suit the changing needs of the organization.
The HR manager must follow a systematic process for HR planning
as given in Figure 2.1.

FORECASTING DEMAND

Considerations
• Product/Service demand
• Technology Techniques BALANCING SUPPLY
• Trend analysis AND DEMAND
• Organizational growth
• Estimation
• Financial resources • Delphi
• Management philosophy technique RECRUIT –
• Absenteeism (For shortages).
• Labour turnover Employees can be
recruited for full time
vacancies, part time
basis or on contract
FORECASTING SUPPLY basis. We may also
recall retrenched
workers
External Considerations
• Demographic changes REDUCTION OF
Techniques
• Marko
• Labour mobility SURPLUS STAFF –
analysis • Policies of government Organizations layoff,
• Replacement • Education level of terminate or give
charts workers golden handshake to
• Succession surplus work force
planning

Fig. 2.1 Flow Chart Depicting ‘Human Resource Planning Model’

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Overview of Human 2.3.1 Objectives of HR Planning
Resource Planning in
Hospitals
From Figure 2.1, it is clear that the failure in HR planning will be a limiting
factor in achieving the objectives of the organization. If the number of persons
NOTES in an organization is less than the number of persons required, then, there
will be disruptions in the work—production will be hampered, the pace of
production will be slow and the employees burdened with more work. If on
the other hand, there is surplus manpower in the organization, there will be
unnecessary financial burden on the organization in the form of a large pay
bill if employees are retained in the organization, or if they are terminated the
compensation will have to be paid to the retrenched employees. Therefore,
it is necessary to have only the adequate number of persons to attain the
objectives of the organization.
In order to achieve the objectives of the organization, the HR planner
should keep in mind the timing and scheduling of HR planning. Furthermore,
the management has to be persuaded to use the results of manpower planning
studies.
Manpower planning can also be used as an important aid in formulating
and designing the training and development programmes for the employees
because it takes into account the anticipated changes in the HR requirements
of the organizations.
2.3.2 Need and Importance of HR Planning
HR planning is a highly important and useful activity. Without clear-cut
planning, an estimation of the organization’s human resource needs is reduced
to mere guesswork. If used properly, it offers a number of benefits. These are:
1. Planning defines future manpower needs and this becomes the basis
of recruiting and developing personnel.
2. Employees can be trained, motivated and developed in advance and
this helps in meeting future needs for high-quality employees.
3. Change in technology has attached more importance to knowledge and
skill resulting in surplus manpower in some areas and shortage in other
areas. HR planning helps in creating a balance in such a situation.
4. Jobs are becoming more and more knowledge-oriented. This has
resulted in a changed profile of HR. Because of increased emphasis on
knowledge, recruitment costs have also increased. To avoid the high
cost of recruitment, proper HR planning is necessary.
5. The organization can have a reservoir of talent at any point. People with
requisite skills are readily available to carry out the assigned tasks.
6. Planning facilitates the preparation of an appropriate manpower budget
for each department. This in turn, helps in controlling manpower costs
by avoiding shortages/excesses in manpower supply.
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18 Material
 7. Systematic HR planning forces top management of an organization to Overview of Human
Resource Planning in
participate actively in total HR management functions. When there is Hospitals
active involvement of top management, they will appreciate the real
value of human resources in achieving organizational effectiveness.
NOTES
8. Systematic HRP forces top management of an organization to participate
actively in total HRM functions. When there is active involvement of
top management, they will appreciate the real value of human resources
in achieving organizational effectiveness.

Check Your Progress

3. Define human resource planning.
4. State one benefit of HR planning.

2.4 ANSWERS TO CHECK YOUR PROGRESS

QUESTIONS

1. The accreditation guidelines like JCI (Joint Commission International)

and NABH (National Accreditation Board for Hospital and Healthcare
Providers) can aid in the organization of the departmental processes.
2. The broad objectives of HR management should be contribution
towards achievement of hospital goals.
3. Human resource planning is the process of assessing the organization’s
human resources needs in the light of organizational goals and making
plans to ensure that a competent, stable workforce is employed.
4. The benefit of HR planning is that it defines future manpower needs,
which becomes the basis of recruiting and developing personnel.

2.5 SUMMARY

• Human resource plays an important role in the hospitals as well, as

they do in other organizations. If human resources are neglected or
mismanaged, the hospitals are unlikely to do well. Human resource
planning has thus become a crucial requirement in every hospital.
• Human resource management is a cornerstone of healthcare setup. A
healthcare provider institute is known by the quality of workforce.
It directly impacts the quality of healthcare services provided by the
hospital through experienced and qualified manpower.
• Human resource planning is the predetermination of the future course
of action chosen from a number of alternative courses of action for
procuring, developing, managing, motivating, compensating, career
Self-Instructional
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Overview of Human planning, succession planning and separating the human element of
Resource Planning in
Hospitals enterprise.
• In order to achieve the objectives of the organization, the HR planner
should keep in mind the timing and scheduling of HR planning.
NOTES
Furthermore, the management has to be persuaded to use the results
of manpower planning studies.
• HR planning is a highly important and useful activity. Without clear-
cut planning, an estimation of the organization’s human resource needs
is reduced to mere guesswork. If used properly, it offers a number of
benefits

2.6 KEY WORDS

• Credentialing: The process of establishing the qualifications of

licensed medical professionals and assessing their background and
legitimacy.
• Manpower: The number of people working or available for work or
service.
• Compensation: It refers to something, typically money, awarded to
someone in recognition of loss, suffering, or injury.

2.7 SELF ASSESSMENT QUESTIONS AND

EXERCISES

Short Answer Questions

1. What is the process of recruitment in hospitals?
2. List the general characteristics of HR planning.
Long Answer Questions
1. Discuss the necessary functions performed by a HR in a hospital.
2. Explain the importance of HR planning, along with its objectives.

2.8 FURTHER READINGS

Venkataratman, C.S. and B. K. Srivastava. 1991. Personnel Management and

Human Resources. New York: Tata McGraw Hill Education.

Self-Instructional
20 Material
Aquinas, P. G. 2005. Human Resources Management – Principles and Overview of Human
Resource Planning in
Practice. New Delhi: Vikas Publishing House Pvt Ltd. Hospitals
Flippo, Edwin B. 1984. Personnel Management, 4th Edition. New York:
McGraw Hill.
NOTES
Websites
https://wwjournals.com/index.php/ijar/article/view/14466/14380
https://ivypanda.com/essays/role-of-human-resources-management-in-
health-care-industry/

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Human Resources
Planning Process
UNIT 3 HUMAN RESOURCES
PLANNING PROCESS
NOTES
Structure
3.0 Introduction
3.1 Objectives
3.2 Process of Human Resource Planning
3.2.1 Advantages of HR Planning Programmes
3.2.2 Limitations of HR Planning
3.3 Job Analysis
3.4 Job Description
3.4.1 Uses of Job Description
3.4.2 Components or Contents of Job Description
3.4.3 Writing a Job Description
3.4.4 Limitations of Job Description
3.5 Job Specification
3.6 Answers to Check Your Progress Questions
3.7 Summary
3.8 Key Words
3.9 Self Assessment Questions and Exercises
3.10 Further Readings

3.0 INTRODUCTION

With the expansion of business, adoption of complex technology and

professional management techniques, the process of HR planning has assumed
greater significance.
As the manpower planning is concerned with optimum use of HR, it
can be of great benefit to the organization in particular and to the nation in
general. HR planning is the responsibility of the personnel department. The
department has to recommend relevant personnel policies in respect of HR
planning, devise methods and procedures and determine the quantitative
aspects of HR planning. Job analysis is the process by means of which
a description of the methods and procedures of doing a job, the physical
conditions under which the job is done and the relation of the job to other
jobs and conditions of employment are developed. The first outcome of a
job analysis is a job description. The job description defines the scope of a
job, its major responsibilities as well as its positioning in the organization.
Placement is an important HR activity and involves assigning a specific rank
and responsibility to an employee. This unit covers the fundamentals of job
analysis, job description and job specification.

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 Human Resources
3.1 OBJECTIVES Planning Process

After going through this unit, you will be able to:

• Understand the human resource planning process in detail NOTES
• Describe the process of job selection
• Explain the process of job description and specification

3.2 PROCESS OF HUMAN RESOURCE

PLANNING

With the expansion of business, adoption of complex technology and

professional management techniques, the process of HR planning has assumed
greater significance. It consists of the following stages.
(i) Analysing organizational plans and deciding on objectives
Before undertaking the HR planning of an organization the short-term and
long-term objectives should be analysed. The process of HR planning should
start with analysing the organizational plans and programmes. They help in
forecasting the demand for human resources as it provides the quantum of
future work activity.
(ii) Analysing factors for manpower requirements
The existing job design and analysis may be reviewed thoroughly keeping
in view the future capabilities, knowledge and skills of present employees.
The job design and analysis should reflect the future human resources and
organizational plans. The factor for manpower requirements can be analysed
in two ways:
(a) Demand forecasting – Forecasting the overall HR requirements in
accordance with the organizational plans.
(b) Supply forecasting – Obtaining the data and information about the
present inventory of human resources and forecast the future changes
in present human resource inventory.
Demand and supply forecasting are discussed in detail in section 1.5.
(iii) Developing employment plans
After determining the number of personnel for each job in the organization,
the HR department has to spell out the job description and job specification.
(a) Job description: A job description generally describes the work to be
performed, the responsibilities involved, the skill or training required,

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Human Resources conditions under which the job is done, relationships with other jobs
Planning Process
and personal requirements on the job.
(b) Job specification: Job specification is an output of job description and
states the minimum acceptable qualifications that the newcomer must
NOTES
possess to perform the job satisfactorily and successfully.
(iv) Developing human resource plans
Net HR requirements in terms of number and components are to be determined
in relation to the overall HR requirement. After estimating the supply and
demand of human resources, the management starts the adjustment. When
the internal supply of employees is more than the demand, that is, there is a
human resource surplus; then the external recruitment is stopped. If there is
a human resource deficit, then the planners have to rely on external sources.
3.2.1 Advantages of HR Planning Programmes
As the manpower planning is concerned with optimum use of HR, it can be
of great benefit to the organization in particular and to the nation in general.
At the national level, it would be concerned with factors like population,
economic development, educational facilities and labour mobility. At the
level of the organization it is concerned with personnel requirements, sources
of availability, the welfare of HR, etc. The advantages of HR planning are
discussed below:
(a) Improvement of labour productivity
Manpower or HR as a factor of production differs from other factors of
production. As it is subject to its free will, the productivity of labour can be
improved if the workers are kept satisfied. In other words, just as the satisfied
workers can be productive, dissatisfied workers can even be destructive.
Therefore, through proper HR planning we can improve the morale of the
labour and thereby labour productivity.
(b) Recruitment of qualified HR
Talented and skilled labour has become a scarce resource, especially in
developing countries. Therefore, for the survival of the firm it is essential to
recruit the best labour force through proper manpower planning.
(c) Adjusting with rapid technological changes
With the advancement in technology, job and job requirements are changing.
Therefore, it is necessary to forecast and meet the changing manpower, which
can withstand the challenges of the technological revolution. This can be
done through effective manpower planning.

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(d) Reducing labour turnover Human Resources
Planning Process
Labour turnover refers to the mobility of labour out of the organization due to
various factors, such as dissatisfaction, retirement, death, etc. Due to labour
turnover a firm loses experienced and skilled labour force. This loss can be NOTES
minimized through efficient manpower planning.
(e) Control over recruitment and training costs
Highly skilled personnel are in short supply and it is costly to hire, train, and
maintain them. A company has to incur heavy costs in processing applications,
conducting written tests, interviews, etc., and in the process providing
adequate training facilities. In consideration of these costs it is essential to
plan carefully vis-à-vis manpower so as to minimize costs.
(f) Mobility of labour
Today, it is difficult to retain qualified personnel in an organization as they
move from one job to another in search of better prospects. In a free society,
people enjoy unrestricted mobility from one part of the country to the other.
Therefore, in order to reduce the loss of experienced and skilled labour, every
organization must have a sound system of manpower planning.
(g) Facilitating expansion programmes
In these days of rapid industrial development every company goes for
expansion of its activities. With the increase in company size, the demand
for HR also increases. This necessitates proper manpower planning so as to
ensure the continued supply of the required manpower for the firms’ activities.
(h) To treat manpower like real corporate assets
Today it is being increasingly felt by the practicing managers and
psychologists that employees in an organization must be treated as the most
significant assets. The productivity of a company can be improved only
through manpower planning, recognizing the significance of the human
factor in business. A proper manpower planning is based on the realization
that satisfied workers can contribute to the overall profitability of the firm
through improved productivity.
3.2.2 Limitations of HR Planning
The main hurdles in the process of HR planning are:
(a) Inaccuracy: HR planning involves forecasting the demand for and
supply of HR. Projecting manpower needs over a period of time is a
risky task. It is not possible to track the current and future trends correctly
and convert the same into meaningful action guidelines. Longer the
time taken, greater is the possibility of inaccuracy. Inaccuracy increases
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Human Resources when departmental forecasts are merely aggregated without critical
Planning Process
review. Factors such as absenteeism, labour turnover, seasonal trends
in demand, competitive pressures, technological changes etc., may
reduce the rest of manpower plans as fashionable, decorative pieces.
NOTES
(b) Uncertainties: Technological changes and market fluctuations are
uncertainties, which serve as constraints to HR planning. It is risky
to depend upon general estimates of manpower in the face of rapid
changes in environment.
(c) Lack of support: Support from management is lacking. The latter is
unwilling to commit funds for building an appropriate HR Information
System. The time and effort involved with no tangible and immediate
gains often force them to look the ‘other way’.
• HR planning grows slowly and gradually. In some cases,
sophisticated technologies are forcefully introduced just because
competitors have adopted them. These may not yield fruit unless
matched with the needs and environment of the particular enterprise.
• Planning is generally undertaken to improve overall efficiency. In the
name of cost cutting it also helps management weed out unwanted
labour at various levels. The few efficient ones that survive such
frequent onslaughts complain about increased workload.
Support from management is lacking. The latter is unwilling to commit
funds for building an appropriate HR information system. The time and
effort involved – with no tangible, immediate gains – often force them to
look the ‘other way’. HR planning grows slowly and gradually. In some
cases, sophisticated technologies are forcefully introduced just because
competitors have adopted them. These may not yield fruit unless matched
with the needs and environment of the particular enterprise.
(d) Numbers’ game: In some companies, HR planning is used as a numbers’
game. The focus is on the quantitative aspect to ensure the flow of people
in and out of the organization. Such an exclusive focus overlooks the more
important dimension, i.e. the quality of human resources. HR planning,
in the long run, may suffer due to an excessive focus on the quantitative
aspects. Aspects such as employee motivation, morale, career prospects,
training avenues, etc may be totally discounted.
(e) Employees resistance: Employees and trade unions feel that due to
widespread unemployment people will be available for jobs as and
when required. Moreover they feel that HR planning increases their
workload and regulates them through productivity bargaining.
(f) Employers resistance: Employers may also resist HR planning on the
ground that it increases the cost of manpower.

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 (g) Lack of purpose: Managers and HR specialists do not fully understand Human Resources
Planning Process
the human planning process and lack a strong sense of purpose.
(h) Time and expense: Manpower planning is a time-consuming and
expensive exercise. A good deal of time and costs are involved in data
NOTES
collection and forecasting.
(i) Inefficient information system: In most of the organizations, human
resource information system has not been fully developed. In the
absence of reliable data, it is not possible to develop effective HR plans.

3.3 JOB ANALYSIS

Job analysis is the process through which a description is developed of the

present methods and procedures of doing a job, physical conditions in which
the job is done, relation of the job with other jobs, and other conditions of
employment. The purpose of job analysis is not to describe the ideal but
to show the management how at the moment the constituent parts of its
business are being carried out. Thus, job analysis helps in the development
of the present method and procedure of doing a job, the physical conditions
in which it is done the relation of the job with other jobs and other conditions
of employment.
Uses of Job Analysis
Job analysis is of fundamental importance to manpower management
programme. The following are the possible uses of job analysis:
(i) Provides complete knowledge of the job: It provides complete
knowledge about the job. Therefore, it is helpful in organi­zational
planning.
(ii) Helps in recruitment and selection: By indicating the specific
requirements of each job, job analysis provides a realistic basis
for recruitment and selection of employees. It is the best means of
discovering the essential traits and personal characteristics leading to
success or failure on the job.
(iii) Establishes a base for compensation of employees: By indicating the
qualifications required for doing a specified job and the risk and hazards
involved in doing a job, job analysis helps in establishing a basis for
compensation. It precedes job evaluation that measures the worth of
jobs within the organization for the purpose of establishing a base
for wages. A satisfactory evaluation of jobs is not possible without a
comprehensive job analysis.
(iv) Job re-engineering: Job analysis provides information that enables
us to change jobs in order to permit their being manned by personnel
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Human Resources with specific characteristics and qualifications. It helps to rearrange
Planning Process
the work flow and to revise existing procedure.
(v) Employee development: Job analysis provides the necessary informa­
tion for employee development. When considering an employee for
NOTES
promotion, it may facilitate his easy consideration for the job.
(vi) Performance appraisal: Job analysis helps in establishing clear-cut
standards. This helps the employees as they can know what is expected
of them. It also helps the managers to appraise the perform­ance of their
subordinates.
(vii) Training: Job analysis reveals the required skills and knowledge for
doing a job. This helps in providing suitable training for the workers
by determining the content and subject matter for the training course.

Check Your Progress

1. What is demand forecasting?
2. State the purpose of job analysis.

3.4 JOB DESCRIPTION

Job description is an important document, which is basically descriptive in

nature and contains a statement of job analysis. It provides both organizational
information (location in structure, authority, etc.) and functional information
(what the work is). It defines the scope of job activities, major responsibilities
and the positioning of the job in the organization. It provides the worker,
analyst and supervisor with a clear idea of what the worker must do to meet
the demands of the job.
Job description is different from performance assessment. The former
is concerned with functions such as planning, coordinating and assigning
responsibility; while the latter is concerned with the quality of performance
itself. Though job description is not assessment, it provides an important
basis for establishing assessment standards and objectives.
Job description describes the ‘jobs,’ not the ‘job holders.’ The movement
of employees due to promotion, quits, etc., would create instability to job
descriptions if people rather than jobs are described.
3.4.1 Uses of Job Description
Job description has several uses, such as:
(i) Preliminary drafts can be used as a basis for productive group
discussion, particularly if the process starts at the executive level.

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 (ii) It aids in the development of job specifications, which are useful in Human Resources
Planning Process
planning recruitment, in training and in hiring people with required
skills.
(iii) It can be used to orient new employees towards basic responsibilities
NOTES
and duties.
(iv) It is a basic document used in developing performance standards.
(v) It can be used for job evaluation, a wage and salary administration
technique.
A job description enables the manager to frame suitable questions to
be asked during an interview. It is particularly helpful when the application
form is used as a tool for eliminating unfit personnel. According to Zerga, a
job description helps in:
(i) Job grading and classification
(ii) Transfers and promotions
(iii) Adjustments of grievances
(iv) Defining and outlining promotional steps
(v) Establishing a common understanding of a job between employers
and employees
(vi) Investigating accidents
(vii) Indicating faulty work procedures or duplication of papers
(viii) Maintaining, operating and adjusting machinery
(ix) Time and motion studies
(x) Defining the limits of authority
(xi) Indicating case of personal merit
(xii) Facilitating job placement
(xiii) Studies of health and fatigue
(xiv) Scientific guidance
(xv) Determining jobs suitable for occupational therapy
(xvi) Providing hiring specifications
(xvii) Providing performance indicators
3.4.2 Components or Contents of Job Description
A job description contains the following data:
(i) Job identification or organizational position which includes the job
title, alternative title, department, division, plant and code number of
the job. The job title identifies and designates the job properly. The
department, division, etc., indicate the name of the department where
it is situated - whether it is the maintenance department, mechanical
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Human Resources shop, etc. The location gives the name of the place. This portion of job
Planning Process
description gives answers to two important questions: to what higher
level job is this job accountable; and who is supervised directly?
(ii) Job summary serves two important purposes. First, it provides a short
NOTES
definition which is useful as an additional identification information
when a job title is not adequate. Second, it serves as a summary to
orient the reader towards an understanding of detailed information
which follows. It gives the reader a ‘quick capsule explanation’ of the
content of a job usually in one or two sentences.
(iii) Job duties and responsibilities give a comprehensive listing of the
duties together with some indication of the frequency of occurrence
or percentage of time devoted to each major duty. It is regarded as the
heart of a job. It tells us what needs to be done, how it should be done,
and why it should be done. It also describes the responsibilities related
to the custody of money, the supervision of workers and the training
of subordinates.
(iv) Relation to other jobs: This helps to locate the job in the organization
by indicating the job immediately below or above it in the job hierarchy.
It also gives an idea of the vertical relationships of work flow and
procedures.
(v) Supervision: Under it is given the number of persons to be supervised
along with their job titles, and the extent of supervision involved —
general, intermediate or close supervision.
(vi) Machine, tools and equipment define each major type or trade name
of the machines and tools and the raw materials used,
(vii) Working conditions usually give information about the environment
in which a job holder must work. These include cold, heat, dust,
wetness, moisture, fumes, odor, oily conditions, etc. present inside the
organization.
(viii) Hazards give us the nature of risks to life and limb, their possibilities
of occurrence, etc.
3.4.3 Writing a Job Description
Opinions differ on how to write job descriptions. Some experts are of the
view that these should be written in detail and in terms of workflow. Others
feel that these should be written in terms of goals or results to be achieved,
in other words as performance standards (or what is popularly known as
‘management by objectives’). The prevalent thinking is that job descriptions
should be written in terms of duties and responsibilities, i.e., in terms of
functions performed.

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 Job descriptions are written by the personnel department or its Human Resources
Planning Process
representatives. Although there is no set way of writing a job description, the
following pattern is fairly typical, and used by many companies:
(i) A paragraph is allocated to each major task or responsibility.
NOTES
(ii) Paragraphs are numbered and arranged in a logical order, task sequence
or importance.
(iii) Sentences are begun with an active verb, e.g., ‘types letters’, ‘interviews
the candidates’, ‘collects, sorts out, routes and distributes mail.’
(iv) Accuracy and simplicity are emphasized rather than an elegant style.
(v) Brevity is usually considered to be important but is largely conditioned
by the type of job being analysed and the need for accuracy.
(vi) Examples of work performed are often quoted and are useful in making
the job description explicit.
(vii) Job descriptions, particularly when they are used as bases for training,
often incorporate details of the faults which may be encountered in
operator tasks and safety check-points.
(viii) Statements of opinion, such as ‘dangerous situations are encountered’,
should be avoided.
(ix) When job descriptions are written for supervisory jobs, the main factors
(such as, manning, cost control, etc.) are identified and listed. Each
factor is then broken down into a series of elements with a note on the
supervisor’s responsibility.
The British Institute of Management publication adds four more guidelines:
(i) Give a clear, concise and readily understandable picture of the whole
job.
(ii) Describe in sufficient detail each of the main duties and responsibilities.
(iii) Indicate the extent of direction received and supervision given.
(iv) Ensure that a new employee understands the job if he reads the job
description.
3.4.4 Limitations of Job Description
In any use of job descriptions, it should be remembered that these descriptions
are not perfect reflections of the job. ‘The object of a job description is to
differentiate it from other jobs and set its outer limits.’ Further, executives
tend to carry work patterns with them into new jobs, thus modifying the job
drastically.
To avoid such problems, care must be exercised in writing a job
description to make it as accurate as possible, and at the managerial or

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Human Resources professional level, it should be reviewed and discussed after the job. Jobs
Planning Process
tend to be dynamic, not static, and a job description can quickly go out of
date. Therefore, a job should be constantly revised and kept up-to-date and the
personnel and other departmental heads should be apprised of any changes.
NOTES
3.5 JOB SPECIFICATION

Job specification states the bare minimum acceptable qualities important to

job performance satisfactorily. Making job description as its base, it lays down
the abilities and qualities that a worker should possess in order to hold the
job in question. Job specifications translate the job description into terms of
the human qualifications which are required for a successful performance of
a job. A job specification or man specification is a statement of the minimum
acceptable human qualities necessary to perform a job satisfactorily. It tells
what kind of person to recruit and for what qualities that person should be
tested. These specifications relate to:
(i) Physical characteristics: height, weight, vision, voice, etc.
(ii) Personal characteristics: emotional stability, good and pleasing
manners, skill in dealing with others, etc.
(iii) Psychological characteristics: analytical ability, mental concen­tration
and alertness, mechanical aptitude, etc.
(iv) Responsibilities: responsibility for the safety of others, respon­sibility
for generating confidence and trust, etc.
(v) Demographic characteristics: age, sex, education, experience, etc.
Job specifications are based on the opinion of supervisors and personnel
managers. It should be remembered that preparing a complete and correct
job specification is relatively difficult as compared with preparing a correct
job description. There is always considera­ble disagreement concerning the
human requirement for work. Further, there is also a difference of opinion
on whether a requirement should be ‘mandatory’ or ‘desirable’.

Check Your Progress

3. What is job description?
4. Who writes job descriptions?
5. What does psychological characteristics include, when it comes to
job specifications?

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 Human Resources
3.6 ANSWERS TO CHECK YOUR PROGRESS Planning Process

QUESTIONS

1. Demand forecasting means forecasting the overall HR requirements NOTES

in accordance with the organizational plans.
2. The purpose of job analysis is to show the management how at the
moment the constituent parts of its business are being carried out.
3. Job description is an important document, which is basically descriptive
in nature and contains a statement of job analysis.
4. Job descriptions are written by the personnel department or its
representatives.
5. Psychological characteristics, when it comes to job specifications
include analytical ability, mental concentration and alertness,
mechanical aptitude, etc.

3.7 SUMMARY

• Before undertaking the HR planning of an organization, the short-

term and long-term objectives should be analysed. The process of
HR planning should start with analysing the organizational plans and
programmes.
• The existing job design and analysis may be reviewed thoroughly
keeping in view the future capabilities, knowledge and skills of present
employees.
• Job analysis is the process through which a description is developed of
the present methods and procedures of doing a job, physical conditions
in which the job is done, relation of the job with other jobs, and other
conditions of employment.
• Job description is an important document, which is basically descriptive
in nature and contains a statement of job analysis. It provides both
organizational information (location in structure, authority, etc.) and
functional information (what the work is).
• Job specification states the bare minimum acceptable qualities important
to job performance satisfactorily.

3.8 KEY WORDS

• Manager: A person responsible for controlling or administering an

organization or group of staff.
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Human Resources • Subordinate: A person under the authority or control of another within
Planning Process
an organization.

NOTES 3.9 SELF ASSESSMENT QUESTIONS AND

EXERCISES

Short Answer Questions

1. What are the stages in the process of human resource planning?
2. How would you define job analysis
3. State the uses of job description.
4. How would you define job specification?
Long Answer Questions
1. Discuss the advantages and limitations of HR planning.
2. Explain the uses of job analysis.
3. Describe the components of job description in detail.
4. Evaluate how the job description is written.

3.10 FURTHER READINGS

Venkataratman, C.S. and B. K. Srivastava. 1991. Personnel Management and

Human Resources. New York: Tata McGraw Hill Education.
Aquinas, P. G. 2005. Human Resources Management – Principles and
Practice. New Delhi: Vikas Publishing House Pvt Ltd.
Flippo, Edwin B. 1984. Personnel Management, 4th Edition. New York:
McGraw Hill.

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 Recruitment and Selection

UNIT 4 RECRUITMENT of Employees

AND SELECTION OF
NOTES
EMPLOYEES
Structure
4.0 Introduction
4.1 Objectives
4.2 Recruitment: Concept, Factors and Types
4.2.1 Meaning and Definitions
4.2.2 Recruitment Policy Sources and Methods
4.2.3 Recruitment Policy
4.3 Answers to Check Your Progress Questions
4.4 Summary
4.5 Key Words
4.6 Self Assessment Questions and Exercises
4.7 Further Readings

4.0 INTRODUCTION

In the previous unit, you studied the meaning, objectives, importance and
process of human resource planning. Apart from this, you also gathered
valuable information about job analysis and job design. In this unit, you
will learn about the recruitment techniques. Recruitment plays a vital role
in the planning function of the human resource of any organization and their
capability to compete. There are two sources of recruitment; internal sources
and external sources. Human resources of high proficiency are positioned at
appropriate levels within an organization. The recruitment process is aimed
at achieving a specific number and quality of workforce. This workforce is
capable of supporting the organization for achieving its goals and objectives.
As an extension of the same goal, recruitment helps in the creation of a team
of prospective candidates for the company. From this group, the management
can make a selection of a suitable employee for the appropriate vacancy.

4.1 OBJECTIVES

After going through this unit, you will be able to:

• Discuss the concept of recruitment and selection
• Explain the factors affecting recruitment
• Describe the types of recruitment

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Recruitment and Selection
of Employees 4.2 RECRUITMENT: CONCEPT, FACTORS AND
TYPES
NOTES If the HR department fails to identify the quality and the number of persons
to be recruited and also fails to procure the services of persons with required
qualifications, skill and calibre continuously, a time may come ultimately
when all the qualified persons have retired, and no qualified person remains
in the organization. Therefore, the importance of recruitment and selection of
the right type of persons at the right time is indispensable to the organization.
4.2.1 Meaning and Definitions
Recruitment is a process designed to attract a qualified pool of job applicants
to the organization. It is important to ensure that there is compatibility
between the job and the applicant. Before the recruitment efforts begin,
the requirements for the jobs to be filled must be clearly specified. These
requirements can be established by job analysis, job descriptions and job
specifications.
Job analysis, as you have already learned in the previous unit, is an
orderly study of job requirements and involves systematic investigation
relating to the operations and responsibilities including knowledge, skills and
abilities required for the successful performance of a job. The information
collected includes work activity as to what is being done, nature of the physical
environment, type of equipment and tools used, performance standards and
personal attributes of the worker such as skills, training, experience and so
on. Job analysis forms the basis for job description and job specification.
You have also learned in the previous unit that job descriptions are
written statements that outline the duties and responsibilities involved in
performing jobs. It is a tangible outcome of job analysis as to ‘who does what,
when, where, how and why.’ A job description generally contains information
which includes job identification, brief summary of the type of job, duties
performed, type of machinery handled, working conditions and so on. Job
descriptions clearly communicate to workers as to what they are required to
do, and this reduces confusion and misunderstanding.
Job specifications define the characteristics of the individuals who
should be hired for the job. These specifications relate to:
• Physical characteristics: These include general health, height and
weight, vision, endurance level, hearing, colour discrimination,
reflexes, motor coordination and so on.
• Psychological characteristics: These include mental dexterity,
emotional stability, maturity, patience, aggressiveness, outgoing

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 nature, poise, initiative, drive, leadership qualities, cooperative Recruitment and Selection
of Employees
spirit, conversational ability and so on.
• Responsibility: This involves supervision of others, responsibility
for safety of others and so on.
NOTES
• Other characteristics: These may be, for the record, age, sex,
education, experience, training required, fluency in languages and
other sensory demands such as sense of sight, smell or hearing.
Once a complete job analysis has been completed and manpower needs
have been determined, then management can begin the recruitment process.
The recruitment may be internal to the organization or the prospective
candidates can be drawn from outside sources. To what extent the internal
sources or external sources for recruitment would be used would depend
upon the specific environment of the organization as well as its philosophy of
operations. Some companies prefer to promote from within for key positions
because these persons know the company well. Others prefer to hire from
outside because the outside personnel do not know the company so that they
can bring some new and fresh ideas into the company.
According to Flippo, recruitment is ‘a process of searching for
prospective employees and stimulating and encouraging them to apply for
jobs in an organization’.
In the words of Mamoria, ‘Recruiting is the discovering of potential
applicants for actual or anticipated organizational vacancies’.
4.2.2 Recruitment Policy Sources and Methods
Basically, the sources of recruitment are of two types: internal and external.
Internal Sources
Internal sources include personnel already on the pay roll of an organization.
Filling a vacancy from internal sources by promoting people has the
advantages of increasing the general level of morale of existing employees and
of providing to the company more reliable information about the candidate.
Internal sources include promotions, transfers, and response of employees to
notified vacancy. Employee referrals and former employees also constitute
the internal sources of recruitment. Let us discuss these five types of sources.
1. Promotions
Promotions from among present employees can be a good source of
recruitment. To be effective, promotion requires using job posting, personnel
records and skill banks. Job posting means notifying vacant positions by
announcing at staff meetings, posting notices and inviting employees to

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Recruitment and Selection apply to notified vacancies. Examining personnel records may help in
of Employees
identifying talented employees for higher positions. Skill banks are a list of
employees who have specific skills. Promotions have several advantages for
the organization as well as its employees, such as:
NOTES
• It builds morale among employees as organizations consider them for
higher positions.
• It is cheaper than going for outside sources.
• Internal employees are familiar with the organizations.
• Promotion when carefully planned acts as a training device for
developing employees for higher level jobs.
• It improves the probability of a good selection since the person is
already known to the organization.
• It encourages competent individuals who are ambitious.
Here it should be noted that promotions can be dysfunctional to
organizations as the advantage of hiring outsiders who may be better qualified
and skilled is denied. Promotion also results in inbreeding and discourages
new blood from entering the organization which is not good for it.
2. Transfers
A transfer is a change in job assignment. It does not involve a change in
responsibility and status. A movement of an employee between equivalent
positions at periodical intervals is calls as ‘transfer’. A transfer, therefore,
does not involve in a change of responsibility or compensation. Transfers
are normally made to place employees in positions where they are likely
to be more effective or where they are likely to get greater job satisfaction.
Transfers are often important in providing employees with a broad-based
view of the organization.
3. Response of employees to notified vacancies
Employees who are qualified but are doing jobs below their educational
qualifications or skill level may respond to notified vacancies. This practice
is not followed for senior positions which are generally filled with people
hired from outside. When employees respond to notified vacancies, examining
personnel records is desirable. It helps to track persons who have the potential
for further training or those who have the right background for the vacant
positions.
4. Employee referrals
Employee referrals can also be treated as a good source of internal recruitment.
This source is usually one of the most effective methods of recruiting
because many qualified people are reached at a very low cost to the company.
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Therefore, when vacancies are notified it is also necessary to bring this Recruitment and Selection
of Employees
information to the employees by posting notices, circulating publications
or announcing job vacancies at staff meetings. In an organization with large
number of employees, this approach can provide quite a large pool of potential
organization members. NOTES
Employee referrals can help employees to develop good prospects to
their family members, friends and can induce them to apply for vacancies in
the organizations. Most employees know from their own experience about the
requirements of the job and what sort of persons the company is looking for.
Often employees have friends or acquaintances who meet these requirements.
5. Former employees
Former employees can include those who have worked on part-time basis and
now desire to work on a full-time employment, retired employees or those
who have left the company for some reason but are now willing to come back
and work. Former employees are a good internal source of recruitment. They
have the advantage of knowing the organization, which, in turn, know the
performance of these people.
Merits of internal sources of recruitment
The merits of internal sources of recruitment are as follows:
• They absorb people already acquainted with the company culture.
• They provide tried and tested people on whom the company can depend.
• They are a useful signal to employees that assures them that their
services are recognized, which helps in maintaining their motivation
and morale.
• They reduce labour turnover as it gives employees a sense of job
security and opportunity for advancement.
• They minimize job training.
• They are less costly than the other sources of recruitment.
Demerits of internal sources of recruitment
Internal sources of recruitment suffer from certain constraints that are as
follows:
• They limit the choice to a few employees only.
• The likes and dislikes of the superiors play an important role in the
selection of an employee.
• They create frustration among the unselected employees.

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Recruitment and Selection External Sources
of Employees
External sources lie outside the organization. There are seven external sources
of recruitment, which are discussed as follows:
NOTES 1. Advertisements
Advertising in newspapers, trade journals and magazines is the most
frequently used method. In order to be successful, an advertisement should
be carefully written. If it is not properly written, it may not draw the right
type of applicants or it may attract too many applicants who are not qualified
for the job.
2. Employment exchanges
An employment exchange is an office set up for bringing together as quickly
as possible candidates searching for employment and employees looking for
prospective employees. The main functions of employment exchanges are
registering job seekers and their placement in notified vacancies.
3. Campus recruitment
Sometimes, recruiters are sent to educational institutions where they meet
the placement officer or the faculty members who recommend suitable
candidates. This system is prevalent in USA where campus recruitment is
a major source. However, today the idea of campus recruitment has slowly
caught up the fancy of Indian employers too.
4. Unsolicited applicants
Unsolicited applicants are another source. Some candidates send in their
applications without any invitation from the organization.
5. Labour contractors
Many organizations employ labour contractors to hire workers. This method
is usually resorted to when the work is of a temporary nature.
6. Employee referrals
Friends and relatives of present employees are also a good source from which
employees may be drawn.
7. Field trips
An interviewing team makes trips to towns and cities, which are known
to contain the kinds of employees required. In this method of recruitment,
carefully prepared brochures describing the organization and the job it offers
are distributed to the candidates before the interviewer arrives. The arrival
dates and the time and venue of interview are given to the candidates in
advance.
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8. Web recruitment Recruitment and Selection
of Employees
In accordance with the research by the Society for Human Resource
Management, the Internet is used by 96 per cent of all job seekers. This makes it
the most commonly used mode of searching. On the other hand, Internet is used NOTES
by 88 per cent of recruiters to advertise for new opportunities and vacancies.
This approach is considered cheaper, faster and highly efficient by firms and
candidates. Applicants can make use of a number of websites that can be availed
on the Internet, for this purpose. The applicants can make use of these websites
for submitting their resumes and similarly, prospective employers can check
these resumes for candidates who may suite their requirements. These websites
also have a system to match the requirements with the skills of the candidates.
Recently, firms have found it more convenient and effective to construct their
own websites, wherein they advertise the job vacancies. Websites prove to be
speedy, convenient and cost-effective for applicants who use the Internet to
submit their resumes. The resumes are then converted into a standard format
that uses the software to make a short list of candidates. This is in accordance
with the set criteria such as qualifications, experiences, etc. The requirements are
furnished by the HR department which also generates the profiles of candidates
from the company’s database.
• Recruitment alternatives: Recruiting sources are equipped for locating
and hiring full-time and permanent employees. Nevertheless, economic
facts, combined with the trends of management such as rightsizing, have
caused the emergence of slightly different focus. A large majority of
companies is presently hiring temporary employees, leased employees
and are using independent contractors.
• Temporary help service: This proves to be valuable when meeting
short-term fluctuations in the need for human resource management
Temporary employees prove to be specifically. Though they are
traditional in their way of handling office administration, yet temporary
staffing services have expanded to a broad range of skills. It is possible
to hire temporary computer programmers, accountants, technicians,
administrative assistants, etc.
• Leased employees: Leased employees tend to be with a firm for a long
time. They work and are employed with the organization in accordance
with a leasing arrangement. If a firm is on the lookout for employees
who are specifically skilled, it gets in touch with leasing firms. These
firms cater them with leased employees. Leased employees are trained
well. The leasing firm screens them, as required and gives them proper
training. They are assigned to organizations with absolute guarantee.
In case a leased employee does not perform, the organization is given
a replacement, or the paid fee is returned. This is also beneficial to the
employee who is being leased. There are a few workers who like their
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Recruitment and Selection lives to be flexible. When they are on lease, it allows them the choice
of Employees
to work at their convenience and for as long as they desire.
• Independent contractors: Independent contracting is an alternative
method of recruitment. Firms may prefer hiring of independent
NOTES
contractors for specific jobs that are located within or outside its
premises. The system of independent contracting is beneficial for
the organization as well as for the worker. In this case, the worker is
different from an employee, since it is more economic for the company
with full or part-time employees, in terms of social security schemes
such as provident fund, insurance, gratuity, etc. In addition, this is
also a good way to keep ideal workers in association with the firm. If
an individual is allowed the freedom to work from home, as per his
convenience of time, it is beneficial to both, the firm and the individual.
9. Employment exchange
Employment exchange is also an important external source of recruitment.
The Employment Exchanges (Compulsory Notification of Vacancies)
Act was enacted in 1959 to provide for compulsory notification of vacancies
to the Employment Exchanges and for the rendition of returns relating to
Employment situation by the employers. This act came into force with effect
from 1st May 1960.
All Establishments in public sector and such establishments in
private sector excluding agriculture, where ordinarily 25 or more persons
are employed come within the purview of the Act. These establishments
are required to notify all vacancies (other than those exempted) to the
appropriate Employment Exchange as notified in the official Gazette by the
State Government in the prescribed format.
This Act will not apply to vacancies in any employment in agriculture
(including horticulture), domestic service, unskilled office work, employment
connected with the staff of parliament, and if the total duration of the vacancies
are less than three months.
The establishments are also required to render quarterly employment
return in Form ERI for every quarter ending 31st March, 30th June, 30th
September and 31st December and biennial occupational return in Form
ER-II once in two years viz., by private sector in odd years and by public
sector in even years.
As per the provisions of this Act, persons authorized by the Government
shall have access to any relevant records of the employer. They are also
empowered to inspect or take copies of relevant records or document. Penal
provision of imposition of fine for any offence has been made for violation
for various provisions of this act.

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Merits of external sources of recruitment Recruitment and Selection
of Employees
The merits of the recruitments using external sources are as follows:
• Fresh talent and skill come into the organization.
• New employees may try to change old habits. NOTES

• New employees may be selected at the latest terms and conditions of

the organization.
• Highly qualified and experienced employees may help the organization
to boost performance.
• Since persons are recruited from a large market, the best selection can
be made. In other words, the recruiter has a wide range of candidates
to choose from.
• They provide the requisite type of personnel having the required skill
and standard.
Demerits of external sources of recruitment
The constraints of recruitments using external sources are as follows:
• They reduce the morale of existing employees because outsiders are
preferred to fill up superior vacancies.
• They deny carrier advancement for existing employees.
• Proper evaluation may not be possible due to the time constraint
resulting in faulty selection.
• Outsiders not being acquainted with the policies and procedures of the
organization need training, before they can deliver.
From all this, we can conclude that there is no hard and fast rule whether
the recruitment must be internally or externally or exclusive to each other. The
best management policy regarding recruitment must be to first look within
the organization and if no able talent is available, external sources may be
looked at. To use the words of Koontz and O’Donnell ‘The (recruitment)
policy should be to ‘raise’ talent rather than ‘raid’ for it’.
Constraints
Some constraints might crop up while placing an employee on a job. These
problems could include:
• Employee’s expectations from the job are not matching with reality.
• Expectation from the employers are more than the employee’s ability
or skills.
• Technological changes might result in mismatch between the job and
the employee.

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Recruitment and Selection • Change in the organizational structure may result in changes in the job.
of Employees
These changes result in a misfit between the employee and the job.
4.2.3 Recruitment Policy
NOTES A policy is a directive providing a continuous framework for executive actions
on recurrent managerial problems. A policy assists decision-making. However,
deviations may be needed, as exceptions and under some extraordinary
circumstances. Such a policy asserts the objectives of the recruitment and
provides a framework of implementation of the recruitment programme in
the form of procedures.
The essentials of policy formation may be listed as follows:
• It should be definite, positive and clear. Everyone in the organization
should understand it.
• It should be translatable into practice.
• It should be flexible and at the same time should have a high degree
of permanency.
• It should be formulated to care all reasonable anticipated conditions.
• It should be founded upon facts and sound judgements.
• It should conform to economic principles, statutes and regulations.
• It should be a general statement of the established rules.
Therefore, a well-considered and pre-planned recruitment policy,
based on corporate goals and needs, may avoid hasty decisions and help the
organization to appoint the right type of personnel.
According to Yoder, ‘A recruitment policy may involve a commitment
to broad principles such as filling vacancies with the best-qualified
individuals... It may also involve the organization system to the developed
for implementing recruitment programme and procedures to the employed’.
Therefore, a recruitment policy involves a commitment by the organization
to principles, such as:
• To find and employ the best qualified persons for each job
• To retain the best talent by offering life-time carriers
• To facilitate personal growth on the job
Conditions Necessary for a Good Recruitment Policy
A good recruitment policy must satisfy the following conditions:
(i) Organization’s objectives: A good recruitment policy should be
in conformity with the organization’s objectives. It must take into
consideration the basic parameters for recruitment decisions.

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 (ii) Identification of recruitment needs: A good recruitment policy should Recruitment and Selection
of Employees
be flexible enough to meet the changing needs of an organization. The
recruiters should prepare profiles for each category of workers and
accordingly work out the employees’ specifications.
NOTES
(iii) Ensuring long term employment opportunities for its employees:
A good recruitment policy should be so designed by the organization
as to ensure career growth for its employees on a long-term basis. It
should help in developing the potentialities of employees.
(iv) Preferred sources of recruitment: A good recruitment policy should
match the qualities of employees with the requirements of the work
for which they are employed. The preferred sources of recruitment,
which would be tapped by the organization for skilled or semi-skilled
workers could be internal sources or employment exchanges, whereas
for highly specialized managerial personnel, external sources could be
preferred.

Check Your Progress

1. What is recruitment?
2. What is required to make promotions effective?
3. What is a transfer?
4. What do you understand by employment exchange?
5. Define what constitutes a good recruitment policy.

4.3 ANSWERS TO CHECK YOUR PROGRESS

QUESTIONS

1. Recruitment is a process designed to attract a qualified pool of job

applicants to the organization.
2. To be effective, promotion requires using job posting, personnel records
and skill banks. Job posting means notifying vacant positions by
announcing at staff meetings, posting notices and inviting employees
to apply to notified vacancies.
3. A movement of an employee between equivalent positions at periodical
intervals is calls as ‘transfer’.
4. An employment exchange is an office set up for bringing together
as quickly as possible candidates searching for employment and
employees looking for prospective employees.

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Recruitment and Selection 5. A good recruitment policy should be in conformity with the
of Employees
organization’s objectives. It must take into consideration the basic
parameters for recruitment decisions.

NOTES
4.4 SUMMARY

• If the HR department fails to identify the quality and the number of

persons to be recruited and also fails to procure the services of persons
with required qualifications, skill and calibre continuously, a time may
come ultimately when all the qualified persons have retired, and no
qualified person remains in the organization.
• Selection, either internal or external, is a deliberate effort of
organizations to select a fixed number of personnel from a large number
of applicants.
• Internal sources include personnel already on the pay roll of an
organization. Filling a vacancy from internal sources by promoting
people has the advantages of increasing the general level of morale
of existing employees and of providing to the company more reliable
information about the candidate.
• External sources lie outside the organization. There are seven external
sources of recruitment.
• Recruiting sources are equipped for locating and hiring full-time
and permanent employees. However, a majority of companies are
presently hiring temporary employees, leased employees and are using
independent contractors.
• A policy is a directive providing a continuous framework for executive
actions on recurrent managerial problems. A policy assists decision-
making.
• The Employment Exchanges (Compulsory Notification of Vacancies)
Act was enacted in 1959 to provide for compulsory notification of
vacancies to the Employment Exchanges and for the rendition of returns
relating to Employment situation by the employers.

4.5 KEY WORDS

• Skill: It is the ability and capacity acquired through deliberate,

systematic, and sustained effort to smoothly and adaptively carryout
complex activities or job functions

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 • Applicant: It refers to a person who makes a formal application for Recruitment and Selection
of Employees
something, especially a job.
• Referral: It is a program where in employees refers their own friends,
ex-colleagues, college batchmates or acquaintances for recruitment in
NOTES
the company where they work.

4.6 SELF ASSESSMENT QUESTIONS AND

EXERCISES

Short Answer Questions

1. Discuss the meaning of recruitment by means of various definitions
given in the unit.
2. What are the merits and demerits of internal sources of recruitment?
3. Write a short note on employment exchange.
4. Briefly mention the conditions necessary for a good recruitment policy.
Long Answer Questions
1. Discuss the specifications required to define the characteristics of the
individuals who should be hired for a job.
2. What are the various types of sources of recruitment? Discuss each in
detail.
3. What is a recruitment policy? What are the essentials of policy
formation?

4.7 FURTHER READINGS

Venkataraman, C.S. and B. K. Srivastava. 1991. Personnel Management and

Human Resources. Tata McGraw Hill.
Yoder, Dale and Paul D Standohar. 1990. Personnel Management and
Industrial Relations. Sterling Publications.
Aquinas, P. G. 2005. Human Resources Management – Principles and
Practice. New Delhi: Vikas Publishing House Pvt Ltd.
Decenco, David A. and Stephen P. Robbins. 1989. Personnel/HRM, 3rd
Edition. New Delhi: Prentice-Hall of India.
Flippo, Edwin B. 1984. Personnel Management, 4th Edition. New York:
McGraw Hill.

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Recruitment and Selection Bernardin, John. 2004. Human Resource Management–An Experimental
of Employees
Approach. New Delhi: Tata McGraw Hill Ltd.
Beardwell, Ian and Len Holden. 1995. Human Resource Management.
London: Macmillan.
NOTES
Byars, Loyd L. and Leaslie W. Rue. 1997. Human Resource Management.
Chicago: Irwin.
Werther Jr, William B. and Keith Davis. 1993. Human Resources and
Personnel Management, 4th Edition. New York: Macmillan.

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 Selection Process
BLOCK - II
SELECTION AND TRAINING
NOTES
UNIT 5 SELECTION PROCESS
Structure
5.0 Introduction
5.1 Objectives
5.2 Concept, Kinds and Methods of Selection
5.2.1 Steps in Selection Procedure
5.2.2 Methods of Selection
5.3 Induction
5.4 Answers to Check Your Progress Questions
5.5 Summary
5.6 Key Words
5.7 Self Assessment Questions and Exercises
5.8 Further Readings

5.0 INTRODUCTION

If an organization fails to procure the services of persons with required

qualifications, skill and calibre continuously, a time may come ultimately
when all the qualified persons retire and then the organization is bound to
suffer. Therefore, the importance of recruitment and selection of the right
type of persons at the right time is indispensable to the organization.
In the previous unit, we discussed recruitment. In this unit we will
discuss the process of selection in detail.

5.1 OBJECTIVES

After going through this unit, you will be able to:

• Understand the process of selection in detail
• Describe the types and methods of selection
• Explain the process of induction after the selection

5.2 CONCEPT, KINDS AND METHODS OF

SELECTION

Selection, either internal or external, is a deliberate effort of organizations to

select a fixed number of personnel from a large number of applicants. The
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Selection Process primary aim of employee selection is to choose those persons who are most
likely to perform their jobs with maximum effectiveness and to remain with
the company. Thus, an attempt is made to find a suitable candidate for the
job. In doing so naturally many applicants are rejected. This makes selection
NOTES a negative function.
According to Yoder, “the hiring process is of one or many ‘go-no-
go’ gauges. Candidates are screened by the employer and the short-listed
applicants go on to the next hurdle, while the unqualified ones are eliminated”.
5.2.1 Steps in Selection Procedure
There is no shortcut to an accurate evaluation of a candidate. A variety of
methods are used to select personnel. The selection pattern, however, is not
common for all organizations. It varies from one to another, depending on
the situation and needs of the organization. Therefore, there is no standard
selection procedure followed by all. However, according to Yoder the steps
commonly followed are as under:
(a) Application Blank
In a sense the application blank is a highly structured interview in which
the questions are standardized and determined in advance. An application
blank, is a traditional, widely accepted device for getting information from a
prospective applicant. The application blank provides preliminary information
as well as aids in the interview by indicating areas of interest that may be
useful for discussion.
(b) Initial Interview of the Candidate
Those who are selected for interviews on the basis of particulars furnished
in the application blank are called for initial interview by the organizations.
This is meant to evaluate the appearance of the candidate and to establish
a friendly relationship between the candidate and the company and for
obtaining additional information or clarification on the information already
on the application bank. Preliminary interview becomes a necessity, when a
large number of candidates apply for a job.
(c) Selection Tests
For further assessment of a candidate’s nature and abilities, some tests are used
in the selection procedure. If tests are properly conducted, they can reduce
the selection cost by reducing the large number of applicants to manageable
levels. The different types of tests are:
(i) Aptitude Test: Aptitude or potential ability tests are widely used to
measure the talent and ability of a candidate to learn a new job or skill.
Aptitude tests measure ability and skills. They enable us to find out
whether a candidate would be suitable for the job.
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 (ii) Interest Test: Interest test finds out the type of work in which the Selection Process
candidate has an interest. An interest test only indicates the interest of
a candidate for a particular job. It does not reveal his ability to do it.
(iii) Intelligence Test: This test is used to find out the candidate’s intelligence.
NOTES
It reveals the candidate’s mental alertness, reasoning ability, power of
understanding etc. The scores on intelligence tests are usually expressed
as Intelligence Quotient (IQ), which is calculated as follows:
Mental Age
IQ = × 100
Actual Age

(iv) Performance or Achievement Test: This test is used to measure the

candidate’s level of knowledge and skill in a particular trade or
occupation. Achievement test measures the skill or knowledge which
is acquired as a result of previous experience or training obtained by
a candidate.
(v) Personality Test: Personality test is used to measure the characteristics
that constitute personality.
(d) Interviews
Candidates are called for an interview after they have cleared all other
tests. The interview consists of interaction between the interviewer and the
applicant. If handled properly, it can be a powerful technique in achieving
accurate information and getting access to material otherwise unavailable. If
the interview is not handled carefully, it can be a source of bias, restricting
or distorting the flow of communication. An interview is thus an attempt to
secure maximum amount of information from the candidate concerning his
suitability for the job under consideration.
(e) Checking References
The reference provided by the applicant has to be checked. This is to find out
from the past records of the candidate. Reference checking requires the same
use of skills as required by the interviewer and some amount of diplomacy.
The main difficulty is ascertaining the accuracy of information given. Besides
inaccurate facts, the referees’ inability to assess and describe the applicant
and his limited knowledge about the candidate also pose problem. In spite
of its difficulties, it is necessary to carry out reference checks. In many
organizations, reference checking is taken as a matter of routine and treated
casually or omitted entirely.
(f) Physical or Medical Examination
The next step is getting the candidates medically examined if there is a
need. Quite often the candidates are told to get medically examined before
reporting for duty. In Government and other quasi-government organizations
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Selection Process getting medically examined is a must before reporting for duty or at the time
of reporting for duty. Medical examination is a part of the selection process
for all suitable candidates in many organizations.

NOTES (g) Final Interview and Induction

After the candidate is finally selected the management will have to explain
the job to him. He should be told as to what his duties are, what is required
of him and what are his future prospects in the organization. Normally this
information is given to the candidate at the time of final selection interview.
This is the way how the candidate is inducted into the job. He is formally
appointed by issuing him an appointment letter or by concluding with him a
service agreement. The appointment letter contains the terms and conditions
of the employment, pay scale and other benefits associated with the job.
The interviewer can describe the company and its policies, the duties
and responsibilities of the applicant as well as the opportunities available
to him for future promotion. The interviewer should, in fact highlight the
favourable aspects of the job. This process is explained in great detail in the
subsequent sections.
Objectives of selection
As Blum and Naylor observe, the purpose of the selection process is to
make effective use of individual differences with a view to select individuals
who possess the greatest degree of qualities required for an effective job
performance. Indeed, individual differences provide the basis for the selection
and placement processes. It has been found that differences between the
most efficient and the least efficient workers for certain jobs, such as spoon
polishing, are five times. This indicates advantages of developing selection
methods to reject individuals with relatively less efficiency. It may be noted,
as the psychology of individual differences reveals, that personal qualities of
people are normally distributed in the population. Thus, some individuals will
have a high amount of a certain quality and some will have a low amount,
while most of the individuals will have a moderate amount of that quality.
5.2.2 Methods of Selection
Earlier on you studied that although selection procedures vary from one
organization to another, in terms of size, industry, location, and scalar levels
of jobs being filled, the selection process depends upon effective job analysis
and recruitment. As Yoder et al. suggest, the selection process involves
seven steps as follows: (i) preliminary screening of applicants, (ii) review
of application blank, (iii) checking references, (iv) physical examination, (v)
psychological testing, (vi) employment interview, and (vii) evaluation of the
programme. Let us now study these in detail.

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I. Preliminary Screening and Review of Application Blank Selection Process

(a) Preliminary Screening

It is highly non-economical to administer the entire series of tests of selection NOTES
process to all the applicants. It is advantageous to sort out unsuitable
applicants before using the selection battery. For this purpose, usually
preliminary interviews, application blank check-lists and short tests can
be used. As regards screening interviews, they should be conducted by
skilled and trained interviewers instead of some lower cadre clerk in the
personnel department. The rejection standards for applications should be
well defined. Further, application blank check-lists can also be used to sort
out applicants. However, the list should be determined through research,
and a suitable standard for rejection should be worked out. Suppose, the
minimum standard for typing is 40 words per minute; the check-list should
include this information. All applicants with a typing speed below 40 can be
straightaway rejected. Sometimes, oral trade tests or aptitude tests are also
used for screening purposes.
A screening device
Yoder et al. suggest Toops’ successive-hurdles technique as an effective
screening device. According to this technique, all selection factors are arranged
in the decreasing order of importance. For example, if the aptitude test has the
highest correlation among all the selection devices with job success, it would
be ranked first. Likewise, if personal history has the least correlation among
all factors with job success, it would come in last. Accordingly, an aptitude
test can be used to screen out the applicants. Then, the next valid test will be
used. Some organizations use non-objective methods such as observational
techniques (i.e., facial expression) and length of experience, in screening
applicants. This is a highly arbitrary method having only a chance validity.
(b) Review of Application Blank
Personal History Data. Application blanks are frequently used as
selection devices. These blanks vary from small one-page sheet to several
folders consisting of hundreds of items regarding the applicant’s history.
The application forms usually involve items such as name, address, age,
marital status and dependents, schooling, experience and reference. There
may be several other items depending upon the specific requirements of
the organization and the job. As Harrell observes, these blanks provide
preliminary information as well as help in the interview by indicating the
areas of interest and discussion. If the application blanks consist of the proper
items, the personal history items can be effectively used. Usually, the past
provides indications regarding the future. The most effective predictor of job
success is one’s demonstrated ability to perform effectively in a similar job.
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Selection Process Limitation. However, in practice, these application forms are not as
effective as they appear to be. Sometimes, the applicants tend to exaggerate
their abilities. In several cases, the questions contained in the blanks
themselves are irrelevant. In addition, sometimes the personnel department
NOTES members are unaware of the proper evaluation procedure of blanks and
accordingly cannot make their effective use.
Determining the Effectiveness of Personal History Data.
Notwithstanding these limitations, the application blanks have proved to
be highly effective in several jobs. For example, several issues of personal
history such as age, marital status and number of dependents are found to
be effective correlates of success of life insurance agents and department or
store salesmen. Likewise, personal history has been found to be associated
with turnover. College scholarship and other factors have been compared with
that of salaries after five years following graduation. The results revealed that
college scholarship was the most important factor for success in business.
Some researchers have pointed out that business leaders are college graduates
and have not benefited by ‘family pull’ in the business, and that they usually
come from homes of professional people, managers and business people. It
may be noted, however, that those results should be interpreted with caution.
Attempts should be made to constantly determine the effectiveness of personal
history data for jobs and organizations.
Weighted Application Blanks. Weighted application blanks can
be prepared on the basis of information regarding personal history items
associated with job success. Suppose, if being under 30 years of age is an
advantage for an insurance agent, it is weighed high, and for a handicap it
is weighed low. Likewise, if academic achievement is the least predictor for
future success in salesmanship, it is assigned a low-weighted value. If it is
markedly associated with success in executive jobs, it is assigned a relatively
high weight. It is not possible to prepare a weighted application blank for
all jobs in general. Rather, attempts should be made to prepare weighted
applications for specific jobs and organizations.
II. Reference Checking and Physical Examinations

(a) Reference Checking

Applicants should be requested to give character and general references in the
application blanks. The previous employers and schools can provide useful
information. Attempts may be made to make personal visits and telephone
calls to procure objective responses. Usually, correspondence is made to verify
work history information including dates of employment, duties performed,
and wages and salaries received. It is an effective practice to send a brief
questionnaire involving checking of answers instead of a great deal of writing.
The enquiries should be as specific and precise as possible.
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(b) Physical Examinations Selection Process

Physical examinations are frequently conducted and used for differential

placement purposes rather than rejection of applicants. Large organizations
have their own medical clinics while the smaller ones refer to private clinics. NOTES
Medical examinations have assumed significance in view of increasing
fringe and welfare programmes. As Yoder observes, physical examinations
form a positive rather than a negative selection device. This helps in
effective manpower utilization by stressing differential placement, involving
assessment of an individual’s capacities and matching them with several
job possibilities in the organizational setting. Attempts should be made to
conduct physical demands analysis related to physical and environmental job
requirements and conditions, and physical capacities analysis related to the
determination of how extensively a person can indulge in physical activities.
The physical demands of the jobs should be matched and compared with the
physical capacities of applicants. Everyone is handicapped physically at some
job or the other. Therefore, physical examination is of utmost significance in
selective or differential placement.
Methods. Following Hanman, physical-demands analysis can be
conducted by three methods: (1) the disability method, (2) the rating method,
and (3) the specific method. The disability method stresses upon employees’
disabilities rather than abilities. For example, jobs are classified in terms
of their suitability for people with various handicaps such as the blind, the
one-armed or the deaf. The rating method involves rating of jobs demanding
‘heavy lifting’, ‘moderate lifting’, ‘light lifting’, etc. This is a highly subjective
method. The specific method stresses what the employee can do. Attempts
are made to state the job demands as well as employee capacities in specific,
objective terms, thereby enabling matching and comparison. This method also
involves development of specific physical and environmental demands of a
job through job analysis. Thus, it enables the personnel manager to assess
specific abilities and demands for specific applicants for several specific jobs.
III. Psychological Testing

(a) General Principles

Psychological tests are used in organizations for several purposes including
selection and placement of employees, their transfer and promotion,
determining training needs, evaluation of training programmes and
counselling. Among these purposes, psycho-logical testing is primarily
used for selection and placement. The testing programme is effective if
the number of applicants for a job is high. Systematic use of tests helps in
rejecting applicants. Thus, the testing programme is highly useful when there
is considerable unemployment and abundance of applicants. However, it
does not mean that it is not useful when the number of applicants is less. In
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Selection Process such a situation, it is useful for placement purposes to enable the manpower
manager to place the individual in a job for which he is most suitable.
As Tiffin and McCormick point out, it should be recognised that
psychological tests are not infallible, and that sometimes they reveal results
NOTES
which are not a true indication of the potential job success of the candidate.
The effectiveness of any method depends upon the degree of improvement and
not perfection. Suppose, without the use of testing programme, the turnover
rate is 30 per cent and with the use of testing programme it comes down to
25 per cent. Here, the testing programme is considered as successful although
it has not eliminated the turnover.
(b) Types of Tests
Psychological tests can be classified under several types. There may be
group or individual tests, instrumental or paper and pencil tests, aptitude or
achievement tests, personality and interest tests, and power or speed tests.
Group tests can be administered to any number of candidates simultaneously
depending upon physical infrastructure, while individual tests can be given
to one applicant at a time, usually involving utmost attention of the tester.
The examples of group tests are Purdue Vocational Achievement Tests,
Adaptability Test, Wonderlic Personnel Test, etc. while among individual tests,
Purdue Pegboard Tests of Manual Dexterity can be cited. The instrumental
tests make use of tools and are usually individual in character. The paper and
pencil tests are usually group tests involving written responses.
Aptitude tests assess an individual’s potentiality to learn about a job
through adequate training. These tests are effective for freshers. Achievement
tests indicate how effectively an individual can perform a job and what he
knows about it. These tests are useful if the candidates have prior experiences
of similar jobs. It may be noted that there are certain tests which when used
in a particular way are classified as achievement tests and when used in
other ways, can be designated as aptitude tests. Thus, the basic classification
criterion should be the purpose and not the content. Personality and interest
tests indicate personal traits conducive to the job performance. These tests
are akin to aptitude tests. A power test refers to a test where the ability of the
candidate to complete the test items is more crucial than his speed, while speed
test refers to a test where each item can be completed by most candidates,
but in which speed is crucial.
Testing the tests
The tests should be tested before they are actually conducted.
Validity of Tests. Explicitly, the tests should have adequate validity.
The term ‘validity’ means that a test measures what it purports to measure.
There are several methods of validating the tests. The present employee
method and the follow-up method are largely used. The present employee
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method involves testing of present employees and correlating their test scores Selection Process
with a suitable criterion of job performance. The follow-up method involves
assessing new employees at the time of recruitment, filing the test scores and
subsequently determining the relationship between the test scores and the
performance of employees on the job after a period of time. Although these NOTES
methods have several advantages and disadvantages, the testing programme
should make use of both methods to have maximum effectiveness. There
are four types of validity related to several purposes of testing. These are
content validity, predictive validity, concurrent validity and construct validity.
Content validity is assessed by indicating how effectively the content of a test
represents the subject matter or types of situations which the test purports
to measure. Predictive validity (exemplified by the follow-up method) is
assessed by indicating how effectively predictions made by the test have
been confirmed subsequently. Concurrent validity (exemplified by the present
employee method) is assessed by indicating how effectively the test is related
to some present criterion of performance. Construct validity is assessed by
determining what psychological characteristics a test usually measures. This
is accomplished by correlating a test with another which measures the same
characteristics. Factor analysis can also be used for this purpose.
In addition to validity, as Tiffin and McCormick point out, other factors
determining the functional value of psychological tests include reliability,
selection ratio and the percentage of present employees who are satisfied
with the job.
Reliability. This refers to the degree of consistency with which a test
measures what it purports to measure. There are three types of reliability
including coefficient of stability, coefficient of equivalence, and coefficient
of internal consistency. Coefficient of stability is assessed by the test-
retest method. A group of individuals are administered the same test twice
after a period of time, and then the two sets of test scores are correlated.
The coefficient of equivalence is evaluated by the alternate forms method
involving administration of two separate but equivalent forms of the test to
the candidates. The coefficient of equivalence is derived by correlating the
scores of the two forms. Index of internal consistency is evaluated by the
split-halves method. Each test is scored on each of the two halves of the items
(odd versus even or chance halves randomly chosen), and then the two sets of
scores are correlated. Usually, tests with the coefficients of reliability above
0.80 are satisfactory. It may be noted that the test might have reliability but
not necessarily high validity. However, if a test has low reliability, it is not
likely to have satisfactory validity.
Selection Ratio. Moreover, the functional value of the test of a
manpower manager depends upon the selection ratio—the ratio of the persons
selected to those tested. Suppose, we have 100 applicants and place the 75
who score the highest on the test. Thus, we reduce those placed to 75 per cent
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Selection Process of those tested. Accordingly, the selection ratio will be 0.75. Likewise, if we
test 200 applicants and place the 100 who score the highest on the test, our
selection ratio will be reduced to 0.50. Again, suppose we test 500 applicants
and place only the 50 who score the highest on the test, the selection ratio
NOTES will be reduced to 0.10. Overall, the effectiveness of the testing programme
increases with a fall in the selection ratio. Thus, as Tiffin and McCormick
observe, in group testing where the manpower manager is interested in
average, rather than individual results, he can effectively use the test with
lower validity by adequately decreasing the selection ratio. Thus, in group
testing, a decrease in selection ratio provides a substitute for high validity.
This does not mean that it is a substitute of ‘no validity’. The test must have
some validity to permit the utilization of reduction in the selection ratio.
Percentage of Present Satisfactory Employees. Finally, another factor
influencing the efficiency of a psychological test relates to the percentage of
the present employees who have been considered satisfactory. Other things
remaining the same, the lower the percentage of existing employees who
have been placed satisfactorily without test, the higher the percentage of
satisfactory employees placed by using tests is likely to result. Let us assume
that we have a test with a validity of 0.50 and use a selection ratio of 0.50, and
only 5 per cent of employees placed by the traditional method are successful.
Under these conditions, the expected increase to 9 per cent represents an 80
per cent increase in the number of satisfactory employees placed by the test.
Indeed, if the percentages of satisfactory employees placed without the test
is larger, the percentages of increase accomplished by using the test becomes
smaller. Accordingly, for 90 per cent of satisfactory employees placed by the
traditional method, the increase of this percentage to 97 per cent by using
the test will lead to a gain of only 8 per cent in the number of employees
satisfactorily placed.
Thus, other things being equal, if more complicated it is to identify
and place satisfactory employees without applying tests, the more advantage
a manpower manager can acquire through a proper psychological testing
programme. The Taylor-Russell tables can be used to ascertain as to what
percentage of employees recruited will be effective under several combinations
of test validity, selection ratio and percentage of present employees viewed
effective. However, these tables should be used with caution.
Using the tests
A significant issue is how to use the tests for employment purposes. The
selection standard (critical score) on the test should vary with the market
conditions. If the market conditions are tight, the critical score should be
low and if loose, the selection standard should be high. Another point is that
several tests should be combined into a battery.

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 A Battery. There are two methods of combining tests in a battery. Selection Process
These include the multiple cut-off and the multiple correlation method. In the
multiple cut-off method, tests are administered one at a time and applicants
who do not perform satisfactorily are eliminated with each test. Thus, the
first test will eliminate all the low-scoring candidates, and the remaining NOTES
candidates will be administered the second test which will further eliminate
more candidates and so on. The multiple correlation method involves the
computation of multiple correlation between the best combination of test
scores and the relevant criterion. Thus, the performance on different tests
can be combined into a composite score in order to weigh each to attain the
maximum correlation between the performance on the test battery and the
criterion of job success. Thus, the value of the testing programme increases
by using many tests in combination because no single test gives as high a
validity coefficient as does the battery as a whole.
Inspection or Graphic Method. Yoder et al. suggest the inspection or the
graphic method using maximum as well as minimum cutting scores. Explicitly,
we may come across the fact that individuals who scored very high in the
test as well as those who scored very low, had a short tenure in an enterprise.
These types of relationships are called ‘curvilinear’ and involve separate
correlational techniques. Usually the eta coefficient is used for this purpose.
A study of turnover data of a company will reveal that short tenure employees
are those who have scored either below 80 or above 120 on the intelligence
test. Obviously, setting a minimum critical score at 80 and a maximum at 120
will remove short tenure risks related with either very high or very low scores.
It may be noted that the selection ratio discussed above assumes linearity of
relationships and accordingly cannot be used for curvilinear data.
Training. Last but not the least, adequate training of testers is of utmost
significance for the full advantage of the testing programme. Testing human
beings is quite different from testing materials or processes. Humans may
react both favourably and unfavourably to test situations. So, attempts should
be made to obtain a favourable response. The testers, therefore, should have
proper training to take the best out of the applicants and leave favourable
impression of the company with them.
IV. Psychological Tests in Selection and Placement
Tiffin and McCormick describe several types of tests used for selection and
placement under three categories including aptitude tests, personality and
interest tests, and achievement tests.
(a) Aptitude Tests
Aptitudes have been grouped into five categories including mental abilities,
mechanical and related abilities, psychomotor abilities, visual skills and a
class of other specific aptitudes.
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Selection Process (i) Mental Ability. The term mental ability has been used interchangeably
with intelligence. There are several kinds of mental abilities such as
verbal comprehension, word fluency, memory, inductive reasoning,
number facility, speed of perception and spatial visualization. Most
NOTES of these tests used for selection and placement purposes are group
tests. The tests that are used most frequently in industry include the
Adaptability Test, Otis Self-Administering Tests of Mental Ability,
Wonderlic Personnel Test, The Purdue Non-Language Personnel Test,
etc. These tests have been effectively used for clerical and supervisory
jobs and found useful in the selection of newspaper writers, teletype
operator trainees, etc. However, these tests have negative relationships
with performance in routine jobs such as assembly workers.
(ii) Mechanical Ability. The term mechanical ability refers to the ability
involved in the working of mechanical parts and equipment. This
ability has two aspects—mental and motor or physical. The mental
aspect relates to mechanical comprehension and the understanding of
the mechanical principles, while the motor or physical aspect relates to
skills such as muscular coordination and dexterity. Mechanical ability
has been used in its restricted sense involving a complex of intellectual
abilities. There may be a general mental ability as well as specific
abilities such as visualization of spatial relations. The most frequently
used group tests for mechanical ability include Flanagan Aptitude
Classification Tests, Bennett Test of Mechanical Comprehension,
Purdue Mechanical Adaptability Test, Revised Minnesota Paper Form
Board, etc. There is also some individual test, such as Minnesota
Mechanical Assembly Test, Purdue Mechanical Performance Test,
etc. These tests have been found effective especially for apprentices,
craftsmen, mechanics and repairmen, draftsmen and engineers.
(iii) Psychomotor Tests. These tests measure dexterity, manipulative ability,
motor ability, eye-hand coordination and allied sensory and muscular
abilities. Specifically, these tests involve several factors such as control
precision, multilimb coordination, response orientation, reaction time,
speed of arm movement rate control, manual dexterity, finger dexterity,
wristfinger speed and aiming. Typical psychomotor tests include
O’Connor Finger Dexterity Test, O’Connor Tweezer Dexterity Test,
Purdue Pegboard, Minnesota Rate of Manipulation Test, etc. These
tests have been found very useful in the selection and placement of
packers and minor operators.
Visual Skills. Vision tests are of special significance for practically every
industrial job. The visual skills required in an industry include keenness of
vision (visual acuity) at appropriate distances, discrimination of differences
at distances (depth perception or stereopsis), discrimination of difference

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in colour and postural characteristics of the eyes (phorias) at appropriate Selection Process
distances. Among the major vision tests used in industry include Ortho-Rater,
the Sight-Screener, the Telebinocular and the Vision Tester. Research results
have revealed several visual job families, i.e., groups of jobs which are similar
to each other vis-à-vis visual requirements. These visual job families include NOTES
clerical and administrative inspection and close work, vehicle operator,
machine operator, labourer, mechanic and skilled tradesmen, etc.
Special Aptitudes. In addition to the earlier mentioned aptitude tests,
there are several other tests to test the special aptitudes such as clerical
aptitude, reading speed and comprehension, vocabulary and perceptual speed.
Clusters. On the basis of extensive research, aptitude tests have
been grouped into three ‘clusters’—intellectual ability, spatial ability and
motor ability. Intellectual ability tests are highly effective in selection and
the placement of general supervisors, foremen, general clerks, salesmen,
protective-service workers and complex machine operators and least effective
for vehicle operators. The spatial ability tests have the highest validity for
structural workers and the lowest for general supervisors and clerks. The
motor ability tests are found useful for selection and placement of vehicle
operators, processing workers and gross manual workers.
(b) Personality and Interest Tests
It has been recognised that an employee may have adequate aptitude for a
required job, but he is still likely to fail if he possesses a personality which
would cause adjustment difficulties in work settings. This necessitates
identification of desirable and undesirable personality traits among job
applicants. Several attempts have been made to devise tests for measuring
personality and interest traits. Among the major personality tests conducted
in the industry are Bernreuter Personality Inventory, the Humm Wadsworth
Temperament Scale, the Guilford Series of Personality Tests, the Minnesota
Multiphasic Personality Inventory, the Gordon Personal Profile, the Rorschach
Projective Test and Thematic Apperception Test. As regards interest tests,
Strong Vocational Interest Blank and Kuder Preference Record, are largely
applied in the industry. The major limitation of personality and interest tests
for employment purposes relates to ‘faking’, i.e., the possibility of responses
to test items are not descriptive of the testee.
Overall, personality tests appear to be more effective for selection of
clerks, salesmen, public relations officials and trades and crafts than for other
occupational categories. It has been widely agreed that the non-intellectual
traits of personality are most significant for failures at work and for the
effectiveness of managers. There has been more evidence of the usefulness
of personality tests than of interest tests in the industry.

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Selection Process (c) Achievement Tests
In industry, achievement tests are used for recruitment of individuals for
jobs demanding experience, transfer and promotion of existing employees
NOTES and training purposes. Achievement tests measure the actual job proficiency
of the testees.
Types. Achievement tests are classified in three groups including job
sample (or performance) tests, written tests, and oral tests.
The job or work sample tests involve utilization of equipments which
are used on the job. An example of job sample test is a miniature punch
press used effectively for selecting individuals in jobs such as packaging,
inspecting and several types of machine operation. Likewise, a performance
test has been devised for selecting fork-lift operators. Again, several tests have
been designed to select individuals for stenographic, clerical and secretarial
positions. These include Blackstone Stenographic Proficiency Tests, the
Purdue Clerical Adaptability Test and the Thurstone Examination in Typing.
Usually, written tests are ‘tailor-made’ to meet the requirements for specific
training programmes. An example of such test is the Purdue Vocational Test
which has been used for several trades such as the operation of the grinder,
planer, lathe and milling machine.
Although achievement tests are not largely used in the industry, they
appear promising for not only differentiating various job groups but also
different levels of ability within a job. Overall, achievement tests are highly
useful in selecting tradesmen and apprentices.
V. Interview Process
Since the interview is one of the most commonly used personal contact
methods, it has to be conducted with great care. Generally, the following
steps are followed in an interview process. They are:
1. Reviewing background information
2. Preparing a question plan
3. Creating a helpful sitting
4. Conducting the interview.
5. Checking references.
6. Physical or medical examination.
7. Final interview and induction.
1. Reviewing Background Information
Before the actual interview begins, the critical areas in which questions will
be asked must be identified for judging the ability and skills required for
the job. Pertinent information about the candidate should be collected and
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noted beforehand. This preparation saves time and mental efforts during the Selection Process
interview. If there is more than one interviewer, some practice and mock
interviews will help.
2. Preparing a Question Plan NOTES
Every interviewer should have a question plan. This is formed by scrutinising
the information given in the application form. This procedure will make
the candidate more comfortable because the discussion will focus on his
experiences. Besides, preparing a question plan is useful for inexperienced
interviewers. It will act as a guide and the interviewer will know whether he
has covered all the areas of the interview or not.
3. Creating a Helpful Setting
The place of interview should be carefully chosen. Make arrangements for
reception and seating so as to give an impression to the interviewee that he
is an important person to whom the interviewer will devote great attention.
Most interviews have overtones of emotional stress for the applicant. Success
in interviewing depends on reducing this stress. Properly arranged seating
should be made available. The candidates should be well-received by the
receptionist. The sitting room is generally kept away from the place where
the actual interviews are held so that the conversation between the interviewer
and the interviewee is not overheard by other candidates. In brief, the place of
interview should have privacy and comfort, atmosphere of leisure, freedom
from interruptions, authentic feeling for and interest in the candidate.
4. Conducting the Interview
Conducting the interview is usually aimed at establishing rapport with the
candidate, getting complete and accurate information from him and recording
it properly. It is, therefore, necessary to use a number of different approaches
during the course of an interview.
(a) Establishing Rapport: The fundamental step is establishing ‘rapport’,
putting the interviewee at ease, conveying the impression that the
interview is a conversation between two friends and not a confrontation.
A job interview can be a trying experience for the applicant. The
interviewer should gain the confidence of the candidate at the very
beginning by establishing rapport with him. To begin with, the interview
should proceed in the form of a conversation so that the two may get
to know each other, with the specific underlying purpose of getting
information in certain areas. Sufficient time should be allowed to enable
the candidate to reveal the facts necessary for a fair assessment of him.
(b)  Getting Complete and Accurate Information: Once the
interviewee is put at ease, the interviewer starts asking questions or
seeking information related to the job. Getting complete and accurate
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Selection Process information from the applicant is an art which calls for experience,
skill and technique on the part of the interviewer. The interviewer
should use the language which is clear to the applicant. Here again
it is extremely important to lead up to complex questions gradually.
NOTES Asking a difficult and complex question in the beginning can affect
subsequent interaction, particularly if the interviewee is not able to
answer the question. Thus, it is advisable for the pattern to follow
the simple-to-complex sequence. Some general rules to be observed
regarding questioning are:
1. The interviewer should be prepared with precise questions and
not take too much time in framing them.
2. Leading questions should be avoided because they give the
impression that the interviewer is seeking certain kinds of answers.
3. Close ended questions which call for “yes” and “no” should not
be asked for they offer little scope to the candidate to expand his
answers and give more information.
4. Showing surprise or disapproval of speech, clothes or answers to
questions can also inhibit the candidate.
5. An interviewer should not allow the interview to get out of hand.
He should be alert and check the interviewee if he tries to lead
the discussion into areas which are not relevant to the interview.
6. The interviewer should have talent, experience, and a sympathetic
attitude so that he is able to draw out the applicant who may have
a considerable potential but who may be shy and reserved in the
beginning.
7. Highly personal questions should be omitted until one is sure that
rapport has been fully established.
(c) Recording of Impressions: In order to make an accurate evaluation
of the interview, it is necessary that the interviewers’ impressions are
briefly written down. This will help the interviewer to arrive at a final
judgment.
(d) Concluding the Interview: In the final few moments, the interviewer
guides the interview to a close. The close of the interview is as important
as its beginning. The interview should be closed diplomatically so that
the interviewee may feel satisfied that he was given a full hearing. After
the candidate leaves, the interviewer looks over his notes, recalls his
impressions and makes a provisional appraisal before seeing the next
candidate.
5. Checking References
The references provided by the applicant have to be checked. This is to find
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64 Material
use of skills as required by an interviewer and diplomacy. The main difficulty Selection Process
is ascertaining the accuracy of information given. Besides inaccurate facts,
the referees’ inability to assess and describe the applicant and his limited
knowledge about the candidate are the difficulties in checking references. In
spite of these difficulties, it is necessary to verify the information secured. NOTES
In many organization, reference checking is taken as a matter of routine and
treated casually or omitted entirely.
6. Physical or Medical Examination
The next step is getting the candidates checked medically if there is a need.
Quite often the candidates are told to get medically examined before reporting
for duty. In government and other quasi government organizations, getting
medically examined is a must before reporting for duty or at the time of
reporting for duty. Medical examination is a part of the selection process for
all suitable candidate in many organizations.
The objectives of this examination are:
(a) to check the physical fitness.
(b) to protect the company against unwarranted claims for
compensation.
(c) to prevent communicable diseases.
(d) to prevent injury or damage to the health of employees.
(e) to discover existing liabilities at the time of hiring so that the
company’s subsequent liabilities can be assessed in case of
workmen’s claim for compensation for an injury.
(f) to place persons on those jobs which they can handle without
damage to their health.
The main purpose of the medical examination is to see whether the
candidate is medically fit to occupy a particular post and has the capabilities
to withstand the physical and psychological stresses and strains required of
the job. When conducted by in service medical personnel, they are more
valuable to the applicant than when done by a doctor knowing very little
about the working conditions under which the job is done. For instance, in
defense service, the medical examination is done by the doctors attached
to each defense wing. Such an examination can predict, the possible health
problems in future involving serious surgical conditions and prolonged
treatment which would involve huge medical expenditure to the organization.
Normally candidates are not rejected in medical examination unless they
are suffering from contagious or incurable diseases or complex emotional
problems. Though medical examinations are generally conducted, they often
fail to detect complicated diseases because they are conducted in a cursory

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Selection Process way. Further, the validity and reliability of medical examination as a selection
tool is minimum because of two reasons. They are:
1. With growing automation, less physical strength will be required for
most jobs.
NOTES
2. A sound physical condition is no guarantee against accidents.
To conclude, medical examination reveals whether or not a candidate
possesses the required stamina, strength and tolerance of hard working
conditions. Major deficiencies may serve as a basis for rejections. The basic
purpose of a physical examination is to place selected candidates on jobs
which they can handle without injury to their health.
7. Final Interview and Induction
After the candidate is finally selected, the management will have to sell the job
to him. He should be told as to what his duties are, what is required of him and
what are his future prospects in the organization. Normally this information
is given to the candidate at the time of final selection interview. This is the
way how the candidate is inducted into the job. He is formally appointed by
issuing an appointment letter or by concluding with him a service agreement.
The appointment letter contains the terms and conditions of employment,
pay scale and other benefits associated with the job.
The interviewer can describe the company and its policies, the duties
and responsibilities of the applicant as well as the opportunities available
to him for future promotion. The interviewer should in fact highlight the
favourable aspects of the job.

5.3 INDUCTION

According to R.P Billimoria, induction or orientation is “a technique by

which a new employee is rehabilitated into the changed surroundings and
introduced to the practices, policies and purposes of the organization”. A
formal orientation tries to bridge the information gap of the new employee.
When a person joins an organization, he is a stranger to it. He may experience
a lot of difficulties which could lead to tension and stress in him. This in turn
can reduce his effectiveness.
Need for Orientation
In an organization, orientation is required for overcoming employee anxiety,
reality shocks and for accommodating employees.
• New employees experience a lot of anxiety in an organization. This is
a natural phenomenon which can be overcome through orientation.
• An employee joins an organization with certain assumptions and
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 the new employee experiences a reality shock. Effective orientation Selection Process
programmes help to reduce this reality shock by providing a more
realistic expectation on the part of the new employee.
• Proper employee orientation helps to accommodate the new employee
NOTES
with existing employees by developing new acquaintances and
understanding of the various aspects of the job.
Content of the Induction Programme: Keith Davis has listed the
following topics that need to be covered in an employee’s induction
programme:
Table 5.1 Topics of an Induction Programme

1. Organizational Issues
• History of the company
• Names and titles of key executives
• Employees’ title and department
• Layout of physical facilities
• Probationary period
• Products/ Services offered
• Overview of production processes
• Company policies and rules
• Disciplinary procedures
• Employees’ handbook
• Safety steps
2. Employee Benefits
• Pay scales, pay days
• Vacations, holidays
• Rest pauses
• Training avenues
• Counselling
• Insurance, medical, recreation, retirement benefits

3. Introductions
• To supervisors
• To co-workers
• To trainers
• To employee counsellors

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Selection Process
4. Job Duties
• Job location
• Job tasks
NOTES • Job safety needs
• Overview of jobs
• Job objectives
• Relationship with other jobs
Types of Induction Programmes
Let us discuss different types of induction programmes.
(a) General Induction Programme
Once an offer of employment has been extended and accepted, the final stage
in procurement function is concluded. The individual has then to be oriented
towards the job and the organization. This is formally done through a process
known as induction or orientation. Induction is a welcoming process—the
idea is to welcome the candidate, make him feel at home in the changed
surroundings and to introduce him to the practices, policies and purposes
of the organization. The necessity of an induction programme is that when
a person joins an organization, he may feel strange, shy, insecure and/or
nervous. Induction leads to reduction of such anxieties.
(b) Specific Orientation Programme
Specific orientation is conducted by the foreman. Induction is specific and
requires skill on the part of the foreman. A new employee must be provided
operational knowledge that is specific to the position and location. The
immediate boss (foreman) is responsible for such induction and training.
Every new employee should know
(i) the people he/she works with
(ii) the work he is responsible for
(iii) the result to be accomplished
(iv) the current status of the work
(v) his relationships in the organization
(vi) reports and records he must understand and maintain
(vii) operating policies, procedures and rules
(viii) service group available to help him
The purpose of specific induction is to enable an employee to adjust
himself to his work environment.

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(c) Follow-up Induction Programme Selection Process

The purpose of the follow-up induction programme is to find out whether the
employee is reasonably satisfied with the job. It is usually conducted by the
foreman or by a specialist from the personnel department. Through guidance NOTES
and counselling, efforts are made to remove the difficulties experienced by
the newcomer. Usually, follow up induction takes place after about one or
two months from the time of appointment.

Check Your Progress

1. What is the primary aim of employee selection?
2. What is an application blank?
3. What does aptitude tests measure?
4. What does an interview consist of?
5. Name the three methods required to conduct physical-demands
analysis.

5.4 ANSWERS TO CHECK YOUR PROGRESS

QUESTIONS

1. The primary aim of employee selection is to choose those persons who

are most likely to perform their jobs with maximum effectiveness and
to remain with the company.
2. The application blank is a highly structured interview in which the
questions are standardized and determined in advance.
3. Aptitude tests measure ability and skills.
4. The interview consists of interaction between the interviewer and the
applicant.
5. Physical-demands analysis can be conducted by three methods namely,
the disability method, the rating method and the specific method.

5.5 SUMMARY

• Selection, either internal or external, is a deliberate effort of

organizations to select a fixed number of personnel from a large number
of applicants.
• There is no shortcut to an accurate evaluation of a candidate. A variety
of methods are used to select personnel. The selection pattern, however,
is not common for all organizations. It varies from one to another,
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Selection Process depending on the situation and needs of the organization. Therefore,
there is no standard selection procedure followed by all.
• As Blum and Naylor observe, the purpose of the selection process is
to make effective use of individual differences with a view to select
NOTES
individuals who possess the greatest degree of qualities required for
an effective job performance.
• The tests should be tested before they are actually conducted.
Explicitly, the tests should have adequate validity. The term ‘validity’
means that a test measures what it purports to measure. There are several
methods of validating the tests.
• A significant issue is how to use the tests for employment purposes.
The selection standard (critical score) on the test should vary with the
market conditions. If the market conditions are tight, the critical score
should be low and if loose, the selection standard should be high.
Another point is that several tests should be combined into a battery.

5.6 KEY WORDS

• Barrier: A circumstance or obstacle that keeps people or things apart

or prevents communication or progress.
• Discrimination: The unjust or prejudicial treatment of different
categories of people, especially on the grounds of race, age, or sex.

5.7 SELF ASSESSMENT QUESTIONS AND

EXERCISES

Short Answer Questions

1. What are the steps followed in a selection procedure?
2. Write a short note explaining the types of employment tests.
3. What are the objectives of selection?
Long Answer Questions
1. Give a descriptive explanation of the methods of selection in detail.
2. ‘The tests should be tested before they are actually conducted’.
Critically comment.
3. How are the tests for employment purposes used? Discuss.

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 Selection Process
5.8 FURTHER READINGS

Venkataratman, C.S. and B. K. Srivastava. 1991. Personnel Management and

Human Resources. New York: Tata McGraw Hill Education. NOTES
Aquinas, P. G. 2005. Human Resources Management – Principles and
Practice. New Delhi: Vikas Publishing House Pvt Ltd.
Flippo, Edwin B. 1984. Personnel Management, 4th Edition. New York:
McGraw Hill.

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Training of Employees

UNIT 6 TRAINING OF EMPLOYEES

Structure
NOTES
6.0 Introduction
6.1 Objectives
6.2 Training: Meaning and Significance
6.2.1 Training Needs and Objectives
6.2.2 Significance and Benefits of Training
6.3 Answers to Check Your Progress Questions
6.4 Summary
6.5 Key Words
6.6 Self Assessment Questions and Exercises
6.7 Further Readings

6.0 INTRODUCTION

In this unit, you will learn about employee training. For any organization
to perpetuate itself through growth, there is a basic need for developing its
manpower resources. It is one thing to possess knowledge but another to
put it to effective use. It is essential to help develop skills and also update
knowledge. Especially, in a rapidly changing society, employee training and
development is very important for an organization.
Training is a method of acquiring a succession of planned behaviour.
It attempts to improve employees’ performance on the current job or prepare
them for an intended job. Among other benefits, training instructs the workers
towards better job adjustment and reduces the rate of labour turnover and
absenteeism.

6.1 OBJECTIVES

After going through this unit, you will be able to:

• Understand the importance of training of employees
• Describe the concept of training
• Discuss the objectives of training

6.2 TRAINING: MEANING AND SIGNIFICANCE

Training is undertaken by organizations to improve the performance, quality,

skill and knowledge of their employees. Thus, it is a vital phase in the
development of industrial relations.
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Features of training Training of Employees

McFarland defines several concepts used in the development of human

resources. Although training and education are closely connected, these
concepts differ from each other in crucial ways. While the term ‘training’ NOTES
relates to imparting specific skills for specific objectives, the term ‘education’
involves the development of the whole individual socially, intellectually and
physically. Accordingly, training forms only a part of the entire educational
process. Moreover, education is more akin to the concepts of growth and
development than training. The term development can be defined as the nature
and direction of change taking place among personnel through educational
and training processes.
Nature of tasks and responsibilities as a determinant
The relative amount of training and education changes with the nature of
tasks and responsibilities in organizational settings. As one goes upward
in the organization, the requirement of training usually diminishes, and the
requirement of education goes up. Explicitly, non-managerial personnel
require more job or trade-related skills than managerial personnel
demanding the generalized conceptual skills and human relations insights.
Accordingly, there is a difference between employee training and management
development. Thus, employee training relates to the process by which non-
managerial employees are imparted job skills. This type of training is largely
task-centred instead of career-centred, and supplements basic skills and job
training obtained in trade schools.
Development as applied to managers
On the other hand, development as applied to managers involves the processes
by which managerial personnel accomplish not only skills in their present jobs,
but also competence for prospective assignments of enhanced difficulties and
scope. The higher responsibilities embrace complex conceptual thoughts and
analyses, and decision-making abilities. The development process relates to
the pressures, changes and growth patterns. Thus, development as applied to
managers embraces all those recognized and controlled measures, which exert
a marked influence towards the improvement of abilities of the participant
to accomplish his present job more effectively and enhance his potential for
prospective higher responsibilities.
Narrow and broad perspectives
However, Dunn and Stephens do not limit the term ‘development’ to
managerial personnel only. According to them, ‘Training refers to the
organization’s efforts to improve an individual’s ability to perform a job or

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Training of Employees organizational role, whereas development refers to the organization’s efforts
(and the individual’s own efforts) to enhance an individual’s abilities to
advance in his organization to perform additional job duties.’ Thus, training
provides knowledge and skills required to perform the job. It may involve
NOTES showing a lathe operator how to produce a new component, demonstrating
to supervisors how to handle grievances, and improving a plant manager’s
skill to negotiate a contract with the trade union. Accordingly, training can
be viewed as job-oriented leading to an observable change in the behaviour
of the trainee in the form of increased ability to perform the job.
On the other hand, although development is still job-related, it is much
broader in scope. This is implied in management development programmes
purporting to prepare managers for higher level positions. It enhances general
knowledge related to a job as well as the ability to adapt to change. Thus,
training is narrow in scope and largely relates to the acquisition of skills,
while development embraces a broader scope. The concept of ‘education’
relates to the acquisition of knowledge of a general nature.
Present and future orientations
Thus, as Fitzgerald observes, training provides employees with specific skills
or helps them to overcome deficiencies in their present performance. On the
other hand, development provides employees with that the abilities that the
organization will need in the future.
Training versus development
According to Yoder, although the terms ‘training’ and ‘development’ appear
synonymous, there is a recognized difference between these concepts. Earlier,
training programmes stressed preparation for an improved performance in
largely specific rank-and-file jobs. With the growth of organizations, several
problems developed specifically at the supervisory level. Accordingly,
supervisory training programmes were launched enabling them to deal
with distinctive problems. During the training of the supervisors, the need
to train their bosses appeared significant. Therefore, special developmental
programmes for middle managers were organized. Later on, the development
programmes were started for the top management as well. These programmes
indicated the significance of the concept of development, and thus training
appeared to be an improper designation for learning a wide variety of complex,
difficult and intangible functions of managerial personnel.
Thus, the concept ‘training’ was degraded. As managers themselves
remarked, ‘training is for dogs, people are developed’. Today, the terms
‘development’ and ‘education’ are more suitable than the term ‘training’. It is
not the training but the full development of personality that enables the human
resources to exert their full potential. Accordingly, training and development
programmes are combined together for developing skills as well as basic
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attitudes, leading to a continued personal growth. These programmes purport Training of Employees

to improve job performance, minimize waste and scrap, prepare individuals

for promotions, reduce turnover, enable individuals to accept organizational
changes, facilitate understanding of the organizational goals and attain allied
behavioural objectives. Obviously, the basic problem in development is to NOTES
integrate the individual’s achievement, motivation and self-interest with the
goals of the organization.
Difference from four standpoints
Likewise, Gomez-Mezia et al. visualized that training tends to focus on
immediate organizational needs, while development focuses on long-term
requirements. While the scope of development is on the whole work group of
the organization, the scope of training is restricted to an individual employee.
The two concepts also differ vis-à-vis their goals. While training overcomes
current skill deficiency, development prepares the employees for future work
demands. Training is concerned with the current job, whereas development
relates to both current and future jobs. Accordingly, it is necessary to remember
these differences while evolving and evaluating training programmes.
Thus, the use of training programmes to influence long-range issues is
likely to be ineffective. In the same way, the use of a development programme
to improve current job performance will be futile.
Obviously, training provides a measure for modifying employee
behaviour involving complex attitudes, knowledge and understanding
and improving organizational effectiveness. Attempts are being made to
determine the training needs for the entire organization rather than its specific
departments and also to involve the top management in this programme.
There is an urgent need for overcoming resistance to a training programme by
demonstrating the concrete results of training, allowing the line personnel to
determine its specific needs and perform its own training as much as possible.
This approach ensures interest and involvement of the line personnel and
minimize conflicts between the line and staff personnel.
6.2.1 Training Needs and Objectives
The needs and objectives are as follows:
(a) Evaluating gap by skills analysis
As Price observes, a training need exists when there is a gap between the
present performance of an employee or group of employees and the desired
performance. The existence of this gap can be determined on the basis
of a ‘skills analysis’ involving the following five steps: (1) Analysis and
determination of the major requirements of the specific job, (2) Identification
of the tasks needed to be accomplished to meet the job requirements, (3)
Understanding of the procedures needed to accomplish each of the job
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Training of Employees tasks, (4) Analysis of the knowledge and skills needed to accomplish the
procedures, (5) Identification of any special problem of the job and analysis
of any particular skill needed to meet the problem.

NOTES (b) Training as a preventive tool to specific problems

Training needs should be determined from the standpoint of a specific problem
for which training is the most effective solution. The problem may be actual
or potential. There may be numerous problems for which training forms
a preventive tool. It may solve several problems of excessive number of
accidents, lack of ambition among employees, excessive buck passing, poor
cooperation, absence of job pride, excessive spoilage of material, frequent
changes in procedures, lack of understanding of responsibilities, lack of
effective teamwork, excessive number of transfers or request for transfers,
higher turnover, etc. The objective of training in these situations is to prevent
the occurrence of such specific problems. As indicated, specific training needs
can be determined by deducting the existing amount of employee skills from
the job requirements.
(c) Training as a tool to achieve organizational goals
As Bernardin points out, an organization should provide resources to training
programmes if they facilitate in the attainment of organizational goals. For
this purpose, needs analysis must be conducted to collect the best possible
data for justifying the use of training programmes. Organizations which
implement training programmes without such assessments are likely to make
pitfalls and waste money. For example, the research may reveal the need
for job redesign rather than training. This analysis must be conducted in the
context of strategic plans of any type of strength, weakness, opportunity and
threat analysis. According to Bernardin, needs assessment can be considered
as a systematic, objective determinant for training needs which involves
conducting three primary types of analysis: organizational analysis, job
analysis, and person analysis. These types of analysis can help in determining
the objectives for the training programmes.
6.2.2 Significance and Benefits of Training
Training is a process of learning a sequence of programmed behaviour. It
is application of knowledge. It gives people an awareness of the rules and
proce­dures to guide their behaviour. It attempts to improve their performance
on the current job or prepare them for an intended job. ‘According to Edwin
D Flippo, the purpose of training is to achieve a change in the behaviour of
those trained and to enable them to perform better.’ In order to achieve this
objec­tive, any training programme should try to bring positive changes in:
(a) Knowledge: It helps a trainee to know facts, policies, procedures and
rules pertaining to his job.
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 (b) Skills: It helps him to increase his technical and manual efficiency Training of Employees
necessary to do the job.
(c) Attitude: It moulds his behaviour towards his co-workers and
supervisors and creates a sense of responsibility in him.
NOTES
Importance of training
(a) It equips the management to face the pressures of changing environment.
(b) It usually results in the increase of quantity and quality of output.
(c) It leads to job satisfaction and higher morale of the employees.
(d) Trained workers need lesser supervision.
(e) Trained workers enable the enterprise to face competition from rival
organizations.
(f) It enables employees to develop and rise within the organization and
increase their earning capacity.
(g) It moulds the employees’ attitudes and helps them to achieve better
cooperation with in the organization.
(h) Trained employees make better economic use of materials and
equipment resulting in reduction of wastage and spoilage.
(i) Training instructs the workers toward better job adjustment and reduces
the rate of labour turnover and absenteeism.
Benefits of training
(a) Benefits to organizations: A programme of training becomes essential
for the purpose of meeting specific problems of a particular organization
arising out of the introduction of new lines of production, changes
in design, demands of competi­tion, and so on. The major benefits of
training to an organization are:
(i) Higher productivity: Training can help employees to increase
their level of performance on their present assignment. It enhances
skills. Increased performance and productivity are most evident on
the part of new employees who are not yet fully aware of the most
efficient and effective ways of performing their jobs. Enhanced
skill usually helps to increase both quantity and quality of output.
(ii) Better organizational climate: An endless chain of positive
reactions results from a well-planned training programme.  In­
creased morale, less supervisory pressures, improved product
quality, increased financial incentives, internal promotions, and
so on result in a better organizational climate.
(iii) Less supervision: Training does not eliminate the need for
supervision; it reduces the need for constant supervision.
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Training of Employees (iv) Prevents manpower obsolescence: Manpower obsolescence
is prevented by training as it fosters initiative and creativity of
employees. An employee is able to adapt himself to technolog­ical
changes.
NOTES
(v) Economical operations: Trained personnel will make economical
use of materials and equipment. This reduces wastage in materials
and damage to machinery and equipment.
(vi) Prevents industrial accidents: Proper training can help to prevent
industrial accidents.
(vii) Improves quality: Trained employees are less likely to make
operational mistakes thereby increasing the quality of the compa­
ny’s products.
(viii) Greater loyalty: A common objective of training programme will
mould employees’ attitudes to achieve support for organiza­tional
activities and to obtain better cooperation and greater loyalty.
Thus, training helps in building an efficient and loyal workforce.
(ix) To fulfil organization’s future personnel needs: When the
need arises, organizational vacancies can be staffed from inter­nal
sources, if an organization initiates and maintains an ade­quate
training programme.
(x) Standardization of procedures: Trained employees will work
intelligently and make fewer mistakes when they possess the
required know-how and understand their jobs.
(b) Benefits to employees
(i) Personal growth: Employees on a personal basis gain individu­ally from
training. They secure wider awareness, enlarged skill and enhanced
personal growth.
(ii) Development of new skills: Training improves the performance of the
employees and makes them more useful and productive.  The skills
developed through training serve as a valuable personal asset to the
employee. It remains permanently with the employee.
(iii) Higher earning capacity: By imparting skills, training facil­
itates higher remuneration and other monetary benefits to the
employee. Thus, training helps each employee to utilize and develop
his full potential.
(iv) Helps adjust with changing technology: Old employees need refresher
training to enable them to keep abreast of the changing methods,
techniques and use of sophisticated tools and equipment.
(v) Increased safety: Proper training can help prevent industrial accidents.
Trained workers handle the machines safely. Thus, they are less prone
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 to industrial accidents. A safe work envi­ronment also leads to a more Training of Employees
stable mental attitude on the part of the employees.
(vi) Confidence: Training creates a feeling of confidence in the minds of
employees. It gives safety and security to them in the organization.
NOTES

Check Your Progress

1. Define the term ‘development’.
2. What is the difference between the scope of development and the
scope of training?
3. What is the purpose of training according to Edwin D. Flippo?

6.3 ANSWERS TO CHECK YOUR PROGRESS

QUESTIONS

1. The term ‘development’ can be defined as the nature and direction of

change taking place among personnel through educational and training
processes.
2. While the scope of development is on the whole work group of
the organization, the scope of training is restricted to an individual
employee.
3. According to Edwin D. Flippo, the purpose of training is to achieve a
change in the behaviour of those trained and to enable them to perform
better.

6.4 SUMMARY

• Training is undertaken by organizations to improve the performance,

quality, skill and knowledge of their employees. Thus, it is a vital phase
in the development of industrial relations.
• As Fitzgerald observes, training provides employees with specific skills
or helps them to overcome deficiencies in their present performance.
On the other hand, development provides employees with that the
abilities that the organization will need in the future.
• The objective of job training is to increase the knowledge of workers
about the job with which they are concerned, so that their efficiency
and performance are improved. Thus, apprenticeship training system
is widely in vogue today in many industries.
• Training is a process of learning a sequence of programmed behaviour.
It is application of knowledge. It gives people an awareness of the rules
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Training of Employees and procedures to guide their behaviour. It attempts to improve their
performance on the current job or prepare them for an intended job.
• A programme of training becomes essential for the purpose of meeting
specific problems of a particular organization arising out of the
NOTES
introduction of new lines of production, changes in design, demands
of competition, and so on.

6.5 KEY WORDS

• Training: The process of learning the skills that you need for a
particular job or activity.
• Employee Retention: The ability of an organization to retain its
employees.

6.6 SELF ASSESSMENT QUESTIONS AND

EXERCISES

Short Answer Questions

1. Write a short note on narrow and broad perspectives.
2. How can you differentiate between training and development?
Long Answer Questions
1. Discuss the objectives and needs of training.
2. Explain the benefits of training to the organization and employees.

6.7 FURTHER READINGS

Venkataratman, C.S. and B. K. Srivastava. 1991. Personnel Management and

Human Resources. New York: Tata McGraw Hill Education.
Aquinas, P. G. 2005. Human Resources Management – Principles and
Practice. New Delhi: Vikas Publishing House Pvt Ltd.
Flippo, Edwin B. 1984. Personnel Management, 4th Edition. New York:
McGraw Hill.
Decenco, David A. and Stephen P. Robbins. 1989. Personnel/HRM, 3rd
Edition. New Delhi: Prentice-Hall of India.

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 Methods and Evaluation

UNIT 7 METHODS AND of Training

EVALUATION OF
NOTES
TRAINING
Structure
7.0 Introduction
7.1 Objectives
7.2 Training Methods and Evaluation
7.2.1 Systems Approaches to Training
7.2.2 Comparison of On-the-Job and Off-the-Job Training Programmes
7.2.3 Training Methods and their Suitability
7.3 Promotions Policy
7.3.1 Types of Promotion
7.3.2 Basis of Promotion
7.3.3 Promotion Policy
7.4 Transfers and its Types
7.4.1 Types of Transfers
7.4.2 Transfer Policy
7.5 Dismissals
7.6 Answers to Check Your Progress Questions
7.7 Summary
7.8 Key Words
7.9 Self Assessment Questions and Exercises
7.10 Further Readings

7.0 INTRODUCTION

Over the years, along with the importance of training function, the
contribution of training to organizational and employee success has also
grown remarkably. With increasing use of technology in manufacturing
and business processes, the need is not just for a ‘pair of hands’ but for an
‘expert pair of hands’. Further, organizations have come to recognize the
key role played by employees in organizational success. This changing
perception of employee’s role in organizational success and the increasing
presence of technology in workspace have made organizations wake up to
the importance of training. Besides, the continuous creation of new jobs due
to modernization of equipment or systems has also increased the importance
of effective training.

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Methods and Evaluation
of Training 7.1 OBJECTIVES

After going through this unit, you will be able to:

NOTES • Discuss the various types of training techniques
• Describe the promotion policy and types of transfer
• Evaluate the concept of dismissals

7.2 TRAINING METHODS AND EVALUATION

There are many types of training methods, some of them are:

(a) Induction or orientation training: It is the method of introducing
a new employee into the organization with a view to gaining his
confidence and developing a sense of cooperation in him. It is a training
programme used to induct a new employee into the new social setting of
his work. The new employee is introduced to his job situation and to his
co-employees. He is also informed about the rules, working conditions,
privileges and activities of the company. The induction training not
only helps personal adjustment of the new employee to his job and
work group but also promotes good morale in the organization.
An induction programme should aim at achieving the following
objectives:
(i) To build up the new employee’s confidence in the organization
so that he may become efficient
(ii) To ensure that the new employee may not form false impres­sions
regarding his place of work
(iii) To promote a feeling of belonging and loyalty
(iv) To give information to the new employee about canteen, leave
rules and other facilities, etc
In short, planned induction welcomes a new employee, creates a good
attitude, reduces labour turnover and makes the employee feel at home
right from the beginning.
(b) Job instruction training: The object of job training is to increase the
knowledge of workers about the job with which they are concerned,
so that their efficiency and performance are improved. In job training,
workers are enabled to learn correct methods of handling machines
and equipment avoiding accidents, minimizing wastes, and so on.

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 Under this technique, an employee is placed in a new job and is told Methods and Evaluation
of Training
how it may be performed. It is primarily concerned with developing in
an employee the skills and habits consistent with the existing practices
of an organization and with orienting him to his immediate problems.
The employees learn the job by per­sonal observation and practice as NOTES
well as occasionally handling it. It is learning by doing, and it is most
useful for jobs that are either difficult to stimulate or can be learned
quickly by watching and doing. The actual training follows a four-step
process:
(i) Preparation of the trainee for instruction
(ii) Presentation of the instructions in a clear manner
(iii) To help the trainee try out the job to show that he has understood
the instructions
(iv) Encourage questions and allowing the trainee to work along with
regular follow-up by the trainer
(c) Promotional training: Many concerns follow a policy of filling some of
the vacancies at higher levels by promoting existing employees. This
policy increases the morale of workers. When the existing employees
are promoted to superior positions in the organization, they are required
to shoulder new responsibilities. For this, training has to be given.
(d) Refresher training: With the passage of time, employees may forget
some of the methods, which were taught to them, or they may have
become outdated because of technological development and improved
techniques of management and production. Hence, refresh­er training is
arranged for existing employees in order to pro­vide them an opportunity
to revive and also improve their knowledge.
According to Dale Yoder ‘Retraining (refresher training) pro­
grammes are designed to avoid personnel obsolescence.’ Thus, refresher
training is essential because:
(i) Employees require training to bring them up-to-date with the
knowledge and skills and to relearn what they have forgotten.
(ii) Rapid technological changes make even the most qualified workers
obsolete in course of time.
(iii) Refresher training becomes necessary because many new jobs
are created and are to be manned by the existing employees.
(e) Apprenticeship training: Apprenticeship training system is widely
in vogue today in many industries. It is a good source of providing the
required personnel for the industry. Under this method, both knowledge

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Methods and Evaluation and skills in doing a job or a series of related jobs are involved. The
of Training
apprenticeship programmes combine on-the-job training and experience
with classroom instructions in particular subjects. Apprenticeship
training is desirable in industries which require a constant flow of new
NOTES employees expect­ed to become all-round craftsmen.
(f) Internship training: Internship training is usually meant for
such vocations where advance theoretical knowledge is to be
backed up by practical experience on the job. Under this method,
the professional institutes enter into arrangement with a big business
enterprise for providing practical knowledge to its students. For
example, engineering students are sent to industrial enterprise and
medical students are sent to hospitals for practi­cal knowledge.
(g) Vestibule training: In this method, actual work conditions are
simulated in a class room. Material, files and equipment that are used
in the actual job are used in the training programme too. In vestibule
training, theory can be related to practice. This type of training is
commonly used for training employees for skilled and semi-skilled
jobs. Vestibule training consists of two parts:
• The lecture method that focuses on theoretical framework and the
principles involved in the job performance, and
• The practical exercises based on the theoretical aspects in a workshop
that is similar to the shop floor in the production department.
The vestibule training is more suitable for those employees who are
required to possess certain specific technical skills before they are
employed in actual operations.
7.2.1 Systems Approaches to Training
While designing training programmes the goal of the organization should
be kept in mind. The organizational goals and strategies form the basis for
training objectives. However, many of the organizations do not make the
connection between their strategic objectives and their training programme.
As a result, much of an organization’s investment in training programmes
does not contribute directly to organizational effectiveness and performance.
To make certain that investments in training and development have maximum
impact on individual and organizational performance, a systems approach to
training should be used. The systems approach to training has four phases
which are explained in Figure 7.1.

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 Methods and Evaluation
PHASE 4: of Training
Evaluation
PHASE 3: • Reactions
Implementation • Learning
PHASE 2: • On-the-job • Behaviour
methods (transfer) NOTES
Design • Off-the-job • Results
• Instructional methods
objectives • Management
PHASE 1: • Trainee development
readiness
Need Assessment • Learning
• Organization principles
analysis
• Task analysis
• Person analysis

. Fig. 7.1 System Model of Training

Phase 1: Conducting the needs assessment: The need for training should be
felt by the organization. Managers, particularly HR managers, should find
out the types of training that are needed, where they are needed, who needs
them, and which method should be used to train the employees. In order to
do this, we must follow three steps:
1. Organization analysis: It is an examination of the environment,
strategies, and resources of the organization to determine where training
emphasis should be placed.
2. Task analysis: After doing the organization analysis, the next step
is to do the task analysis. Task analysis involves reviewing the job
description and job description and job specification to identify the
activities performed in a particular job. Task analysis often becomes
more detailed than job analysis, but the overall purpose is to determine
the exact content of the training programme. The knowledge skills
and abilities (KSAs) needed to perform the particular job should be
ascertained. The competency assessment focuses on the set of skills and
knowledge employees need to be successful, particularly for decision-
oriented and knowledge-intensive jobs.
3. Person analysis: Person analysis involves determining which employees
require training and which employees do not need the particular type
of training. Person analysis helps the organizations in several ways (i)
it helps in avoiding the mistake of sending all employees into training
when some do not need it. (ii) It enables managers to determine what
prospective trainees are able to do when they enter training so that the
programmes can be designed to emphasize the areas in which they are
deficient.

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Methods and Evaluation Phase 2: Designing the training programme: The second step is to design
of Training
the type of learning environment necessary to enhance learning. The training
design should focus on the following:
1. Instructional objectives: They describe the skills and knowledge to
NOTES
be acquired and the attitudes to be changed. A clear statement of
instructional objectives will provide a sound basis for choosing methods
and materials and for selecting the means for assessing whether the
instruction will be successful or not.
2. Trainee readiness: For any training to be successful the trainee should
be prepared to receive the training. In order to achieve this, prospective
trainees should be screened to determine that they have the background
knowledge and skill necessary to absorb what will be presented to them.
3. Principles of learning: Since the success or failure of a training
programme is frequently related to certain principles of learning,
managers and employees should understand that different training
methods or techniques vary in extent to which they utilize these
principles.
4. Characteristics of instructors: The success of any training effort will
depend to a large extent on the teaching skills of the instructors. A good
instructor is one who shows a little more effort or demonstrates more
instructional preparation.
Phase 3: Implementing the training programme: A major consideration in
choosing among the various training methods is determining which one is
more appropriate for the KSAs to be learned.
Phase 4: Evaluating the training programme: Training should be evaluated
to determine its effectiveness. The four basic criteria available to evaluate
training are: (i) reactions (ii) learning (iii) behaviour and (iv) results. These
criteria can give a total picture of the training programme and help managers
evaluate the success or otherwise of the training programme.
Training programme is a costly and time-consuming process. The
following training procedure is essentially an adoption of the job instruction-
training course. The following steps are usually considered necessary.
(a) Discovering or identifying the training needs: A training programme
should be established only when it is felt that it would assist in the
solution of specific problems. Identifica­tion of training needs must
contain three types of analysis:
(i) Organizational analysis: Determine the organization’s goals, its
resources and the allocation of the resources as they relate to the
organizational goals.
(ii) Operations analysis: Focuses on the task or job regardless of the
employee doing the job.
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 (iii) Man analysis: Reviews the knowledge, attitudes and skills a Methods and Evaluation
of Training
person must acquire to contribute satisfactorily to the attain­ment
of organizational objectives.
Armed with the knowledge of each trainee’s specific training
NOTES
needs, programmes of improvement can be developed that are tai­
lored to these needs. The training programme then follows a general
sequence aimed at supplying the trainee with the opportu­nity to develop
his skills and abilities.
(b) Preparing the instructor: The instructor is the key figure in the entire
programme. He must know both the job to be taught and how to teach
it. The job must be divided into logical parts so that each can be taught
at a proper time without the trainee losing perspective of the whole.
This becomes a lesson plan. For each part one should have in mind
the desired technique of instruction, i.e., whether a particular point is
best taught by illustration, demonstration or explanation.
(c) Preparing the trainee: This step consists of:
• Putting the learner at ease
• Stating the importance and ingredients of the job and its relationship
to work flow
• Explaining why he is being taught
• Creating interest and encouraging questions, finding out what the
learner already knows about his job or other jobs
• Explaining the ‘why’ of the whole job and relating it to some job
the worker already knows
• Placing the learner as close to his normal position as possible
• Familiarizing him with the equipment, materials, tools and trade
terms
(d) Presenting the operations: This is the most important step in a
training programme. The trainer should clearly tell, show, illustrate and
question in order to put across the new knowledge and operations. There
are many ways of presenting the operation, such as explanation and
demonstration. An in­structor mostly uses the method of explanation. In
addition, one may illustrate various points through the use of pictures,
charts, diagrams and other training aids. Demonstration is an excellent
device when the job is essentially physical in nature. The training
programme may be followed as per the following steps:
(i) Explain the course of the job
(ii) Do the job step-by-step according to the procedure
(iii) Explain each step that he is performing
(iv) Have the trainee explain the entire job
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Methods and Evaluation Instructions should be given clearly, completely and pa­tiently; there
of Training
should be an emphasis on key points and one point should be explained
at a time. The trainee should also be encouraged to ask questions in
order to indicate that he really knows and understands the job.
NOTES
(e) Try out the trainees’ performance: Under this, the trainee is asked
to go through the job several times slowly, explaining him each step.
Mistakes are corrected, and if necessary, some complicated steps are
done for the trainee the first time. Then the trainee is asked to do the
job, gradually building up skill and speed. As soon as the trainee
demonstrates that he can do the job in the right way, he is put on his
own. The trainee, through repetitive practice, will acquire more skill.
(f) Follow-up: The final step in most training procedures is that of follow-
up. This step is undertaken with a view to test the effectiveness of
training efforts. The follow-up system should provide feedback on
training effectiveness and on total value of training system.  It is worth
remembering that if the learner has not learnt, the teacher has not taught.
7.2.2 Comparison of On-the-Job and Off-the-Job Training
Programmes
On comparing the on the job and off the job training it is clear that on-the-job
training has both merits and demerits:
Merits of on-the-job training
(a) It permits the trainee to learn on the actual equipment and on-the-job
environment.
(b) It is a relatively cheaper and less time consuming as no additional
personnel or facilities are required for training.
(c) As the trainee gets a feeling of actual production conditions, it increases
the effectiveness of training.
Demerits of on-the-job training
(a) The instruction in on-the-job training is often highly disorganized and
haphazard.
(b) Trainees are often subjected to distractions of a noisy shop or office.
(c) There is low productivity.
7.2.3 Training Methods and their Suitability
The success of any training or development programme largely depends on the
selection of the methods used. Here, it should be remembered that no single
method can prove to be the best method. Various methods are suitable for
various reasons. Table 7.1 shows the methods and their suitability for training.
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 Table 7.1 Suitability of Training Methods Methods and Evaluation
of Training

Technique of Training Suitability

For large groups. For orientation or easy to NOTES

Lecture
understand material.
Case study For small groups. Requires discussion and
participation by all participants. It may be
used to develop group decision-making skills.

In-basket technique For small groups. For developing analytical

and decision-making skills.

For broadening knowledge, stimulating new

Conferences and seminars ideas and changing attitudes and for
developing skills.
For either large or small groups where cost is
Programmed instruction and
critical. Permits people to study at their own
computer-assisted learning
convenience.

For group projects. For developing decision-

Simulation and gaming
making skills required the integration of many
factors.

For groups of almost any size. For changing

Laboratory training an organization’s attitudes. For increasing
organizational problem-solving capabilities.

For developing better understanding and

T-group sensitivity training
better perceptions of co-workers.

Selection of a training method

The selection of an appropriate method depends upon the following factors:
(a) Nature of problem area: The choice of a training method de­pends
upon the task to be done or the manner in which people interact with
each other, i.e., the problem may be either an operational problem or
a human relations problem.
(b) Level of trainees in the organization’s hierarchy: The choice of a
training method also depends upon the level of the participants.
(c) Method’s ability to hold and stimulate the interest of trainees
during the training period: A trainer has to consider alterna­tive
methods of presenting training material to participants also from the
point of view of their ability to stimulate interest and facilitate retention
of the matter.
(d) Availability of competent trainers: A training method is as effective
as the ability of the trainer. He is the most important figure in the
entire training programme. Therefore, before ven­turing into a training
programme we have to first find a good trainer.
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Methods and Evaluation (e) Availability of finance: Availability of finance is crucial for any training
of Training
programme. To make a training programme effec­tive adequate finance
is necessary.
(f) Availability of time: Training cannot be done in a hurry. Adequate
NOTES
time is necessary to make the training programme a success.

Check Your Progress

1. What is the effect of not making the connection between organizations’
strategic objectives and their training programme?
2. What do you mean by man analysis?
3. State the final step in the training procedure.
4. Mention any one merit and demerit of on-the-job training.

7.3 PROMOTIONS POLICY

Some definitions given by authorities on the promotion policy. According

to Scott and Clothier, ‘A promotion is the transfer of an employee to a job
which pays more money or one that carries some preferred status.’ According
to Arun Monappa and Saiyadain, ‘Promotion is the upward reassignment
of an individual in an organization’s hierarchy, accompanied by increased
responsibilities, enhanced status, and usually with increased income, though
not always so.’
From the above definitions, we can say that promotion usually implies
several things to the person concerned—higher status, both at work and in the
community outside, more pay and fringe benefits, perhaps greater job security
and a more senior position from which a person renders better service to his
organization. Employees expect to be informed about ladders of promotion,
how they can prepare themselves for advancement and what will be expected
of them from the higher rated jobs.
7.3.1 Types of Promotion
The different types of promotions are the following:
(a) Limited Promotion
Limited promotion is also known as upgrading. It is the movement of an
employee to a more responsible job within the same occupational unit and
with a corresponding increase in pay. Thus, upgrading means an increase of
pay on the same job or moving to a higher scale without changing the job.

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(b) Dry Promotion Methods and Evaluation
of Training
Dry promotion is a promotion as a result of which there is no increase in the
employee’s pay. Dry promotions are those which are given in lieu of increases
in compensation. It is usually made decorative by giving a new and longer NOTES
title to the employee.
(c) Multiple Chain Promotion
Multiple chain promotion provides for a systematic linking of each position
to several other positions. Such promotions identify multi-promotional
opportunities through clearly defined avenues of approach to and exist from
each position in the organization.
(d) Up and Out Promotion
Up and Out Promotion often leads to termination of services. In this type
of promotion, a person must either earn a promotion or seek employment
elsewhere.
7.3.2 Basis of Promotion
Different promotion systems are used in different organizations. Of them,
the following are considered the most important:
(a) Promotion Based on Seniority
In the case of promotion based on seniority, the employees are promoted to
higher positions purely based on their length of service irrespective of their
qualifications, experience, performance and track record. Trade unions prefer
seniority as a basis of promotion because lay-offs, recalls and discharges
are usually based on seniority. The seniority promotion plan is as old as
civilization itself. In business, however, it is not always dependable as a
promotional policy. It survives simply because no better system has been
evolved. If the seniority principle is adopted, capable young men will look for
better prospects elsewhere. Normally, this method of promotion policy is seen
in Government services and in services of quasi-Governmental organizations.
Unless the official has a very poor and bad work record, he is automatically
promoted to higher position based on his service seniority.
(b) Promotion Based on Merit
Under promotion based on merit, employees are promoted to higher positions
purely on their performance and work record. Here, the management will
look into the qualifications, experience, previous work record, performance
capability, etc. The service seniority of the employee would not be considered
for promotion. In principle, it is felt that promotion should be based on merit.
However, the use of merit as a basis for promotion can cause problems because
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Methods and Evaluation what management regards as merit, trade unions may see as favouritism.
of Training
Therefore, as far as possible, merit rating should be based on operating facts.
Promotion by merit method is normally followed in majority of
commercial and industrial enterprises where the main consideration for
NOTES
assessment is efficiency and work performance. The argument in favour
of using merit or ability as a criterion for promotion is that it enhances
organizational efficiency, and maximizes utilisation of talent, since only
deserving employees are promoted after a thorough assessment of their
abilities for the next job of higher responsibility and status.
(c) Merit-cum-Seniority Promotion
Promotion based on ‘Merit cum Seniority’ would have a blend of the
advantages of both the systems discussed above. Both the service seniority
and work efficiency will be taken into account in promoting an employee.
These two possibly conflicting factors - seniority and merit - frequently pose
problems in considering employees for promotion. From the point of view
of organizational efficiency, merit seems to be the logical basis of promotion
and therefore, management would like it to be the only factor. Trade unions
want seniority to be considered as the basis for promotion since it is an
objective and impartial method of judging employees for promotion. A sound
management will pursue a policy of properly balancing these two factors i.e.,
seniority and merit. An employee who has service seniority with the desired
level of merit and efficiency would be given priority in promotion to the next
cadre as compared to others having only one of them. Merit-cum-seniority
method has been considered as the best method of promotion as it gives due
weightage to the skill efficiency and better service record of the employee.
(d) Promotion by Selection
Promotion by selection is a process through which employees are promoted
after undergoing rigorous test and screening. The service records of all the
employees due for promotion are screened and scrutinised by a committee
appointed for that purpose. The Committee will scrutinise the past records,
merit, qualification and experience of the employees due for promotion
to a cadre. Under this system employees with service seniority or better
qualifications and experience need not be promoted automatically. The
employees are put to various tests and interviews before a final selection is
made and some employees are promoted.
(e) Time Bound Promotion Scheme
Under this method, employees would be promoted according to standards
of time set for promotions to higher cadre subject to the condition that they
possess the minimum qualifications required for entry into a higher position.
Neither seniority nor merit will be considered here. The employees may
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have to pass some departmental examinations or tests for being considered Methods and Evaluation
of Training
for such a promotion.
(f) Temporary Promotion Scheme
Also known as officiating promotion scheme, under the temporary promotion NOTES
scheme officials are promoted temporarily to higher positions in case there
are vacancies and if they are due for promotion. Such temporary promotion
is no guarantee for a permanent promotion, though normally temporary
promotions are automatically made permanent if the service of the employee
during the officiating period is satisfactory. It is like keeping the employee
under some sort of probation at the higher position before he is confirmed.
7.3.3 Promotion Policy
Whatever may be the type of promotion followed by the management, there
should be a definite promotion policy which should be effective and protect the
interests of the employees due for promotion. A concrete, comprehensive and
realistic promotion policy should be evolved covering the following points:
(a) Promotion Policy Statement
A corporate policy on promotion helps to state formally the organization’s
broad objectives, and to formulate both the organization’s manpower and
individual career plans.
(b) Ratio of Internal Promotion Vs External Recruitment
A promotion policy statement must state the ratio of internal promotions
to external recruitment at each level. Such a statement will help manpower
planners to project numbers of internally available candidates for vacancies.
(c) Decide the Basis for Promotion
A promotion policy statement must decide the basis on which promotions
are to be given. Usually promotions are decided on the basis of performance
appraisals.
(d) Decide the Routes for Promotion
We have to identify the network of related jobs. Such an exercise will help in
succession planning and also help aspirants to acquire the necessary formal
qualifications or on-the-job training. This process would help in identifying
promotion channels. Once it is finalised, it should be made known to the
employees concerned.
(e) Communicate the Promotion Policy
The organization should communicate its promotion policy to its employees.
Such an exercise will help aspirants to acquire the necessary formal
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Methods and Evaluation qualifications, encourage them to attend suitable external development
of Training
programmes etc.
(f) Lack of Promotional Avenues
NOTES There may be some deserving candidates who will not get promoted due to
lack of available positions. In such cases where employees perform adequately
in their present jobs, wage increments should be forthcoming.
(g) Determination of Seniority
A ticklish area in the formation of a promotional policy is the determination
of an employee’s seniority. Should the seniority be plant-wise, unit-wise or
occupation-wise? Generally, seniority is unit wise.
(h) Relationship of Disciplinary Action to Promotion
Another area to look into while formulating a promotional policy is whether
there is a relationship between any disciplinary action taken against an
employee and promotion. Does a disciplinary action cause a loss in employee
seniority? If yes, then to what extent?
Advantages of a Promotion Policy
The following are the benefits of a good promotion policy:
(i) A good promotion policy provides an incentive to work more effectively
as it recognises an employee who does better work. It must however
tell employees in advance what avenues exist for advancement.
(ii) It develops employee loyalty by rewarding him and placing him in a
higher position in the organization for his efficiency.
(iii) It facilitates and increases job satisfaction.
(iv) It increases work effectiveness in the organization.
(v) It also attracts efficient employees to the organization.
(vi) It increases employee interest in training and self-development.
(vii) A promotion policy makes employees believe that their turn too will
come and so they remain with the company. This reduces labour
turnover.
Demotion
Demotion is a process by which the employee is downgraded and sent to a
lower position from the one he is holding at present. When an employee is
moved to a job with less responsibility, status or compensation he is said to
be demoted. Demotion is the reverse of promotion. It is more a punishment
for inefficiency or incompetence. According to D.S. Beach, demotion is ‘the
assignment of an individual to a job of lower rank and pay usually involving
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lower level of difficulty and responsibility’. According to Arun Monappa Methods and Evaluation
of Training
and Saiyadain demotion ‘is a downward assignment in the organization’s
hierarchy to a lower level job which has less responsibility, pay and status.
Because of this hierarchical repositioning it has a negative connotation and
may lead to employee dissatisfaction’. Demotions, being a serious penalty, NOTES
must be handled tactfully. The usefulness of demotion as a punitive measure
is questioned on many grounds. A demoted employee will be disgruntled
and his dissatisfaction may spread to co-workers which will adversely affect
morale, productivity and discipline of the work force. The causes of demotion
could be:
• Demotion may be used as a disciplinary weapon.
• Demotion may be resorted to when employees, because of ill health
or personal reasons, cannot do their job properly.
• If a company curtails some of its activities, employees are often required
to accept lower-level position until normalcy is restored.
• If an employee finds it difficult to meet job requirement standards,
following his promotion he may be reverted to his old position.
Conditions for Demotion
Demotions serve a useful purpose in the sense that they keep the employees
alert and alive to their responsibilities and duties. Demotion will serve its
purpose if it satisfies the following conditions:
• Violations of rules and regulations of the organization would subject an
employee to demotion. Here it should be noted that serious violations
of rules and regulations would only warrant such a drastic action.
Demotion should never be made as penalty for violation of the rules
of conduct, poor attendance record or insubordination.
• There should be a proper and detailed investigation of any alleged
violation of rules and regulation.
• If any violations occur, there should be a consistent and equitable
application of the penalty. A hasty decision should be avoided.
• There must be a provision for review.
• Demotions have a serious impact on the employees. Therefore,
demotions are made infrequently.

Check Your Progress

5. How is ‘promotion’ defined by Arun Monappa and Saiyadain?
6. State any two causes of demotion.
7. What is the purpose of demotions?

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Methods and Evaluation
of Training 7.4 TRANSFERS AND ITS TYPES

A transfer is a change in job assignment. It does not involve a change in

NOTES responsibility and status. A movement of an employee between equivalent
positions at periodical intervals is called “transfer”. A transfer therefore
does not involve a change of responsibility or compensation. Transfers are
normally made to place employees in positions where they are likely to be
more effective or where they are likely to get greater job satisfaction. Transfers
may be either organization-initiated or employee-initiated. An organization
may initiate a transfer to place employees in positions where they are likely
to be more effective or where they are better able to meet work schedules
of the organization. Employee initiated transfers also known as “personnel
transfers” may be initiated for several reasons. These could range from
wanting a change of boss or a change of location or to avoid interpersonal
conflicts with their present colleagues or to join their friends and relatives.
Yoder has defined transfer as “a lateral shift causing movement of
individuals from one position to another usually without involving any marked
change in duties, responsibilities, skills needed or compensation”.
According to Arun Monappa and Mirza Saiyadain, transfer “is a change
in assignment in which the employee moves to another job at approximately
the same level of responsibility, demanding about the same skill and at about
the same level of pay”.
According to R.S. Davar, transfer is “a lateral movement of an
employee, not involving promotion or demotion. A transfer therefore does
not involve a material change in responsibility or compensation”.
A transfer may be either temporary or permanent, depending upon the
need, and may occur within a department, between departments and divisions,
or between plants within a company. A transfer may require an employee to
change his work group, work place or organizational unit. It should be the aim
of any company to change positions of employees as soon as the capacities
increase and vacancies warrant.
7.4.1 Types of Transfers
There are different types of transfers depending on the purpose for which the
transfers are made. Judging from the viewpoint of purpose, there are nine
types of transfers.
(a) General
General transfers are normally affected during a particular period of the year
wherein all employees having completed a given period of service in a post
or at a place are involved. Definite rules and regulations are to be followed
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in affecting such transfers. Such transfers are followed in big organizations, Methods and Evaluation
of Training
quasi-governmental organizations and government departments.
(b) Production
Production transfers are normally made from one department to another NOTES
where the need for the employee is more. This type of transfer is made to
avoid lay-off of efficient and trained employees by providing them with
alternative positions in the same organization. These changes help to stabilise
employment in an organization and therefore require centralised control.
Although it is called production transfer, similar situations can exist in non-
manufacturing enterprises or divisions too where an employee is transferred
from one department to another for similar reasons.
(c) Replacement
These are transfers of long-service employees to similar jobs in other
departments where they replace or ‘bump’ employees with shorter service.
Replacement transfers are affected to replace persons leaving the organization,
due to resignations, retirements, dismissal or death. Quite often such transfers
are affected to change a new employee who has proved to be ineffective in
the organization. Even though the objective of these transfers is to retain the
efficient and trained employees, in the process some short-service employees
may lose their jobs.
(d) Shift
Shift transfers are transfers of workers from one shift to another on the same
type of work. Workers generally dislike second or third shift as it affects their
participation in community life. To minimise this, shift transfers are effected.
Shift transfers also help workers to be out of routine fatigue.
(e) Remedial
Remedial transfers are transfers made to remedy some situation primarily
concerned with employee on the job. Remedial transfers provide management
with a procedure whereby an unsatisfactory placement can be corrected.
Initial placement might be faulty or the type of job might not suit his health.
In such cases the worker would benefit by transfer to a different kind of work.
(f) Versatility
The objective of these transfers is to increase the versatility of the employee
by shifting him from one job to another. In this way, the employee is provided
a varied and broad job experience. This transfer is like a rotation transfer.
Versatility transfers, besides resulting in greater satisfaction of the workers
through job enlargement, also creates a work force which can be conveniently
shifted to other jobs in time of necessity.
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Methods and Evaluation (g) Punishment or Penal
of Training
This transfer is made as punishments to erring employees. Quite often the
employees are transferred from one place to another so that they are made to
NOTES work in a situation of risks and hazards. Employees are posted to such places
as a matter of punishment for the errors and omissions they have committed.
Sometimes, transfer is used as a concealed penalty. A trouble-maker
may be transferred to a remote branch where he cannot continue his activities.
(h) Request Transfers
This type of transfer is done on the request of the employee. It is normally
done on humanitarian grounds to help the employee to look after his family
and personal problems.
(i) Mutual Transfers
When transfers turn out to be mutual between two employees they are referred
to as mutual transfers. Usually the organization concedes to the request of
employees for transfer if another employee is willing to go to the other place.
7.4.2 Transfer Policy
It is clear that transfers are made for a number of reasons and are initiated
by either the supervisor or the subordinate. If transfers are left entirely to
the discretion of supervisors or employees, a number of problems are likely
to occur such as favouritism or victimisation. To avoid these problems it is
necessary that every organization evolve its transfer policy. Every organization
should have a just and impartial transfer policy which should be known to
each employee. It is, therefore, important that the company should formulate
a policy to govern the administration of all types of employee transfers, rather
than decide each case solely on the characteristics of that case. The absence
of a well-formulated transfer policy will breed a state of uncertainty amongst
the employees. For a successful transfer policy, proper job description and job
analysis should be done. Further, care should be taken to ensure that frequent
or large-scale transfers are avoided by laying down adequate procedures for
the purpose. A systematic transfer policy should provide for the following:
• A transfer policy should clarify the types and circumstances under which
transfers will be used. The organization should specifically clarify the
types of transfers and the conditions under which these will be made.
• The transfer policy must locate the authority that may initiate and
implement the transfer. In other words, it should indicate who would
be responsible for initiating and approving the transfers.
• A transfer policy should indicate whether the transfer could be made
only within a sub-unit or also between departments, divisions and
plants.
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 • The transferability of both jobs and individuals’ needs should be Methods and Evaluation
of Training
examined in terms of job descriptions, streams of specialization and
individual background and training.
• A transfer policy should indicate the basis for transfer. Should it be on
NOTES
the basis of seniority or skill and competence?
• A transfer policy should prescribe whether, when an employee is
transferred, his previous seniority credit will be retained.
• The transfer policy should indicate to the transferee the pay scales, the
exact wages and perquisites that he would receive in the transferred
job. If there is any difference, it should be specified.
• A transfer policy should provide for timely communication of the
transfer decision. The transferee should be intimated of the transfer
well in advance.
• A transfer should be in writing and duly communicated to all concerned.
• Transfers should not be made frequently.
Industrial practices vary and each organization must formulate its
own policy and rules in connection with transfers. In making transfers, it is
advisable for the organization to pay the employee the actual cost of moving
the household to the place of transfer. A transfer policy will help effective
employee redeployment and protect employees from arbitrary transfers.

7.5 DISMISSALS

Dismissal is the process of separating a worker where the employer asks the
employee to leave, generally for the fault of the employee. The term is used
in the colloquial sense as ‘getting fired’ in America and ‘getting sacked’ in
Britain.
Lay-off
Lay-off means the inability or refusal of a company to provide job to an
employee on the grounds of shortage of coal, power, or raw materials, or the
breakdown of machinery. A laid-off employee is not retrenched. In a lay-off,
the name of the employee must be in the muster rolls on the date they have
been laid off.
Retrenchment
Retrenchment means the termination of service of an employee for any reason;
but it certainly isn’t a punishment imposed as a disciplinary action. The job can
be either terminated due to economy, installation of labour-saving machinery
or other any such industrial or trade reasons. Usually, the employee is given
a month’s notice in writing or is offered payment in place of such notice.
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Methods and Evaluation Termination
of Training
Termination of job can be two types: 1. Voluntary termination, 2. Involuntary
termination. Also termed as the ‘pink slip’, job termination happens at the
NOTES hand of the employer. The terminations that occur due to a mutual agreement
between the company and the worker are termed as involuntary terminations.
The end of an employment contract for a particular period of time is one such
example. There are also age-related job terminations, where the employee
leaves the company as he reaches the pre-determined age of retirement.

Check Your Progress

8. How many types of transfers are there in human resource
management?
9. Why may an organization initiate a transfer of an employee?
10. Define lay-off.
11. What is the other name of job termination?

7.6 ANSWERS TO CHECK YOUR PROGRESS

QUESTIONS

1. The effect of not making the connection between organizations’

strategic objectives and their training programme is that much of an
organization’s investment in training programmes does not contribute
directly to organizational effectiveness and performance.
2. Man analysis means the knowledge, attitudes, and skills, a person must
acquire to contribute satisfactorily to the attainment of organizational
objectives.
3. The final step in the training procedure is that of follow-up. This step
is undertaken with a view to test the effectiveness of training efforts.
4. The merit of on-the-job training is that it permits the trainee to learn on
the actual equipment and on-the-job environment. While the demerit
of on-the-job training is that the instruction in on-the-job training is
often highly disorganized and haphazard.
5. According to Arun Monappa and Saiyadain, ‘Promotion is the
upward reassignment of an individual in an organization’s hierarchy,
accompanied by increased responsibilities, enhanced status, and usually
with increased income, though not always so.’
6. The causes of demotion are:
(a) Demotion may be used as a disciplinary weapon.

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100 Material
 (b) Demotion may be resorted to when employees, because of ill Methods and Evaluation
of Training
health or personal reasons, cannot do their job properly.
7. The purpose of demotions is to keep the employees alert and alive to
their responsibilities and duties.
NOTES
8. There are nine types of transfers in human resource management.
9. An organization may initiate a transfer of an employee to place
employees in positions, where they are likely to be more effective or
where they are better able to meet work schedules of the organization.
10. The lay-off means the inability or refusal of a company to provide
job to an employee on the grounds of shortage of coal, power, or raw
materials, or the breakdown of machinery.
11. The other name of job termination is ‘pink slip’.

7.7 SUMMARY

• Promotion usually implies several things to the person concerned—

higher status, both at work and in the community outside, more pay and
fringe benefits, perhaps greater job security and a more senior position
from which a person renders better service to his organization.
• Whatever may be the type of promotion followed by the management,
there should be a definite promotion policy which should be effective
and protect the interests of the employees due for promotion. A concrete,
comprehensive and realistic promotion policy should be evolved.
• Demotion is a process by which the employee is downgraded and
sent to a lower position from the one he is holding at present. When
an employee is moved to a job with less responsibility, status or
compensation he is said to be demoted.
• A transfer is a change in job assignment. It does not involve a change
in responsibility and status. A movement of an employee between
equivalent positions at periodical intervals is called “transfer”.
• There are different types of transfers depending on the purpose for
which the transfers are made.
• If transfers are left entirely to the discretion of supervisors or employees,
a number of problems are likely to occur such as favouritism or
victimisation. To avoid these problems it is necessary that every
organization evolve its transfer policy.
• Every organization should have a just and impartial transfer policy,
which should be known to each employee.
• Dismissal is the process of separating a worker where the employer
asks the employee to leave, generally for the fault of the employee.
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Methods and Evaluation
of Training 7.8 KEY WORDS

• Career: It is an occupation undertaken for a significant period of a

NOTES person’s life and with opportunities for progress.
• Retrenchment: The termination of service of an employee for any
reason; but it certainly isn’t a punishment.

7.9 SELF ASSESSMENT QUESTIONS AND

EXERCISES

Short Answer Questions

1. Write a short note on the phases of system approach to training.
2. What are the factors, which decide the selection of an appropriate
training method?
3. What are the different types of promotion?
4. What are the essentials of systematic transfer policy?
Long Answer Questions
1. Discuss the types of training methods in detail.
2. Describe the promotion policy in detail, along with its advantages.
3. Explain the different promotion system used in different organizations.
4. Evaluate the different types of transfers.

7.10 FURTHER READINGS

Venkataratman, C.S. and B. K. Srivastava. 1991. Personnel Management and

Human Resources. New York: Tata McGraw Hill Education.
Aquinas, P. G. 2005. Human Resources Management – Principles and
Practice. New Delhi: Vikas Publishing House Pvt Ltd.
Flippo, Edwin B. 1984. Personnel Management, 4th Edition. New York:
McGraw Hill.
Decenco, David A. and Stephen P. Robbins. 1989. Personnel/HRM, 3rd
Edition. New Delhi: Prentice-Hall of India.
Bernardin, John. 2004. Human Resource Management–An Experimental
Approach. New Delhi: Tata McGraw Hill Ltd.
Beardwell, Ian and Len. Holden. 1995. Human Resource Management.
London: Macmillan.
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 Wage and Salary

UNIT 8 WAGE AND SALARY Administration

ADMINISTRATION
NOTES
Structure
8.0 Introduction
8.1 Objectives
8.2 Meaning and Purpose of Wage and Salary Administration
8.2.1 Theories of Wages
8.3 Developing Wage and Salary Structure
8.4 Answers to Check Your Progress Questions
8.5 Summary
8.6 Key Words
8.7 Self Assessment Questions and Exercises
8.8 Further Readings

8.0 INTRODUCTION

Proper job evaluation is the foundation for developing a sound wage structure.
Job evaluation is a formal and systematic comparison of jobs in order to
determine the worth of one job in relation to another, it is logical and, to
some extent, an objective method of ranking jobs relative to one another.
The basic purpose of wage and salary administration is to establish and
maintain an equitable wage and salary structure. Its secondary objective is the
establishment and maintenance of an equitable labour-cost structure, i.e., an
optimal balancing of conflicting personnel interests so that the satisfaction of
employees and employers is maximized and conflicts minimized. The wage
and salary administration is concerned with the financial aspects of needs,
motivation and rewards.

8.1 OBJECTIVES

After going through this unit, you will be able to:

• Discuss the nature and significance of wage and salary administration
• Explain the theories of wages
• Describe the methods of wage fixation

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Wage and Salary
Administration 8.2 MEANING AND PURPOSE OF WAGE AND
SALARY ADMINISTRATION
NOTES Wages and salaries, the payment received for performing work, is a major
component of the compensation and reward process which is aimed at
reimbursing employees for their work and motivating them to perform to
the best of their abilities. In addition to pay, most employees receive benefits
such as ESI, leave travel concession, and they receive non-financial rewards
such as security, recognition and privileges. Although individual employees
vary in the extent to which they value pay in relation to other work rewards,
for most people the pay received for work is a necessity.
Determining wage and salary payments is one of the most critical
aspects of human resource management because:
(a) the organization’s reward system has a profound effect on the
recruitment, satisfaction and motivation of employees and
(b) wage and salaries represent a considerable cost to the employer.
A carefully designed wage and salary programme that is administered
according to sound policies and consistently applied rules is essential if human
resources are to be used effectively to achieve organizational objectives.
The activities of wage and salary administration are as follows:
• Job evaluation
• Surveys of wage and salaries
• Analysis of relevant organizational problems
• Development and maintenance of the wage structure
• Establishing rules for administering wages
• Wage payments
• Incentives
• Profit sharing
• Wage changes-adjustments
• Supplementary payments
• Control of compensation and other related items
The basic purpose of wage and salary administration is to establish and
maintain an equitable wage and salary structure. Its secondary objective is the
establishment and maintenance of an equitable labour-cost structure, i.e., an

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104 Material
optimal balancing of conflicting personnel interests so that the satisfaction of Wage and Salary
Administration
employees and employers is maximized, and conflicts minimized. The wage
and salary administration is concerned with the financial aspects of needs,
motivation and rewards.
NOTES
The objectives of the wage and salary administration are mentioned
as follows:
1. For employees
• Employees are paid according to requirements of their jobs.
• The chances of favouritism (which creep in when wage rates are
assigned) are greatly minimized.
• Job sequences and lines of promotion are established wherever they
are applicable.
• Employees’ morale and motivation are increased because a wage
programme can be explained and is based upon facts.
2. To employers
• They can systematically plan for and control their labour costs.
• In dealing with a trade union, they can explain the basis of their wage
programme because it is based upon a systematic analysis of job and
wage facts.
• A wage and salary administration reduces the likelihood of friction and
grievances over wage inequities.
• It enhances an employee’s morale and motivation because adequate
and fairly administered wages are basic to his wants and needs.
• It attracts qualified employees by ensuring an adequate payment for
all the jobs.
Wage Determination Process
The steps involved in the wage determination process steps are as follows:
• Performing job analysis
• Wage surveys
• Analysis of relevant organizational problems forming the wage structure
• Framing rules of wage administration
• Explaining these to employees
• Assigning grades and price to each job and paying the guaranteed wage

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 • Wage surveys
• Analysis of relevant organizational problems forming the wage structure
• Framing rules of wage administration
• Explaining these to employees
Wage and Salary • Assigning
Figuregrades and price
8.1 illustrates tosteps
the each involved
job and paying
in the the guaranteed of
determination wage
wage
Administration
rates.
Figure 6.1 illustrates the steps involved in the determination of wage rates.

NOTES

Fig. 6.18.1Steps
Fig. StepsInvolved
Involved in
in Determination
Determination ofofWage
Wage Rate
Rate

6.4.3Factors
FactorsInfluencing
InfluencingWageWage
and Salary Structure
and Salary and Administration
Structure and
Administration
The wage policies of different organizations vary somewhat. Marginal units
pay the
The wage minimum
policies necessaryorganizations
of different to attract the required number and
vary somewhat. kind ofunits
Marginal labour.
pay the
Often these units pay only the minimum wage rates required by labour
minimum necessary to attract the required number and kind of labour. Often these units
legislation and recruit marginal labour. At the other extreme, some units pay
pay only the minimum wage rates required by labour legislation and recruit marginal
well above the going rates in the labour market.
labour. At the other extreme, some units pay well above the going rates in the labour
market. A sound wage policy is to adopt a job evaluation programme in
order to establish fair differentials in wages based upon differences in job
contents. Besides, the basic factors provided by a job description and job
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232 Material evaluation, those that are usually taken into consideration for wage and salary
administration are as follows:
• The organization’s ability to pay
• Supply and demand of labour
• The prevailing market rate
• The cost of living
• Living wage
• Productivity
• Trade union’s bargaining power
• Job requirements

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 • Managerial attitudes Wage and Salary
Administration
• Psychological and sociological factors
Principles of Wage and Salary Administration
NOTES
The commonly suggested principles governing fixation of wage and salary
are:
• There should be a definite plan to ensure that differences in pay for
jobs are based upon variations in job requirements, such as skill, effort,
responsibility of job or working conditions, and mental and physical
requirements.
• The general level of wages and salaries should be reasonably in tune
with that prevailing in the labour market. The labour market criterion
is most commonly used.
• The plan should carefully distinguish between jobs and employees.
A job carries a certain wage rate, and a person is assigned to fill it at
that rate. Exceptions sometimes occur in very high-level jobs in which
the job-holder may make the offer large or small, depending upon his
ability and contributions.
• Equal pay for equal work, i.e., if two jobs have equal difficulty
requirements, the pay should be the same, regardless of who fills them.
• An equitable practice should be adopted for the recognition of individual
differences in ability and contribution. For some units, this may take
the form of rate ranges, with in-grade increases; in others, it may be
a wage incentive plan; in still others, it may take the form of closely
integrated sequences of job promotion.
• There should be a clearly established procedure for hearing and
adjusting wage complaints. This may be integrated with the regular
grievance procedure, if it exists.
• The employees and the trade union, if there is one, should be informed
about the procedure used to establish wage rates. Every employee
should be informed of his own position, and of the wage and salary
structure. Secrecy in wage matters should not be used as a cover-up
for haphazard and unreasonable wage programme.
• The wage should be sufficient to ensure for the worker and his family
a reasonable standard of living. Workers should receive a guaranteed
minimum wage to protect them against conditions beyond their control.
• The wage and salary structure should be flexible so that changing
conditions can be easily met.
• Prompt and correct payments of the dues of the employees must be
ensured and arrears of payment should not accumulate.
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Wage and Salary • For revision of wages, a wage committee should always be preferred
Administration
to the individual judgement, however unbiased, or a manager.
• The wage and salary payments must fulfil a wide variety of human
needs, including the need for self-actualization. It has been recognized
NOTES
that ‘money is the only form of incentive which is wholly negotiable,
appealing to the widest possible range of seekers.... Monetary payments
often act as motivators and satisfiers interdependently of other job
factors.’
8.2.1 Theories of Wages
Different methods of wage payment are prevalent in different industries and
in various countries. There may be payment by time or payment by results,
including payment at piece rates.
Wages are fixed mainly as a result of individual bargaining, collective
bargaining or by public or state regulation. The manner in which wages
are determined has been the subject of several theories of wages. The main
elements in these theories may be summed up as follows:
1. Subsistence Theory
This theory, also known as ‘Iron Law of Wages,’ was propounded by David
Ricardo (1772-1823). This theory (1817) states that ‘the labourers are paid to
enable them to subsist and perpetuate the race without increase or diminution.’
The theory was based on the assumption that if the workers were paid more
than subsistence wage, their numbers would increase as they would procreate
more, and this would bring down the rate of wages. If the wages fall below
the subsistence level, the number of workers would decrease as many would
die of hunger, malnutrition, disease, cold, etc., and many would not marry;
when that happened the wage rates would go up.
2. Wages Fund Theory
This theory was developed by Adam Smith (1723–1790). His basic
assumption was that wages are paid out of a pre-determined fund of wealth
which lays surplus with wealthy persons as a result of savings. This fund
could be utilized for employing labourers for work. If the fund was large,
wages would be high; if it was small, wages would be reduced to subsistence
level. The demand for labour and the wages that could be paid them were
determined by the size of the fund.
3. The Surplus Value Theory of Wages
This theory owes its development to Karl Marx (1849–1883). According to
this theory, the labour was an article of commerce which could be purchased
on payment of ‘subsistence price’. The price of any product was determined
by the labour time needed for producing it. The labourer was not paid in
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proportion to the time spent on work, but much less, and the surplus was Wage and Salary
Administration
utilized for paying other expenses.
4. Residual Claimant Theory
Francis A Walker 1984 propounded this theory. According to him, there are NOTES
four factors of production/business activity, viz., land, labour, capital and
entrepreneurs. Wages represent the amount of value created in the production
which remains after payment has been made for all these factors of production.
In other words, labour is the residual claimant.
5. Marginal Productivity Theory
This theory was developed by Phillips Henry Wicksteed (England) and
John Bates Clark (USA). According to this theory, wages are based upon an
entrepreneur’s estimate of the value that will probably be produced by the last
or marginal worker. In other words, it assumes that wages depend upon the
demand for, and supply of, labour. Consequently, workers are paid what they
are economically worth. The result is that the employer has a larger share in
profit as he does not have to pay the non-marginal workers. As long as each
additional worker contributes more to the total value than the cost in wages,
it pays the employer to continue hiring; where this becomes uneconomic,
the employer may resort to superior technology.
6. The Bargaining Theory of Wages
John Davidson propounded this theory. Under this theory, wages are
determined by the relative bargaining power of workers or trade unions and
of employers. When a trade union is involved, basic wages, fringe benefits,
job differentials and individual differences tend to be determined by the
relative strength of the organization and the trade union.
7. Behavioural Theories
Many behavioural scientists — notably industrial psychologists and
sociologists — like Marsh and Simon, Robert Dubin, Eliot Jacques have
presented their views or wages and salaries, on the basis of research studies
and action programmes conducted by them. Briefly, such theories are:
Employee’s Acceptance of a Wage Level: This type of thinking takes into
consideration the factors which may induce an employee to stay on with a
company. The size and prestige of the company, the power of the union, the
wages and benefits that the employee receives in proportion to the contribution
made by him—all have their impact.
Internal Wage Structure: Social norms, traditions, customs prevalent in the
organization and psychological pressures on the management, the prestige
attached to certain jobs in terms of social status, the need to maintain internal
consistency in wages at the higher levels, the ratio of the maximum and
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Wage and Salary minimum wage differentials, and the norms of span of control and demand
Administration
for specialized labour all affect the internal wage structure of an organization.
Wage, Salaries and Motivators
NOTES Money often is looked upon as a means of fulfilling the most basic needs
of men. Food, clothing, shelter, transportation, insurance, pension plans,
education and other physical maintenance and security factors are made
available through the purchasing power provided by monetary income-wages
and salaries. Merit increases, bonuses based on performance, and other forms
of monetary recognition for achievement are genuine motivators. However,
basic pay, cost of living increases, and other wage increases unrelated to
an individual’s own productivity may typically fall into the maintenance
category.
Compensation Plan
For the higher management, salaries are influenced by the size of a company
in a specific industry, and in part by the contribution of the incumbent
to the process of decision-making. The bigger the firm, the greater is the
compensation paid to the executives. The industries that are more highly
constrained by governmental regulation (banks, life insurance, air transport,
railroads, public utilities) pay relatively less than those that are more free to
carry on their business (private firms).
Straight salaries, bonuses, stock purchase plans and profit-sharing are
used to compensate major executives. Of these, the straight salary is the most
common method. The salary is determined by mutual agreement between
the individual and the employer. The sales affected, the cost of production,
reduction in expenses and the profits made are also taken into account.
Bonuses are also aid to executives at a certain percentage of the profits.
The bonuses may average from 30 per cent to 50 per cent of the basic salary.
These bonuses operate most effectively in increasing motivation when the
following conditions exist:
• The amount paid is closely related to the level of individual
performance.
• The amount paid after taxes represents a clearly noticeable rise
above the base salary level.
• The amount paid is closely related to the level of company
performance.
• The amount paid is tied into the base salary in such a way that the
combined earnings are equitable both in relation to internal and
external standards.

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 • The amount paid is reduced drastically whenever an individual Wage and Salary
Administration
experiences a real and continuing decrease in performance
effectiveness.
• The amount paid is based on an easily understandable system of
NOTES
allocation, and the individual is provided with complete information
on the relationship between bonus and performance.
Moreover, executives are compensated for the various expenses
incurred by them, for taxation takes away a major portion of their salary.
Such payments are in the form of:
• Medical care
• Counsel and accountants to assist in legal, tax and financial problems
• Facilities for entertaining customers and for dining out
• Company recreational area (swimming pool and gymnasium)
• The cost of the education and training of executives, scholarships
for their children, and allowances for business magazines and books
• Free well-furnished accommodation, conveyance and servants
Wage Incentives
The term wage incentives has been used both in the restricted sense of
participation and in the widest sense of financial motivation. It has been
defined differently by different authors. We give here a few of these definitions.
‘It is a term which refers to objectives in the external situation whose
function is to increase or maintain some already initiated activity, either in
duration or in intensity.’ According to Hummel and Nickerson: ‘It refers to all
the plans that provide extra pay for extra performance in addition to regular
wages for a job.’ Florence observes: ‘It refers to increased willingness as
distinguished from capacity.’ Incentives do not create but only aim to increase
the national momentum towards productivity.’
In the words of Scott, ‘it is any formal and announced programme
under which the income of an individual, a small group, a plant workforce
or all the employees of a firm are partially or wholly related to some measure
of productivity output.’
According to the National Commission on Labour, ‘wage incentives
are extra financial motivation. They are designed to stimulate human effort
by rewarding the person, over and above the time-rated remuneration for
improvements in the present or targeted results.’
‘A wage incentive scheme is essentially a managerial device of
increasing a worker’s productivity. Simultaneously, it is a method of sharing
gains in productivity with workers by rewarding them financially for their
increased rate of output.’ According to Sun, this definition is based on the
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Wage and Salary principle that ‘an offer of additional money will motivate workers to work
Administration
harder and more skilfully for a greater part of the working time, which will
result in a stepped-up rate of output.’
We may define a wage incentive as a system of payment under which
NOTES
the amount payable to a person is linked with his output. Such a payment
may also be called payment by results. The term incentive has gradually
acquired a wide connotation and includes all the possible factors, besides
economic gains, which can possibly motivate human beings towards better
and greater performance.
Objectives of Wage Incentive Plans
Wage incentive plans aim at the fulfilment of one or more of the following
objectives:
• To improve the profit of a firm through a reduction in the unit costs of
labour and materials or both.
• To avoid or minimize additional capital investment for the expansion
of production capacity.
• To increase a worker’s earnings without dragging the firm in a higher
wage rate structure regardless of productivity.
• To use wage incentives as a useful tool for securing a better utilization
of manpower, better production scheduling and performance control,
and a more effective personnel policy.
Merits of Wage Incentive Plans
Such plans are regarded as beneficial to both employers and workers. They
are accepted as a sound technique for the achievement of greater production
on the grounds that workers would work at their best if they were offered
monetary rewards for good performance. For employers the need for a
vigorous supervision is reduced, and consequently there is a cut in the
expenditure on supervision.
• When well-designed and properly applied, payment by results may
generally be relied upon to yield increased output, lower the cost of
production and bring a higher income to the workers.
• A works study associated with payment by results is a direct stimulus
to workers to improve the organization of work and to eliminate lost
time and other waste.
• Labour and total costs per unit of output can be estimated more
accurately in advance.
• Less direct supervision is needed to keep output up to a reasonable
level.

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 • The conflicting interests of employers and employees are unified. Wage and Salary
Administration
Increased efficiency and smooth working can therefore be promoted
and sustained.
Demerits of Wage Incentive Plans NOTES
• Quality tends to deteriorate unless there is a stricter system of checking
and inspection.
• Payment by results may lead to opposition or restriction on output
when new machines and methods are proposed or introduced. This is
because of the fear that the job may be restudied, and earnings reduced.
• When paid by result, workers tend to regard their highest earnings as
norms and, therefore, press for a considerable higher minimum wage.
• The amount and cost of clerical work increases.
• There is a danger of disregarding safety regulations and thereby
increasing the rate of accidents.
• Some workers tend to overwork and thus undermine their health.
• Jealousies may arise among workers because some are able to earn more
than others or because fast workers are dissatisfied with the slower or
older workers in the group.
• It is difficult to set piece or bonus rates accurately. If they are too
low, workers may be under pressure to work too hard and become
dissatisfied; and if too high, they may slacker their efforts to avoid a
revision of rates.
A successful wage incentives plan should consist of the following key
points:
• The management should recognize that the effectiveness of an incentive
depends on the total situation, which includes worker-management
confidence, relations with the trade union, the quality of communication
and supervision and the traditions in an industry.
• The management should not introduce an incentive system until it has
taken action to ensure full understanding of what is involved. This may
call for procedures for the participation of employees and negotiations
with the trade union.
• The management should avoid any action that may be interpreted as
unfair. There must be proper machinery for handling grievances. The
management should avoid actions that resemble ‘rate cutting’ because
of the need to change methods and rates from time to time.
• It is essential that the management pay in proportion to output once
this output rises above the required amount of guaranteed pay.

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Wage and Salary • The management should train supervisors all the way down the line so
Administration
that foremen and department managers are able to deal with problems
within their own departments.
• Great care should be taken in setting up standards to avoid rates that
NOTES
are too loose or too tight.
The following are the chief incentive plans:
• Halsey Premium Plan
• Halsey-Weir Premium Plan
• Rowan Premium Plan
• 100 per cent Premium Plan
• Bedeaux Point Plan
• Taylor’s Differential Piece Rate Plan
• Merric’s Multiple Piece Rate Plan
• Gnatt Task and Bonus Plan
• Emerson Efficieny Plan
• Co-partnership System
• Accelerating Premium Systems
• Profit Sharing Schemes

Check Your Progress

1. What is the basic purpose of wage and salary administration?
2. What is a sound wage policy?
3. State the subsistence theory.
4. Who developed wage fund theory?

8.3 DEVELOPING WAGE AND SALARY

STRUCTURE

In this section, you will learn about the factors which are involved in
developing wage and salary structure.
Essentials of Sound Wage Plan
• Fair and Adequate Compensation: The wage plan must recognize
the principle of “equal pay for equal work”. There should be proper
wage differentials based on job evaluation, experience, skill etc.

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 • Simplicity: The wage plan should be simple so that it is easily Wage and Salary
Administration
understandable to average employees.
• Incentive Wage: Wherever desirable and practical, one should
introduce elements of wage incentives. Incentive wages through NOTES
productivity bonus or premium can facilitate higher rate of economic
growth.
• Minimum Guaranteed Earnings: There must be established a base
wage rate. This will give security of income to incentive workers.
• Additional Payments and Allowances: The wage plan should also
establish supplementary compensation like overtime wages, paid
vacations etc.
• Equitable to All: Wage plan must achieve the living wage for labour
and must also be within the capacity of industry to pay the wages set
by the plan.
• Easy Collective Bargaining: The wage plan should simplify collective
bargaining process between the management and labour union.
Advantages of a Sound Wage Plan
• No chance for favoritism.
• Reduction of inequalities.
• It leads to increase in labour efficiency, productivity, morale and
motivation.
• Grievances over wage inequalities are reduced to minimum.
• Management can systematically plan for and control labour costs.
• Adequate compensation to attract qualified and satisfied labour.
Principles Governing the Fixation of Wages
Wages must fulfill a wide variety of human needs. It has been accepted that
money is the only form of incentive which is wholly negotiable. The generally
accepted principles governing the fixation of wages are:
• Job Requirements: Wages should be based on the variations in
job requirements such as skill, effort, responsibility, labour market
conditions and mental and physical requirements.
• Criterion: The level of wages paid should be in line with the prevailing
rate in the labour market.
• Equal Pay for Equal Work: If two jobs have the same requirements
and similar responsibilities, the pay should be the same.
• Reasonable Standard of Living: Workers should receive a guaranteed
minimum wage to assure them of a reasonable standard of living.
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Wage and Salary • Flexible Wage Structure: The wage structure should be flexible so
Administration
that changing conditions can be easily met.
• Distinguish between Jobs and Employees: A job should carry a certain
NOTES wage rate and a person should be assigned to fill it at that rate.
• Avoid Secrecy in Wage Matters: Every employee should be informed
about the procedure used to establish wage rates. If there is a trade
union, it should also be kept informed. Secrecy in wage matters should
be avoided.
• Appointment of Wage Committee: For revision of wages, a wage
committee should be appointed, as individual judgment could be biased.
Requisites of a Sound Primary Compensation Structure
There are 3 requisites of a sound primary compensation structure. They are:
• Internal Equity
• External Competitiveness
• Performance-based payment
Let’s discuss each of these factors in detail in this section.
• Internal Equity
Internal equity means that there should be a proper relationship between the
wages for the various positions within the organization. Job evaluation is the
corner-stone of a formal wage and salary programme.
Job Evaluation and Merit Rating
Job Evaluation: Job evaluation or job rating is a systematic procedure for
measuring the basis of their common factors such as skill, training, effort,
responsibility and job conditions. The relative job values are thus converted
into definite wage rates by assigning the money rate of pay to each job
according to a definite system on scale.
• External Competitiveness
Once the internal equity has been established through job evaluation, the next
step is to make a comparison with other firms in the industry. To achieve
external alignment, the management must first know the average rates of
wages for the jobs. Here, it should be noted that it is not always easy to
compare the wage rates of two firms because of some significant difficulties.
They are:
(i) The content of the jobs that have the same title may differ considerably.
(ii) The wage payment methods may differ.

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 (iii) Employees with the same jobs may have different degrees of regularity Wage and Salary
Administration
of employment, so that even if wage rates are identical, annual earnings
are not.
(iv) The costs of living in different geographic locations may be different.
NOTES
Though it is difficult to make a comparison, still, the organization
should make a comparison. It is only then that they can fix their wage level
at the average rate prevailing in the industry or they may decide on a higher
or lower wage level for itself.
• Performance based Payment
Finally, the organization has to decide whether all individuals in jobs of the
same level should be paid the same pay or not. There are four approaches to
determine the individual pay:
(i) Single Rates: When employee performance is almost similar, single
rates are paid to employees on jobs e.g., clerks in office jobs.
(ii) The Informal Approach: Under this method, individual pay decisions
are made on an informal basis without any guides or controls.
(iii) The Automatic Approach: Under this method, both the amount of
the pay increase and the period of review are usually predetermined.
Individual merit has no consideration.
(iv) Merit Approach: Under this method, individual performance and
output are important basis for compensating employees. Merit rating
system assumes that performance can be observed with reasonable
accuracy.

Check Your Progress

5. List the advantages of a sound wage plan.
6. What is the automatic approach of performance based payment?

8.4 ANSWERS TO CHECK YOUR PROGRESS

QUESTIONS

1. The basic purpose of wage and salary administration is to establish

and maintain an equitable wage and salary structure.
2. A sound wage policy is to adopt a job evaluation programme in order
to establish fair differentials in wages based upon differences in job
contents.
3. The subsistence theory (1817) states that ‘the labourers are paid to
enable them to subsist and perpetuate the race without increase or
diminution.’
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Material 117
Wage and Salary 4. This theory was developed by Adam Smith (1723–1790).
Administration
5. The Advantages of a Sound Wage Plan include:
• No chance for favoritism.
NOTES • Reduction of inequalities.
• It leads to increase in labour efficiency, productivity, morale and
motivation.
• Grievances over wage inequalities are reduced to minimum.
• Management can systematically plan for and control labour costs.
• Adequate compensation to attract qualified and satisfied labour.
6. There are 3 requisites of a sound primary compensation structure. They
are:
• Internal Equity
• External Competitiveness
• Performance-based payment

8.5 SUMMARY

• The basic purpose of wage and salary administration is to establish and

maintain an equitable wage and salary structure.
• Its secondary objective is the establishment and maintenance of an
equitable labour-cost structure, i.e., an optimal balancing of conflicting
personnel interests so that the satisfaction of employees and employers
is maximized, and conflicts minimized.
• A sound wage policy is to adopt a job evaluation programme in order
to establish fair differentials in wages based upon differences in job
contents.
• Wages are fixed mainly as a result of individual bargaining, collective
bargaining or by public or state regulation.
• Subsistence theory, also known as ‘Iron Law of Wages,’ was propounded
by David Ricardo (1772-1823).
• This theory (1817) states that ‘the labourers are paid to enable them to
subsist and perpetuate the race without increase or diminution.’
• The theory was based on the assumption that if the workers were paid
more than subsistence wage, their numbers would increase as they
would procreate more, and this would bring down the rate of wages.
• Wages fund theory was developed by Adam Smith (1723–1790).

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 • His basic assumption was that wages are paid out of a pre-determined Wage and Salary
Administration
fund of wealth which lays surplus with wealthy persons as a result of
savings.
• For the higher management, salaries are influenced by the size of a
NOTES
company in a specific industry, and in part by the contribution of the
incumbent to the process of decision-making.
• The salary is determined by mutual agreement between the individual
and the employer.
• Wage incentives: ‘It is a term which refers to objectives in the external
situation whose function is to increase or maintain some already
initiated activity, either in duration or in intensity.’
• We may define a wage incentive as a system of payment under which the
amount payable to a person is linked with his output. Such a payment
may also be called payment by results.
• Wage Incentive Plans are regarded as beneficial to both employers and
workers.
• They are accepted as a sound technique for the achievement of greater
production on the grounds that workers would work at their best if they
were offered monetary rewards for good performance.
• There are 3 requisites of a sound primary compensation structure. They
are:
o Internal Equity
o External Competitiveness
o Performance-based payment
• Essentials of Sound Wage Plan include: Fair and Adequate
Compensation, Simplicity, Incentive Wage, Minimum Guaranteed
Earnings, Additional Payments and Allowances, Equitable to All and
Easy Collective Bargaining.

8.6 KEY WORDS

• Wages: It refers to the fixed regular payment earned for work or

services, typically paid on a daily or weekly basis.
• Survey: It means to ask (many people) a question or a series of
questions in order to gather information about what most people do
or think about something.
• Union: It is a society or association formed by people with a common
interest or purpose.

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Wage and Salary
Administration 8.7 SELF ASSESSMENT QUESTIONS AND
EXERCISES
NOTES Short Answer Questions
1. Briefly describe the nature and purpose of wage and salary
administration.
2. Explain the wage determination process.
3. What factors influence the wage and salary structure and administration?
4. What are the commonly suggested principles governing fixation of
wage and salary?
Long Answer Questions
1. Give a detailed explanation of the main elements in various theories
of wages. Explain each theory in detail.
2. Discuss compensation plan.
3. What are wage incentives? Explain its objectives and merits and
demerits in detail.
4. Describe the factors and principles used in developing wage and salary
structure.

8.8 FURTHER READINGS

Venkataraman, C.S. and B. K. Srivastava. 1991. Personnel Management and

Human Resources. Tata McGraw Hill.
Yoder, Dale and Paul D Standohar. 1990. Personnel Management and
Industrial Relations. Sterling Publications.
Well, Ian Beard and Len Holden. Human Resource Management - A
Contemporary Perspective. Macmillan.
Aquinas, P. G. 2005. Human Resources Management – Principles and
Practice. New Delhi: Vikas Publishing House Pvt Ltd.
Decenco, David A. and Stephen P. Robbins. 1989. Personnel/HRM, 3rd
Edition. New Delhi: Prentice-Hall of India.

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 Job Evaluation and
BLOCK - III Working Conditions

ORGANIZATIONAL BEHAVIOUR AND ABILITY

NOTES
UNIT 9 JOB EVALUATION AND
WORKING CONDITIONS
Structure
9.0 Introduction
9.1 Objectives
9.2 Overview of Job Evaluation
9.3 Safety, Welfare and Employee Health
9.4 Answers to Check Your Progress Questions
9.5 Summary
9.6 Key Words
9.7 Self Assessment Questions and Exercises
9.8 Further Readings

9.0 INTRODUCTION

In every organization, there are many different works and job descriptions. It
is important for the organization to ascertain the work of each job to determine
wage structure. This is dependent on the setting a job hierarchy. International
Labour Office (ILO) defines job evaluation as ‘an attempt to determine and
compare the demands which the normal performance of a particular job makes
on normal workers, without taking into account the individual abilities or
performance of the workers concerned.’ Job evaluation determines a sort of
ranking of different jobs in an organization. In this unit, you will learn the
merits of job evaluation.
Working condition is a very important factor which affects the employee
wellbeing, the employee turnover and overall productivity. In this unit, you
will learn about the important provisions of related to the safety, welfare and
health services with regards to working conditions of the employees.

9.1 OBJECTIVES

After going through this unit, you will be able to:

• Discuss the concept of job evaluation
• Describe the need and principles of labour welfare
• Explain the legal provisions for labour safety, welfare and health
services
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Job Evaluation and
Working Conditions 9.2 OVERVIEW OF JOB EVALUATION

Job evaluation is a very important part of the process of developing wage

NOTES and salary structure.
Merits of Job Evaluation
(i) Management will have better control over labour costs since pay for
each job is consistent with its value to the company.
(ii) Workers doing a similar type of work will receive similar pay. This
will also control labour cost and can improve employee morale.
(iii) Since job evaluation shows the relative worth of jobs, it provides a
basis for establishing a sequence for promotion through merit rating.
(iv) It provides a means for justifying different rates of pay for different
jobs.
(v) It provides a basis for setting rates of pay on new jobs.
(vi) It can provide for incentive wages.
According to Knowles and Thomson, job-evaluation is useful in eliminating
the following discrepancies of a wage payment system:
(i) Payment of high wages and salaries to persons who hold jobs and
positions not requiring greater skill, effort and responsibility;
(ii) Paying beginners less than they are entitled to receive in terms of what
is required of them;
(iii) Giving a raise to persons whose performance does not justify the raise;
(iv) Deciding rates of pay on the basis of seniority rather than ability;
(v) Payment of widely varied wages for the same or closely related jobs
and positions; and
(vi) Payment of unequal wages and salaries on the basis of race, sex, religion
or political differences.
Role Analysis is the process whereby information related to the
requirements of various roles is collected, analysed and recorded to form the
basis of a role profile. Role analysis focuses on what is expected of the role
holders, that is, what they are expected to know and how they are expected
to perform. As the name suggests, role analysis has the concept of a role at
its core. Role here, refers to the part people play in fulfilling the objectives
of their work through efficient operation. It also includes the manner in
which people are able to perform with sufficient flexibility in keeping with
the structure, goals and processes of the organization.
In case of a job, no matter who the job holder is, his/her responsibilities
and duties are fixed. Systematic analysis of roles and jobs is done to find
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out their relative size. This is referred to as job evaluation. The terms job Job Evaluation and
Working Conditions
evaluation and role evaluation are often used interchangeably.
Role analysis can be said to be a branch of job analysis and is generally
done through interviews along with some competency analysis technique.
NOTES
Role analysis focusses on the identification of the KRA or key result areas.
It helps define the behavioural and occupational competencies that job
holders must possess and their importance in smooth operations. It analyses
the relationship of the job holders with their team members, team leaders,
clients, suppliers and all those they are required to deal with outside the
organization. Role analysis helps to define the manner in which job holders
fit into the structure of the organization, the initiatives they are expected to
take and the manner in which they set priorities.
Importance of role analysis in an organization
Role analysis and job evaluation are aimed at establishing the relative value
or size of jobs or roles. It provides the relevant information for designing
and maintaining equitable pay structures and grades. Role analysis helps to
place roles and jobs within a grade structure in the most objective manner
possible. It also facilitates consistent decisions regarding the grading of jobs
or roles to ensure that the organization fulfills the ethical requirements with
regard to pay. Role analysis helps organizations avoid discrimination on the
basis of sex, religion, disability or race.
Advantages of role analysis
• It allows judgements about relative size of job and gradings to be made
objectively.
• Judgements can be made on the basis of facts without relying on
opinions.
• It allows evaluation of the job and not the person.
• Evaluations ignore the job holder’s personal characteristics.
• Evaluations do not directly take into consideration the volume of work.
• Role analysis does not take into account market rates.
Management in various organizations, work at different levels along
with their subordinates to identify goals and set objectives that are consistent
with the goals of the organization. They work hand-in-hand to achieve these
organizational goals.
Measurement of performance is done against objectives and deviations
are discussed. The existing objectives are reviewed by superiors as well
as subordinates and new objectives are defined following discussions on
deviations. Management by objectives or MBO is a self-evaluation technique
wherein the process of setting goals is extremely participative.
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Job Evaluation and MBO is essentially a method of self-evaluation. Goal-setting is a
Working Conditions
highly participative process with self-established role prescriptions. Since
job analysis does not cover all the activities of tasks performed by the seniors
and subordinates under MBO, here, role analysis is preferred to cover the
NOTES task performed under MBO programmes by the employees.
In view of the criticism against job analysis, Edwin B Flippo was of
the opinion that role analysis should include the different roles played by
an employee. A role would comprise the job holder’s pattern of expected
behaviour, interactions as well as sentiments. The concept of role goes
beyond that of a job. Usually, a job holder is expected to play different roles
in the process of discharging his duties. A manager, for instance, is expected
to also act as an individual who protects the interests of subordinates. The
subordinates, in the same way, are expected to work towards maximizing
sales/profits/ productivity. At times, employees are expected to play various
roles, informally. Such roles are not included in job analysis.
In a boundary spanning job, the incumbent is assigned the task of
dealing with an element of the outer environment. Employees holding
boundary spanning jobs, such as personnel managers, are required to interact
with trade union leaders, government officers, management associations,
etc. Therefore, they are required to possess verbal skills, a certain degree of
sensitivity to the values of external individuals and employees, counselling
skills and interpersonal relations. The personnel manager, therefore, plays
many different roles—roles that conflict with one another, roles that are in
addition to the personnel manager’s duties as outlined in the job description.
Therefore, in modern organizations, the job designers try to take into
account the concept of role analysis while designing jobs.
MBO with regards to HR forms the basis for performance appraisal
and at the end of the specified period performance evaluation. The superior in
setting up the objectives tries to include all possible roles of the incumbent.
MBO is a broader term for an organization and even overall strategy for short
term and long term formulated by the directors also covered by this.

Check Your Progress

1. What does the term ‘role’ refer to in role analysis?
2. Mention the relationship that are analysed under role analysis.

9.3 SAFETY, WELFARE AND EMPLOYEE

HEALTH

Labour welfare implies providing better work conditions (for e.g., proper
lighting, cleanliness, low noise) and reasonable ameni­ties (for e.g., recreation,
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housing, education etc). The need for providing such services and facilities Job Evaluation and
Working Conditions
arises from the social responsibility of industries, a desire for upholding
democratic values and a concern for employees.
The Oxford dictionary defines labour welfare as “efforts to make life
NOTES
worth living for workmen”. The report of the committee on labour welfare set
up by the Government of India in 1969 refers to welfare as a broad concept,
a condition of well-being. It suggests the measures which promote “the
physical, psychologi­cal and general well-being of the working population”.
The ILO defines labour welfare as “such services, facilities and
amenities as adequate canteens, rest and recreation facili­ties, arrangements for
travel to and from work, and for the accommodation of workers employed at
a distance from their houses, and such other services, amenities and facilities
as contribute to improve the conditions under which workers are employed”.
The Encyclopaedia of Social Sciences (vol XV, 1935) defines labour
welfare as “The voluntary efforts of the employers to establish within the
existing industrial system, working and sometimes living and cultural
conditions of the employees beyond that which is required by law, the custom
of the industry and the conditions of the market”.
Labour welfare has its origin either in some statute formed by the state
or in some local custom or in a collective agreement or in the employer’s own
initiative. Today, welfare has been generally accepted by the employers. Each
employer depending on his priorities, gives varying degrees of importance to
labour welfare. The state only intervenes to “widen the area of applicability”.
It is now accepted that labour welfare is a social right.
Need for Labour Welfare
1. From the point of view of workers: Welfare measures must eliminate
risk and insecurity. The organization besides provid­ing fair wages must
also provide facilities like medical aid, crèches, subsidised food and
transport required by workers.
2. From employer’s point of view: Employers provide amenities to
discharge their social responsibility, raise the employee’s morale, use
the work force more effectively and reduce turnover and absenteeism.
Welfare helps build a positive image of the organization and makes it
easier for them to attract and hire competent personnel.
3. From union’s point of view: Trade union’s role in labour welfare
stems from workers’ need for welfare services. Unions feel that
welfare services ought to be provided either by the government or the
employers. However, much depends on the initi­ative of the unions,
their bargaining strength and the priority given by them to the rights
of the workers.

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Job Evaluation and Principles of Labour Welfare
Working Conditions
The following principles should be borne in mind while setting up a labour
welfare service:
NOTES 1. First determine the employees’ real needs. The welfare serv­ice should
satisfy the real needs of the workers.
2. Due to differences in sex, age, income levels of employees, a mix
of benefits is suggested so that the choice is left to each individual
employee.
3. The cost of the service should be calculated and its financing established
on a sound basis.
Types of Labour Welfare
The ILO classifies labour welfare serv­ices under two heads:
1. Intra-Mural
Intra-mural services are those which are provided within the factory. They
include
(a) Drinking water
(b) Toilets
(c) Crèche
(d) Washing facilities
(e) Occupational safety
(f) Uniforms and protective clothing
(g) Shift allowance
(h) Canteen
2. Extra-Mural
Extra-mural services are those which are provided outside the factory. They
include:
(a) Health and medical facilities
(b) Education facilities
(c) Recreation facilities
(d) Leave travel facilities
(e) Transport to and from place of work
(f) Social security like gratuity, pension and PF
(g) Maternity benefits
(h) Benevolent fund
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Classification of Labour Welfare Job Evaluation and
Working Conditions
Labour welfare measures has its origin either in some statute or in the
employers, own initiative or by collective agreement. Thus, labour welfare
can be classified into two categories: NOTES
1. Statutory labour welfare
2. Voluntary labour welfare
1. Statutory Labour Welfare
The Government of India passed several acts to ensure a fair deal to employees
in various as­pects of their job. Statutory welfare comprises those provisions
whose observance is binding on employers by law. These relate to certain
essential working conditions and standards of health. The most important of
the welfare acts is the Factories Act.
The Factories Act 1948: The Factories Act 1948, was conceived
in 1881 when a legislation was enacted to protect children and to provide
health and safety measures. In 1934, following the recommendations of the
Royal Commission of Labour, the act was amended. A more comprehensive
legislation to regulate working conditions replaced the act in 1948.
The Factories Act 1948 came into force on the 1st day of April
1949. Its objectives is to regulate the conditions of work in manufacturing
establishments which come within the definition of the term ‘factory’ as
used in the Act. The Act extends to the whole of India including the state of
Jammu and Kashmir.
According to sec 2 (m) ‘factory’ means any premises including the
precincts thereof-
(i) whereon 10 or more workers are working or were working on
any day of the preceding 12 months and in any part of which a
manu­facturing process is being carried on with the aid of power,
or is ordinarily so carried on or
(ii) whereon 20 or more workers are working or were working on
any day of the preceding 12 months and in any part of which a
manufacturing process is being carried on without the aid of power
or is ordinarily so carried on.
Worker (sec 2 (l)): A worker means a person employed, directly or by or
through any agency (including a contractor) with or without the knowledge
of the principal employer. He may be employed for or without remuneration
but he must be employed in a manufacturing process.

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Job Evaluation and General Provisions
Working Conditions
Working Hours: No adult worker shall be required or allowed to work in a
factory for more than 48 hours in any week (sec 51). For female workers,
NOTES the working hours are to be only between 6 A.M. to 7 P.M.
Inspectors (sec 8): The State Government may appoint any person to be Chief
Inspector to exercise the powers conferred on him by the Factories Act. He
shall exercise the powers of an Inspector throughout the State. The manager
may be penalised for not fol­lowing the Factory Act.
Statutory Provisions
Health: The Act provides detailed instructions on cleanli­ness, disposal of
wastage, ventilation, lighting, over-crowding etc. The factors which influence
the general health of the worker in the working environment which tend to
produce ill health have to be controlled. Every employer should protect his
employees against health hazards by
(i) Devoting adequate attention to working conditions.
(ii) Substituting a less toxic substance for the hazardous one.
(iii) Providing protective clothing.
Section 11 to 20 of the Act provide detailed instructions. They are
discussed below.
Sec 11 – Cleanliness: Every factory shall be kept clean and free from
effluvia and dirt. Accumulation of dirt shall be removed daily by some
effective method.
Sec 12 - Disposal of Wastes: Effective arrangements shall be made in
every factory for the treatment of wastes due to the manufacturing process
carried on therein, so as to make them harmless and for their disposal.
Sec 13 – Ventilation and Temperature: Effective and suitable provision
shall be made in every factory for securing and main­taining in every
workroom, adequate ventilation by the circula­tion of fresh air and such a
temperature as will secure to work­ers therein reasonable conditions of comfort
and prevent injury to health.
Sec 14 – Dust and Fume: Where dust or fume or impurity of such
a nature as is likely to be injurious or offensive to the workers is given
off as a result of the manufacturing process being carried on in a factory,
effective measures shall be taken in the factory for prevention of inhalation
or accumulation of dust and fumes in workrooms.
Sec 15 – Artificial Humidification: In respect of all factories in which
the humidity of the air is artificially increased, the State Government may
make rules prescribing standards of humidification.

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 Sec 16 – Overcrowding: There shall not be overcrowding in any room Job Evaluation and
Working Conditions
of the factory so as to be injurious to the health of the workers employed
therein. There shall be at least 14.2 cubic metres of space for every worker.
Sec 17 – Lighting: In every part of a factory where workers are working,
NOTES
there shall be provided and maintained sufficient and suitable lighting, natural
or artificial or both.
Sec 18 – Drinking Water: In every factory, effective arrange­ments shall
be made to provide and maintain at suitable points conveniently situated for all
workers employed therein as suffi­cient supply of wholesome drinking water.
Sec 19 – Latrines and Urinals: In every factory, separate en­closed
accommodation of latrine and urinals of prescribed types for male and female
workers shall be provided for. Such accommodation shall be conveniently
situated and accessible for workers at all times.
Sec 20 – Spittoons: In every factory, there shall be provided a sufficient
number of spittoons in convenient places and they shall be maintained in a
clean and hygienic condition.
Safety: Prevention of accidents is an objective which requires no expansion.
This is one area in which there is complete identity of employer-employee
interests. The employee does not want to be injured and the employer does
not want to incur the cost of injuring him. The Act provides 20 different
sections on obliga­tory safety measures.
Sections 21 to 41 of the Act provide detailed instructions. They are discussed
below:
Sec 21 – Fencing of Machinery: Every dangerous part of every
machinery shall be securely fenced by safeguards of substantial construction
which shall be constantly maintained and kept in position while the parts of
machinery they are fencing are in motion or in use.
Sec 22 – Work on Machinery in Motion: Where in any factory it becomes
necessary to examine any part of machinery while the machinery is in motion,
such examination shall be made only by a specially trained adult male worker
wearing tight fitting cloth­ing. The clothing shall be supplied by the occupier.
Sec 23 – Employment of Young Persons on Dangerous Machines: No
young person shall be required or allowed to work on any machine unless
(a) He has been fully instructed as to the dangers and the pre­cautions
to be observed.
(b) He has received sufficient training or is under adequate supervision
by an experienced person.
Sec 24 – Striking gear and devices for cutting off power: When a
device, which can inadvertently shift from ‘off’ to ‘on’ position is provided,

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Job Evaluation and arrangements shall be provided for locking the device in safe position. This
Working Conditions
is to prevent accidental starting of the machinery.
Sec 25 – Self-acting Machines: No traversing part of a self-acting
NOTES machine shall be allowed to run on its outward or inward traverse within a
distance of 45 centimetres from any fixed structure which is not part of the
machine.
Sec 26 – Casing of new machinery: All machinery driven by power
and installed in any factory, shall be completely encased unless it is safely
situated, to prevent danger.
Sec 27 – Prohibition of employment of women and children near
cotton-openers.
Sec 28 – Hoists and lifts: In every factory every hoist and lift shall
be of good mechanical construction, sound material and adequate strength.
Sec 29 – Lifting machines, chains, ropes and lifting tackles: In every
factory, cranes and other lifting machines shall be of good construction, sound
material, adequate strength, free from defects and properly maintained.
Sec 30 – Revolving Machinery: In every factory in which the process
of grinding is carried on, there shall be permanently kept near each machine
a notice indicating
(a) Maximum safe working speed
(b) The diameter of the pully.
Sec 31 – Pressure Plant: If in any factory any plant or any machinery
is operated at above the atmospheric pressure, effec­tive measures shall be
taken to ensure that the safe working pressure is not exceeded.
Sec 32 – Floors, stairs and means of access: All floors, steps stairs
passages and gangways shall be of sound construction and properly
maintained.
Sec 33 – Pits, slumps, openings in floors etc: In every factory, pits,
slumps, fixed vessels, tanks, openings in the ground or in the floor shall be
securely covered or securely fenced.
Sec 34 – Excessive weights: No person shall be employed in any factory
to lift, carry or move any load so heavy as to be likely to cause him injury.
Sec 35 – Protection of eyes: Screen or suitable goggles shall be provided
for the protection of persons employed on or in immedi­ate vicinity of any
process which involves any danger or injury to the workers’ eyesight.
Sec 36 – Precautions against dangerous fumes: No person shall be
required or allowed to enter any chamber, tank, vat, pit, flue or other confined
space in any factory in which any gas, fume vapour or dust is likely to be
present to such an extent as to involve risk to persons being overcome thereby,
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unless it is provided with a manhole of adequate size or other effective means Job Evaluation and
Working Conditions
of exit.
Sec 37 – Precautions against explosive or inflammable dust, gas etc:
When in any factory any manufacturing process produces dust, gas fume or
NOTES
vapour which is likely to explode on ignition, all practicable measures shall
be taken to prevent any such explosion.
Sec 38 – Precautions in case of fire: In every factory, all practicable
measures shall be taken to prevent outbreak of fire and its spread both
internally and externally and to provide and maintain safe means of escape.
Sec 39 – Power to require specifications of defective parts or tests of
stability: If it appears to the inspector that any building, machinery or plant
may be dangerous to human life or safety, he may ask the manager to carry
out tests to prove their safety.
Sec 40 – Safety of building and machinery: If any building, machinery
or plant is dangerous to human life or safety, the inspector may prohibit to
use it until it has been properly repaired or altered.
Sec 40 A – Maintenance of building: If any building is in a state of
disrepair, the inspector may ask the manager to specify the measures to be
taken for such repairs.
Sec 40 B – Safety Officers: Wherein 1000 or more workers are employed
and the manufacturing process involves any risk of injury, hazard to health,
safety officers may be appointed.
Welfare: The Act also obligates the organisations to provide certain amenities
like facilities for washing, drying and storing of clothes, first-aid box, canteen,
crèches, welfare officers etc.
Sections 42 to 49 of the Act provide detailed instructions. They are
discussed below:
Sec 42 – Washing facilities: In every factory, adequate and suitable
facilities (separately for male and female workers) should be provided and
maintained for the use of workers.
Sec 43: Facilities for storing and drying clothes
Sec 44 – Facilities for sitting: Suitable arrangements for sit­ting shall
be provided and maintained for all workers who are obliged to work in a
standing position.
Sec 45 – First Aid appliances: At least one first aid box with prescribed
contents for every 150 workers.
Sec 46 – Canteens: If more than 250 workers are ordinarily employed,
a canteen shall be provided and maintained for the use of workers.

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Job Evaluation and Sec 47 – Shelters, rest rooms and lunch rooms:If more than 150 workers
Working Conditions
are ordinarily employed there shall be a provisions for shelters, rest rooms
and a suitable lunch room with provision for drinking water.
Sec 48 – Crèches: If more than 30 women workers are ordinarily
NOTES
employed, a suitable room should be maintained for the use of children of
such women under the age of 6 years.
Sec 49 – Welfare Officer: Welfare officer should be provided in a factory
employing more than 500 workmen.
The Employees’ State Insurance Act, 1948
The Employees’ State Insurance Act was passed in 1948 to make available
various social welfare facilities available to the employees of a company
through one agency. The Employees’ State Insurance Scheme (ESIS) is
a compulsory and causative scheme for the well-being of the employees.
According to this Act, a company should provide medical benefits, such as
medical attendance, treatment, drugs and injections to the insured employees
having net salary less than 6,500 and their family members. This Act is
applicable only to the companies that employ more than 20 employees in
the company.
The ESIS is a breakthrough in the history of social security in India. The
main objective of this scheme is to launch social insurance for the employees
of a company in order to provide them social security during situations, such
as illness, long-term sickness or any other health hazard. According to this
scheme, medical facilities are also provided to the retired insured individuals
and permanently disabled workers and also to their spouses at a minimal
payment of ` 10 per month.
The ESIS Act is monitored by the Employees’ State Insurance
Corporation (ESIC), which is established by Central Government. ESIC
has its own funds, known as ESI fund that provides cash benefits to insured
persons, medical benefits, such as hospitals and dispensaries. The following
are the benefits provided by this act:
• Sickness benefits: This is given to the employees for maximum period
of 91 days. The sickness benefit is the half of the daily average wages of
the employee. For getting the sickness benefit the employee should be
under the medical treatment at a hospital maintained by the company.
Extended sickness benefit is also given to the insured employees who
are suffering from the long-term diseases. In this case, employee can
get sickness benefit for maximum period of 309 days and the payment
given to the employee is 63% of the wages. Sickness benefit is useful
to an employee who is unable to work due to illness. Employee also
gets medical treatment and financial support.

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 • Medical benefit: It is in the form of free medical treatment that an Job Evaluation and
Working Conditions
employee claims in case of illness, maternity and accident. Employee
gets this benefit at ESI hospital or dispensary of the doctor to whom
the worker is getting treatment. The family of the insured worker also
avails this benefit. Workers suffering from critical diseases, such as T.B., NOTES
Cancer, Leprosy and mental diseases are provided special facilities.
• Maternity benefit: It is in the form of cash payment to the insured
women for confinement, miscarriage or illness arising out of pregnancy.
This benefit is calculated at half of average daily wages. If the insured
woman dies during the period of confinement, the nominee gets the
benefit for the whole period.
• Disablement benefit: This is given in case of permanent disablement
of an employee. The benefit is given when an employee is caught in
an industrial accident within the factory. The annual benefits depend
on the nature of disablement. For the temporary disablement full
pay is given to the employee for the period of disablement. For the
permanent disablement the employee is given cash benefit for the life
at a percentage of full rate.
• Dependents’ benefit: It is given to the dependents of the employee of
a dead insured employee. The benefit is given if an employee dies in
an industrial accident. The family of the employee is entitled for cash
benefit under this scheme. The widow will receive pension for her
whole life.
• Funeral benefit: This is given in the form of cash up to maximum of
1,000 to the insured individual for funeral. This benefit is given to the
eldest person or the person who is actually incurring the expenditure
at the time of funeral.
The Employees’ Provident Fund Act, 1952
The Employees’ Provident Fund Act was launched in 1952 that provides
retirement benefits to the employees of a company. Retirement benefits
include provident fund, family pension, and deposit-linked insurance. This
Act is applicable for the companies in India that employ 20 or more than
employees except in Jammu and Kashmir. This Act is not applicable on the
companies that are registered under the Cooperative Societies Act, 1912, or
under any other law related to cooperative societies of less than 50 individuals.
This scheme is applicable to the employees getting the salary of ` 5,000 per
month.
According to this Act, the employees need to contribute 8.33 percent
of his/her basic salary and dearness allowances comprising of cash value of
food allowances and maintaining allowances given to the employees. Now,

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Job Evaluation and the government has increased the rate of employee contribution to 10 per
Working Conditions
cent. The government has introduced various provident fund schemes but the
contributory fund scheme became more popular than others. According to the
contributory provident fund scheme, both employer and employee contribute
NOTES equal portion of the basic salary of the employee for provident fund. The total
contribution of the provident fund is then deposited with the Provident Fund
Commissioner or any trust. The employees get the provident fund after their
retirement. The employees also get 8 to 12 per cent interest on the provident
fund. Under this scheme individual pension and family pension are provided
to the employees of the company.
The government has introduced various schemes under this act. These
are as follows:
• Employees’ Pension Scheme, 1995: It was introduced for the individual
employees of a company in the year 1995. Under this scheme, the
employees are provided 50 per cent of the salary as their pension after
retirement or superannuation after completing 33 years service.
• Death relief fund: It was established by the government in January
1964 in order to provide financial help to the nominees or the successor
member of the family whose salary does not exceeds ` 1,000 per month.
• Gratuity scheme: It was a scheme introduced under the Payment of
Gratuity Act, 1972, meant for factories, mines, oil fields, plantations,
ports, railways, and other companies. This act is applicable for the
employees that obtain salary less than or equal to ` 3,500 per month.
• Employees’ Deposit-Linked Insurance Scheme: It was launched
for the members of Employees’ Provident Fund and the exempted
Provident Funds on 1 August 1976. According to this scheme, after the
expiry of the member of the provident fund, the individual allowed to
obtain the provident fund deposits would be given an extra payment
equal to the average balance in the provident fund account of the
deceased person during last three years. This scheme is applicable only
when the average amount is greater than or equal to 1,000.
• Group life insurance: It is a plan that provides coverage for the risks
on the lives of a number of individuals under one contract. However, the
insurance on each life is independent from the insurance of individuals.
This facility is given to the employees that work with an employer
without evidence of insurability. The following are features of group
life insurance:
o Insurance is provided to the employees without any evidence of
insurability.
o The insurance contract is signed between the insurance company
and the employer. There is no direct interaction of the employee
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 o It is yearly renewable insurance plan. Job Evaluation and
Working Conditions
o If any employee of the company suffers from an injury or death, then
the claim received by the employer from the insurance company is
given to the nominee of the employee.
NOTES
o The premium of the insurance is either paid the employer or by the
employer and the employee both.
The Workmen’s Compensation Act, 1923
The Workmen’s Compensation Act was established by the government in
the year 1923. According to this Act, a company needs to provide a payment
of compensation to its employees and their family on the occurrence of
organizational accidents and some disease leading to the death or any kind
of disablement of the individual. The main objective of this Act is to apply a
commitment on the employers to offer compensation to the employees against
the accidents that occur during the course of employment. The following are
the important features of The Workmen’s Compensation Act:
• This Act provides social security to the employees of a company by
providing them compensation against various risks.
• A company is liable to pay the compensation only if the accident
or the injury to the employee has been caused during the course of
employment.
• This Act also provided overtime pay and the value of concessions or
benefits in the form of food, clothing and accommodation.
• The amount of compensation that a company needs to pay to an
employee depends upon the type of injury or disablement suffered by
the employee.
• The minimum amount of compensation that must be paid to an
employee on the occurrence of permanent disablement or death is
` 60,000 and ` 50,000 respectively. However, the maximum amount
of compensation that must be paid to an employee on the occurrence
of permanent disablement or death is ` 2.28 lakh and ` 2.74 lakh
respectively.
This Act is applicable for all the employees that work in railways,
factories, mines and other companies. It also applies to all the companies that
are involved in an industry specified in Schedule II of the Act.
The Maternity Benefit Act, 1961
The Maternity Benefit Act was launched in 1961. This is a compensation
given against the loss of salary to a woman who discontinues to work during
the period of pregnancy. The following are the main objectives of this Act:

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Job Evaluation and • Enable the female employee of a company to withdraw her services
Working Conditions
during the 6 weeks before her expected confinement date
• Allow the female employee to discontinue her services after 6 weeks
of confinement
NOTES
• Provide free medical treatment to a female employee during her
pregnancy
• Provide an expected female employee the facility of public funds along
with cash benefit so that she can take good care of herself and her child
• Disallow the dismissal of a female employee during her pregnancy
period
• Allow the female ladies to feed her baby twice a day during the working
hours
The Industrial Disputes Act, 1947
The Industrial Disputes Act was passed in the year 1947. This Act is related
to the termination and retrenchment of the employees by a company. This
act includes Sections 25-A to 25-S related to employee termination. Among
these sections, Section 25-C to 25-E are not applicable for the companies
that employ less 50 individuals in the company. Sec 25-C states that when
any permanent employee who has worked for more than or equal to one
year is being terminated by the company, the company is liable to provide a
compensation equal to the 50 per cent of her/his basic salary. Sec 25-C also
states that the company is not responsible to give any compensation to an
employee, if he or she refuses to accept an alternative job equivalent to his/
her previous job. A company is also not liable to give compensation if he or
she does not reach the workplace at the scheduled time during the normal
working hours at least once a day.
Sec 25-F states that a company cannot terminate the services of an
employee without giving a written notice of one month provided the employee
has worked for at least one year with the company. The notice must contain the
termination information, such reason for termination and wages for the period
of notice. Similarly, according to Sec 25-FF, Sec 25-FFA and Sec 25-FFF, a
company is liable to give compensation in case of transfer of undertaking, 60
days notice to the employees before closing the company and compensation
to the employees if the employer is closing down the company, respectively.
Section 25-G and Section 25-H handles the processes of retrenchment
and re-employment for retrenched employee. Section 25-M states that a
company cannot terminate a permanent employee without the permission
of the government or such authority as may be specified by the government
in the Official Gazette.
Section 25-N states that a company cannot terminate the services of
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the employee has worked for at least one year with the company. The notice Job Evaluation and
Working Conditions
must contain the termination information, such reason for termination and
wages for the period of notice. Section 25-Q and Section 25-R deals with the
notice of at least 90 days by a company before closing a company, special
provisions relating to restarting of a company closed down before operation of NOTES
the Industrial Disputes Act, 1976, penalty for termination, and retrenchment
without any prior notification and penalty of closure.
Industrial accident
The life of an industrial worker is a hazardous one. An industrial accident
may be defined as ‘an occurrence which interferes with the orderly progress
of work in an industrial establishment.’ According to the Factories Act,
industrial accident is ‘an occurrence in an industrial establishment causing
bodily injury to a person which makes him unfit to resume his duties in the
next 48 hours.’
Causes of accidents: Accidents are usually the result of a combination
of factors. According to safety experts there are three basic causes. These are:
1. Unsafe conditions: Also known as ‘technical causes.’ They arise when
there are improper or inadequate safety guards on machines, when
mechanical or construction designs are defective and unsafe; or when
there is an absence of proper maintenance and supervision of these
devices.
2. Unsafe acts: These acts may be the result of lack on the part of the
employee or certain bodily defects or wrong attitudes on the part of
the employee.
3. Other causes: These refer to unsafe situational and climate conditions
and variations – such as bad working conditions, rough and slippery
floors, excessive glare, etc.
Accident prevention
According to the National Safety Council, USA, accident prevention depends
on three E’s.
• Engineering – the job should be engineered for safety.
• Employees – employees should be educated in safe procedure, and
• Enforcing safety – safety rules should be properly enforced.
Accident prevention can be achieved through two basic activities:
1. Reducing unsafe conditions, i.e., removing and reducing physical
hazards
2. Reducing unsafe acts. This can be implemented through proper selection
and placement of employees, providing training to new employees in
safety practices, and through persuasion and propaganda
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Job Evaluation and Occupational diseases
Working Conditions
Occupational diseases are the result of physical conditions and the presence
of industrial poisonous and non-poisonous dust in the atmosphere. They
NOTES usually develop over an extended period of time. They are slow and generally
cumulative in their effect. The diseases are the result of constant exposure
to the influence of toxic substances of micro-organisms, of air-borne
contaminants and stress-producing elements.
Provisions under the Factories Act, 1948
The Factories Act, 1948, provides for health safety and welfare. We explain
the relevant sections pertaining to health and safety of workers:
Health
The Act provides detailed instructions on cleanliness, disposal of wastage,
ventilation, lighting, over-crowding and so on. The factors that influence
the general health of the worker is the working environment that tends to
produce ill health. Every employer should protect his employees against
health hazards by:
(i) Devoting adequate attention to working conditions.
(ii) Substituting a less toxic substance for the hazardous one.
(iii) Providing protective clothing.
Sections 11 to 20 of the Factories Act provide detailed instructions.

Check Your Progress

3. State the need of labour welfare from the employer’s point of view.
4. Name the act which has been established to apply a commitment
on the employers to offer compensation to the employees against
accidents that occur during the course of employment.
5. List the types of retirement benefits included under the Employees’
Provident Fund Act.

9.4 ANSWERS TO CHECK YOUR PROGRESS

QUESTIONS

1. The term ‘role’ in role analysis refers to the part people play in fulfilling
the objectives of their work through efficient operation. It also includes
the manner in which people are able to perform with sufficient flexibility
in keeping with the structure, goals and processes of the organization.

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 2. Role analysis analyses the relationship of job holders with their team Job Evaluation and
Working Conditions
members, team leaders, clients, suppliers and all those they are required
to deal with outside the organization.
3. Employers provide amenities to discharge their social responsibility,
NOTES
raise the employee’s morale, use the work force more effectively and
reduce turnover and absenteeism. Welfare helps build a positive image
of the organization and makes it easier for them to attract and hire
competent personnel.
4. The Workmen’s Compensation Act is the Act which has been established
with the objective for apply a commitment on the employers to offer
compensation to the employees against accidents that occur during the
course of employment.
5. The types of retirement benefits included under the Employees’
Provident Fund Act are provident fund, family pension and deposit-
linked insurance.

9.5 SUMMARY

• Role analysis is the process whereby information related to the

requirements of various roles is collected, analysed and recorded to
form the basis of a role profile.
• Role here, refers to the part people play in fulfilling the objectives of
their work through efficient operation.
• Role analysis focusses on the identification of the KRA or key result
areas.
• Role analysis and job evaluation are aimed at establishing the relative
value or size of jobs or roles.
• Labour welfare implies providing better work conditions (for e.g.,
proper lighting, cleanliness, low noise) and reasonable amenities (for
e.g., recreation, housing, education etc). The need for providing such
services and facilities arises from the social responsibility of industries,
a desire for upholding democratic values and a concern for employees.
• Labour welfare can be classified into two categories:
1. Statutory labour welfare
2. Voluntary labour welfare
• The Factories Act, 1948 was conceived in 1881 when a legislation was
enacted to protect children and to provide health and safety measures.
In 1934, following the recommendations of the Royal Commission of
Labour, the act was amended. A more comprehensive legislation to
regulate working conditions replaced the act in 1948.
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Job Evaluation and • The Employees’ Provident Fund Act was launched in 1952 that provides
Working Conditions
retirement benefits to the employees of a company. Retirement benefits
include provident fund, family pension, and deposit-linked insurance.

NOTES • The Industrial Disputes Act was passed in the year 1947. This Act
is related to the termination and retrenchment of the employees by a
company.
• The Employees’ State Insurance Act was passed in 1948 to make
available various social welfare facilities available to the employees
of a company through one agency.
• The ESIS is a breakthrough in the history of social security in India.
The main objective of this scheme is to launch social insurance for
the employees of a company in order to provide them social security
during situations, such as illness, long-term sickness or any other health
hazard.
• The ESIS Act is monitored by the Employees’ State Insurance
Corporation (ESIC), which is established by Central Government. ESIC
has its own funds, known as ESI fund that provides cash benefits to
insured persons, medical benefits, such as hospitals and dispensaries.
• The Industrial Disputes Act was passed in the year 1947. This Act
is related to the termination and retrenchment of the employees by a
company.
• The Workmen’s Compensation Act was established by the government
in the year 1923.

9.6 KEY WORDS

• Job evaluation: It is the systematic analysis of roles and jobs to find

out their relative size.
• Role analysis: It is the process whereby information related to the
requirements of various roles in collected, analysed and recorded to
form the basis of a role profile.
• MBO: Management by Objectives is a self-evaluation technique
wherein the process of setting goals is extremely participative.
• Labour welfare: It implies providing better work conditions (for e.g.,
proper lighting, cleanliness, low noise) and reasonable amenities (for
e.g., recreation, housing, education etc).

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 Job Evaluation and
9.7 SELF ASSESSMENT QUESTIONS AND Working Conditions

EXERCISES

Short Answer Questions NOTES

1. State the merits of job evaluation.

2. Mention the discrepancies of wage payment systems eliminated through
the process of job evaluation.
3. Write a short note on MBO.
4. List the types of labour welfare as per ILO.
5. What are the benefits provided by ESIS Act?
6. Briefly explain the main provisions of the Maternity Benefit Act, 1961.
Long Answer Questions
1. How are role analysis and job evaluation related? Discuss. Mention
the advantages of role analysis.
2. Explain the need and principles of labour welfare.
3. Describe the provisions of the Factories Act, 1948.
4. Discuss the schemes introduced under the Employees’ Provident Fund
Act, 1952.
5. Examine the important provisions of the Industrial Disputes Act, 1947.

9.8 FURTHER READINGS

Venkataraman, C.S. and B. K. Srivastava. 1991. Personnel Management and

Human Resources. Tata McGraw Hill.
Yoder, Dale and Paul D Standohar. 1990. Personnel Management and
Industrial Relations. Sterling Publications.
Well, Ian Beard and Len Holden. Human Resource Management - A
Contemporary Perspective. Macmillan.
Aquinas, P. G. 2005. Human Resources Management – Principles and
Practice. New Delhi: Vikas Publishing House Pvt Ltd.
Decenco, David A. and Stephen P. Robbins. 1989. Personnel/HRM, 3rd
Edition. New Delhi: Prentice-Hall of India.

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Organizational Behaviour

UNIT 10 ORGANIZATIONAL
BEHAVIOUR
NOTES
Structure
10.0 Introduction
10.1 Objectives
10.2 Individual Behaviour
10.3 Personality
10.4 Perception
10.5 Learning
10.6 Attitude
10.7 Motivation
10.8 Answers to Check Your Progress Questions
10.9 Summary
10.10 Key Words
10.11 Self Assessment Questions and Exercises
10.12 Further Readings

10.0 INTRODUCTION

The study of Organizational Behaviour (OB) is interesting as well as

challenging. It relates to individuals and group of individuals working together
in teams. The study becomes all the more interesting with the influence
of situational factors around the individuals. We all are aware that no two
individuals are similar; hence, it depends on the acumen of the manager
to analyse the behaviour of the individual and delegate the work to him
accordingly. Organizational behaviour endeavours to gather information with
reference to a topic in a scientific manner under controlled conditions. In this
unit, you will learn about the important elements which govern organizational
behaviour including individual behaviour, personality, learning, attitudes,
perception, and motivation.

10.1 OBJECTIVES

After going through this unit, you will be able to:

• Explain the meaning of individual behaviour
• Discuss the concept of Personality
• Examine learning in the context of an organization

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 • Explain the importance of attitudes in organization behaviour Organizational Behaviour

• Assess the relation between perception and organization behaviour

• Recall the concept of motivation under organizational behaviour
NOTES
10.2 INDIVIDUAL BEHAVIOUR

It has been established that certain characteristics of behaviour are genetic

in nature, and a human being inherits a certain degree of similarity to other
individuals, as well as uniqueness in the form of genes and chromosomes.
Some of the characteristics such as physical traits including physical height,
slimness, dexterity, intellectual capacity and the ability to learn and logicalize
are all inherited and have a wide impact on behavioural patterns.
According to R.S. Dwivedi, the structures of the nervous system play
a significant part in the emerging pattern of behaviour thus bringing about
the integration of human behaviour and personality. Some psychologists
believe that some aspects of human behaviour can be explained in terms of
neural activity and neuro-physiological processes. Dwivedi further explains:
‘Integration of human behaviour takes place because of the constant
functioning of receptors, effectors and connectors. Here the nervous system
is primarily involved in the connecting process. The numerous receptor
cells attached to the individual’s sense organs tend to convert physical and
chemical events from the environment into neural events while the several
effector cells attached to the muscles and glands convert these neural events
into responses.’
These responses result in behavioural activity ranging from simple
reflex action to the complex creative activity.
Behaviour is sometimes easily explained by laymen as a reflection of the
state of the nervous system. This causal relationship is referred to continuously
during our daily routine impressions and conversations. For example, when
somebody loses patience quickly, we tend to brand him as ‘stupid’, and the
behaviour is explained by a lack of intelligence where intelligence reflects a
state of neural system. Similarly, a person whose behaviour is depressive is
considered to be having a ‘nervous breakdown’. In other words, it is implied
that a man exhibits a certain type of behaviour because he was ‘born that
way’, again pointing to genetic structure.
Causes of Human Behaviour
As discussed earlier, both scientific thinkers as well as behaviourists have
always been interested in finding out the causes for a given human behaviour.
Science has always been involved in explaining a phenomenon by looking
at its causes and then establishing a relationship between a cause and its
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Organizational Behaviour effect. For example, the cause of formation of water is mixing of two parts
of hydrogen and one part of oxygen in a given manner. Accordingly, the
effect of water can be explained by its cause. This relationship is scientific
and every time, the same cause will produce the same effect. Similarly, the
NOTES behaviour scientists want to find out the causes for why people behave in a
certain way. If these causes can be established, then certain types of behaviour
can be predicted, manipulated and controlled.
The assumption that the study of any subject begins in the realm of
superstition has some validity. For example, the scientific field of astronomy
started as astrology. Similarly, the study and prediction of behaviour has
its roots in superstitious beliefs in supernatural phenomenon. Even though
such beliefs are not supported by science, they are still socially prevalent.
Any conspicuous event that coincides with some part of general human
behaviour is likely to be seized upon as a cause. Many such beliefs have
been extensively discussed by B.F. Skinner. He cites as an example, the
belief of many people that the position of various planets at the exact time
of the birth of the individual determines many aspects of his behaviour,
such as whether he is temperamental, impulsive, trustworthy, and so on.
Millions of people who read the daily horoscope would testify to this belief,
even though these horoscopes describe only general characteristics and
general predictions that could be interpreted to be applicable to any person,
irrespective of when he was born. The ‘science’ of astrology is taken very
seriously in most underdeveloped countries and even in the technologically
and scientifically advanced countries, astrologers are seriously consulted.
In India, for example, many business meetings are arranged on the advice
of astrologers. Former Prime Minister of India, Indira Gandhi and Ronald
Reagan, Former President of America have been known to have arranged
important political conferences in consultation with astrologers. The position
of planets at birth, as a cause, is not considered as predicting specific actions or
unique aspects of behaviour of an individual, but only general characteristics
such as whether the person is impulsive or thoughtful, even though some of
these general characteristics may be explained as being responsible for some
specific action of the individual. For example, a quick but wrong decision can
be attributed to ‘impulsiveness’, that is identified by astrology. It is strange that
there is a lack of serious questioning to its validity, even though the process
proposes that all mankind can be divided into 12 monthly categories as far
as their behaviour pattern is concerned.
Then there are numerologists who propose another cause of behaviour.
This has to do with a person’s name. They believe and propose that the choice
of a person’s name is not a coincidence but a predetermined and predestined
phenomenon that is associated with the person’s behaviour. Based upon this
philosophy, certain patterns of behaviour are identified and predicted by the

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number and types of letters in a person’s name. Each letter of the alphabet Organizational Behaviour
has been assigned a number. Thus, the letters of the name are replaced by
their respective numbers. These numbers are then manipulated and an end
result of a single number is obtained. This last number can be used to find
some behavioural characteristics associated with this number, as explained NOTES
by numerologists.
Common practice is to explain behaviour in terms of certain physical
characteristics of a person, the most important of these characteristics being
the lines on the palm. Palmistry or palm reading is often explained as a science
and has been made popular by Cherio and Saint Germain, who practised the
‘art’ of palmistry and wrote extensively about it. The four major lines on the
palm of the hand are the Life line, the Heart line, the Brain line or the line of
education and intelligence and the Fate line. These major lines are supported
by scores of smaller lines, crosses, stars, islands and branches. There are
special lines about number of marriages and children and all these lines are
supposed to predict not only how long the person will live or whether he will
be rich or poor but also such behavioural traits such as intelligence, patience,
restlessness, trust worthiness, and so on.
Another common practice is to explain behaviour in terms of the
physical structure of the individual. It is sometimes said that the eyes betray
the character of the person. Similarly, certain ideas can be formed about
behaviour on the basis of whether the person is fat or tall or slim. Whether
there is a correlation between body structure and behaviour has not been
scientifically demonstrated. Even if there is such a correlation between the
two, it is not always clear which is the independent variable and which is
the dependent variable. For example, we cannot be sure whether fat people
are jolly because, being at a disadvantage, they develop jolly nature as a
competitive edge or whether jolly people are fat because they are free of
emotional disturbances and enjoy their life by eating, drinking and not caring
too much about their physique.
The theory of ‘born’ leaders suggests that some people behave in a
certain manner, because they were born that way. The belief is based upon
the assumption that certain behavioural characteristics are genetic in nature
and are inherited. If we know that a person has certain inherited qualities
and limitations, then we may be able to use our control techniques more
intelligently.
Categories of Human Behaviour
There are two categories in which the causes of human behaviour can
be classified. These are: (1) inherited characteristics and (2) learned
characteristics. Let us explain each of these two in more detail.

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Organizational Behaviour Inherited characteristics
Some of the inherited characteristics that may or may not be changed by
external forces and may or may not be important determinants of performance
NOTES are as follows:
Physical characteristics: Some of these characteristics relate to physical
height, slim body, vision, dexterity and stamina and have some bearing on
performance. Manual dexterity, for example, results in quality performance in
such jobs that require artistic manoeuvring. Similarly, tall and slim people are
expected to dress well and behave in a sophisticated manner, and fat people
are assumed to have a jovial nature.
Intelligence: Intelligence is primarily an inherited trait, even though children
of some very intelligent parents have turned out to be less intelligent and
vice versa. It is also known that intelligence can be enhanced by proper
environment or by proper motivation. Einstein was not considered very
intelligent during his earlier years. In any case, intelligence as a trait is related
to certain behaviour. Intelligent people are easy to convince if the point is
right and they can be expected to be much more stable and predictable.
Sex: Being a male or a female is genetic in nature and can be considered as
an inherited characteristic. However, it is highly debatable whether being a
male or a female in itself is indicative of any behavioural patterns. Man is
expected to be tough while a woman is expected to be gentle. Men ‘never cry’
and women are ‘highly emotional’, are some of the stereotyped assumptions
that have no basis in genetic influences. These behaviour are developed, if at
all, due to differences in treatment that boys and girls receive in the family
environment.
Even though some work roles are assumed to be the exclusive domain
of women, such as nurses or airline stewardesses, these roles are being
modified to accommodate men in these positions. As far as the administration
of the management process is concerned, women in general do not differ from
men in their operative behaviour.
Age: Since age is determined by the date of birth, it is a kind of inherited
characteristic. Age may affect the behaviour in physiological as well as
psychological ways. Psychologically, young people are expected to be more
energetic, innovative, risk taking and adventurous, while old people are
supposed to be conservative and set in their ways. Physiologically, with age,
older people experience waning of some of their faculties such as memory,
stamina, coordination, and so on, and hence the related behaviours change
as well. According to Lehman, the peak of creative ability is among people
between the ages of 30 and 40.
Religion: Religion and cultures based on it play an important role in
determining some aspects of individual behaviour, especially those that
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concern morals, ethics and a code of conduct. Highly religious people have Organizational Behaviour
high moral standards and usually do not tell lies or talk ill of others. They
are highly contented and thus strive for achievement and self-fulfilment.
Additionally, religion and culture also determine attitudes towards work and
towards financial incentives. NOTES

Learned characteristics
Some of the behavioural characteristics that account for enormous diversity
in human behaviour are a product of our exposure to various situations
and stimuli, both within the family and the outside environment. These
characteristics are acquired by learning where learning is defined as a
‘relatively permanent change in behaviour resulting from interactions with
the environment.’
These characteristics involve an individual’s attitudes, values and
perceptions about the environment around him. They are the result of parental
values and expectations and the values and norms of our culture and sub-
cultures. Children learn the need and values of being honest and truthful and
the value of love and affection from the family environment. If the parents
are always fighting, if the father is always drunk or if the mother resents the
child, it is most likely that the child will grow up lacking the warmth of love
and respect. Similarly, a loving family instils certain positive values about
life in the minds of the children.
The physical environment itself has a profound effect on the individual
behaviour. Persons who have come through the rigorous routine of the armed
forces or students who have been active sportsmen may have learned the
spirit of competition as well as cooperation. Similarly, students who have
studied in religious schools and convents may have learned different values
about truth and human decency.
Since inherited behavioural characteristics are more difficult to change
or modify, it is the learned characteristics that the managers want to study,
predict and control. Some of these learned characteristics are as follows:
Perception: Perception is the process by which information enters our
minds and is interpreted in order to give some sensible meaning to the world
around us. It is the result of a complex interaction of various senses such as
feeling, seeing, hearing, etc. Sayings and proverbs like ‘things are not what
they seem’ or ‘all that glitters is not gold’, reflect a sense of perception. ‘One
man’s meat is another man’s poison’, is in a psychological sense an indication
that different people see and sense the same thing in different ways.
Perception plays an important part in human as well as organizational
behaviour. For example, if a manager perceives a subordinate’s ability as
limited, he will give him limited responsibility, even if the subordinate, in

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Organizational Behaviour fact, is an able person. Similarly, we lose a lot of good friends due to our
changed perceptions about them.
Attitude: Attitude may be defined as the organization of a perception
within a frame of reference. It can also be described as the manner in which
NOTES
an individual behaves, reacts, thinks or perceives a particular object in a
given situation. It is a tendency to act in a certain way, either favourably or
unfavourably concerning objects, people or events. For example, if I say that
‘I like my job,’ I am expressing my attitude towards my work.
Attitude has three elements in it that lead to measurable outcomes. These
are feelings, thoughts and behaviour. Feelings and thoughts can be measured
by simply asking individuals about their feelings and opinions. Behaviour can
be measured either by actual overt actions or simply by asking the person how
he would act in a certain situation. By measuring and integrating these three
elements, a person’s attitude towards a given situation can be established.
In general, a person may have a positive attitude that is good outlook of
life, or negative attitude that means continuous complaining about problems
in life. Organizationally speaking, an employee’s negative attitude about work
may be reflected by substandard work performance, excessive absenteeism,
excessive complaining about work environment or disobedience to rules
of authority. These attitudes can be changed either by simple persuasion or
by training and coaching. Kelman has identified three processes that act as
instruments of change. The first is compliance, that is application of subtle
pressure either through reward or punishment in order to change the behaviour,
and expecting this change to be lasting.
The second process is that of identification with the person who is
affecting the change and is acting as a change agent. This change agent could
be a close friend who wants you to change and you respect and love him
enough to do so to please him. In marriage, for example, both the husband
and the wife make a lot of sacrifices and change their behaviour to please
each other. The third process is the process of internalization, that is more
permanent in nature. This means that the new attitude is integrated with the
other attitudes and becomes a part of the person’s total personality. This
change may occur through internal soul searching and the desire to change
that comes from within.
Personality: When we describe people as quiet and passive or loud and
aggressive or ambitious, we are portraying an aspect of their personality. A set
of traits, habits and characteristics comprise the personality of an individual.
This may also include conditioned responses that an individual may express
to a set of given stimuli which in a way also contribute towards creating an
impression of an individual upon others. This personality may come out as
warm and friendly, or arrogant and aggressive. Many psychologists contend
that personality traits develop in the early childhood years and very few
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personality changes can be made after the childhood years. There are different Organizational Behaviour
types of personality traits. Some of them can be biological in nature while
others may be learned over a period of time. Examples of biological traits
include physical build and intelligence. The traits which are learned over a
period of time are patience, open mindedness, outspoken nature, introvertness NOTES
or extrovertness in behaviour, etc.
Some of these personality traits are highly influential in certain
organizational operations from organizational behaviour point of view. For
example, Tedeschi and Lindskold propose that people who are open minded
seem to work better in bargaining agreements than people who are narrow
minded. Similarly, people who are extroverts and outgoing are more likely
to be successful as managers than those who are introverts.

Check Your Progress

1. What does the theory of ‘born’ leaders suggest?
2. Define the learned characteristics of behaviour.

10.3 PERSONALITY

As seen in the previous section, personality of an individual plays an extremely

important role in assessing the behaviour of a person at an organization. In
case an individual who is holding a senior position in an organization has a
wrong type of personality, it may lead to a very bad impact on the relationship
between superior and his subordinates and ultimately it may lead to protests
and unrest at the workplace. Sometimes the personality difficulties are the
root cause of labour strikes. No matter how good the superior is in technical
knowledge or other behavioural characteristics, it is the ‘temperament’ of the
superior that is crucial in ensuring a cordial interaction with subordinates.
Personality has been defined by Salvatore Maddi as follows:
‘Personality is a stable set of characteristics and tendencies that determine those
commonalties and differences in the psychological behaviour (thoughts, feeling
and actions) of people that have continuity in time and that may not be easily
understood as the sole result of the social and biological pressures of the moment.’

This definition however has several aspects which must be considered.

Stability of characteristics is the first important aspect which needs to be
considered. Consistency in an individual’s characteristics will actually define
the consistency of the behavioural patterns that may be expressed by an
individual. If a person’s entire personality could change suddenly, then we
would not be able to predict his personality traits. For example, if a person is
sometimes warm and friendly and at other times he is cold and hostile, then we
cannot conclude that his personality is warm and friendly. Accordingly, when
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Organizational Behaviour assessing a person’s personality, we need to look for characteristics that are
relatively stable or that change only very slowly over a long period of time.
Understanding the ‘commonalities and differences’ is another important
aspect. This helps in assessing the different aspects that an individual has
NOTES
similar to others and what are those points which actually make him different
from the others and set him apart as an individual. Each and every person
• like all other people
• like some other people
• like no other person
Organizationally, a manager must understand that all subordinates are
not alike and that each subordinate is unique and may or may not respond to
the same stimuli, such as pay raise or reprimands.
Finally, we are interested in such aspects of personality that induce
people to behave in a manner as required by social pressures or biological
pressures. For example, if your boss wants you to do a job in a certain way,
you will do it even if you disagree with your boss. That is a kind of social
pressure. Similarly, you will stop working and go for lunch because you are
hungry. That is a biological pressure. Hence, these behaviours do not require
any explanation in terms of personality factors because the causes of such
behaviour are clearly understood.
Determinants and Structure of Personality
Let us now study about the determinants and structure of personality.
Type A and Type B personality and behaviour
One dimension of personality that is getting attention both from organizational
as well as medical researchers is the Type A and Type B behaviour profiles.
The Type A behaviour individuals are most of the times restless and impatient
in their expressions. They generally aim at perfectionism and want to achieve
results as quickly as possible in lesser amount of time. The other type of the
individuals are those with Type B behaviour. These are generally more relaxed
and patient in their expression. They do not feel the pressure of timelines.
These individuals are more philosophical in nature and are however less
competitive.
Some of the characteristics of the individuals with Type A personality
are as follows:
• They are generally restless so they eat rapidly and keep walking or
are generally on the move.
• They have the tendency to perform several tasks at one given time.
• They are generally impatient in their expressions; do not like to
waste their time in waiting for others.
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 • They are also impatient about other individuals who are not really Organizational Behaviour
impatient.
• They have habit of starting with newer tasks before completing the
previous ones.
NOTES
• They normally schedule greater number of activities in lesser time
though they are initially themselves not really sure that whether
everything will be done or not.
• At times, they are involved in nervous gestures such as banging on
the table and using clenched fists, etc.
• They generally do not have time to relax or enjoy life.
Thus, the Type A personality individuals are generally obsessive in
nature. The managers who possess the traits of this personality pay attention
to details, are hard-driving in nature and also keep their team members pushed
towards achieving performance.
Individuals with Type B personality are generally the opposite to the
Type A individuals. These type of individuals are more relaxed and sociable
in nature. They have a balanced outlook in life.
Type A managers have difficulties in creating cordial interpersonal
relationships and create a lot of stress for themselves and the people they deal
with. They specially feel pressurized if they have to complete a task within
a given deadline. Type B persons on the other hand, do put in extra effort in
order to meet a deadline but do not feel pressurized.
Those persons who are classified as Type A have a strong desire and
tendency to control all aspects of the situation, and if they are unable to control
a situation, they react with anger and frustration. Because of their obsession
with perfection, they are more apt to fear of failure and even if their work is
good, they tend to underestimate the quality of their work. In case of negative
outcomes, they blame themselves more than the external factors.
A comprehensive identification of Type A personality is given by Karen
A. Mathews as follows:
The Type A pattern can be observed in any person who is aggressively involved
in a chronic, incessant struggle to achieve more and more in less and less time,
and if required to do so, against the opposing efforts of other things or other
persons. The overt manifestations of this struggle include explosive, accelerated
speech, a heightened pace of living, impatience with slowness, concentrating
on more than one activity at a time, self-preoccupation, dissatisfaction with life,
evaluation of the worthiness of one’s activities in terms of numbers, a tendency
to challenge and compete with others even in non-competitive situations, and
a free floating hostility. The major facets of ‘core’ elements of the behaviour
pattern are extremes of aggression, easily aroused hostility, a sense of time
urgency and competitive achievement surviving.

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Organizational Behaviour Research has indicated that such patterns of behaviour as exhibited by
Type A personality profile, lead to health problems, specially heart related
illness. In contrast, Type B persons may be hard working but feel no pressing
conflict with people or time and hence are not prone to stress and coronary
NOTES problems.
Assessment of Personality
While we know what personality is, we are interested to know how a
given personality is formed. What determines an individual’s personality?
Personality can be compared to a jigsaw puzzle in which we are interested
in finding out the sources of all the pieces in the puzzle as well as their
interrelationships.
There are two broad categories of factors that influence the formation
and development of personality. These are heredity factors and environmental
factors. It is debatable as to which of these factors have a greater influence on
the structure of personality. Some behaviour scientists argue that personality
characteristics are derived from heredity factors and the right type of
environment only brings them out. Others feel that the effect of environment
is quite strong. According to Maier, ‘knowledge, skill and language are
obviously acquired and represent important modifications of behaviour.
Learned modifications in behaviour are not passed on to children, they must
be acquired by them through their own personal experience.’
Thus, a probable consensus can be reached that it is both hereditary
and environmental factors together affect the personality development of an
individual. There may be some environmental constraints or limitations at
times which may not allow an individual to completely realize his potential.
However, the complete potential of an individual comprising both physical
as well as psychological aspects may be determined by the hereditary aspects
that is the complex set of genes.

10.4 PERCEPTION

The psychological processes that allow an individual to adjust his behaviour

is called perception. The behaviour of an individual is influenced by his
personality, motives and efforts. The behaviour and performance provides
satisfaction to the employee who gets stimulated to work more and develop
his personality and work quality.
Behaviour is a victim of the environment, which is observed in the form
of stimuli. The sensory organs perceive the stimuli as per their learning and
personality. The reverse functions are also correct. Perception, if modified
through adequate and qualitative stimuli, helps to develop learning and
personality. Improved behaviour has better performance and rewards which
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provide more satisfaction to the employees. A satisfied employee tries to learn Organizational Behaviour

and work effectively. An organization grows with the developed employees.

Perception is therefore an important and initial step for developing an
organizational behaviour. It is a cognitive process which selects, organises
and interprets the stimuli. It paves the base for behaviour. Although perception NOTES
may not be a real-world presentation, it is an imaginary understanding of
the situation. The behaviour of an individual is guided by perception. People
perceive differently as per their learning and personality. The perceptual
world of a manager is different from the perceptual world of employees.
Social factors also influence the perception process. Employees coming
from a poor family have different perceptions of an organization from those
coming from rich families. The levels of education, family background and
political situation have a direct impact on the perception level.
Definition
Perception may be defined as “a cognitive process by which people attend
to incoming stimuli, organise and interpret such stimuli into behaviour.”
Perception can also be defined as “a process by which individuals organise
and interpret their sensory impressions in order to give meaning to their
environment.”
The environment is a stimulus to influence behaviour, because the
stimuli are attended, organised and interpreted to arrive at certain forms of
behaviour. The sensory organs, i.e. eyes, nose, ears, skin and tongue, are
used to change the stimuli into behaviour through their attention, recognition
and interpretation processes. The information or stimuli are not accepted
by individuals unless they are evaluated and interpreted by the mental
processing system. Individuals attend to the stimuli, recognise and translate
them into meaningful information, which inspire them to act and perform
the job. These processes are known as perpetual process. When employees
get satisfaction through their performance, either by meeting their physical
or mental needs, they perceive the organization in the right perspective. It
helps them understand the functions and achieve satisfaction.
Components of Perception
Perception is a process of sensory organs. The mind gets information
through the five sense organs, viz. the eyes, ears, nose, tongue and skin. The
stimulation coming to these organs may be through action, written messages,
oral communication, odour, taste, touch of the product and people. The
perception starts with the awareness of these stimuli. Recognising these
stimuli takes place only after paying attention to them. These messages are
then translated into action and behaviour.
Stimuli: The receipt of information is the stimulus which results in sensation.
Knowledge and behaviour depend on senses and their stimulation. The
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Organizational Behaviour physical senses used by people are vision, hearing, touch, smell and taste.
Intuitions and hunches are known as the sixth sense. These senses are
influenced by a larger number of stimuli which may be action, information,
consideration and feelings, etc. The stimuli may be in the form of objects
NOTES or physical commodities. The human body itself is developed through the
acceptance of the stimuli. The mind and soul are the victims of these stimuli
occurring in the surroundings of the people. The family, social and the
economic environment are important stimuli for the people. The physiological
and psychological functions are the result of these stimuli. The intensive and
extensive forms of stimuli have a greater impact on the sensory organs. The
physical work environment, socio-cultural environment and other factors have
certain stimuli to influence the employee’s perception. Perception begins only
when people confront stimuli; that is, stimulating factors give information
about the situation.
Attention: Stimuli are selectively attended to by people. Some of the stimuli
are reacted to while others are ignored without being paid any attention. The
stimuli that are paid attention depend purely on the people’s selection capacity
and the intensity of stimuli. Educated employees pay more attention to any
stimuli, viz. announcement of bonus, appeal for increasing productivity,
training and motivation. The management has to find out suitable stimuli
which can appeal to the employees at the maximum level. If the attention of
the employees is not drawn, the organization cannot expect proper behaviour
from the employees. An organization should be aware of all those factors
which affect the attention of the employees. During the attention process,
sensory and neural mechanisms are affected and the message receiver becomes
involved in understanding the stimuli. Taking employees to the attention
stage is essential in an organization for making them behave in a systematic
and required order.
Recognition: After paying attention to the stimuli, the employees try to
recognise whether the stimuli are worth realising. The messages or incoming
stimuli are recognised before they are transmitted into behaviour. Perception
is a two-phase activity, i.e. receiving stimuli and translating the stimuli
into action. However, before the stage of translation, the stimuli must be
recognised by the individual. The recognition process is dependent on mental
acceptability. For example, if a car driver suddenly sees a child in front of
his running car, he stops the car. He recognises the stimuli, i.e. the life of
the child is in danger. His mental process recognises the danger after paying
attention to the stimuli. If he does not pay attention to the stimuli, he cannot
recognise the danger. After recognising the stimuli, he translates the message
into behaviour.
Translation: The stimuli are evaluated before being converted into action
or behaviour. The evaluation process is translation. In the above example,
the car driver after recognising the stimuli uses the clutch and brake to stop
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the car. He has immediately translated the stimulus into an appropriate Organizational Behaviour
action. The perception process is purely mental before it is converted into
action. The conversion is translation. The management in an organization
has to consider the various processes of translating the message into action.
The employees should be assisted to translate the stimuli into action. For NOTES
example, the announcement of bonus should be recognised as a stimulus
for increasing production. The employee should translate it into appropriate
behaviour. In other words, they should be motivated by the management to
increase productivity. During the translation period, psychological mechanism
commonly known as sensory and mental organs are affected. They influence
perception. The incoming stimuli are interpreted and perception is developed.
Behaviour: Behaviour is the outcome of the cognitive process. It is a
response to change in sensory inputs, i.e. stimuli. It is an overt and covert
response. Perceptual behaviour is not influenced by reality, but is a result
of the perception process of the individual, his learning and personality,
environmental factors and other internal and external factors at the workplace.
The psychological feedback that may influence the perception of an employee
may be superior behaviour, his eye movement, raising of an eyebrow, the
tone of voice, etc. The behaviour of employees depend on perception which
is visible in the form of action, reaction or other behaviour. The behavioural
termination of perception may be overt or covert. The overt behaviour of
perception is witnessed in the form of physical activities of the employees
and covert behaviour is observed in the form of mental evaluation and self-
esteem. The perception behaviour is the result of the cognitive process of
the stimulus which may be a message or an action situation of management
function. Perception is reflected in behaviour which is visible in different
forms of employees’ action and motivation.
Performance: Proper behaviour leads to higher performance. High
performers become a source of stimuli and motivation to other employees.
A performance–reward relationship is established to motivate people.
Satisfaction: High performance gives more satisfaction. The level of
satisfaction is calculated with the difference in performance and expectation. If
the performance is more than the expectation, people are delighted, but when
performance is equal to expectation, it results in satisfaction. On the other
hand, if performance is less than the expectation, people become frustrated
and this requires a more appealing form of stimulus for developing proper
employee work behaviour and high performance. It is essential to understand
the factors that influence the perception process and mould employees’
behaviour towards the corporate objectives and self-satisfaction.
Several stimuli are observed everyday by individuals. They confront
these stimuli, notice and register them in their minds, interpret them and
behave according to their background and understanding. Employees
confronted with stimuli select only a few stimuli of their choice and leave Self-Instructional
Material 155
Organizational Behaviour other stimuli unattended and unrecognised. Factors influencing the selective
process may be external as well as internal, organizational structures, social
systems and characteristics of the perceiver.

NOTES Check Your Progress

3 Which personality type is known to be more relaxed and sociable
in nature?
4. How does perception start?

10.5 LEARNING

Learning has been defined by several authors in different ways. All of them
have accepted that learning shapes human behaviour. Employees may learn
knowingly or unknowingly in the organisation. Tim R.V. Davis and Fred
Luthans have defined learning as a cognitive and modelling process for
acquiring knowledge and experience. They have analysed different theories
of learning for explaining the learning process. Robbins has stressed upon
learning as a “relatively permanent change in behaviour that occurs as a result
of experience.” He has opined on experience only, although an employee might
change his behaviour as a result of a social process. Learning is a process
of observation, action, reaction and response to some stimuli. Learning is
a process of change in behaviour. The outcome of learning is a permanent
change in behaviour. Therefore, learning is a permanent change in behaviour
as a result of a cognitive process. A temporary change in behaviour is not
learning because it is purely reflexive. Change in behaviour is the necessary
outcome of learning. If it is purely theoretical or attitudinal, it would not be
learning. A cognitive change process in the mind of an employee resulting
in behaviour is learning. “Learning is the process by which an activity
originates or is changed by reacting to an encountered situation, provided
that the characteristics of the change in activity cannot be explained on the
basis of native response tendencies, maturation or temporary states of the
organism.” This definition includes almost all the attributes of learning. It
reveals that learning is the inferred process which influences behaviour.
The learning is an original activity for the employee. He gets new things or
may change his process as a result of observation and cognitive processes.
The learning can take place only when the employee reacts to the stimuli,
evaluates and accepts the stimuli for changing his behaviour. Learning must
be deliberately accepted. It does not include maturity, temporary changes in
behaviour and the natural process of behaviour. Behaviour is learned through
a cognitive process. It is not a spontaneous and natural process. A child
knowing the language of her mother is not learning, because it is a natural
process. Children learn good habits and sports on account of their environment
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156 Material
must be deliberately accepted. It does not include maturity, temporary changes in
behaviour and the natural process of behaviour. Behaviour is learned through a
cognitive process. It is not a spontaneous and natural process. A child knowing
the language of her mother is not learning, because it is a natural process. Children
learn good habits and sports on account of their environment which is a stimulus of
learning.
whichThe
is a learning
stimulus ofprocess
learning.starts with motives
The learning and continues
process starts with motiveswith
and cues,
Organizational Behaviour
responses and reinforcements
continues with cues, responsesuntil
andthe learner acquires
reinforcements thelearner
until the required changes in
acquires
behaviour permanently.
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drive a car isLearning
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to drive a of
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a
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process.
NOTES

Fig.
Fig.4.1
10.1The
TheLearning Process
Learning Process

The learning process

The learning is aismental
process a mentaland andhabit formationprocess.
habit formation process. Attention is
Attention
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for learningwhich arearerecognised
which recognised and translated into
and translated
into reinforcement and behaviour. If the learner gets a reward for his
reinforcement and behaviour. If the learner gets a reward for his improved behaviour, improved
behaviour, he forms it into behaviour. Proper habits motivate the employee
he forms it into behaviour. Proper habits motivate the employee who makes efforts
who makes efforts in the right direction. The efforts result in satisfaction and
in the become
right direction.
a stimulusThe
for efforts result inThe
further learning. satisfaction
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behaviour. A habit motivates an employee to perform better. It helps him
Self-Instructional
pay proper attention. He learns constantly and effects a permanent change Material 49
in behaviour. Learning improves behaviour. This process continues and the
employee learns in the process.
The Learning Process
Stimuli: Stimuli are any objects and language which draw the attention of
people. Employees get stimuli from the actions of their superiors. Superiors
tell and advice employees who pay attention to these stimuli. All the stimuli
may not be fully attended to. Literary works are also stimuli which are given
attention by educated employees. Stimuli are provided at jobs by perks and
scores. Universities and colleges also impart stimuli for learning. Stimuli
provides quality performances. Practical training and vocational teaching are
forceful stimuli. The stimuli available at work are numerous. Social, political,
cultural and geographical factors provide varieties of stimuli for learning.
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Material 157
Organizational Behaviour Attention: The degree of attention depends upon the nature of stimuli. All
stimuli are not paid attention to. Technical and interesting stimuli are highly
attended. Career oriented stimuli are generally accepted by employees. The
personality levels of employees influence their desires to learn, motives
NOTES for need fulfilment and tension reduction. Employees having more values
of life pay more attention to the stimuli for acquiring more knowledge and
experience. People’s creative attitude are favourable factors for learning and
paying more attention to available stimuli.
Recognition: Attention-paid stimuli are recognised as acceptable factors
of improvement and new life styles. Employees paying attention to stimuli
are recognising the stimuli for learning purposes. The levels of recognition
depend upon the levels of values, preferences, needs and desires of the
employees. When objectives are unclear, employees do not pay attention
and do not recognise the training as a fruitful process of improvement. In the
learning process, unambiguous activities must be observed for recognition
by employees as useful factors for their well being and satisfaction.
Translation: Recognised stimuli are evaluated at the mental level to eliminate
the irrelevant points for accepting a part of the stimulus for changing
behaviour. The evaluation and appraisal of the recognised stimuli helps in
reinforcement. An activity will not take place unless it is found useful by
employees. The translation and evaluation process is a crucial point for
implementing the stimuli in behaviour through reinforcement. Employees
behave properly through attitude changes, objectivity, mental and physical
development. It is observed in better performances.
Reinforcement: Reinforced perception is learning. The perception process
includes stimuli, attention, recognition, translation and behaviour. Perception
leads to learning, but perception itself is not learning unless it is reinforced.
Repeated action is reinforcement. Reinforcement may be positive, negative,
punishment and extinction. Learners learn as per their perception levels.
Generally positive reinforcement is more effective for making permanent
changes in behaviour.
Behaviour: Learning changes behaviour through reinforcement of perceived
knowledge. It makes permanent changes in behaviour. A temporary change
in behaviour is not learning. Positive behaviour gives rewards to employees.
Reward: Employees expect rewards for learning. If the translated behaviour
provides a reward, it is accepted, otherwise it is not accepted. Employees
develop their behaviour into habits. Rewards may be monetary or non-
monetary. A non-monetary reward includes job satisfaction, status recognition
and task achievement. Professional satisfaction is attached to the behaviour
which influences the form of reward. The behaviour of employees decides
the level and form of reward. The reward reinforcement makes employees
learn more than positive reinforcement behaviour.
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158 Material
Habits: A permanent change in behaviour becomes a habit which helps Organizational Behaviour
continuous improvement in behaviour and performance. Employees develop
the habit of self-appraisal and development. It helps to instil creativity and
confidence in employees who are encouraged to behave properly again and
again. Right behaviour is reinforced repeatedly. Habits help the development NOTES
of capability and capacity of employees. Habits translate theoretical
knowledge into practice. Skill development requires habitual performance.
Motives: Motives depend on the level of satisfaction. Employees getting more
satisfaction through learning develop high motives. Less satisfied learners
have low motives. Learning is complete only when motives are fully realised
and translated into efforts.
Efforts: Habits help achieve good efforts and performance. This is a
continuous process. Efforts are the automatic outcome of good habits which
are acquired through the learning process. Self-development is possible
through self-effort. Employees willing to develop themselves are self-
motivated and effort-oriented. Efforts become the stimuli for learning after
development of the standard of employees. Self-learning has been observed
when employees have developed good habits and right motives. The learning
process itself provides all these opportunities.
The learning process is totally associated with the mental process,
inspiration and action. Stimuli reach only the unconscious mind. If it pays
attention to stimuli it goes to the inner-level of the mind at subconscious level.
Attention is paid by the subconscious mind which analyses the stimuli and
filters out irrelevant stimuli from the employee’s angle. The relevant stimuli
are attended to, but a smaller portion of the stimuli attended is recognised
by the clear mind. Recognition of stimuli is done only by the clear mind.
The stimuli recognised further go to the inner part of the mind only when
the clear mind has received them and the feeling cell of the mind evaluates
their utilities. A felt mind has the capacity to evaluate and appraise the
recognised stimuli. The evaluated stimuli if found correct are stored at the
level of the feeling cell of the mind. The stored stimuli or retention work
for mobilising the function through reinforcement. Repeat and recall are
mobilising factors for action. Similarly, a tense mind gets reinforcement; it
compels and forces the heart to activate the body for action and behaviour.
Intensity at the mental level activates the heart to function. The level, quality
and direction of intensity give the behavioural function a real shape. Behaviour
is the outcome of intensified stimuli and the heart’s activitisation. Behaviour
producing reward helps the mental process to think and rethink again and
again at all the five levels of the mind. The reward itself becomes a stimulus
which is attended, recognised, translated and reinforced respectively by the
unconscious, subconscious, clear, felt and intense mind. It reaches to the
heart level, and consequently this process develops into a habit. Permanent
changes in behaviour converge in the form of a habit.
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Material 159
 rethink again and again at all the five levels of the mind. The reward itself becomes
a stimulus which is attended, recognised, translated and reinforced respectively
by the unconscious, subconscious, clear, felt and intense mind. It reaches to the
heart level, and consequently this process develops into a habit. Permanent changes
in behaviour converge in the form of a habit.
Organizational Behaviour

NOTES

FigFig.
4.2 10.2
Biological
Biologicalpresentation ofthe
presentation of thelearning
learning process
process

Employees learn
Employees to to
learn behave
behaveproperly.
properly.The
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eachifand
eachevery process
and every is given
process due
is given dueimportance andplaced
importance and placed at the
at the respective
respective
level.level.

4.5 10.6 ATTITUDEOF LEARNING

THEORIES
If you ask some one ‘how are you?’ his response would depend upon his
Theories of learning
attitude towards have been
life. If his developed as models
attitude towards life isofpositive,
learninghe which explain
will say he the
learning
feelsprocess by which
very good employees
and thank God for acquire
what he ahas.
pattern
If hisofattitude
behaviour. Inborn
towards ability
life is
negative, he will start complaining about everything that is wrong with the
Self-Instructional
52 Material world. Similarly, if you ask someone about his job, you will find him to be very
opinionated. He might say he likes his job very much or he might complain
about the job bitterly. This would be a function of his attitude towards his
job. Attitude is a collection of the type of personality, feelings towards the
outside world, confidence within self and more.
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160 Material
Characteristics and Components of Attitude Organizational Behaviour

Attitudes have four basic characteristics—direction, intensity, salience and

differentiation. The direction of an attitude is favourable, unfavourable or
neutral. We may like, dislike or be neutral in our views about a person, a NOTES
job or a situation. The intensity of the attitude refers to the strength of the
effective component. For example, we may dislike a person but the extent
of our disliking would determine the intensity of our attitude towards him.
Such dislike may range from weak to strong. In general, the more intense
the attitude the more persistent will be such behaviour. Salience refers to
the perceived importance of the attitude. Some people may not like to work
with computers as they may not perceive it to be as important as a student
in computer information systems for whom the knowledge of computers is
mandatory for a career. Finally, attitudes can be high or low in differentiation
depending upon how strong the supporting beliefs and values of the person
are.
Components of Attitude
The attitudes, irrespective of what they are, generally consist of three major
components. These are:
1. Evaluative Component. The evaluative component of attitude is a
function of how we feel about something. It refers to our liking or
disliking for a particular person, any particular event or any particular
situation. Such person, event or situation becomes the focus of our
attitude and is known as attitude object. For example, you may feel
positively or negatively about your boss, about your friend, about the
movie you have seen or about anything you happen to see.
2. Cognitive Component. Feelings, however, do not simply and
automatically develop. Most often they are based on knowledge. For
example, if you know that your friend is talking ill about you behind
your back, such knowledge would result in negative attitude towards
your friend. Similarly, you might believe that your supervisor does not
know much about the job. This belief is based upon your knowledge
of how the supervisor is handling the job. These beliefs, which may or
may not be justified comprises the cognitive component of attitude.
3. Behavioural Component. What you believe about something and
how you feel about it would determine your behaviour regarding that
particular person, event or situation. For example, if you believe that
your boss is embezzling company funds, and you feel negatively about
it, you are likely to behave with little respect for such a boss. You
may either inform his superiors about it or you may want to look for
another job. Such predisposition to act in a certain way contributes the
behavioural component of the attitude. Such a predisposition may not
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Material 161
Organizational Behaviour actually predict your behaviour. For example, if your boss is embezzling
company funds, you may take some steps or you might simply ignore
it by convincing yourself that it does not directly concern you. In other
words, your intention to behave in a certain way dictates how you
NOTES actually do.
Based upon these components, attitudes can be defined as relatively
stable clusters of feelings, beliefs and behavioural predispositions. By
including the words relatively stable, we are referring to something that is
not permanent nor fleeting. In other words, once attitudes are formed, they
tend to persist and can only be changed by strong outside or inside forces. For
example, your attitude towards someone may be negative but may change if
situations or circumstances change.
Attitude and Behaviour
It is assumed that the relationship between the attitude of a person and his
behaviour is causal in nature, meaning that the attitudes that people hold
determine their behaviour and what they do. Logic also suggests such a
relationship. For example, people watch television programs that they like,
that is, their attitude about such programs is positive.
Research conducted in the late sixties concluded that the relationship
between attitude and behaviour is, at best, minimal. More recent studies
have indicated that there is indeed a measurable relationship if moderating
contingency variables are taken into consideration. The moderating variables
which have been found to be most powerful include:
• Importance of the attitude
• Specificity of the attitude
• Accessibility of the attitude
Additionally, they have been also linked to existence of any social
pressures on the individual and the direct experience of the attitude.
Attitudes that are considered important by the individual tend to be
strongly related with behaviour. Similarly, attitudes that are specific are
more predictable of behaviour. For example, if someone really likes his job,
it can be predicted that he will stay with the company for a longer period
of time. Attitudes that are frequently expressed are more reliable and more
accessible to the memory and hence greater predictors of behaviour. Social
pressures have a strong influence on attitudes and behaviour. For example,
a member of a group may not agree with the group on certain issues but
may go along, because of the social pressures within the group. Finally, the
personal experiences with people and situations affect strongly the attitude
and behaviour of a person. Positive experiences result in positive attitudes and
negative experiences result in negative attitudes. For example, a student who
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has taken a course with a professor is in a much better position to evaluate Organizational Behaviour
him as compared to someone who has not taken his course.
The relationship between attitude and behaviour is well documented.
However, a debate is still going on as to whether the changes in attitudes
NOTES
affect the changes in behaviour or whether the changes in behaviour affect
the changes in attitudes. In other words, it is not clear as to which one is the
cause and which one is the effect.
Attitude Formation
The question often arises, ‘how are the attitudes and subsequent behaviours
formed?’ While attitudes are basically learned over the years, some inherited
characteristics do affect such attitudes. For example, physical characteristics
such as the height of the person. Tall and slim people are expected to dress
well and behave in a sophisticated manner. Similarly, intelligence is primarily
an inherited trait and it is related to certain behaviours. Intelligent people are
considered to be much more logical and this affects their attitude. Religion
and religious beliefs can be considered as inherited, as the religion of the
child is determined by the religion of his parents and it determines some
aspects of individual behaviour, especially those that concern attitudes based
on morals, ethics and code of conduct. Similarly, whether a person is born a
male or a female determines some stereotype traits such as aggressiveness
and physical stamina. Most of the inherited traits are strengthened by learning
and experiencing.
While some attitudes are adopted early in life from our family values
or cultural environment, most are developed gradually over time through
experiences and observations. Some of the learned characteristics responsible
for attitude formation are:
Experiences: Our personal experiences with people and situations develop
our attitude towards such persons and situations. Through job experience,
people develop attitudes towards working conditions, salaries, supervision,
group dynamics and so on. Similarly, interaction with other people would
determine your attitude towards them. A positive interaction with a person
would result in a positive attitude towards that person. Many people who
are afraid of swimming or horse riding or darkness can trace back this fear
to some fearful or negative experiences in these areas in the past.
Perceptual biases: Perception is the result of a complex interaction of various
senses such as feelings, seeing, hearing and so on and plays an important part
in our attitude and behavioural formation. For example, if a manager perceives
a subordinate’s ability as limited, he will give him limited responsibility.
Similarly, we lose many good friends due to our changed perception about
them.

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Organizational Behaviour Observation of the other person’s attitude: When we like someone, we
try to emulate that person’s attitude. For example, when we are impressed
by someone keeping calm under stressful circumstances and we appreciate
such calmness, we might try to do the same. Similarly, our attitude towards
NOTES a spiritual person changes if we observe him committing what we consider
a sinful act.
Association: Our association with the group we belong to strongly influences
our attitude. Our close association with a group would encourage us to be
consistent with the attitude of the group. Belonging to an elite group or
a religious group would determine some aspects of our attitude. Family
association determines our attitudes from the very beginning. There is a high
correlation between the parents and the children with respect to attitude in
many specific areas. Similarly, attitudes of our peers as we grow older also
influence our own attitudes. We make friends with people who share our own
attitudes, interests and preferences. Many a times, our parents object to our
friendship with persons whom they deem undesirable and encourage us to
make friends with those who have an outlook similar to our own.
Personality: Personality is a set of traits and characteristics, habit patterns
and conditioned responses to certain stimuli that formulate the impression that
a person makes upon others and this impression is a function of a person’s
attitude. This personality may come out as warm and friendly or arrogant and
aggressive. From an organizational behaviour point of view, it is believed
that people who are open-minded seem to work better than those who are
narrow minded. Similarly, people who are extroverts and outgoing are more
likely to be successful as managers than those who are introverts.

10.7 MOTIVATION

The subject of motivation is one of the most important and widely studied
topics in the field of management and organizational behaviour. One of the
most frequently used terms among managers is ‘motivation’. The level of
performance is often tied with the level of motivation. Accordingly, work
effective managers are concerned about motivation because the work motives
of employees affect their productivity and quality of their work.
People differ by nature, not only in their ability to perform a specific task
but also in their ‘will’ to do so. This ‘will’ to do is known as motivation. By
understanding a person’s ability and his motivation, a manager can forecast
his performance level. Motivation and ability interact in a multiplicative
manner to yield performance, so that:
Performance = Ability × Motivation
This means that if either ability or motivation is zero, then the resulting
performance is zero. However, people with less ability and stronger ‘will’
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may be able to perform better than people with superior ability and lack of Organizational Behaviour
‘will’, because people with high motivation learn to become capable while
superior ability may not induce any motivation.
The force of motivation is a dynamic force, setting a person into motion or
NOTES
action. The word motivation is derived from ‘motive’, which can be defined
as an active form of a desire, craving or need which must be satisfied. All
motives are directed towards goals, and the needs and desires affect or change
a person’s behaviour which becomes goal oriented. For example, if you
ordinarily do not want to work overtime, it is quite likely that at a particular
time, you may need more money (desire), change your behaviour, work
overtime (goal oriented behaviour) and satisfy your needs.
Motivation is defined by Viteles as follows:
‘Motivation represents an unsatisfied need which creates a state of tension or
disequilibrium, causing the individual to move in a goal directed pattern towards
restoring a state of equilibrium by satisfying the need’.

Motivated people are in constant state of tension. This tension is

relieved by drives towards an activity and outcome that is meant to reduce
or relieve such tension. The greater the tension, the more activity will be
needed to bring about relief and hence higher the motivation.
The concept of motivation has three basic characteristics. These are:
• Effort: The amount of effort put into the activity identifies the
strength of the person’s work related behaviour. Hard work usually
reflects high motivation and high motivation is crucial to success
and achievement. For example, a student who works very hard to
get top grades can be referred to as highly motivated. Similarly,
a professor who is engaged in research and publishes many high
quality articles and books, is exerting extensive efforts related to
his job.
• Persistence: Motivation is a permanent and an integral part of a
successful person. Its second characteristic is persistence in the
efforts. Motivation is continuously goal oriented so that once a
goal is achieved, a higher goal is selected and efforts are directed
towards the higher goal. For example, a professor who publishes
simply to get a promotion and then stops or reduces research efforts
would not be considered as highly motivated. Accordingly, high
motivation requires persistent efforts.
• Direction: Persistent hardwork determines the quantity of effort
while direction determines the quality of the anticipated output.
All efforts are to be directed towards goal achievement. This
would ensure that the persistent effort is actually resulting into
expected outcomes. For example, a quality control inspector in
a manufacturing organization is consistently expected to direct
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Organizational Behaviour his efforts in discovering defects in the produced items so that the
organizational goal of high quality output is met.

Check Your Progress

NOTES
5. How does learning process starts and continues?
6. What are the types of reinforcements?
7. State the four basic characteristics of attitudes.

10.8 ANSWERS TO CHECK YOUR PROGRESS

QUESTIONS

1. The theory of ‘born’ leaders suggests that some people behave in a

certain manner, because they were born that way. The belief is based
upon the assumption that certain behavioural characteristics are genetic
in nature and are inherited.
2. Those characteristics that are a product of our exposure to various
situations and stimuli, both within the family and the outside
environment are known as learned characteristics of behaviour.
3. Type B personality type is generally more relaxed and sociable in
nature.
4. The perception starts with the awareness of the stimuli including
information from the five sense organs.
5. The learning process starts with motives and continues with cues,
responses and reinforcements until the learner acquires the required
changes in behaviour permanently.
6. Reinforcement may be positive, negative, punishment and extinction.
7. Attitudes have four basic characteristics: direction, intensity, salience
and differentiation.

10.9 SUMMARY

• Human behaviour, a complex phenomenon as it is, is most difficult to

define in absolute terms. It is primarily a combination of responses to
external and internal stimuli.
• It has been established that certain characteristics of behaviour are
genetic in nature, and a human being inherits a certain degree of
similarity to other individuals, as well as uniqueness in the form of
genes and chromosomes.

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• There are two categories in which the causes of human behaviour can Organizational Behaviour

be classified. These are: (1) inherited characteristics and (2) learned

characteristics.
• The concept of personality is often discussed in our daily routine and NOTES
while coming across different people, one may associate different
individuals with different personalities. For example, one particular
individual may be having a pleasing personality while another one
may be having an arrogant personality.
• There are two broad categories of factors that influence the formation
and development of personality. These are heredity factors and
environmental factors.
• Personality is a set of relatively stable characteristics or dimensions
of people that account for consistency in their behaviour in various
situations.
• Perception may be defined as ‘a cognitive process by which people
attend to incoming stimuli, organize and interpret such stimuli into
behaviour.’
• Perception can also be defined as “a process by which individuals
organize and interpret their sensory impressions in order to give
meaning to their environment
• The factors influencing perceptions are the perceiver’s characteristics,
object and situations. However, they can be analysed under specific
heads such as the perceiver’s characteristics, personal factors, internal
factors, organisational structures and social conditions.
• Learning has been defined by several authors in different ways. All of
them have accepted that learning shapes human behaviour.
• The learning process is totally associated with the mental process,
inspiration and action.
• Attitudes have four basic characteristics—direction, intensity,
salience and differentiation. The direction of an attitude is favourable,
unfavourable or neutral. We may like, dislike or be neutral in our views
about a person, a job or a situation.
• It is assumed that the relationship between the attitude of a person and
his behaviour is causal in nature, meaning that the attitudes that people
hold determine their behaviour and what they do. Logic also suggests
such a relationship.
• The subject of motivation is one of the most important and widely
studied topics in the field of management and organizational behaviour.
One of the most frequently used terms among managers is ‘motivation’.
The level of performance is often tied with the level of motivation.
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Organizational Behaviour Accordingly, work effective managers are concerned about motivation
because the work motives of employees affect their productivity and
quality of their work.
• People differ by nature, not only in their ability to perform a specific
NOTES
task but also in their ‘will’ to do so. This ‘will’ to do is known as
motivation. By understanding a person’s ability and his motivation, a
manager can forecast his performance level.

10.10 KEY WORDS

• Chromosomes: It is a threadlike structure of nucleic acids and protein

found in the nucleus of most living cells, carrying genetic information
in the form of genes.
• Perception: It is the organization, identification, and interpretation of
sensory information in order to represent and understand the presented
information, or the environment.
• Attitude: It is a feeling or opinion about something or someone, or a
way of behaving that is caused by this.
• Stimuli: It is a thing or event that evokes a specific functional reaction
in an organ or tissue.

10.11 SELF ASSESSMENT QUESTIONS AND

EXERCISES

Short Answer Questions

1. What are the causes of human behaviour?
2. Write a short note on assessment of personality.
3. List the major components of attitude.
4. What is the relationship between attitude and behaviour?
5. What are the three characteristics of motivation?
Long Answer Questions
1. Examine the inherited and learned characteristics of human behaviour.
2. Explain the determinants and structure of personality.
3. What are the different components of perception?
4. Examine the important elements under the learning process.
5. Discuss the concept of attitude formation.

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 Organizational Behaviour
10.12 FURTHER READINGS

Venkataraman, C.S. and B. K. Srivastava. 1991. Personnel Management and

Human Resources. Tata McGraw Hill. NOTES
Yoder, Dale and Paul D Standohar. 1990. Personnel Management and
Industrial Relations. Sterling Publications.
Well, Ian Beard and Len Holden. Human Resource Management - A
Contemporary Perspective. Macmillan.
Aquinas, P. G. 2005. Human Resources Management – Principles and
Practice. New Delhi: Vikas Publishing House Pvt Ltd.
Decenco, David A. and Stephen P. Robbins. 1989. Personnel/HRM, 3rd
Edition. New Delhi: Prentice-Hall of India.

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Ability: Relevance to
Organizational Behaviour
in Hospital Management UNIT 11 ABILITY: RELEVANCE
TO ORGANIZATIONAL
NOTES
BEHAVIOUR IN HOSPITAL
MANAGEMENT
Structure
11.0 Introduction
11.1 Objectives
11.2 Organizational Behaviour in Health Care Setting
11.3 Group Behaviour
11.4 Group Dynamics
11.5 Answers to Check Your Progress Questions
11.6 Summary
11.7 Key Words
11.8 Self Assessment Questions and Exercises
11.9 Further Readings

11.0 INTRODUCTION

A well-managed organization can survive and even prosper during the most
difficult economic times whereas business history is full of instances where
badly managed companies declared bankruptcy even during economic upturns.
Even though organizational vitality depends upon a number of factors such
as general state of the economy, management and even luck—which means
being in the right business at the right time—it is primarily the managerial
ability or inability that determines the success or failure of an organization.
If the success of an organization is directly dependent upon the ability
of management then which critical aspect of management differentiates a
“good” management from a “bad” management?
In other words, out of all the skills required of management such as
technical, analytical, conceptual and human skills, which one is the most
crucial as to determine the success or failure of the organization?
While technical, analytical and conceptual skills are primarily
knowledge based and can be learned and predictably applied, it is human
skills that pose the greatest challenge to management due to complexity of
human psychological processes and unpredictability of human behaviour. In
the previous unit, you studied about the important elements of organizational
behaviour, in this unit, you will learn about the relevance of organizational
behaviour specifically in the healthcare setting.
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 We define group as more than two employees who have an ongoing Ability: Relevance to
Organizational Behaviour
relationship in which they interact and influence one another’s behaviour and in Hospital Management
performance. The behaviour of individuals in groups is something more than
the sum total of each of the individuals acting in his or her own way. Learning
capabilities represent a set of core competencies, which are defined as the special NOTES
knowledge, skills, and technological know-how that differentiate an individual or
an organization from competitors and enable them to adapt to their environment.
Learning capacities are the fuel for individuals or organizational
success. In this unit, you will study about theories of group behaviour and
group dynamics.

11.1 OBJECTIVES

After going through this unit, you will be able to:

• Discuss the relevance of organizational behaviour in hospital management
• Explain the concept of group behaviour
• Examine the nuances of group dynamics

11.2 ORGANIZATIONAL BEHAVIOUR IN HEALTH

CARE SETTING

Organizational behaviour is the study of human behaviour in groups or

organizations and it also aims at moulding behaviour through specific means
of analysis.
An organization is a group of people working together for a specific
goal. The working relation with each other in a group is a constant contributing
factor towards the achievement of goals. This also helps in giving proper
shape to the organization. Organizational behaviour takes its part from various
branches of science like psychology, sociology, anthropology etc.
Organization behaviour is very important in formulating guidelines for
regulating activities of people and staff in an organization and also gives a
light to develop overall culture of any institution.
The success of any institution depends on the performance of its
employees. Better performance of people can be achieved by effective
management of people. Behaviour of people in any group is largely influenced
by ideas, feelings and attitudes. For effective management of people, it is
important to understand the feelings, ideas and attitudes of people working
in an organization. As learnt in previous unit, individual behaviour varies
from one person to another. So, it becomes almost impossible to find a single
guideline for managing people. As organizational problems may vary, there
should be a number of guidelines or solutions.
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Ability: Relevance to Organizational behaviour in health care setting is mandatory for
Organizational Behaviour
in Hospital Management ensuring patient safety, ethical behaviour among the health care members,
client centered care and effectiveness in providing health care facilities. This
also leads to increased patient satisfaction towards the care provided.
NOTES
The existence of various levels of hospitals in the community aims at
providing optimum delivery of health care facilities for different levels of
care and region. Here organizational behaviour serves as a guideline for the
behaviour of staff. Organizational behaviour management focuses mainly
on what people do and also analyses why they do it. This then leads to an
evidence-based intervention strategy to improve the behaviour of people,
i.e., staff in the case of hospitals. Organizational behaviour management has
much more to do in health care management.
The different types of healthcare delivery system including hospitals,
home care, rehabilitation services and palliative care aide a variety of people
in health care system. The needs of patients are different in each segment.
The lifestyle, values, beliefs and attitudes of health care professionals are
definitely different as they belong to different settings. The capacity of each
professional is different. Their perceptions are also varied based on their
values and customs.
It is important for the health care staff to understand the needs of people
coming to them for in different capacities. So it is important for the managers
in the healthcare sector to possess skills and knowledge concerning the
integration of change in the right manner. They should also possess effective
interpersonal skills, communication ability, and competent leadership skills.
This is very much needed to guide and direct diverse groups of individuals
towards the achievement of an optimum health care.
The behaviour of people in an organization can either improve or bring
down the level of organization. Some employees may be compassionate and
helpful towards others in their workplace, this helps to create a supportive
work culture. This attitude is because of the faith in the management and
their commitment towards the organization. An employee who has no trust in
the management will become unsatisfied in work and can cause harm to the
organization. Hence organization behaviour largely depends on the attitude
of the employee and can directly contribute to the overall improvement of
organization.
When employees are encouraged, they feel more confident with the
ideas that will eventually benefit the organization. On the other side, when
the employees are unable to provide valuable suggestions, they feel they are
going to face criticism or embarrassment. Employees in any institution get
socialized based on the working environment.
For solving the organizational problems, it is necessary to understand
the reason for their occurrence. Top level management should try to find out
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172 Material
factors in the work culture. This should be in the form of promotions, new Ability: Relevance to
Organizational Behaviour
incentives or rewards. in Hospital Management
Organizational behaviour takes into account individual and group
behaviour and the major factors that impact their behaviours. Influencing and
NOTES
changing the human behaviour is another important aspect of organizational
behaviour.
Organizational behaviour also helps in improving labour relationships.
This helps in identifying the root cause of any problem and thus it helps in
removing the cause and improving relationships. It also helps in alleviating
negative responses. This also aids in maintaining friendly relationship with
the employees and build a work place harmony.
Another advantage of understanding the organizational behaviour is
that it helps in predicting and controlling human behaviour. A person who can
apply his skills in understanding organizational behaviour can easily identify
changes in human behaviour, and he can apply his knowledge in this regard.
It also helps in increasing productivity, effectiveness, efficiency etc., and it
aids in reducing dysfunctional behaviour in workplace like absenteeism,
dissatisfaction and delay etc.
Understanding organizational behaviour also helps in better utilization
of human resource. It helps in inspiring the employees in the organization.
Organizational behaviour helps in improving managerial skills. Or in other
words it helps in creating leaders. It also aids in self-development. It also
contributes towards improving human values.
Importance of Organizational Behaviour
• It helps in building better relationships by achieving organizational,
and social objectives.
• It includes a wide range of human resource like behaviour, training
and development, change management, leadership etc.
• It is effective in facilitating coordination among employees.
• It helps in improving goodwill of the organization.
• It helps in achieving organizational goals quickly.
• It is helps in judicious utilization of resources.
• It facilitates motivation.
• It improves efficiency.
Limitations of Organizational Behaviour
• It can cause dependence and irresponsibility.
• At times, it gives a message that beyond a certain point, there is a
decline in output.
• Manipulative managers can mislead the employees. Self-Instructional
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Ability: Relevance to Applications of Organizational Behaviour in the Hospital Setting
Organizational Behaviour
in Hospital Management
Organizational behaviour is mainly focused to improve the patient safety
in health care setting. It aims at bringing up new dimensions in health care
NOTES management system.
• It aims at observable behaviour.
• It tries to identify external factors affecting behaviour.
• It aims to correlate with antecedents and motivate with consequences.
• It focuses on positive outcome.
• It helps in finding out new interventions.
• It assists with the application of scientific methods
• It integrates theory with practice.
Organizational Behaviour Management (OBM) for Patient Safety
Let’s see how organizational behaviour management may be used for ensuring
patient safety. For instance, activity like hand washing is the primary and
most important step in reducing cross infections. Here the human resource
manager can reinforce the importance of hand washing through training. This
behaviour of employees can be forced or strengthened through the awards or
positive encouragement towards proper hand washing techniques.
This will make a positive sense towards hand washing and employees
will naturally follow it.
Other examples of influencing staff behaviour through OBM are:
• Antecedent strategy for patients’ admission to medicine departments
to effect reduced length of stay with no difference in outcomes.
• Education, discussion, and feedback on proper laboratory tests to
reduce the overall number of tests ordered without any decrement
in patient outcomes.
• Proper communication procedure using antecedent reminders and
feedback to improve patient satisfaction, medication administration
and record-keeping.
• Improving communication with the patients and other health team
members through arranging various motivational sessions.
Instead of giving punishments and negative feedback, health care
delivery system can ensure better delivery through understanding behaviour
of people working in the organization. Here comes the role of proper
understanding of organizational behaviour. OB helps in shaping, directing
and controlling the behaviour of employees in an organization.
Hospital management has to take care of various stakeholders including
not just the doctors, but the care staff, workers and cleaners, dispensary and
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canteen personnel, medical directors, board members, sales representatives, Ability: Relevance to
Organizational Behaviour
customer care officials, among many others. Organizational behaviour then in Hospital Management
allows the hospitals to ensure that the operation of the entire hospital is
efficient with effective communication and work channels defining roles upto
the lowest unit of functions. NOTES

Specific applications Of OB in Health care Setting

• It aids in preventing diagnosis errors.
• It helps in alleviating treatment errors.
• It helps in preventing conducting wrong procedures.
• It helps reducing bedsores and patient falls.
• It fosters the use of glove and hand washing.
• It also helps in reducing communication errors.

Check Your Progress

1. Why is organizational behaviour mandatory in health care setting?
2. List the different types of healthcare delivery system.

11.3 GROUP BEHAVIOUR

We define ‘group’ as more than two employees who have an ongoing

relationship in which they interact and influence one another’s behaviour and
performance. The behaviour of individuals in groups is something more than
the sum total of all acting in their own way. In other words, when individuals
are in groups, they act differently than they do when they are alone.
Groups can be either formal or informal.
Formal Groups
A formal group is set up by the organization to carry out work in support of
the organization’s goals. In formal groups, the behaviour that one should
engage in are stipulated by and directed towards organizational goals.
Examples include a bookkeeping department, an executive committee and
a product development team. The formal group may be a command group
or a task group.
(i) Command group
A command group comprises a manager and the employees who report to him
or her. Thus, it is defined in terms of the organization’s hierarchy. Membership
in the group arises from each employee’s position in the organizational chart.

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Ability: Relevance to (ii) Task group
Organizational Behaviour
in Hospital Management
A task group comprises employees who work together to complete a particular
task or project. A task group’s boundary is not limited to its immediate
NOTES hierarchical superior. It can cross-command relationships. An employee’s
membership in the group arises from the responsibilities delegated to the
employee—that is, the employee’s responsibility to carry out particular
activities. The task group may be temporary with an established life span,
or it may be open ended.
Informal Groups
An organization’s informal groups are groups that evolve to meet social
or affiliation needs by bringing people together based on shared interests
or friendship. Thus, informal groups are alliances that are neither formally
structured nor organizationally determined. These groups are natural
formations in the work environment that appear in response to the need for
social contact. Many factors explain why people are attracted to one another.
One simple explanation is proximity; when people work near one another
every day, they are likely to become friends. That likelihood is even greater
when people share similar attitudes, personalities or economic status.
(i) Friendship groups
Groups often develop because the individual members have one or more
common characteristics. These formations are known as friendship groups.
Social alliances, which frequently extend outside the work situation, can be
based on similiraties age, political view, education, etc.
(ii) Interest groups
People who may or may not be aligned to common command or task groups
may affiliate to attain a specific objective with which each is concerned. This
is an interest group.
(iii) Reference groups
Sometimes, people use a group as a basis for comparison in making decisions
or forming opinions. When a group is used in this way, it is called a reference
group. Employees have reference groups inside or outside the organization
where they work. For most people, the family is the most important reference
group. Other important reference groups typically include co-workers, friends
and members of the person’s religious organization. The employee need not
admire a group for it to serve as a reference group. Some reference groups
serve as a negative reference; the employee tries to be unlike the members
of these groups.

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(iv) Membership groups Ability: Relevance to
Organizational Behaviour
in Hospital Management
When a person belongs to a group (formal and informal groups to which
employees actually belong) the group is called a membership group (or
affiliation group) for that person. Members of a group have some collective NOTES
benefits and responsibilities that go beyond the group serving as a reference
point. In a membership group, each member would be expected to contribute
to the group’s well-being and would enjoy the benefit arising from the group
member’s friendship.
There are two theories of group formation, i.e., functionalist theory
and interpersonal attraction theory. The first focusses on the functionality of
the group aimed at achieving collective goals and the second emphasizing
on the human need for social interaction.
Sigmund Freud believed that groups form and continue because of the
need for affiliation and power.
Lewin held that group was a function of inter-related factors of the
individual and the group.
Interaction theory views the group as a system of interacting individuals
that produce three elements; activity-interaction-sentiment. This holds that
you look at each to understand group behaviour.
The systems theory adopts a position similar to interaction but adding
the elements of positions and roles along with inputs and out puts.
Sociometric orientation emphasizes interpersonal choices among group
members and the focus is on morale and performance and their dependence
on the group
Psychoanalytic orientation focusses on the drives of the individual and
is concerned about the motivational and defensive processes of the individual
as related to the group.
General Psychology orientation attempts to extend the theoretical
analyses of individual behaviour to group behaviour.
Empirical-statistical orientation holds the basic concepts of group
theory can be discovered through the application of statistical analysis of
data abut individuals.
Formal and informal groups are formed in organizations for different
reasons. Formal groups are sometimes called official or assigned groups
and informal groups may be known as unofficial or emergent groups.
Organizations routinely form groups. If we assume that management decisions
are rational, groups must benefit organizations in some way. Presumably,
the use of groups can contribute to achieving and maintaining a sustainable
competitive advantage. Groups can do this if they enable an organization to

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Ability: Relevance to fully tap the abilities and energy of its human resources. Furthermore, with
Organizational Behaviour
in Hospital Management regard to informal groups, people form groups to meet their individual needs.
(i) Performance
NOTES Group effort can be more efficient and effective than individual efforts,
because it enables the employees to specialize in and contribute to a variety
of strengths. Organizations structure employees into functional and task
groups so that they can develop and apply expertise in particular functions,
products, problems or customers. The other factor contributing to performance
is motivation, and groups can enhance this as well. When employees work in
groups, the group is an important force for creating and enforcing standards
for behaviour.
(ii) Cooperation
Carrying out an organization’s mission is something no person can do
alone. However, for several people to accomplish a mutual goal, they must
cooperate. Group dynamics and characteristics can enhance cooperation
among employees, especially when members identify themselves as a group
and are rewarded for group success.
(iii) Satisfaction
If satisfaction improves motivation (and therefore performance), organizations
as well as individual employees can benefit from employees’ satisfaction
derived from group membership. A major source of this satisfaction is that
people have a need of being with others and being liked by them. The way
people satisfy this category of needs is by participating in groups focusing
on social activity. Group membership may also be a means of satisfying their
need for security, power, and esteem.

Check Your Progress

3. What is a command group?
4. What is expected of members in a membership group?

11.4 GROUP DYNAMICS

Group dynamics was invented at the early stages of civilisation. When

individual members were unable to meet their economic and social
requirements, they united together. Some members sat together and pondered
over the problem to get an effective solution. This was the beginning of
the formation of a group, because a group can perform some things which
individuals cannot. The group has a tremendous force of strength. The more

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effective the formulation and proper utilisation of group thinking are in the Ability: Relevance to
Organizational Behaviour
organization, the more strength the group will possess. in Hospital Management
Group dynamics has become an important subject of management,
because it provides useful information on dynamics of behaviour. The social
NOTES
process by which people interact face to face is called group dynamics. The
study of group dynamics has been done under meaning and design, type of
group, physical environment, personal environment, social environment,
task environment, group decisions, strength and weakness and team work.
Meaning and Origin of Group Dynamics
Dynamics means force. It infers that group dynamics is group force and
strength. It is a force operating within the group. The kind of force operating
within the group depends upon the kind of leadership style. Group dynamics
has synergy whereby two plus two is equal to five. A group is the composition
of two or more persons formed for achieving the group goals through personal
interaction and relationship. The group members are interdependent. A group,
once formed, motivates people to join it for personal and organisational
interests. Members perceive that the group exists and they are members of
the group.
Features of Group Dynamics
The important features of group dynamics are perception, motivation, groups
goals, group organization, interdependency, interaction and entitativity.
1. Perception: Group dynamics as defined by perception implies that
every member of the group is aware of his respective relationship
with others. The group consists of organisms or agents. The members
or agents are engaged in interaction with one another. They have
face to face meetings. They develop some impression or perception
about each other and give their reactions to each other. Each member
perceives the group differently, which he reveals at some situations.
The members perceive the role of the group based on their learning and
background. Group strength is developed if its members are properly
trained and motivated. Group members form a group against the forces
which threaten their individual freedom. Members perceive the group
as problem-solving or as developmental depending upon the situation
on which groups are formed by the members.
2. Motivation: Members join groups because they expect that the group
will solve their problems. They want progress and promotion which are
achieved through group performance. The pressures and problems are
jointly met by them. Group norms emerge to guide individual behaviour.
Cooperative feelings are increased for helping each other. The group
is developed taking into consideration individual interests. Employees
join groups to get their pay and working problems redressed. In a social
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Ability: Relevance to system, businessmen join a club or association to improve their business
Organizational Behaviour
in Hospital Management opportunities and solve the problems posed by the administration and
people. Social groups are formed for solving individual problems. A
group is a collection of organisms in which the existence of a member is
NOTES assured by them. The perception of unity and interactive force is present
in a group, which motivates the employees for better performance. The
different needs of society are met by forming different groups. The
group leader has to play his role of providing a proactive influence and
receiving the feedback from the group members.
3. Group goals: Group goals are targets towards which input, process
and output are directed. Group goal is the essential component of group
formation, although it is not the only condition for forming a group. A
goal is used for motivating the employees. The path goal relationship
produces a higher responsibility for attaining the goals. If people of a
group accept responsibility, group activities are evolved and workers
perform successfully. When employees see the manager as supportive,
they try to achieve the group goals. The responsibility consciousness
makes the group members realise their duties. They put group goals
above their individual goals. Members become an inevitable part of the
group if they start realising the group goals as superior to the individual
goals.
4. Group organization: Group is an organization which is composed of
different organs to attain certain objectives. A group has the structural
elements of an effective organization. A socio-psychological group is
evolved wherein two or more individuals are interrelated. It has a set
standard of relationship among its members. Similarly, it has a set of
norms that regulate the functions of the group. A number of individuals
in the group have definite status, role relationship, set of values and
own regulating behaviour. The group structure has power relations,
effective relations and well-defined jobs. It has diagnosing, adapting
and communicating processes. Individual group members differ from
each other. A group is used for developing knowledge and skills. All
the group members are not equally powerful. Some of them have
more power and a higher position than others. A hierarchical structure
is visible in the group. It has group force for the development of the
whole organization.
5. Interdependency: The main feature of a group is the members’
interdependence. The members of a group may have a common goal but
they may not be a part of the group because they are not interdependent.
Individuals waiting for their turn at a bus stop have the common goal
of travel but they do not constitute a group because the individuals
are not interdependent. If the individuals start supporting each other
and interact with each other, they form a group. If they develop it as a
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 permanent system, it becomes an organization. Interdependence must Ability: Relevance to
Organizational Behaviour
be dynamic. The group members have equity of goals and similarity in Hospital Management
of performance. Dynamism is experienced if interdependence is
committed into group strength. A group is a social entity which has
social strength. It is derived from the constituent members who are NOTES
interdependent.
6. Interaction: Members of a group must interact with each other. If
they are interdependent but do not interact, the group’s goals are not
achieved. Members have an interpersonal problem-solving mode.
If any problem arises, the interaction of all the members is needed
to solve the problem. Each person must communicate with others
when the need arises. Interaction differentiates the group from a mere
collection of people. Interaction between the members of a group
may take different forms, e.g. verbal interaction, physical interaction,
emotional interaction and so on. The group is defined on the basis of
interaction, wherein two or more persons interact with one another in
such a manner that each person influences and is influenced by each
other. It is a two-way communication which requires mutual influence.
A group is an entity in which communication is essential as in any other
organization.
7. Entitativity: A group has its own identity. It has similarity and
proximity. It is felt and realised but cannot be seen. The collection of
individual experiences become the guidelines for the members. The
uniform, office and people become the symbol of a group. The vicinity
and proximity have given birth to the group.
Issues in Group Dynamics
Some of the issues that hinder healthy group dynamics are bad communication,
poor leadership, lack of focus, social loafing, group thinking, dominating
and arguing behaviour, tunnel vision, over-dependency and people pleasing
behaviour, etc.

Check Your Progress

5. What produces a higher responsibility for attaining the goals?
6. List some of the issues that hinder healthy group dynamics.

11.5 ANSWERS TO CHECK YOUR PROGRESS

QUESTIONS

1. Organizational behaviour in health care setting is mandatory for

ensuring patient safety, ethical behaviour among the health care
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Ability: Relevance to members, client centered care and effectiveness in providing health
Organizational Behaviour
in Hospital Management care facilities. This also leads to increased patient satisfaction towards
the care provided.
2. The different types of healthcare delivery system including hospitals,
NOTES
home care, rehabilitation services and palliative care aide a variety of
people in health care system.
3. A command group comprises a manager and the employees who report
to him or her. Thus, it is defined in terms of the organization’s hierarchy.
4. In a membership group, each member would be expected to contribute
to the group’s well-being and would enjoy the benefit arising from the
group member’s friendship.
5. The path goal relationship produces a higher responsibility for attaining
the goals.
6. Some of the issues that hinder healthy group dynamics are bad
communication, poor leadership, lack of focus, social loafing, group
thinking, dominating and arguing behaviour, tunnel vision, over-
dependency and people pleasing behaviour, etc.

11.6 SUMMARY

• An organization is a group of people working together for a specific

goal. The working relation with each other in a group is a constant
contributing factor towards the achievement of goals. This also helps in
giving proper shape to the organization. Organizational behaviour takes
its part from various branches of science like psychology, sociology,
anthropology etc.
• Organizational behaviour in health care setting is mandatory for
ensuring patient safety, ethical behaviour among the health care
members, client centered care and effectiveness in providing health
care facilities. This also leads to increased patient satisfaction towards
the care provided.
• The existence of various levels of hospitals in the community aims
at providing optimum delivery of health care facilities for different
levels of care and region. Here organizational behaviour serves as
a guideline for the behaviour of staff. Organizational behaviour
management focuses mainly on what people do and also analyses why
they do it. This then leads to an evidence-based intervention strategy
to improve the behaviour of people, i.e., staff in the case of hospitals.
Organizational behaviour management has much more to do in health
care management.

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 • We define ‘group’ as more than two employees who have an ongoing Ability: Relevance to
Organizational Behaviour
relationship in which they interact and influence one another’s in Hospital Management
behaviour and performance. The behaviour of individuals in groups
is something more than the sum total of all acting in their own way.
NOTES
• Formal and informal groups are formed in organizations for different
reasons. Formal groups are sometimes called official or assigned groups
and informal groups may be known as unofficial or emergent groups.
Organizations routinely form groups.
• A formal group is set up by the organization to carry out work in support
of the organization’s goals. In formal groups, the behaviour that one
should engage in are stipulated by and directed towards organizational
goals. Examples include a bookkeeping department, an executive
committee and a product development team. The formal group may
be a command group or a task group.
• An organization’s informal groups are groups that evolve to meet
social or affiliation needs by bringing people together based on shared
interests or friendship. Thus, informal groups are alliances that are
neither formally structured nor organizationally determined.
• There are two theories of group formation, i.e., functionalist theory and
interpersonal attraction theory. The first focusses on the functionality
of the group aimed at achieving collective goals and the second
emphasizing on the human need for social interaction.
• Group dynamics was invented at the early stages of civilisation. When
individual members were unable to meet their economic and social
requirements, they united together. Some members sat together and
pondered over the problem to get an effective solution.
• Dynamics means force. It infers that group dynamics is group force
and strength. It is a force operating within the group. The kind of force
operating within the group depends upon the kind of leadership style.
Group dynamics has synergy whereby two plus two is equal to five. A
group is the composition of two or more persons formed for achieving
the group goals through personal interaction and relationship.
• The important features of group dynamics are perception, motivation,
groups goals, group organization, interdependency, interaction and
entitativity.

11.7 KEY WORDS

• Group: It refers to more than two employees who have an ongoing

relationship in which they interact and influence one another’s
behaviour and performance.
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Ability: Relevance to • Formal groups: It is group set up by the organization to carry out work
Organizational Behaviour
in Hospital Management in support of the organization’s goals.
• Informal groups: These are alliances that are neither formally structure
NOTES nor organizationally determined.
• Group dynamics: It refers to the group force and strength or the force
operating within the group.

11.8 SELF ASSESSMENT QUESTIONS AND

EXERCISES

Short Answer Questions

1. What is the importance and limitations of organizational behaviour?
2. Write a short note on examples of influencing staff behaviour through
OBM.
3. List the specific applications of organizational behaviour in health care
setting.
4. Explain the reasons for forming formal and informal groups in an
organization.
5. What is the meaning and origin of group dynamics?
Long Answer Questions
1. Describe the different types of groups in an organization.
2. Examine the features of group dynamics.

11.9 FURTHER READINGS

Venkataraman, C.S. and B. K. Srivastava. 1991. Personnel Management and

Human Resources. Tata McGraw Hill.
Yoder, Dale and Paul D Standohar. 1990. Personnel Management and
Industrial Relations. Sterling Publications.
Well, Ian Beard and Len Holden. Human Resource Management - A
Contemporary Perspective. Macmillan.
Aquinas, P. G. 2005. Human Resources Management – Principles and
Practice. New Delhi: Vikas Publishing House Pvt Ltd.
Decenco, David A. and Stephen P. Robbins. 1989. Personnel/HRM, 3rd
Edition. New Delhi: Prentice-Hall of India.

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 Group Norms, Cohesiveness
BLOCK - IV and Organizational
Behaviour
NATURE OF CHANGE RESSITANCE
NOTES
UNIT 12 GROUP NORMS,
COHESIVENESS AND
ORGANIZATIONAL
BEHAVIOUR
Structure
12.0 Introduction
12.1 Objectives
12.2 Group Norms
12.3 Group Cohesiveness
12.4 Relevance of Norms and Cohesiveness to Organizational
Behaviour
12.5 Answers to Check Your Progress Questions
12.6 Summary
12.7 Key Words
12.8 Self Assessment Questions and Exercises
12.9 Further Readings

12.0 INTRODUCTION

In the previous unit, you were introduced to the group behaviour and
dynamics and how it affects organizational behaviour. In this unit, we
will continue the discussion by introducing two other important elements
crucial to group and its effect on the organizational behaviour: group norms
and cohesiveness. Group norms are standard behaviour and rules followed
by the group members. It comes into existence because of two important
factors: group members need a sort of identity through uniform attitudes
and the group members need to validate their beliefs. These norms help to
regulate behaviour of the group members. Group cohesiveness, on the other
hand, refers to the force or attraction or relationship of the group members
with other members of the group as well as the group itself. It positively
affects production, increases the conformity to the group norms, results in
better communication and increases group retention. In this unit, you will
learn about the concept of group norms, cohesiveness and its relevance to
organizational behaviour.

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Group Norms, Cohesiveness
and Organizational 12.1 OBJECTIVES
Behaviour

After going through this unit, you will be able to:

NOTES • Discuss the concept of group norms
• Explain the meaning of group cohesiveness
• Describe the relevance of group norms and cohesiveness to
organizational behaviour

12.2 GROUP NORMS

Norms are shared ways of looking at the world. Groups control members
through the use of norms. A norm is a rule of conduct that has been established
by group members to maintain consistency in behaviour. Norms tell members
what they should and should not do under certain circumstances. From an
individual’s standpoint they tell what is expected of you in certain situations.
Norms differ among groups, communities, and societies, but they all have
norms.
According to Hackman, norms have the following characteristics:
(i) Norms summarize and simplify group influence processes. They
resolve impersonal differences in a group and ensure uniformity
of action.
(ii) Norms apply only to behaviour, not to private thoughts and
feelings.
(iii) Norms are usually developed gradually, but the process can be
shortened if members so desire.
(iv) Not all norms apply to everyone. High-status members often enjoy
more freedom to deviate from the ‘letter of the law’ than do other
members.
Types of Norms
Norms are unique to each work group. Yet, there are some common classes
of norms that appear in most work groups.
(i) Performance-related processes: Work groups typically provide their
members with explicit cues on how hard they should work, how to
get the job done, their level of output, etc. These norms deal with
performance-related processes and are extremely powerful in affecting
an individual employee’s performance.
(ii) Appearance factors: Some organizations have formal dress codes.
However, even in their absence, norms frequently develop to dictate
the kind of clothes that should be worn to work.
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 (iii) Allocation of resources: These norms cover pay, assignment of difficult Group Norms, Cohesiveness
and Organizational
jobs, and allocation of new tools and equipment. Behaviour
(iv) Informal social arrangement: These norms can originate in the group
or the organization and cover pay assignment of difficult jobs, and
NOTES
allocation of new tools and equipment.
Factors Influencing Conformance to Norms
As a member of a group, you desire acceptance from the group. Due to
your desire for acceptance, you are susceptible to conforming to the group’s
norms. Considerable evidence shows that groups can place strong pressures
on individual members to change their attitudes and behaviours to conform
to the group’s standard. However, conformity to norms is not automatic. It
depends on the following factors:
(i) Personality factors: Research on personality factors suggests that the
more intelligent are less likely to conform than the less intelligent.
Again, in unusual situations where decisions must be taken on unclear
items, there is a greater tendency to conform to the group’s norms.
Under conditions of crisis, conformity to group norms is highly
probable.
(ii) Situational factors: Group size, communication patterns, degree of
group unanimity, etc., are the situational factors influencing conformity
to norms.
(iii) Intragroup relationships: A group that is seen as being creditable will
evoke more compliance than a group that is not.
(iv) Compatible goals: When individual goals coincide with group goals,
people are more willing to adhere to group norms.

12.3 GROUP COHESIVENESS

Groups are a pervasive part of modern life. We are members of many different
groups. Although every group is different, possessing its own unique attributes
and dynamics, it is also true that in many important ways groups tend to
display similar patterns of evolution. Formal and informal groups are formed
for various reasons. Some of the reasons involve the need for satisfaction,
proximity, attraction, goals and economics. The closeness or commonness
of attitude, behaviour and performance makes groups cohesive.
Formal and informal groups seem to possess a closeness or commonness
of attitude, behaviour and performance. This ‘closeness’ or ‘commonness’
is called ‘cohesiveness’. Cohesiveness is a force that acts on the members
to remain in a group and is greater than the forces that work on members to
pull them away from the group. Highly cohesive groups comprise individuals
who are motivated to be together. Group cohesiveness is the extent to which Self-Instructional
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Group Norms, Cohesiveness a group is committed to remaining together; it results from ‘all forces acting
and Organizational
Behaviour on the members to remain in the group.’ The forces that create cohesiveness
are attraction to the group, resistance to leaving the group and motivation to
remain a member of the group. There are a number of reasons for groups to
NOTES be cohesive. Some of them are given below:
(i) The goals of the group and the members are compatible and therefore
individuals are attracted towards groups.
(ii) The group has a charismatic leader who is well respected and admired
by his followers.
(iii) Members get support from other group members and are helped by
other members to overcome obstacles and barriers.
(iv) The group is small enough to enable members have their opinions heard
and are evaluated by others.
The concept of group cohesiveness is important for understanding
groups in organizations. From the organization’s point of view, the degree of
cohesiveness in a group can have either positive or negative effects depending
on how group goals match up with those of the organization. If the group
is highly cohesive but its goals are not compatible with the organization
then group behaviour will be negative. Therefore, from the point of the
organization, it may sometimes be desirable to alter the cohesion of a work
group; for example, if the group goals are compatible with organizational
goals then the managers must increase cohesiveness as higher the group
cohesiveness, the more beneficial is its effect on the organization. However,
when group goals counter those of the organization, managers must take steps
to decrease group cohesiveness. Here, it should be noted that attempts to
alter the cohesiveness of any group may not work and may even backfire on
the organization. Therefore, managers should exercise great care in making
decisions about attempting to influence the cohesion of work groups.
Successful groups reach their goals more often and this increases group
cohesiveness. It should also be noted that a successful group becomes more
cohesive and this increases the possibility of success.

12.4 RELEVANCE OF NORMS AND

COHESIVENESS TO ORGANIZATIONAL
BEHAVIOUR

One of prevailing arguments in business is the effectiveness of group work.

There are several opinions to suggest that companies are overestimating
the importance of group dynamics, and that the use of a group approach
to resolve issues should be cut down. There is, however, another school of
thought that endorses the use of groups and views it as among the best tools
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of involving employees. Many also believe that group dynamics is an ethical Group Norms, Cohesiveness
and Organizational
way of managing an organization. Behaviour
Organizations need groups so that its employees can exchange
information. It is impossible for any one individual to know about every
NOTES
little thing relevant to the organization. That knowledge is only possible
through group discussion. Teamwork is vital to the success of an organization.
Without proper group dynamics, members of an organization may not be able
to function at their optimum potential. For example, if a boss dominates a
business meeting without taking feedback from those attending it, the purpose
of the meeting is nullified and the attendees are rendered redundant.
All successful organizations have good teamwork. There are five crucial
elements of effective group dynamics:
(i) A personal desire to accomplish team goals
(ii) A desire to learn from one another
(iii) A willingness to openly share information
(iv) A desire to ask questions, and do so in a respectful way
(v) A desire to help each other to achieve team goals
For groups to function effectively there will have to be certain norms.
Norms help to establish proper behaviour in social situations; they have a
great influence over group behaviour. If individuals in a group were to behave
as they pleased, there would be ceaseless arguments and no decision would
be possible.
It is important for managers to understand how norms develop and the
reasons for their enforcement. So, why is it so important for group norms to
be enforced? One major reason is that norms help groups to survive. They
are also enforced to simplify the behaviour of group members. With norms
in place, everyone will behave in a respectful manner, and groups can avoid
embarrassing interpersonal problems.
When a group becomes cohesive, the organization will benefit. There
are factors that influence the cohesiveness of the group. Groups tend to
become cohesive when competition is great or there is a threat to their survival.
Smaller groups are more cohesive as members get more time for each other.
The advantages to group cohesiveness to an organization are manifold.
Worker satisfaction increases; there will be low turnover and absenteeism
as employees enjoy spending time with group members. Ultimately, higher
productivity is achieved.
There is evidence to suggest that groups characteristically do better
than individuals when the work requires greater skill and decision-making
ability. Groups have greater flexibility. Individuals in a group have more
likelihood of partaking in decision-making and problem-solving activities
than individuals outside of a group. Groups are also mainly responsible for
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Group Norms, Cohesiveness completing organizational work. Thus, the effectiveness of groups is relevant
and Organizational
Behaviour to the effectiveness of an organization.

Check Your Progress

NOTES
1. Give an example of appearance factors or norms in organizations.
2. List some of the situational factors which affect conformance to
norms.
3. What are the forces that create cohesiveness?

12.5 ANSWERS TO CHECK YOUR PROGRESS

QUESTIONS

1. Examples of appearance factors or norms include formal dress codes.

2. Group size, communication patterns, degree of group unanimity, etc.,
are the situational factors influencing conformity to norms.
3. Factors that create cohesiveness are attraction to the group, resistance
to leaving the group and motivation to remain a member of the group.

12.6 SUMMARY

• Norms are shared ways of looking at the world. Groups control members
through the use of norms. A norm is a rule of conduct that has been
established by group members to maintain consistency in behaviour.
Norms tell members what they should and should not do under certain
circumstances.
• Some common classes of norms that appear in most work groups
include: performance related processes, appearance factors, allocation
of resources and informal social arrangement.
• Factors influencing conformance to norms include personality factors,
situational factors, intragroup relations and compatible goods.
• Groups are a pervasive part of modern life. We are members of many
different groups. Although every group is different, possessing its own
unique attributes and dynamics, it is also true that in many important
ways groups tend to display similar patterns of evolution.
• Cohesiveness is a force that acts on the members to remain in a group
and is greater than the forces that work on members to pull them away
from the group. Highly cohesive groups comprise individuals who are
motivated to be together. Group cohesiveness is the extent to which a

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 group is committed to remaining together; it results from ‘all forces Group Norms, Cohesiveness
and Organizational
acting on the members to remain in the group.’ Behaviour
• For groups to function effectively there will have to be certain norms.
Norms help to establish proper behaviour in social situations; they have
NOTES
a great influence over group behaviour. If individuals in a group were
to behave as they pleased, there would be ceaseless arguments and no
decision would be possible.
• The advantages to group cohesiveness to an organization are manifold.
Worker satisfaction increases; there will be low turnover and
absenteeism as employees enjoy spending time with group members.
Ultimately, higher productivity is achieved.

12.7 KEY WORDS

• Norms: It refers to the rule of conduct that has been established by

group members to maintain consistency in behaviour.
• Group cohesiveness: It refers to the extent to which a group is
committed to remaining together; it results from ‘all forces acting on
the members to remain in the group.’

12.8 SELF ASSESSMENT QUESTIONS AND

EXERCISES

Short Answer Questions

1. What are the characteristics of group norms?
2. List some of the reasons for groups to be cohesive.
3. Why is group cohesiveness important for understanding groups in the
organization?
Long Answer Questions
1. Explain the types of norms and the factors influencing the conformance
to norms.
2. Discuss the relevance of norms and cohesiveness to organizational
behaviour.

12.9 FURTHER READINGS

Venkataraman, C.S. and B. K. Srivastava. 1991. Personnel Management and

Human Resources. Tata McGraw Hill.
Self-Instructional
Material 191
Group Norms, Cohesiveness Yoder, Dale and Paul D Standohar. 1990. Personnel Management and
and Organizational
Behaviour Industrial Relations. Sterling Publications.
Well, Ian Beard and Len Holden. Human Resource Management - A
Contemporary Perspective. Macmillan.
NOTES
Aquinas, P. G. 2005. Human Resources Management – Principles and
Practice. New Delhi: Vikas Publishing House Pvt Ltd.
Decenco, David A. and Stephen P. Robbins. 1989. Personnel/HRM, 3rd
Edition. New Delhi: Prentice-Hall of India.

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 Organizational Culture

UNIT 13 ORGANIZATIONAL
CULTURE
NOTES
Structure
13.0 Introduction
13.1 Objectives
13.2 Meaning and Significance of Organizational Culture
13.2.1 Organizational Climate
13.3 Creation and Maintenance of Culture
13.3.1 Sustaining Culture
13.4 Change and Organizational Culture
13.5 Impact of Organizational Culture
13.5.1 Theories
13.5.2 Issues in Organizational Culture
13.6 Organizational Change
13.7 Answers to Check your Progress Questions
13.8 Summary
13.9 Key Words
13.10 Self Assessment Questions and Exercises
13.11 Further Readings

13.0 INTRODUCTION

This unit will introduce you to the meaning, significance and theories of
organizational culture. Organizational culture is a system of shared beliefs
and attitudes that develop within an organization and guides the behaviour
of its members. It is also known as corporate culture, and has a major impact
on the performance of organizations and specially on the quality of work life
experienced by the employees at all levels of the organizational hierarchy.
The corporate culture consists of the norms, values and unwritten rules of
conduct of an organization as well as management styles, priorities, beliefs
and interpersonal behaviours that prevail. Together they create a climate
that influences how well people communicate, plan and make decisions.
Strong corporate values let people know what is expected of them. There
are clear guidelines as to how employees are to behave generally within the
organization and their expected code of conduct outside the organization.
Also, if the employees understand the basic philosophy of the organization,
then they are more likely to make decisions that will support these standards
set by the organization and reinforce corporate values. Apart from learning
about the concept of organizational culture, you will be introduced to the
idea of organizational change.

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Organizational Culture
13.1 OBJECTIVES

After going through this unit, you will be able to:

NOTES • Define organizational culture
• Discuss the creation and maintenance of culture
• Analyse the relationship between change and organizational culture
• Name the theories of organizational culture
• State the issues faced with reference to organizational culture

13.2 MEANING AND SIGNIFICANCE OF

ORGANIZATIONAL CULTURE

While culture has been a continuous development of values and attitudes over
many generations, at least the organizational culture can be partially traced
back to the values held by the founders of the organization. Such founders
are usually dynamic personalities with strong values and a clear vision as to
where they want to take their organizations. These founders usually selected
their associates and their employees who had a similar value system so that
these values became an integral part of the organization.
Secondly, the organizational culture is influenced by the external
environment and the interaction between the organization and the external
environment. For example, one organization may create a niche for itself for
extremely high quality defect-free product as a result of competitive forces
and customer demand, while another organization may opt for moderate
quality but lower prices. The work cultures at these two types of organizations
would accordingly differ and would be influenced by external forces such as
customer demand.
Thirdly, work culture is also a function of the nature of the work and
mission and the goals of the organization. For example, in a professional,
research oriented small organization, the workers may be more informal at
all hierarchical levels of the organization, the dress code may not be strictly
observed and the employees may be encouraged to be independent and
innovative. In contrast, other organizations may have a strictly enforced
formal classical hierarchical structure with clearly established channels
of communications and strict adherence to work rules. Accordingly, the
organizational culture of these two types of organizations would be different.
Much has been written and talked about Japanese management styles.
Almost invariably, the economic success of Japanese society is associated
with Japanese culture. The cultural aspect of organizational performance came
into focus with Theory Z, proposed by William Ouchi in 1981. Even though
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Theory Z draws heavily on Japanese approach to management, it is more a Organizational Culture
combination of the current American as well as Japanese style of managing
an organization. Basically, Ouchi’s approach to management calls for:
• Consensus decision-making.
NOTES
• Worker participation in all phases of organizational operations.
• Genuine concern for the overall well-being of employees.
• Life time job security.
The importance of strong culture as a driving force for organizational
success was emphasised by Peters and Waterman in their well received book,
In Search of Excellence. They observed:
Without exception, the dominance and coherence of culture proved
to be an essential quality of the excellent companies. Moreover,
the stronger the culture and the more it was directed towards the
marketplace, the less need was there for policy manuals, organization
charts and detailed procedures and rules. In these companies, people,
way down the line know what they are supposed to do in most situations
because the handful of guiding values is crystal clear.

13.2.1 Organizational Climate

The process of quantifying culture in an organization is called organizational
climate. This is also referred as corporate culture. According to this process,
an employee’s behaviour is influenced by a set of guidelines laid down by
the organization.
There are different approaches to define organizational climate, which
are based on how to define climate and how to measure it effectively on
different stages. These two approaches are as follows:
• Cognitive Schema
• Shared perception
The cognitive schema approach regards climate as an individual
perception and as the work of environment. Therefore, according to this
perspective climate assessments should be covered individually. The shared
perception approach on the other hand gives importance to other perceptions
vis-à-vis climate and has also been defined as the shared perception of the
way things are around here. It is to be noted that there are major overlaps in
both the approaches.
• Cognitive schema approach: Schemas are known to be mental
structures that perceive the world. They are said to be organized in
memory of associative network in which schemes of similar nature
are clubbed together. Thus, when a particular schema is activated,
the relating schemes will get activated too. Relative schemes become
more accessible in the associative network. If the schema is more
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Organizational Culture accessible it can be used directly and quickly to a particular situation.
When related schemas are activated they tend to influence social
behaviour. However, it is also important to know that a person may
or may not be aware when a schema is activated.
NOTES
Accessibility of schema is increased by the process of salience
and priming. Salience can be defined as the degree to which one
social object stands out in respect to other social objects in a given
situation. This means that the higher the salience of a social object,
more accessibility will be there for the related schemas whereas
priming refers to experiences prior to a situation that make a schema
more accessible.
• Shared perception approach: This approach discusses the
variables which influence an organization’s ability to mobilize
their employees in order to get their business targets met and also
to maximize employee performance. Under this model, the staff of
an organization is surveyed to identify and measure aspects of a
workplace which effect the quality of work life.

13.3 CREATION AND MAINTENANCE OF

CULTURE

The traditions and way of life of the employees create culture in an organization.
The organizational culture is known by its employees’ behaviour and attitudes.
The early traditions are the basis of culture in an organization. The vision
and functions of an organization are the creators of culture. Accumulated
traditions and methods of functions are culture. The ideology and customs of
organizational functions are organizational culture. An organization develops
progressive ideas and technological development for forming a good culture
in an organization. The mission and vision of the founder members of an
organization are the basis for creating the organizational culture. Hard work,
competitive spirit and a disciplined way of life of the founders have created a
disciplined organizational culture for improving the performance. The vision
of Ratan Ji Tata and Ghanshyam Das Birla has created the Tata culture and
Birla culture respectively in the Tata Group and the Birla Group. They are
known by their organizational culture.
13.3.1 Sustaining Culture
Sustaining and maintaining culture is essential for the organization to make
it a permanent source of energy. The experience gained by predecessors must
be continued by the subsequent successors. An improvement for the better
must be introduced into the existing culture. Reinforcement of learning,
performance evaluation criteria, reward system, promotion procedures, etc.
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should be continued as it existed in the vision of the founders. Maintaining Organizational Culture
the culture does not mean that the organisations should adhere to a cultural
paradox. The changing environment is absorbed in the dynamic culture of
an organization. The top management, selection, training­­ and development
programme and socialisation are the important methods of sustaining culture. NOTES
Top management: The attitudes of the top management should continue
to guide the organizational functions. The culture is maintained by adhering
to old values and developmental attitudes. They have certain norms and
values which flow in the minds of sub-ordinates. The culture sponsored by
the top management continues in the employees of an organization. The latter
follows the former. The top management decides and subordinates work. The
dress recommended, the job designs suggested and other factors are taken
into account for keeping culture alive. Tata Groups perpetuate a risk-taking,
bold and innovative culture. HMT is dedicated to a culture of quality and
innovative vision as the top management are practicing it themselves.
Selection: Culture is maintained by a proper selection policy. People
who are qualified and experienced must be appointed ignoring those persons
who want an entry on a pull-push basis. If needed persons are appointed,
the organization can maintain work culture. On the contrary, if people are
appointed based on political support, they are bound to destroy the existing
work culture. The vision, mission and policy of a sound organization must not
be bypassed while selecting the people for work performance. In India, the
public sector could not maintain the real character of the public sector because
of a defective selection policy. But, those public enterprises which have been
given autonomy and have no interference from politicians have worked
satisfactorily. Indian Oil, Oil and Natural Gas Commission, Life Insurance
Corporation of India and Steel Authority of India have been successful in
maintaining some of the policies of a sound public sector. People who do not
have the core values of an organization must not be appointed because they
will destroy the very structural value of the organization.
Training and development programme: After selection and placement,
an organization should adopt a training and development programme
based on the values of the organization. Employees learn the values of the
organization. Training and development programmes are channelised for
enhancing the culture of an organization. Video films, practicing lectures
and problem solutions are the important components of a value sustaining
process. The instructor should identify the problems of learners so that they
can be directed towards the cultural values of the organization. The traits and
qualities of the employees are used for instrumenting the employees on the
values of the organization.
Socialisation: The employees are indoctrinated in the organization’s
culture through the adaptation process which is called socialisation. New
employees are put in the culture of an organization through on the job and Self-Instructional
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Organizational Culture sensitive training. An intensive training programme is instituted to make
the new employees accustomed with the values of the organization which
includes performing all the activities from the early morning to sleeping time.
The whole day is systematically scheduled to make the employees learn all
NOTES the cultures of an organization. The organizational culture is maintained
not only in the form of work functions but also in dining, dressing and
developmental activities. New graduates can easily learn all the cultural
values of an organization through the intensive training programme.
Employees prove their commitment with the cultural values of the
organization after getting the intensive training programme. The newly
appointed employees remain in good standing. They learn the pivotal role
or basic values of an organization. People who fail to learn the basic values
of an organization after training are termed as ‘non-conformists’. They
become rebels if they have values contrary to the organizational values. These
employees are further brought to a steep socialisation process, i.e. prearrival
stage, encounter stage and metamorphosis stage.
Prearrival stage: The values, attitudes and personalities of newly
appointed employees are assessed for driving them towards the organizational
culture. Their weaknesses are revealed to paste them with the organizational
values. Modification and smoothening of their existing values are made by the
management towards the culture of an organization. Employees might have
knowledge of socialisation of the business functions. It is revealed how their
socialisation has not moved towards the organizational values. The diagnosis
reveals the possibilities of a complete socialisation of the organizational
culture. Their firmness, rigidity, unfaithfulness and other anti-attitudes are
smoothened to make their uses in different functions of required values.
Psychologists and behaviourists are invited to smoothen their individual
values towards the organizational values.
Encounter stage: The employees, after entering into business
functions, find the activities against their attitude and expectations. The
expectations of the employees may or may not be equal to the reality of the
business policy, procedures and fellow workers’ attitudes. If expectations are
not very far from the reality in the organization, they reinforce the values
of the organization. A smoothening process is used in this case. When
expectations are far from the reality, the employees are required to replace
their existing style with the organizational policy. The employees should try
to adopt themselves to the values of the organizational culture. If they fail
to adopt, they are put in adverse conditions. They should not be permitted
to destroy the existing culture of the organization. They are forced to resign
if the do not perform according to the norms and values of the organization
after their intensive training programme.
Metamorphosis stage: Employees are required to change their values
which are contrary to those of the organization. The socialisation process is
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reintroduced for emphasising divestiture, stripping away and replacing their Organizational Culture
own values. Perception, learning and personality development programmes
are used to change the values of the employees to bring them on par with those
of the organization. The group values and norms are made sacred objectives
which should be achieved by individuals. Role models are used to train and NOTES
encourage the employees. Monitoring and self-exercise programmes are
held to make people organization-minded. A serial socialisation is needed
for changing the employees’ values for organizational values.

Check Your Progress

1. Name the two schemes used to define and measure of organizational
climate.
2. What forms are the basis for creating the organizational culture?
3. Which type of programmes are used to change the values and norms
of employees to bring them on par with those of the organization?

13.4 CHANGE AND ORGANIZATIONAL CULTURE

Although international business, to some degree, has existed for centuries,

the second half of the last century was most influential in bringing the world
closer to itself. The world, since 1950s has entered an era of unprecedented
global economic activity, including worldwide production, distribution and
global strategic alliances. More recently, in the last decade of the last century,
India and China have opened up for entry of multinational companies. Some
other closed markets under communism and social economies, such as one
time Soviet Union and Eastern Europe have joined the international economic
arena. Some multinational companies such as IBM, GE, BP and Siemens do
business in more than 50 countries. According to Mitroft, ‘For all practical
purposes all business today is global. Firms, industries and whole societies
that clearly understand the new rules of doing business in a world economy
will prosper; those that do not will perish’.
Culture defines behaviour of people and organizations and international
managers are increasingly recognizing the influence of national culture on
organizational functioning. They are being trained in acquiring the skills
of cross-cultural management and they study the behaviour of people in
organizational settings around the world. They seek to understand and improve
the interaction with co-workers, clients, suppliers and alliance partners from
different countries and cultures. Often multilingual, the global manager thinks
with a world view and develops his strategy on the basis of diverse beliefs,
behaviour and practices of people of different countries. He adopts well to
different business environments and solves problems quickly relative to the
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Organizational Culture environment he is in. He understands and respects different government and
political systems and he communicates in the cultural context of a given
class of people. Experienced international managers understand the need
for ‘global mindset’ of cultural adaptability, flexibility, patience and respect.
NOTES
13.5 IMPACT OF ORGANIZATIONAL CULTURE

Culture to an organization is an intangible force, with far reaching

consequences. It plays several important roles in organizations. Different
functions performed by culture are discussed below.
Culture Gives a Sense of Identity to Its Members
An organization’s culture provides a sense of identity to its members. The
more clearly an organization’s shared perception and values are defined,
the more strongly people can associate themselves with their organization’s
mission and feel a vital part of it.
Culture Helps to Generate Commitment Among Employees
The second important function of culture is generating commitment to the
organization’s mission. Sometimes it is difficult for people to go beyond
thinking of their own interest: How will this affect me? However, when there
is a strong, overarching culture, people feel that they are part of that larger,
well-defined whole and involved in the entire organization’s work. Not just
focussed on any one individual’s interest, culture reminds people of what
their organization is all about.
Culture Serves to Clarify and Reinforce Standards of Behaviour
A third important function of culture is that it serves to clarify and reinforce
standards of behaviour. While it is essential for newcomers, it is also beneficial
for veterans. In essence, culture guides employees’ words and deeds, making
it clear what they should do or say in a given situation. In this sense, it
provides stability to behaviour, both with respect to what an individual might
do at different times and what different individuals may do at the same time.
For example, in a company with a culture that strongly supports customer
satisfaction, employees will have clear guidance as to how they are expected
to behave; doing whatever it takes to please the customer. By serving these
important roles, it is clear that culture is an important force influencing
behaviour in organizations.
13.5.1 Theories
No single framework for describing the values in organizational culture has
emerged; however, several frameworks have been suggested. Although these
frameworks were developed in the 1980s, their ideas about organizational
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culture are influential even today. Some of the “excellent” companies that Organizational Culture
they described are less excellent now, but the concepts are still used in
companies all over the world. Managers should evaluate the various parts of
the frameworks described and use the parts that fit the strategic and cultural
values for their own organization. NOTES

1. The Ouchi Framework

One of the first researchers to focus explicitly on analysing the culture of
a limited group of firms was William G. Ouchi (1981). Ouchi analysed the
organizational culture of three groups of firms, which he characterized as (1)
typical US firms, (2) typical Japanese firms, and (3) type Z US firms.
Based on his analysis, Ouchi developed a list of seven points on which
these three types of firms can be compared. He argued that the cultures of
typical Japanese firms and US type Z firms are very different from those
of typical US firms and that these differences explain the success of many
Japanese firms and US type Z firms and the difficulties faced by typical US
firms. The seven points of comparison developed by Ouchi are as follows:
(i) Commitment to employees
According to Ouchi, typical Japanese and Type Z US firms share the cultural
value of trying to retain employees. Thus, both types of firms layoff employees
only as a last resort. In Japan, the value of “keeping employees on” often
takes the form of lifetime employment. This cultural value is manifested in
a commitment of what Ouchi called “long-term employment.”
Ouchi suggested that typical US firms do not have the same cultural
commitment to employees as Japanese firms and US type Z firms do. In
reality, American workers and managers often spend their entire careers in
a relatively small number of companies. Still there is a cultural expectation
that if there is a serious downtown in a firm’s fortune, change of ownership,
or a merger, workers and managers will be let go.
(ii) Evaluation
Ouchi observed that in Japanese and type Z US companies, appropriate
evaluation of workers and managers is thought to take a very long time—
up to 10 years—and requires the use of qualitative as well as quantitative
information about performance. For this reason, promotion in their firms is
relatively slow, and promotion decisions are made only after interviews with
many people who have had contacts with the person being evaluated.
(iii) Careers
Ouchi next observed that the careers most valued in Japanese and Type Z
US firms span multiple functions. In Japan, this value had led to very broad
career paths, which may result in employees gaining experience in six or
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Organizational Culture seven distinct business functions. The career paths in type Z US firms are
somewhat narrower.
However, the career path valued in typical US firms is considerably
narrower. Ouchi’s research indicated that most US managers perform only
NOTES
one or two different functions in their careers. This narrow career path reflects
the value of specialization that is part of so many US firms.
(iv) Control
All organizations must exert some level of control to achieve coordinated
action. Thus, it is not surprising that firms in the US and Japan have developed
cultural values related to organizational control on how to manage it. Most
Japanese and type Z US firms assume that control is exercised through
implicit, informal mechanisms. One of the most powerful of these mechanisms
is the organizational culture.
In contrast, typical US firms expect guidance to come through explicit
directions in the form of job descriptions, delineation of authority, and various
rules and procedures, rather than informal and implicit cultural values.
(v) Decision-making
Japanese and type Z US firms have a strong cultural expectation that decision
making occurs in groups and is based on the principles of full information
sharing and consensus. In most typical US firms, individual decision making
is considered appropriate.
(vi) Responsibility
Here, the parallels between Japanese firms and type Z US firms break
down. Ouchi showed that in Japan strong cultural norms support collective
responsibility, that is, the group as a whole, rather than a single person, is
held responsible for decisions made by the group. However, in type Z US
firms and typical US firms, individuals are expected to take responsibility
for decisions.
(vii) Concern for people
In Japanese firms and type Z firms, the cultural value that dominates is a
holistic concern for workers and managers. Holistic concern extends beyond
concern for a person simply as a worker or a manager to concern about that
person’s home life, hobbies, personal beliefs, hopes, fears, and aspirations. In
typical US firms, the concern for people is a narrow one that focuses on the
workplace. A culture that emphasizes a strong concern for people, rather than
the one that describes a work task orientation can decrease worker turnover
(Powell and Mainiero 1993).

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Theory Z and performance Organizational Culture

Ouchi argued that the cultures of Japanese and type Z firms help them
outperform typical US firms. Toyota imported the management style and
culture that succeeded in Japan into its manufacturing facilities in North NOTES
America. Toyota’s success has often been attributed to the ability of Japanese
and type Z firms to systematically invest in their employees and operations
over long periods, resulting in steady and significant improvement in long-
term performance.
2. The Peters and Waterman Approach
Tom Peters and Robert Waterman (1982) in their best seller “In search of
Excellence” focused even more explicitly than Ouchi on the relationship
between organizational culture and performance. Peters and Waterman chose a
sample of highly successful US firms and sought to describe the management
practices that led to their success. Their analysis rapidly turned to the cultural
values that led to successful management practices. Some of the excellent
values practiced in the sample firms are as follows:
(i) Bias for action
According to Peters and Waterman, successful firms have a bias for action.
Managers in these firms are expected to make decisions even if all the facts
are not in. They argued that for many important decisions, all the facts will
never be in. Delaying decision making in these situations is the same as
never making decisions. Meanwhile, other firms probably will have captured
whatever business initiatives that existed. On average, according to these
authors, organizations with cultural values that include a bias for action
outperform firms without such values.
(ii) Stay close to the customer
Peters and Waterman believe that firms which value customers over anything
else outperform firms without this value. The customer is a source of
information about current products, a source of ideas about future products,
and responsible for the firm’s current and future financial performance.
Focusing on the customer, meeting the customer’s needs, and pampering the
customer when necessary lead to superior performance.
(iii) Autonomy and entrepreneurship
Peters and Waterman maintained that successful firms fight the lack of
innovation and the bureaucracy usually associated with large size. They do
this by breaking the company into smaller, more manageable pieces and
then encouraging independent, innovative activities within smaller business
segments. Stories often exist in these organizations about the junior engineer,
who takes a risk and influences major product decisions, or of the junior
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Organizational Culture manager, who implements a new and highly successful marketing plan
because he is dissatisfied with the current plan.
(iv) Productivity through people
NOTES Peters and Waterman believe that successful firms recognize that their most
important assets are their people—both workers and managers—and that the
organization’s purpose is to let its people flourish. It is a basic value of the
organizational culture—a belief that treating people with respect and dignity
is not only appropriate but also essential to success.
(v) Hands-on management
They also noted that the firms they studied insisted that senior managers stay in
touch with the firm’s essential business. It is an expectation, reflecting deeply
embedded cultural norms that managers should not manage from behind the
closed door of their offices but by “wandering around” the plant, the design
facility, the research and development department, and so on.
(vi) Stick to the knitting
Another cultural value characteristic of excellent firms is their reluctance
to engage in business outside their areas of expertise. These firms reject the
concept of diversification, the practice of buying and operating businesses
in unrelated industries. This notion is currently referred to as relying on the
“core competencies,” or what the company does best.
(vii) Simple form, lean staff
According to Peters and Waterman, successful firms tend to have few
administrative layers and relatively small corporate staff group. In companies
that are managed excellently, importance is measured not only by the number
of people who report to the manager but also by the manager’s impact on the
organization’s performance. The cultural values in these firms tell managers
that the performance of the staff is more important than their number.
(viii) Simultaneously loose and tight organization
The final attribute of organizational culture identified by Peter and Watermen
appears contradictory. The firms are tightly organized because all their
members understand and believe in the firm’s values. This common cultural
bond is the strong glue that holds the firms together. At the same time, however,
the firms are loosely organized because they tend to have less administrative
overheads, fewer staff members, and fewer rules and regulations. The result
is increased innovation and risk taking and faster response time.

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3. The Udai Pareek Approach Organizational Culture

According to Pareek (2002), there are eight values that govern the culture of
an organization. These eight values together are responsible for making the
culture of an organization strong or weak. These are as follows: NOTES
(i) Openness
As the term implies openness refers to free sharing of thoughts, ideas, and
feelings with each other in an organization. The open environment of the
organization results in a culture where employees have no reservation or
negative hidden feelings against each other. In situations of disagreements
they are able to come out openly and share their concerns with each other.
Openness also deals with doing away with the physical boundaries and
erected walls in the organizations. Openness has to be practiced both in terms
of giving as well as receiving information at all levels in the organization.
(ii) Confrontation
With openness comes the ability to face the situation as it comes to us
rather than move away from it. In cases where there is willingness to face
the problem and solve it, many interpersonal differences are resolved and
individuals come forward with their ideas and solutions.
(iii) Trust
The surety with which people can share their confidential information with
each other without the fear of it being known all over the organization reflects
the level of trust in the organization. In organizations where trust is high
among employees, there is better problem solving and less stress.
(iv) Authenticity
This refers to the equivalence that members of an organization have between
their words and deeds. If people do what they say and feel, it leads to high
level of openness and trust in organizations.
(v) Proactivity
Proactive organizations are ready to face any eventuality and are prepared
for adversaries too. Proactive individuals are more calm and relaxed in their
behaviour towards others. With proactivity, there is a possibility of thinking
and planning ahead and being prepared to encounter situations or individuals.
(vi) Autonomy
It involves giving enough space to other individuals in the organization as you
would seek for yourself. A person with knowledge and competence should be
given freedom to take the decisions for the department or the organization.
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Organizational Culture This promotes a sense of achievement and self-confidence among employees
thereby leading to mutual respect.
(vii) Collaboration
NOTES Organizations consist of individuals who are expected to work together
in a group and this sense of togetherness can only be generated by the top
management in organizations. People should be forced to learn to work
together to develop a sense of team spirit. It will result in openness, trust
among members, sharing, and a sense of belongingness and commitment to
the organization.
(viii) Experimentation
In this age of scarce resources, and fast change, any organization which is
not willing to try out new and better ways of working is likely to perish fast.
Individuals as well as organizations can sustain themselves only if they are
able to experiment with the available resources and identify and develop
better approaches to deal with the problems. There has to be out of the box
thinking in which nothing that is obsolete is likely to be accepted.
13.5.2 Issues in Organizational Culture
The following are some of the issues in organizational culture:
• Maintaining the organizational culture. This involves employee
engagement at all times
• Reinforcing organizational culture through different actions so that the
employees do not forget that the ideas of the organizational are not for
a one time show or biased towards one group etc.
• Many times the employees might get the feeling that the organizational
culture is to be maintained overall and that they are not important part
of it. So, it is crucial that the managers ensure that every employee
understands that he/she is important in the process.
• Employees rely on their instincts which might or might not be based
on evidence or are actually opposing to the organization. It is important
that the organizational culture is clearly understood and maintained.
• The organization culture might become outdated or regressive if they
are not adaptive to the change in the environment.
• The different departments in the organization might become a hindrance
to organizational culture if the employees create invisible walls between
themselves.

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 Organizational Culture
Check Your Progress
4. Who was one of the first researchers to focus explicitly on analysing
the culture of a limited group of firms?
5. List the eight values that govern the organizational culture as pre the NOTES
Udai Pareek approach.

13.6 ORGANIZATIONAL CHANGE

If we see around us, life is changing every moment. Maya, the Sanskrit word,
means ‘life is an illusion’—the world around us is steady and not changing.
A good leader looks beyond the illusion of ‘changelessness’ and unearths
opportunities for change. There have been several passionate arguments
put forward by academics about which comes first—a change in attitude
or a change in behavior. In organizational terms, this means do we help the
people challenge their beliefs and thus bring about behavioural change, or do
we encourage them to experiment with behavioural change in the hope that
different results will revolutionize their thinking. Well, the answer is both.
Change takes place even when employees do not believe it will.
They may not be susceptible to change or even detest the idea of behaving
differently, but as long as they stay open to the possibility, they are on the
road to change. This is because the act of doing something differently will
start to influence their belief systems. In addition, the response received from
others will reinforce the new behavior. For example, a CEO of an organization
might want to be less positioned, more flexible and visibly vulnerable in
looking for conflict resolutions vis-a-vis peers. However, this CEO might
have a dualistic approach to thinking—perceiving two alternatives to every
problem: ‘him’ or ‘they’. Thus, from this perspective, there could only be
one ‘winner’, and the CEO will obviously be determined to win.
The management should realize the value of effective employees’
cooperation and collaboration, and motivation in the workplace. Before
putting into practice a change in an organization, managers should understand
that different people hold dissimilar opinions about change. Also, not all
employees are candid and willing to be straightforward with their managers.
Therefore, managers should have the initiative to interact with all employees
and keep them informed about any organizational change. By communicating
and listening to employees, managers can be aware of their unfulfilled needs
and resistance to change. In other words, the communication should be
improved between managers and employees, in places where employees are
not too keen on change.
While implementing organizational change, managers should be able
to understand employees’ attitudes, but also they should keep in mind how
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Organizational Culture the employees feel. As leaders, managers should guide and direct employees
along the organizational change process, appreciate the significance of
employees’ motivation to proceed with change, and be open to new ideas that
come from employees. Listening and explaining to employees is an essential
NOTES process to convince them about the projected benefits that are expected from
the introduced change.
As soon as the change is implemented, managers should continue
to communicate with employees about the benefits of the new working
environment. This will promote an open exchange of ideas and information
among all parties. By being helpful, managers can discover to what extent
change affects employees and take remedial actions immediately to support
them. For example, managers should be aware that although organizational
change impacts that bring positive results into the industry do not necessarily
bring about the same outcome to employees. Change of a working system
may increase employees’ income with extra workload which can in turn
creating fatigue and low spirits.
Levels of Change
There are various levels within the organizational domain where changes can
be brought about for operational enhancement of the organization as well as
desirable behaviour of members. The various types of changes that can have
considerable impact on the organizational culture are:
• Strategic change: This is a change in the very mission of the
organization. A single mission may have to be changed to multiple
missions. For example, when British Airways acquired a major part
of US Air, the culture of the entire organization had to be modified to
accommodate various aspects of American organizational culture into
the British organizational culture.
• Structural change: Decentralized operations and participative
management style have been seen as more recent trends in the
organizational structure. Since these structural changes shift the
authority and responsibility to generally lower level management, it
has a major impact on an organization’s social climate and members
have to be prepared to develop a team spirit as well as acquire skills
to make on-the-spot decisions at points of operations.
• Process-oriented change: These changes relate to technological
developments, information processing, automation and use of robotics
in the manufacturing operations. This means replacing or retraining
personnel, heavy capital equipment investment and operational
changes. This would affect the organizational culture and hence changes
in the behaviour patterns of members.

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 • People-oriented change: Even though, any organizational change Organizational Culture

affects people in some form, it is important that the behaviour and

attitudes of the members be predictable and in accordance with the
expectations of the organization and be consistent with the mission
and policies of the enterprise. These changes are directed towards NOTES
performance improvement, group cohesion, dedication and loyalty
to the organization as well as developing a sense of self-actualization
among the members. These can be developed by closer interaction
with employees and by special behavioural training and modification
sessions.
You will learn more about the concept of organizational change in
Unit 14.

Check Your Progress

6. What should managers do right after organizational change is
implemented?
7. What is process oriented change?

13.7 ANSWERS TO CHECK YOUR PROGRESS

QUESTIONS

1. The two schemes used to define and measure of organizational climate

are the following:
• Cognitive schema approach
• Shared perception approach
2. The mission and vision of the founder members of an organization are
the basis for creating the organizational culture.
3. Perception, learning and personality development programmes are
used to change the values of the employees to bring them on par with
those of the organization.
4. One of the first researchers to focus explicitly on analyzing the culture
of a limited group of firms was William G. Ouchi.
5. The eight values that govern the organizational culture as pre the Udai
Pareek approach are the following:
• Confrontation
• Trust
• Authenticity
• Proactivity
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Organizational Culture • Autonomy
• Collaboration
• Experimentation
NOTES 6. As soon as the change is implemented, managers should continue to
communicate with employees about the benefits of the new working
environment. This will promote an open exchange of ideas and
information among all parties.
7. Process-oriented change: These changes relate to technological
developments, information processing, automation and use of robotics
in the manufacturing operations. This means replacing or retraining
personnel, heavy capital equipment investment and operational
changes. This would affect the organizational culture and hence changes
in the behaviour patterns of members.

13.8 SUMMARY

• Organizational culture is a system of shared beliefs and attitudes that

develop within an organization and guides the behaviour of its members.
It is also known as corporate culture, and has a major impact on the
performance of organizations and especially on the quality of work
life experienced by the employees at all levels of the organizational
hierarchy.
• While culture has been a continuous development of values and
attitudes over many generations, at least the organizational culture
can be partially traced back to the values held by the founders of the
organization.
• The process of quantifying culture in an organization is called
organizational climate. This is also referred as corporate culture.
According to this process, an employee’s behaviour is influenced by a
set of guidelines laid down by the organization.
• The traditions and way of life of the employees create culture in an
organization. The organizational culture is known by its employees’
behaviour and attitudes. The early traditions are the basis of culture in
an organization.
• Sustaining and maintaining culture is essential for the organization
to make it a permanent source of energy. The experience gained by
predecessors must be continued by the subsequent successors.
• Although international business, to some degree, has existed for
centuries, the second half of the last century was most influential in
bringing the world closer to itself.
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 • Culture to an organization is an intangible force, with far reaching Organizational Culture
consequences. It plays several important roles in organizations.
• No single framework for describing the values in organizational culture
has emerged; however, several frameworks have been suggested.
NOTES
Although these frameworks were developed in the 1980s, their ideas
about organizational culture are influential even today.
• Change is a phenomenon that pushes us out of our comfort zone. It is
for the better or for the worse, depending on how it is viewed. Change
has an adjustment timeline that varies from person to person.
• A good leader looks beyond the illusion of ‘changelessness’ and
unearths opportunities for change.
• The management should realize the value of effective employees’
cooperation and collaboration, and motivation in the workplace. Before
putting into practice a change in an organization, managers should
understand that different people hold dissimilar opinions about change.
• There are various levels within the organizational domain where
changes can be brought about for operational enhancement of the
organization as well as desirable behaviour of members.

13.9 KEY WORDS

• Organizational culture: It is a system of shared beliefs and attitudes

that develop within an organization and guides the behaviour of its
members.
• Organizational climate: The process of quantifying culture in an
organization is called organizational climate.
• Change: It is defined as the act or process of doing something different.

13.10 SELF ASSESSMENT QUESTIONS AND

EXERCISES

Short Answer Questions

1. Write a short note on the significance of organizational culture.
2. How has the organizational culture responded to with the changing
global scenario?
3. What are the issues faced in organizational culture?
4. ‘The management should realize the value of effective employees’
cooperation and collaboration, and motivation in the workplace.’
Comment.
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Organizational Culture Long Answer Questions
1. ‘Sustaining and maintaining culture is essential for the organization to
make it a permanent source of energy.’ Explain the statement.
NOTES 2. Discuss the Ouchi Framework developed by William Ouchi with
reference to organizational culture.
3. Explain the theories of organizational culture.
4. Discuss the levels of change.

13.11 FURTHER READINGS

Robbins, Stephen P. 2010. Organizational Behaviour. New Delhi: Prentice

Hall.
Davis, Keith. 2010. Organizational Behaviour: Human Behaviour at Work.
New York: McGraw Hill.
Gordon, Judith R. 2001. Organizational Behaviour: A Diagnostic. New
Delhi: Prentice Hall.
Aswathappa, K. 2010. Organizational Behaviour. Mumbai: Himalaya
Publishing House Pvt. Ltd.

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 Organizational Change

UNIT 14 ORGANIZATIONAL
CHANGE
NOTES
Structure
14.0 Introduction
14.1 Objectives
14.2 Need and Nature
14.2.1 Causes of Change
14.2.2 Forces that Introduce Change
14.2.3 Managing Change
14.3 Resistance to Change
14.4 Management of Change in Hospitals
14.5 Answers to Check Your Progress Questions
14.6 Summary
14.7 Key Words
14.8 Self Assessment Questions and Exercises
14.9 Further Readings

14.0 INTRODUCTION

In the previous unit, you were introduced to the concept of organizational

change. In this unit, you will learn its need and nature, causes, factors of
resistance and application in the hospital setting. Change is a phenomenon
that pushes us out of our comfort zone. It is for the better or for the worse,
depending on how it is viewed. Change has an adjustment timeline that varies
from person to person. Change has a negative effect on those who do not
want to let go. Being flexible is the key. For instance, a roller coaster ride
can symbolically be indicative of change—it can be fun if you know when
to lean and create balance. Change is not related to the mantra ‘just hang in
there’, but the mantra ‘you can make it’. It is not associated with worrying.
Change spurs you to achieve your best. It will cause you to learn.

14.1 OBJECTIVES

After going through this unit, you will be able to:

• Discuss the need and nature of organizational change
• Explain the causes of change

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Organizational Change • Examine the resistance to change
• Describe management of change in hospitals

NOTES 14.2 NEED AND NATURE

Managers who are interested in implementing change are required to be aware

of the nature of organizational change which includes two important aspects
of change: (1) Diagnosis and (2) Implementation
1. Diagnosis: The first, most important stage of any change effort is
diagnosis. Broadly defined, the skills of diagnosis include putting
forward correct questions at correct time, assessing the organizational
culture, developing the strategies for research and gathering information
or data, and developing ways to process and interpret data. In
diagnosing change, managers should attempt to find out: (a) what is
actually happening now in a particular situation; (b) what is likely to
happen in the future if no change effort is made; (c) what would people
ideally want in a situation like this; and (d) what are the blocks, or
restraints, stopping movement from the actual to the ideal.
There are two steps in the diagnostic process. These are discussed
below.
(i) Point of view: There are various people whose interests have to be
protected by the organization. It is, therefore, necessary to decide
from whose point of view you are to observe the organization and
from whose point of view the change should be implemented—
your own, your boss, your associates, your followers or an
consultant? Ideally, to assess the complete problem, you need to
examine the condition from the perspective of the person whose
life would be influnced by the change. Their interest is of great
importance for an organization to sustain and grow in the present
fast-moving world.
(ii) Identification of problem(s): Any change effort begins with the
identification of problem(s). There exists a problem in a situation
when what actually happens (the real) differs from what, according
to you, should happen (the ideal). What is important is the end
result that an organization can offer to its customers. Is the work
group functioning in a harmonious manner? Is there a conflicting
situation in the organization? If the response is in the negative for
the former and positive in the latter, then there is a problem of
behavioural nature and suitable change efforts may be required
sooner than later. Before implementing any change, a leader will

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 have to observe the battle indications in the organization. High Organizational Change
level of absenteeism, more wastage in the use of raw materials,
irrational behaviour of various employees, and not meeting
various targets are enough indications to show that a problem
exists, that it needs to diagnosed and the kind of change required NOTES
to be effected needs to be decided. The discrepancy may be in the
end result variables like low production or insufficient sales by the
marketing department. Alternatively, problems may exist in causal
factors, that is, the independent variables like leadership style,
motivation levels of the employees, or the delegation of authority
and empowerment. Depending upon the situation, suitable change
strategies may have to be employed by the organization.
2. Implementation: It involves using the data collected during diagnosis to
accomplish the targets and plan for the organizational change. Questions
such as the following must be asked: How can change be affected in
a work group or organization, and how will it be received? What is
adaptive, and what is resistant to change within the environment?
14.2.1 Causes of Change
Change is inevitable. Nothing is permanent, except for change. It is the
management’s duty to see that change is managed properly. Organizations
must keep a watch on the environment and incorporate suitable changes
that the situation may demand. As mentioned earlier, change is a continuous
phenomenon. Organizations must be proactive in effecting change. Even in
the most stable organizations, change is necessary just to maintain a certain
level of stability. The major environmental forces that make change necessary
are technology, market forces and socio-economic factors. Resistance to
change is counterproductive for growth and destructive by nature; it is,
therefore, undesirable. Managers must, hence, evolve policies to effect change.
According to Barney and Griffin, ‘the primary reason cited for organizational
problems is the failure by managers to properly anticipate or respond to
forces for change’.
The following are the characteristics of change:
• Change refers to any alteration that occurs in the overall work
environment of an organization. It relates to changes in technology,
organizational structure, working processes, work environment,
organizational policy and the roles people play.
• The introduction of change in one part of an organization forces a
change in other parts of the organization. If the change is beneficial,
people accept it willingly. If it is not desirable, there is great
resistance. If it is of no consequence to the people, they may adopt
an attitude of indifference.
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Organizational Change • If they consider the change detrimental to their growth and
prosperity, they may resist through counter pressure. This reaction
is based on their perception of the change and not necessarily on
reality or facts.
NOTES
There are various factors that must be considered in order to implement
change. Organizations undergo change because of several reasons as studied
earlier. Some of the external causes are as follows:
• Government policies
• Economic changes
• Competition from peers
• Cost of raw materials
• Pressure groups/lobbies
• Information technology
• Scarcity of labour
• Societal pressures
• Legal requirements
Some of the internal causes are as follows:
• Leadership changes
• Decline in profitability
• Change in employee profiles
• Trade unionism
• Low morale
The organizational changes that are commonly seen in the contemporary
world are downsizing/rightsizing, introduction of new technology, mergers
and acquisitions.
14.2.2 Forces that Introduce Change
There are two major forces that introduce changes. These are:
1. External reasons
Technology is a major external force that calls for change. In recent times,
information technology (IT) has had a remarkable impact on the ability of
managers to use information to arrive at a decision. Storage, retrieval of
information and its utilization are important aspects of technology. Where
human beings cannot operate, robots has been introduced to work for and on
behalf of human beings. Financial decisions, operations, product features, new
product development, market potential and marketing strategies are changing
at a fast pace and organizations must carry out appropriate and timely change
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so as to avoid being left behind in the race. With liberalization, the market has Organizational Change
become one large entity. Organizations must, therefore, be highly sensitive to
changes in the external environment. The external environment is task-related
and general in nature. A task-related environment has a direct influence on
the health of an organization. It consists of customers, competitors, suppliers, NOTES
labour and stakeholders. All these factors induce change in the organization.
The general environment consists of political, legal, economic, socio-cultural
and technological forces and change in government polices or fiscal policies
that have a direct impact on the organization. For example, a change in the
needs, expectations and desires of society for housing has changed the outlook
of the financial sector and loans are now easily available to all sections of
society.
2. Internal reasons
Once organizations adapt to external change, the managers have to take
appropriate steps as far as internal systems are concerned—change of process,
modification to human behaviour, training and development of the workforce
based on new technology and adopting new polices that are beneficial to the
organization. Owing to current social changes in which women are taking
up jobs in greater numbers, childcare, more and frequent rest periods and
greater flexibility of time may be necessary. Workers are more educated
and are aware of their duties and rights. This may necessitate change in
corporate policies towards wage and salary structure and implementation,
promotion policy and management obligation towards them. Customers,
shareholders, boards of directors and employees may bring about changes
in the internal environment. These, however, have to be in line with the
external factors and not arbitrary. Change, which is deliberately designed
and implemented, is ‘planned change’. This is carried out to counter threats
and encash opportunities. ‘Reactive changes’ are unknown and caused as a
response to sudden surprises like change in price of a particular product. It
is, therefore, necessary that the management is ‘proactive’ in incorporating
change with fewer surprises. It must build on the organization’s strengths
and take appropriate preventive actions on its weaknesses in order to be
competitive in the marketplace.
Proactive Vs. Reaction Change
According to Nadler discontinuous change involves a breakfrom the past and a
major reconstruction of the entire organization. Reactive change occurs when
an organization must respond to environmental changes. Nadler et al., refer to
anticipatory change as occurring when an organization acts in anticipation of
changes that may occur in the future. Whereas incremental and discontinuous
changes refer to the continuity of change, reactive and anticipatory changes

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Organizational Change address the timing of it. These four types of change also differ by their driving
force, focus, pacing, and approach to management, and each has different
implications for organizational behaviour. For instance, an organization that
experiences both reactive and incremental change typically expresses an
NOTES adaptive behaviour, whereas an organization experiencing discontinuous
and anticipatory change may focus on reorienting itself by fundamentally
redefining itself. Unplanned change usually occurs because of a major, sudden
surprise to the organization, which causes its members to respond in a highly
reactive and disorganized fashion. Unplanned change might occur when the
Chief Executive Officer suddenly leaves the organization, significant public
relations problems occur, poor product performance quickly results in loss
of customers, or other disruptive situations arise. Planned change occurs
when leaders in the organization recognize the need for a major change and
proactively organize a plan to accomplish the change. Planned change occurs
with successful implementation of a Strategic Plan, plan for reorganization,
or other implementation of a change of this magnitude. Note that planned
change, even though based on a proactive and well done plan, often does not
occur in a highly organized fashion. Instead, planned change tends to occur
in more of a chaotic and disruptive fashion than expected by participants.
Stability Vs. Change
In every organization, there are found two types of forces: forces of stability
and forces of change. In depends on the management to find a balance between
the two or give more priority to one and less to another.
Three factors make up the forces of stability in an organization:
consistency, maintaining the status quo and predictability. The strategic vision
and process are very clearly prescribed and followed within a set structure
in such organizations. Some examples of forces of stability are: Mature
company hierarchy, Job security, Logical order and flow, Continuity in task
or project management, Predictability in role’s responsibilities, Confidence
in taking risks to find solutions, Formalization of policies and procedures
and Consistency and standardization in work.
The factors which define the forces of change in an organization are
flexibility and adaptability. These types of organization are more insistent
on innovating, setting themselves apart and improving at every stage. Some
examples of forces of change in an organization are exploring opportunities
for growth and development, adapting to customer feedback, analysing and
facing competitive pressure, seeking out creative solutions to problems
or challenges, innovating to improve employees or the organization and
expanding into new areas internally or externally.

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 It becomes the duty of the manager to balance the two forces in the Organizational Change
organization as per the broad organizational objectives and vision.
14.2.3 Managing Change
Organizations must plan to implement change in a systematic manner. They NOTES
must identify the field in which the change is required and ascertain whether
it is strategic, structural, process-oriented or cultural. Changes can also be
affected in all the areas concurrently, but it must be managed appropriately so
that there is no bottleneck effect. Once the need for change is identified as also
the area in which it is to be implemented, the following steps are suggested:
Step 1—Develop new goals and objectives
Objectives and goals that are derived out of mission statements may need
revision due to changes in external or internal forces.
Step 2—Elect an agent for change
It is the responsibility of the management to entrust execution of change to the
appropriate authority. A manager may be given this responsibility. A change
agent can also be employed from outside for the purpose. A specialist or a
consultant can be brought in to suggest change and monitor implementation.
Step 3—Diagnose the problem
Diagnosis is the first step implementing change. If an organization has a large
employee turnover, then the data must be collected and made available to the
consultant so that the reasons for turnover can be identified and appropriate
corrective measures can be selected. The process of identifying a problem
is not as simple as it appears. This itself may need research.
Step 4—Select a methodology
It is easy, in corporate terms, to implement material change as a part of change
in the system. What is important is to protect the emotions of the employees
which must be considered during the selection of methods, so that it is easier
to implement at a later stage.
Step 5—Develop a plan
If the organization wants to reduce employee turnover, it may carry out a
comparative study of other organizations with respect to job content, reward
system, employee performance appraisal system, promotion criteria, training
and development and the strategy adopted by the organization for its growth.
Based on the examination of these factors, the consultant in charge of this
would be able to develop a plan for change. It may require introducing a

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Organizational Change new training and development policy that can reduce employee turnover.
While developing a plan, various other factors must also be reviewed. Plans
should not be finalized in isolation. All department heads must be co-opted
in the exercise.
NOTES
Step 6—Draw a strategy for implementation
Care must be taken to consider the timing of any change that is to be
implemented. A deliberate decision must be taken in this regard. For example,
in the case of a hike in the price of a product, the decision to implement
change is critical. If the change is related to internal employees, it must be
communicated at an appropriate time so that there is no resistance to planned
change.
Step 7—Implement the plan
Once the decision to implement the plan and the mode by which the plan is to
be implemented is decided, it is the responsibility of the various departments to
implement the same. This may need notification, briefing sessions or inhouse
seminars so as to ensure the acceptance of all members of the organizations,
especially those who are likely to get affected. Implementation may be for a
short duration as a one-time change of system or process but its aftermath is
of great value. Employee reactions in terms of attitudes, aspirations, emotions
and behaviour must be channellized in positive directions with change.
Step 8—Evaluate and give feedback
The result of the change must be evaluated and suitable feedback given. If
modification to training and development causes a decrease in employee
turnover, the objective of the change would be deemed to have been achieved.
If the results are contrary to expectation, then a new change may be required
to diagnose the cause.

Check Your Progress

1. What is the process of skills of diagnosis?
2. Mention some of the constituents of task-related environment.
3. Give examples of forces of stability.

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 Organizational Change
14.3 RESISTANCE TO CHANGE

Although organizations initiate changes in order to adjust to the changes in

their environments but people sometimes resist them. Therefore, managers NOTES
need to recognize the manifestations of resistance both in themselves and in
others, if they want to be more effective in supporting change.
The sources of resistance to change within organizations are classified
into organizational sources of resistance and individual sources of resistance.
Organizational Sources of Resistance
According to Daniel Kantz and Robert L Khan, organizational sources of
resistance can be divided into following six general groups.
1. Over determination or structural inertia refers to the tendency of an
organization’s rules, policies and structure to maintain the existing
conditions and therefore resist change even when change would benefit
the organization more than stability.
2. When an organization tries to change one of its division or part of the
division without recognizing the interdependence of the division with
other divisions of the organization, then it is said to have a narrow
focus of change. Often a part of division cannot be changed without
changing the whole division.
3. Group inertia may weaken an individual’s attempt to bring about
change.
4. Resistance may also take the form of threatened expertise if the change
tends to weaken special expertise built after years of experience.
Organizational restructuring that involves reducing the number of job
categories often meets this kind of resistance.
5. Any change that may alter the power relationships within an organization
may meet the form of resistance known as ‘threatened power’.
6. Resistance may occur when a change threatens quantum of resource
allocation from one part of the organization to another.
Individual Sources of Resistance
According to researchers, individuals have the following reasons for resisting
change:
• Simple habits create a lot of resistance. Most people prefer to do their
work the way they did it last week rather than learn a new approach.

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Organizational Change • Perhaps the biggest cause of employee resistance to change is
uncertainty. In the face of impending change, employees are likely to
become anxious and nervous. They worry about their ability to meet
new job demands therefore, leading to feeling of job insecurity.
NOTES
• Some people resist change to avoid feeling of loss. For example, many
organizations change interventions and alter work arrangements, thus
disrupting existing social networks. Social relationships are important
to most people, so they resist any change that might adversely affect
those relationships. Change may also threaten people’s feelings of
familiarity and self-confidence.
• People may resist change because their perceptions of underlying
circumstances differ from the perceptions of those who are promoting
the change.
Overcoming Resistance to Change
Managers need not abandon planned change in the face of resistance. Before
recommending specific approaches to overcome resistance, there are three key
conclusions that should be kept in mind. First, an organization must be ready
for change. Second, the top management should inform the employees about
the process of change. Third, the employees’ perceptions or interpretations
of a change should be considered.
The following methods of overcoming resistance to change are as
follows:
• Participation: Participation is generally considered the most
effective technique for overcoming resistance to change. Employees
who take part in planning and implementing change are better able
to understand the reasons for the change than those who are not
involved. They become committed to the change and make it work.
Employees who have the opportunity to express their own ideas and
to understand the perspectives of others are likely to accept change
gracefully. It is a time consuming process.
• Education and communication: Educating employees about the
need for and the expected results of an impending change help
reduce their resistance. Managers should maintain an open channel
of communication while planning and implementing change.
However, it is also a time consuming process.
• Facilitation of change: Knowing ahead of time that employees
are likely to resist change then the manager should do as much as
possible to help them cope with uncertainty and feeling of loss.

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 Introducing change gradually, making only necessary changes, Organizational Change
announcing changes in advance and allowing time for people to
adjust to new ways of doing things can help reduce resistance.
• Force-field analysis: In almost any situation where a change is
NOTES
being planned, there are forces acting for and against the change.
In force-field analysis, the managers list each set of forces and then
try to remove or minimize some of the forces acting against the
change.
• Negotiation: Where someone or some group will clearly lose out
in a change and where that group has considerable power to resist,
there negotiation is required. Sometimes it is a relatively easy way
to avoid major resistance.
• Manipulation and cooperation: This is followed when other tactics
will not work or are too expensive. It can be quick and inexpensive.
However, it can lead to further problems if people feel manipulated.
• Explicit and implicit coercion: This is adopted where speed is
essential and where the change initiators possess considerable
power. It is speedy and can overcome resistance.
Each of the above methods has its advantages and disadvantages.
There is no universal strategy for overcoming resistance to change. Hence, an
organization that plans to introduce certain changes must be prepared to face
resistance from its employees. An organization should also have a planned
approach to overcome such resistances.

14.4 MANAGEMENT OF CHANGE IN HOSPITALS

Trading with the change in a healthcare organization can be one of the

substantial challenges for the healthcare business. Globalization, digitization
and rising competition among the organizations has resulted in the emergence
of new payment methods and business models. These demands and mandates,
paired with the constant variation in the healthcare IT space, invariably
influence the operations and outcomes of healthcare delivery. This change
affects healthcare professionals at the entry level, from the physician dealing
with new reimbursement models, workflow alterations and regulations to the
leader evaluating strategies for profitability and patient satisfaction.
Change may require new clinical responsibilities, time for development
and training, and openness to new ways of doing things. It also requires
letting go of the previous practices. Change may need notable investment in
people, systems, equipment and facilities, and is therefore likely to require

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Organizational Change financial backing. These challenges make the planning of the change process a
prerequisite for success. Effective change has been recognized as revaluating
old behaviours, instigating new ones, and locking them. Change may be
continuous, irregular, occasional, or rare. The predictable change permits time
NOTES for production, whereas uncertain change is tougher to answer effectively.
Since changes in hospitals arise so swiftly, they are less likely to be expected.
The only viable competitive leverage today is the capability to change,
transform, and develop - and to do it better than the contest. Failure rates
are connected to a number of various factors such as lack of vision and
commitment from senior management, limited coordination with other
systems and procedures in the hospital and ill-conceived implementation
ideas. If hospitals are to experience a higher level of success in their
development attempts, managers and executives need to have a better skill
for thinking about change and interpreting of the key issues which follow
change management.
Managing change in healthcare organizations
Managing change is about gauging the difficulties of the process. It is about
evaluating, planning and executing operations, schemes, and strategies and
making sure that the change is worthwhile and applicable. Managing change
is a composite, vigorous and demanding process. It is never a choice between
technological or people focused solution but an integration of all.
Even if the change is implemented, employees want to know why change
is happening and how it will be carried out. Layoffs or other organizational
changes can lead to confusion, anger, and inhibitions anticipating change.
Encouraging change is both challenging and exhausting. To bring
any change in the system, the managers have to evaluate the model which
requires persistence against the culture and rules of conventional and orthodox
behaviours. Bringing change takes time and requires dedication from the top
management, managers, as well as the employees of the organization. The
manager must be well versed with the vision and mission of the organization
before implementing any change. She/he must be explicit about what is
significant and develop reactions and dynamic actions accordingly.
An organization will not get full worth from its professional staff if
they hold the reservation that they do barely what they are told. Therefore,
managers have to grasp how to deal change, rather than change deals them
in the way to move ahead with success In addition, leaders require knowing
the change process and affairs that are mixed up with it in sequence to have
the volume to lead and manage change and upgrade efforts proactively.
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naturally subsists during the composite process of change. Leaders should Organizational Change
assist employees and other colleagues, shape and build productive teams by
preparing the latest organizational structures and designing a split vision that
focuses on authentic employee’s production. Such influenced and instructed
leadership is judgemental and essential for organizations to be fortunate. NOTES

Effective Change Management in Healthcare Organizations

Change can be implemented successfully only if the employees are thoroughly
guided throughout the process of change. It has been observed that around
70 per cent of the change initiatives fail because of negative and pessimistic
attitude of the employees and unsupportive management behaviour. There
are six key steps of effective change management.
• Define the change clearly and align it to organizational goals
It is very important to evaluate why change is required. Ideally
thorough review should be conducted by healthcare managers against
the organization’s vision and goals to ensure that the change will carry
organization in the right direction financially, strategically and morally.
This will help to assess the value of the change, which will in turn
quantify the efforts and inputs one should invest in bringing change.
• Evaluate the impact of change
Once the management decides exactly what it wishes to achieve by
bringing change and why, impacts of the change at different levels of
the organization should be determined. It is very important to review
the impact of change on each organizational unit and how it will flow
through the organizational structure to the employees. This will help
to prepare the blueprint to identify where training and assistance is
required the most to amplify the impacts.
• Developing a communication strategy
All the employees should be taken into confidence and it should be
clearly communicated as why change is required before taking them
on the journey of change. The most effective means of communication
should be identified for the employees as that will bring them on board.
A proper strategy for communication should be framed including
channel and medium of communication, to decide how the change will
be incrementally communicated to the employees.
• Training and counselling of the employees
A structured training programme should be arranged for the employees
to impart the technical skills that are required to perform efficiently the
moment the change is rolled out.

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Organizational Change • Implementing a support structure.
It is essential to provide a concrete support structure to help the
employees so as to enable them practically and mentally adjust to the
NOTES change and to gain proficiency in the technical skills required to get
the desired clinical results.
• Measuring the change process.
Throughout the process of change management, it is very important to
measure the business impact of the change. It should also be ensured that
reinforcement opportunities should exist in order to create proficiencies.
Change management plan should be evaluated continuously to analyse
its impact and document any lessons learned.
Initiating a clear observation about the management of the change
operation is another key component for assuring victorious change.
Calculating and monitoring outcomes of the change procedure is
necessary for identifying whether or not the change action has fulfilled
its motives. Since change is going to happen in organizations and
connected moderations are taking place, it is important for those who
are in authority of the change process to record and aim at the emerging
issues due to change. This will help in addressing them in the later so
that the new management system will be more capable of managing
change in the genuine and best way.
To conclude, there are global changes incidence, which induce
individual organizations to change appropriately in order to strive ahead.
These changes have generated problems within organizations involved.
Solutions are essential to overcome any rising problems due to the change
that are continuously cropping up. And in sequence to keep the organization
functioning adhere to the pre-determined scheme, the knowledge and skills
of the managers and should be improved and necessary training provided.
Individuals who are in power of the change procedure should record all
arising difficulties and design an effective solution for the better future of the
hospital. Changes in healthcare setting are hailed if they improve the quality
and safety of the practice or save money.
However, the health care delivery system requires most importantly
the support of the local population. This can be done through awareness
programme. Further, clear information exchange between the public and
organization is very important and highly in need. The rate of change in
healthcare is rising, not slowing and the powerful forces that are transforming
healthcare can produce vast economic possibilities for those who are able to
engage effective survival abilities in the short term and at the same time plan

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for success in the long term. To establish this, an organization must tackle Organizational Change
the forces driving change and use them to its maximum potential. Finally,
change in health services requires incremental improvement on sustaining
organizational capacities, more empowerment to the changing representative
and continuous support to the changing managers. NOTES

Check Your Progress

4. Define the term ‘threatened power’.
5. What are the conclusions that must be kept in mind before
recommending specific approaches to change?

14.5 ANSWERS TO CHECK YOUR PROGRESS

QUESTIONS

1. The skills of diagnosis include putting forward correct questions

at correct time, assessing the organizational culture, developing
the strategies for re4search and gathering information or data and,
developing ways to process and interpret data.
2. A task-related environment consists of customers, competitors,
suppliers, labour and stakeholders.
3. Some examples of forces of stability are: Mature company hierarchy,
job security, logical order and flow, continuity in task or project
management, predictability in role’s responsibilities, confidence in
taking risks to find solutions, formalization of policies and procedures
and consistency and standardization in work.
4. Any change that may alter the power relationships within an organization
may meet the form of resistance known as ‘threatened power.’
5. Before recommending specific approaches to overcome resistance,
there are three key conclusions that must be kept in mind. First, an
organization must be ready for change. Second, the top management
should inform the employees about the process of change. Three,
the employees’ perceptions or interpretations of a change should be
considered.

14.6 SUMMARY

• Managers who are interested in implementing change are required to

be aware of the nature of organizational change which includes two
important aspects of change: (1) Diagnosis and (2) Implementation.

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Material 227
Organizational Change • There are various factors that must be considered in order to implement
change. Organizations undergo change because of several reasons.
These include both external and internal reasons.

NOTES • There are two major forces that introduce changes. These are: external
reasons and internal reasons.
• External forces for change arise from general environment as well
as from task environment. The general environment that affects the
organizations indirectly consists of economic, political, legal, socio-
cultural and technological forces and these forces keep the organizations
alert so that they become aware of any changes in the direction and
momentum of these forces.
• Task related environment has direct influence on the health of the
organizations and it consists of customers, competitors, suppliers,
labour, stockholders and so on. All these factors can induce a change
in the organizational direction.
• Internal forces for change could be reactive that would constitute
a response to outside forces or these could be proactive that brings
in change induced by management in anticipation of different and
beneficial internal environment that could result because of this internal
change.
• Change, which is deliberately designed and implemented, is ‘planned
change’. This is carried out to counter threats and encash opportunities.
‘Reactive changes’ are unknown and caused as a response to sudden
surprises like change in price of a particular product. It is, therefore,
necessary that the management is ‘proactive’ in incorporating change
with fewer surprises. It must build on the organization’s strengths and
take appropriate preventive actions on its weaknesses in order to be
competitive in the marketplace.
• In every organization, there are found two types of forces: forces of
stability and forces of change.
• Organizations must plan to implement change in a systematic manner.
They must identify the field in which the change is required and
ascertain whether it is strategic, structural, process-oriented or cultural.
• The sources of resistance to change within organizations are classified
into organizational sources of resistance and individual sources of
resistance.

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228 Material
 • There are many methods of overcoming resistance to change including: Organizational Change

participation, education and communication, facilitation of change,

force-field analysis, negotiation, manipulation and cooperation as well
as explicit and implicit coercion.
NOTES

14.7 KEY WORDS

• Reactive changes: It refers to the change which occurs when an

organization must respond to the unknown and sudden environmental
changes.
• Planned changes: It occurs when leaders in the organization recognize
the need for a major change and proactively organize a plan to
accomplish the change.
• Force-field analysis: It refers to the method of overcoming change in
which the managers list each set of forces and then try to remove or
minimize some of the forces acting against the change.

14.8 SELF ASSESSMENT QUESTIONS AND

EXERCISES

Short Answer Questions

1. What are the two steps in the diagnostic process of implementing
change?
2. State the characteristics of change.
3. What are the causes of change?
4. Briefly explain the organizational and individual sources of resistance
to change.
Long Answer Questions
1. Discuss the forces that introduce change.
2. Describe the process of managing change.
3. Explain the methods for overcoming resistance to change.
4. Discuss management of change in hospitals.

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Material 229
Organizational Change
14.9 FURTHER READINGS

Robbins, Stephen P. 2010. Organizational Behaviour. New Delhi: Prentice

NOTES Hall.
Davis, Keith. 2010. Organizational Behaviour: Human Behaviour at Work.
New York: McGraw Hill.
Gordon, Judith R. 2001. Organizational Behaviour: A Diagnostic. New
Delhi: Prentice Hall.
Aswathappa, K. 2010. Organizational Behaviour. Mumbai: Himalaya
Publishing House Pvt. Ltd.
Websites
https://www.ncbi.nlm.nih.gov/pmc/article/PMC3294155/

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