Chapter : 9

Prepared by : Chandani Karn

Course Content (LH 5)

 Concept and functions of HRM

 HRM as a business strategy

 Acquisition of staff-employ or not employ, organization structure, job

analysis, setting selection criteria, remuneration and rewards and
recruitment sources

 Employment contract

 Maintenance-orientation and induction, and motivation mechanisms

 Performance appraisal

 Termination

 Regulatory requirements
Concept of HRM
Among the various factors of production (land, labor, capital, and
entrepreneurship), which are used in an organization, Human Resources is the most
important

In other words, 5 element required to successfully run an organization

•Material
Factors of production
•Machine Operation Management
•Land
•Method •Labor
•Money Finance Management •Capital
•Men Human Resource Management •Organization/entrepreneurship

If the Willpower and Skills of employee are properly applied, wonderful things can
happen.

Human resources can help in transforming the Loss Making Organization into Profit
Making Organization.

To extract the Best Out The People, therefore, the organization must provide a
healthy work climate where they cam exploit best from their employees, so that the
Goal of organization cam achieve Effectively and Efficiently.
Definition of HRM
Human Resource, refers to the knowledge, education, skills, training and ability of the
members of the organization.

Human Resource Management is a process, which consists of four main activities,

namely, acquisition, development, motivation, as well as maintenance of human
resources.

Main aim of HRM – To ensure the right people with the right skills for the right job
position in an organization.

Main function of HRM – consist of recruiting, selection, training, performance appraisal,

motivating employees, ensuring their good health and safety, managing workplace
communication, and so on.
According to Edwin B. Flippo, “Human resource management is the planning,
organizing, directing and controlling of the procurement development, compensation,
integration, maintenance and separation of human resources to the end that individual,
organizational and societal objectives are accomplished.”

This definition reveals that HRM is that aspect of management, which deals with the
planning, organizing, directing and controlling the personnel functions of the enterprise.
Nature or Features of HRM

 Universal/Pervasive (required in each and every organization private or

public)

 Action Oriented (not only record keeping i.e. rule, regulation, procedure)

 Focus on People Dimension (5M dimension)

 Future Oriented (by providing the competent and well motivate

 Group Oriented

 On Going Process

 HRM involves Management Functions

 Functions of Human Resource Management

Managerial Functions Operative Functions Advisory Functions

1. Planning 1. Recruitment/Hiring 1. Top management

2. Organizing 2. Job Analysis and Design advice
3. Staffing 3. Training and Development 2. Departmental head
4. Direction 4. Performance Appraisal advice
5. Controlling 5. Salary Administration
6. Employee Welfare
7. Motivation
8. Maintenance
9. Labor Relation
Managerial functions
1. Planning:
 One of the primary function where number and type of employees needed to
accomplish organizational goals are determined.
 HRM planning which also helps management to collect, analyze and identify
current plus future needs within the organization.

2. Organizing :
 Organization of the task is another important step.
 Task is allocated to every member as per their skills and activities are integrated
towards a common goal.

3. Directing :
 This includes activating employees at different levels and making them contribute
maximum towards organizational goal.
 Tapping maximum potentialities of an employee via constant motivation and
command is a prime focus.

4. Controlling :
 Post planning, organizing and directing, performance of an employee is checked,
verified and compared with goals.
 If actual performance is found deviated from the plan, control measures are taken.
5. Staffing :
 Placing the right people with the right skills for the right job position in an
organization.

Operating Functions
1. Recruitment/Hiring :
 Hiring is a process which brings pool of prospective candidates who can help
organization achieve their goals and allows managements to select right candidates
from the given pool.

2. Job Analysis and Design

 Describing nature of the job like qualification, skill, work experience required for
specific job position is another important operative task.
 Whereas, job design includes outlining tasks, duties and responsibilities into a single
work unit to achieve certain goal.

3. Training and Development :

 This function allows employees to acquire new skills and knowledge to perform
their job effectively.
 Training and development also prepares employees for higher level responsibilities.
4. Performance Appraisal :
 Checking and analyzing employee performance is another important function that
human resource management has to perform/

5. Salary Administration :
 HRM also determines pays for different job types and includes compensations,
incentives, bonus, benefits etc. related with a job function.

6. Employee Welfare :
 This function takes care of numerous services, benefits and facilities provided to an
employee for their well-being.

7. Motivation :
 HR department in collaboration with departmental managers design a system that
include financial as well as non financial benefits to motivate employees.

8. Maintenance :
 Minimizing employee turnover and sustaining best performing employees within the
organization is the key.

9. Labor Relation :
 It is regards to the workforce who work within a trade union.
 Employees in such domain form a union/group to voice their decisions affectively to
the higher management.
Advisory Function
1. Top management advice :
 HR manager is a specialist in Human Resource Management functions. They cam
advice the top management in formulating policies and procedures/
 They also recommend the top management for the appraisal of manpower which
they feel apt.
 This function also involves advice regarding maintaining high-quality human
relations and far above the ground employee morale.

2. Departmental head advice :

 Under this function, HR advises the heads of various departments on policies
related to job design, job description, recruitment, selection, appraisals.
HRM as a business strategy
Strategic Human Resource Management (SHRM) is the combination and human
resource management in which the HSR programs are designed and implemented in
such a way, that the problems of the organization can be solved and long term
objectives can be achieved.

It is a process of managing human resources that links the workforce with the core
strategies, objectives, and goals of an organization.

It involves identifying and prioritizing the skills, competencies, and experiences
needed for success in your organization. After that, it develops a plan on how to use
those skills to push the company’s goals.

Compensation planning, recruitment, succession planning, and employee

development are examples of strategic HR functions.
Five steps to creating an effective strategic HR plan and
gaining a competitive advantage for company
I. Assess your current workforce. ...

ii. Create employee development plans. ...

iii. Create a succession plan. ...

iv. Perform a gap analysis. ...

v. Decide how to increase resources for the future.

 Types of strategy

1. Corporate strategy 2. Business strategy 3. Functional strategy

1. Corporate strategy :

I. The corporate level of management consists of the chief executive officer (CEO),
other senior executives, the board of directors, and corporate staff.

II. The role of corporate-level managers is to oversee the development of strategies for
the whole organization.

III. This role includes ,

a. Defining the mission and goals of the organization,
b. Allocating resources among the different businesses,
c. Formulating and implementing strategies that span individual businesses, and
providing leadership for the organization
2. Business strategy :
 Business-level general managers are concerned with strategies that are specific to
a particular business.

 The strategic role of these managers is to translate the general statements of

direction and intent that come from the corporate level into concrete strategies for
individual businesses.

3. Functional strategy :
 Functional-level managers are responsible for the specific business functions or
operations (human resources, purchasing, product development, customer
service, and so on) that constitute a company or one of its divisions.
 Acquisition of staff – employ or not employ,

 Organization structure,

 Job analysis,

 Staffing selection criteria,

 Remuneration and rewards

 Recruitment sources
 Acquisition of staff – employee or not employee

Successful employee acquisition involves much more than job interviews and
acceptance. It’s all about finding the ideal candidate, with the right fit, and
making a great first impression. When done strategically, employee acquisition
can reduce risk and save money over the long haul.

Staff acquisition involves getting the human resources needed (individuals or

groups ) assigned to and working on the project. In most environments, the
“best” resources may not available, and the project management team must
take care to ensure that the resources which are available will meet project
requirements:
 Tools and
Inputs Outputs
Techniques
• Human resource • Pre-assignment • Project staff
management plan • Negotiation assignments
• Enterprise • Acquisition • Resource calendars
environmental • Virtual terms • Project
factors management plan
• Multi-criteria
• Organizational decision analysis updates
process assets
Inputs to Staff Acquisition

1. Staffing management plan

2. Staffing pool description : When the project management team is able to

influence or direct staff assignments, it must consider the characteristics of the
potentially available staff. Considerations include, but are not limited to :
• Previous experience – have the individuals or group done similar or related work
before? Have they done it well?
• Personal interests – are the individuals or group interested in working on this
project?
• Personal characteristics – are the individuals or groups likely to work well together
as a tea ?
• Availability – will the most desirable individuals or groups be available in the
necessary time frames?

3. Recruitment practices : one or more of the organizations involved in the project

may gave policies, guidelines, or procedures governing staff assignments, when
they exist, such practices act as a constraint on the staff acquisition process.
Tools and Techniques for Staff Acquisition
1. Negotiation : Staff assignments must be negotiated on most projects. For example, the
project management team may need to negotiate with;
• Responsible functional managers to ensure that the project receives appropriately
skilled staff in the necessary time frame.
• Other project management team within the performing organization to assign scarce
or specialized resources appropriately. For example, a functional manager may be
rewarded based on staff utilization.

2. pre-assignment : In some cases, staff may be pre-assigned to the project. This is often
the case when (a) the project is the result of a competitive proposal and specific staff
were promised as part of the proposal, or (b) the project is an internal service project
and staff assignments were defined within the project charter.

3. Procurement : Project procurement management can be used to obtain the services of

specific individual or groups of individuals to perform project activities. Procurement is
required when the performing organization lacks the in-house staff needed to
complete the project ( e.g. As a result of a conscious decision not to hire such
individuals as full-time employees, as a result of having all appropriately skilled staff
previously committed to other projects, or as a result of other circumstances).
Output from Staff Acquisition

1. Project staff assigned : The project is staffed when appropriate people have
been reliably assigned to work on it. Staff may be assigned full-time , or
variably, based on the needs of the project.

2. Project team assigned : A project team directory lists all the project team
members and other key stakeholders. The directory may be formal or
informal, highly detailed or broadly framed, based on the needs of the
project.
 Organizational Structure
An organizational structure is a system that outlines how certain activities are
directed in order to achieve the goals of an organization.
These activities can include rules, roles, and responsibilities.

It also determines how information flows between levels within the company.
Five elements create an organizational structure: job design, departmentation,
delegation, span of control and chain of command.

These elements comprise an organizational chart and create the organizational

structure itself. "Departmentation" refers to the way an organization structures
its jobs to coordinate work.

Organizational structure is a system used to define a hierarchy within an

organization . It identifies each job, its function and where it reports to within
the organization.

This structure is developed to establish how an organization operates and

assists an organization in obtaining its goals to allow for future growth.

The structure is illustrated using an organizational chart.

The 6 Building Blocks of Organizational Structure / Elements of
Organizational Structure

1. Chain of Command

2. Span of Control

3. Centralization

4. Specialization

5. Formalization

6. Departmentalization
1. Chain of Command

 One of the most basic elements of an organizational structure, chain of command is

exactly what it sounds like : an unbroken line of authority that extends from the top of
the organization (e.g. a CEO) all the way sown to the bottom. Chain of command
clarifies who reports to whom within the organization.

Long chain of command Short chain of command

CEO CEO

VP Manager

Director Specialist

Sr. Manager

Manager

Specialist
2. Span of Control

 Span of control refers to the number of subordinates a superior can effectively

manage. The higher the ratio of subordinates to superiors, the wider the span of
control.

Wide Span of Control Narrow Span of Control

CEO CEO
3. Centralization /Decentralization

 Who makes the decisions in an organization? If decision-making power is

concentrated at a single point, the organizational structure is centralized. If
decision-making power is spread out, the structure is decentralized.
 While a decentralized structure promotes a more democratic decision-making
process, it can also slow sown the decision-making process, making it harder
for organizations to operate efficiently.

Centralized Decentralized

CEO CEO
4. Specialization

 Also known as division of labor, specialization is the degree to which activities or

tasks in an organization are broken down and divided into individual jobs.
 High specialization can be beneficial for an organization, as it allows employees to
become “masters” in specific areas, increasing their productivity as a result.
 However, low specialization allows for more flexibility, as employees cam more
easily tackle a broader array of tasks (as opposed to being specialized for a single
task).
5. Formalization

 Similar to specialization, formalization deals with the how jobs are structured
within an organization. The key differentiator here is that formalization also
takes into account and degree to which an employee’s tasks and activities are
governed by rules, procedures, and other mechanisms.

 A formal organizational structure seeks to separate the individual from the role
or position, as the role or position stays the same regardless of who’s holding it.
 An informal organization, on the other hand, places more value on the
individual. It allows for of a role or position based on an individual’s
preferences, skill set, etc., and places less importance on what team or
department that individual is part of.
6. Departmentalization

 It refers to the process of grouping jobs together in order to coordinate common

activities and tasks.
 If any organization has rigid departmentalization, each department or team is
highly autonomous, and there is little (or no) interaction between different
teams. In contrast, loose departmentalization entails that teams have more
freedom to interact and collaborate

A
Types of Organizational Structure
1. Hierarchical Structure

2. Functional Structure

3. Flat Structure

4. Divisional Structure

5. Matrix Structure

6. Network Structure
Mechanistic vs. Organic Organizational Structure
The mechanistic structure represents the traditional, top-sown approach to
organizational structure, whereas the organic structure represents a more
collaborative, flexible approach.

Mechanistic Organization

It is also called Hierarchical and

Bureaucratic organization.
They are characterized by highly
centralized authority, formalized
procedures and practices, and specialized
functions.
It is a rigid and tightly controlled
structure characterized by high
specialization, rigid departmentalization,
narrow span of control, high formalization,
a limited information network and little
participation in decision making by lower
level employees.
Organic organization

It is a flat organization that allows for a

horizontal communications and
interactions.
It is decentralized in nature and
involves the employees at all levels in
the decision making process.
communication channels between
managers and subordinates are open.
It encourage group participation and
the sharing of work responsibilities.
They focus on effectiveness, problem
solving, responsiveness, flexibility,
adaptability, creativity and innovation.
This organization is very flexible and
informal model of organization design,
most often found in unstable and a
unpredictable environments.
Job Analysis
What is Job ?
Job is a position where certain duties, responsibilities are performed to achieve
organization’s goals.

What is Analysis ?
Careful examination of Job (or something) in order to understand more about it.

Job Analysis
 It is a process of systematic investigation and detailed examination of job i.e. collection
information about the Task, Duties and Responsibilities.
 Need to be performed and determining the knowledge, skills and experience required to
carry out the a job effectively.

Task – is an identifiable work activity carried out for a specific purpose.

Duty – is a larger work segment consisting of several tasks.
Responsibility – obligation to perform task.

Job Analysis

Job Tasks Job Duties Job Responsibilities

Components of Job Analysis
Job analysis comprises two main components:

A. Job Description B. Job Specification

Or, Job Task Analysis Or, Job Skill Analysis

Job Description Job Specification

 It is written statement of tasks,  It focuses on person.

duties and responsibilities of any  It is a statement of knowledge, skills and
specified job. abilities associated with education, training
 It states about job title, duties and and experience required to successfully
responsibilities to e performed, perform the job.
location, required  It also specifies physical, psychological,
machines/tools/equipment, work personal, social, behavioral characteristics etc.
environment etc.
 It focuses on the job.
 It is required to prepare job
description before a vacancy is
advertised, because it tells the brief
the nature and type of the job.
 Job Analysis

Job Description Job Specification

Job title Qualification

Job location Qualities

Duties and responsibilities Experience

Reporting to Skills/communication skills

Working hours/conditions Training

Salary, incentives Personality characteristics

etc
Working conditions etc
Purpose of Job Analysis
 Work simplification

 Establishment of work standard

 Improving the safety of the organization

 Support the other HR activities

Purpose of Job Description Purpose of Job Specification

Grading and classification of job Personal planning

Placement Recruitment
Promotions and transfers Training and development
Developing work standards Employee discipline
Counseling of employees
Process of Job Analysis
1. Organizational analysis
 The first step in the job analysis process is to
determine its purpose. This will help
determine what kind of data to collect and
how to collect it.

2. Select representative positions

 It will be time consuming and costly to
analyze all jobs in an organization. So, it is
essential to select a representative sample
of jobs for detail job analysis.

3. Collect data
 The next step is to collect job-related data
such as educational qualification, duties,
responsibilities, working conditions,
employee behavior, skills and abilities. Data
is collected by using methods such as
observation, interviews and questionnaire.
4. Review collected data
 A job analysis report is prepared by using
the gathered data.

5. Developing job description

 The information collected is used to
develop a written statement known as job
description. Job description is a document
that describes the responsibilities, working
conditions, locations, risks and tasks
required for effective job performance.

6. Developing job specification

 The final step in the process is to develop
job specification. It is a statement of
personal traits, educational qualification,
experience, background and skills needed
to perform a job.
Setting selection criteria,
Remuneration and
rewards , and
Recruitment sources
Selection criteria
The selection process can be defined
as the process of selection and short
listing of the right candidates with the
necessary qualifications and skills set to
fill the vacancies in an organization.
The selection process varies from
industry, company to company and
even amongst departments of the
same company.

Every organization creates a selection

process because they have their own
requirements. Although, the main steps
remain the same.
 Preliminary Interview
This is a very general and basic interview conducted so as to eliminate the candidates
who are completely unfit to work in the organization. This leaves the organization with
a pool of potentially fit employees to fill their vacancies.

 Receiving Application
Potential employees apply for a job by sending application to the organization. The
application gives the interviewers information about the candidates like their bio-data,
work experience, hobbies and interests.

 Screening Applications
Once the applications are received, they are screened by a special screening
committee who choose candidates from the application to call for an interview.
Applicants may be selected on special criteria like qualifications, work experience etc.

 Employment Tests
Before an organization decides a suitable job for any individual, they have to gauge
their talents and skills. This is done through various employment tests like intelligence
tests, aptitude tests, proficiency tests, personality tests etc.
 Employment Interview
The next step in the selection process is the employee interview. Employment
interviews are done to identify a candidate’s skill set and ability to work in an
organization in detail. Purpose of an employment interview is to find out the suitability
of the candidate and to give him an idea about the work profile and what is expected
of the potential employee. An employment interview is critical for the selection of the
right people for the right jobs.

 Checking References
The person who gives the reference of a potential employee is also a very important
source of information. The referee cam provide into about the person’s capabilities,
experience in the previous companies and leadership and managerial skills. The
information provided by the referee is meant to kept confidential with the HR
department.
 Employee Remuneration
 Remuneration is the total compensation received by an employee. It includes not
only base salary but any bonuses, commission payments, overtime pay, or other financial
benefits that an employee receives from an employer. A job perk(facilities in addition)
may or may not be a component of employee remuneration.

The two main types of remuneration are

 financial remuneration and non-financial remuneration.

1.Financial remuneration refers to money

received for services rendered, and
2. non-financial remuneration includes additional
benefits awarded to the employee.
 Method of Remuneration
 Remuneration is a payment made to somebody for the work they have
done.

Time rate
system
Piece rate
system
Balance of
debt system
Time rate system
The system under which the payment is made to the workers according to the time for
which they work is known as time rate system.

For example :– employee has to work -8 hour daily

Rate per hour fixed – Rs. 100
Remuneration per day – 8 X 100 = Rs. 800

Advantages : Disadvantages :
1. Simplicity. 1. No distinction is made between efficient
2. Stability in wages and sense of worker and inefficient worker.
security. 2. Worker become lazy and dull and try to avoid
3. Quality production. work.
4. Unity in labor. 3. Worker try to make the work last as long as
possible so that earning may be greater.
4. There is discontentment among the efficient
worker since their efforts are not properly
rewarded.
 Piece rate system
Payment under this system is made according to work done, no regard being
had to time taken in performing the work.
The rate is fixed per unit of output, per article, per commodity etc.
Total earning = rate per unit X unit completed.

Advantages : Disadvantages :
1. The system recognizes the merit and 1. They take no precaution to improve
efficiency of workers and therefore can the quality of products.
be regarded as more equitable than the 2. No guarantee is given for day’s
time wage system. wages.
2. The workers are induced to work hard 3. Speedy and excessive work, in a bid
with the result that production is to earn more, prove injurious to
enhanced. health of worker.
3. Total labor cost per unit or job is
accurately ascertained.
Balance of debt system
Worker is paid on the basis of rate of output but if
On some occasions,

Earning by piece rate < Earnings by time rate,

the worker is paid according to time rate.

In future this extra payment to him can be recovered if

Piece rate Earning > Time rate earning

Advantage – it helps the worker to earn money even when they finishes the
work in a longer duration due to certain unavoidable reasons.
 Balance of debt system

Workers are paid according to piece-wage system

But on some occasion/situation

Earning as per
piece rate < Earning as per
time rate

Worker is paid according to time rate wage.

In future, extra payment may be recovered, when

piece rate wage > time rate wage

 For example:-

Rate per hour = Rs 2 Second day

Rate per piece = Rs 3
Hour in a day = 8 hrs Piece wage system = 6X3 =Rs18
Time wage system = 8X2 =Rs16
A, produces 3 pieces on 1st day piece wage > time wage
A, produces 6 pieces on 2nd day His wages as per piece rate system shall be
reduced by Rs2(18-16 ), his deemed debt
First day stands reduced to Rs5, (7-2), which will be
Wages as per piece rate system =3X3 = Rs 9 recovered in future.
Wages as per time rate system = 8X2 = Rs 16

Piece wage < time wage

9 < 16 This method helps the workers to make
A will be paid Rs16 for 1st day enough money when they finishes the work
Extra payment of Rs7 (16-9) is deemed to be in longer duration due to unavoidable
a debt to A which will be recovered in future. reasons.
 Remuneration Reward / Reward System /
Reward Management
factors Psychological Contract Items
Autonomy and growth Meaningful work
Challenging and interesting work
Participation in decision making
Freedom to be develop new skills
Opportunity to develop new skills
Benefits Health care benefits
Vacation benefits
Retirement benefits
Rewards and opportunities Opportunities for promotion
Opportunities for personal growth
Job training
Continual professional training
Job security and work Well-defined job responsibilities
responsibilities A reasonable workload
Job security
Work facilitation Adequate equipment to perform job
Enough resources to do the job
 Source of Recruitment
 Recruitment is a process of identifying, screening, short listing and hiring potential
resource for filling up the vacant positions in an organization. It is a core function of
Human Resource Management. Recruitment is the process of choosing the right person
for the right position and at the right time.
Sources of managerial recruitment

Internal Source External Source

Promotion Press advertisement

Retirements Placement agencies

Employment exchange
Former employees

Walk-in interviews
Transfers

E-recruitment
Internal advertisement
competitors
Employment Contract When creating an Employment
Contract, you can include the
A contract of employment (or employment following terms:
contract) is an agreement or term of hire that
is extended from an employer to an employee The type and rate of compensation
to set the terms and conditions of their
employment. While usually a written The frequency of payment
document, these agreements can also be
verbal. Vacation time

An employment contract is a signed Specified work hours

agreement between an employee and an
employer. It establishes both the rights and Specified work location
responsibilities of the two parties: ...
Employee responsibilities
A contract is an agreement, either written or
spoken, between two or more parties that Length of a probationary period
creates a legal obligation. The terms of a
contract are enforceable by law, with clearly Confidentiality, non-solicitation, or
defined penalties and remedies should the non-competition clauses
contract be breached.
Termination terms
Types of employment contract

7 types of employment contract

1. Fixed-term contract. ...

2. Full-time or part-time contract for an indefinite period. ...

3. Agency staff or temporary employment contract. ...

4. Zero Hours Contracts. ...

5. Self-employment contract. ...

6. An internship employment contract. ...

7. Apprentice agreement.
Maintenance - orientation and induction, and
motivation mechanisms
Induction is a procedure or ceremony for introducing someone to a new job,
organization, or way of life.

Employee orientation is about introducing new employees to the workplace which

includes their job responsibilities, their team members, departments and so on.

Purpose: Induction is the process of introducing new employees to the company,

its culture, policies, and procedures. Orientation is the process of providing new
employees with information about the company, its products, services, and the job
they will be performing.

The new employee orientation process is important to both the company and the
employee. The company gets a chance to complete the necessary employment
paperwork and begins the process of obtaining productivity from the new employee.
The employee has the opportunity to become familiar with their new surroundings and
to find out what the exact job duties will be. Using the proper employee induction and
orientation procedures can insure a smooth transition for the employee and company.
Difference between induction and orientation

1. Meaning :
 Induction is the process of welcoming new employees into the organization and
officially making them a part of the organization.
 Orientation is a more formal process that occurs after induction and is carried out to
help the employees adjust to their position and the work environment .

2. Duration :
 Induction is a shortest duration and is typically carried put on only the day the
employee formally joins the organization.
 Orientation, however , extends for longer time periods and may often be carried out
for a few weeks.

3. Order :
 Induction typically occurs first and is followed by orientation.
4. Includes :
 The employee is introduced to other employees and the work environment to make
them feel at ease in the new setting. Employees are provided a preview about their jobs
and the company so that they know the kind of people and environment they will be
working with.
 In the orientation process, the employees are made familiar with the work environment,
machines, tools and tasks that they are supposed to carry out.

5. Kind of process :
 In the induction process is more like a presentation that is made by the employer for the
employee, i.e. it is a one way process in which the employer explains the new recruits
about their job.
 Orientation is more like a training process where the employees are made to learn about
the job. It is a two-way process where both the manager and the employee interact with
one another and with other employees in the organization.

6. Level of formality :
 Induction is an informal process,
 Whereas orientation is more formal in nature.
Performance Appraisal
The term “performance appraisal” refers to the regular review of an employee's job
performance and overall contribution to a company.

Also known as an annual review, employee appraisal, performance review or

evaluation, a performance appraisal evaluates an employee's skills, achievements, and
growth, or lack thereof.

It's a subjective evaluation of the employee's strengths and weaknesses, relative

worth to the organization, and future development potential. It is also called
performance evaluations, performance reviews, development discussions, or employee
appraisals.

Performance appraisal is the process by which organizations collect information

about how well employees are doing their jobs.

Evaluation of employee job performance is one component of the performance

management process. Organizations use performance appraisals to: Provide feedback
to employees in performance reviews.
Objectives of performance appraisal
To identify the strengths and weaknesses of employees to place right men on
right job. To maintain and assess the potential in a person for growth and
development. To provide a feedback to employees regarding their performance and
related status.

1. Evaluate employee performance

2. Provide feedback

3. Set performance goals

4. Identify training and development needs

5. Determine compensation and rewards

6. Support performance management

7. Identify potential for career growth

Types of performance appraisal
1. Management by objective. ...
2. 360 review. ...
3. Project-based review. ...
4. Self-assessment. ...
5. Peer review. ...
6. Behaviorally anchored rating scale.

Methods of performance appraisal

720-Degree Feedback. You could say that this method doubles what you would
get from the 360-degree feedback! ...
The Assessment Center Method. ...
Behaviorally Anchored Rating Scale (BARS) ...
Checklist Method. ...
Critical Incidents Method. ...
Customer/Client Reviews. ...
Field Review Method. ...
Forced Choice Method.
Termination
The term termination of employment refers to the end of an employee’s
work with a company.

An employee may be terminated from a job of their own free will or
following a decision made by the employer.

Employers who execute a termination of employment may do so for a

number of reasons, including downsizing, poor job performance, or
redundancies.
Types of employee termination

1. Voluntary Termination
In this type of termination, the worker takes the initiative to leave the company. A decision, as
such, can be for many professional or personal reasons. For example, it could be a toxic work
environment, lack of growth opportunities or employee development, personal problems, etc.

2. Involuntary Termination
Involuntary termination refers to an event wherein the employer removes a worker from
employment. It can be for low performance, employee behavior, violation of company rules,
etc. This type of termination can also be the result of an employee disciplinary action.

3. Employment at Will
This termination type dictates that an employer can fire a worker anywhere at any place
without any reason. Here, an employer need not give any reason to the leaving employee.
However, employers must document the reason for themselves to fight or prohibit any
discrimination case, should it arise.

4. Mutual Termination
As the name suggests, this termination arises when both parties conclude that they are not a
good fit. This type of termination is a lot less messy since it is a decision both parties agree on
mutually.
Causes for employee termination
From the viewpoint of the Employer:
 Low performance.
 Violation of Company Rules.
 Employee Disciplinary Action.
 Harassment of any sort, be it sexual, physical, mental, or emotional.
 Lack of cooperation and progressive discipline
 Leaking information to competition, etc.

From the viewpoint of the Employee:

 Better employment contract elsewhere.
 Lack of growth opportunities like employee promotion, etc.
 Lack of interest in the job.
 Studies/Business/Retirement Plans.
 Workers with personal problems/issues.
 Bad employment relationship.
Steps leading up to an employee termination

1. Reasons for termination

2. Termination Policy
3. Employee Review Process
4. Inform the Employee
5. Severance Package
6. Proper Send-Off
Regulatory requirements

A regulatory requirement is a rule that a government entity

imposes on an organization. Some federal and state laws govern
virtually all organizations. Regulations govern how organizations
manage their business and employees and how they interact with
customers, among many other areas.

There are many different types of regulatory requirements.

Some common examples include environmental regulations,
labour laws, consumer protection laws, and occupational safety
and health regulations. Businesses must comply with all relevant
regulatory requirements in order to operate legally.
 Labour law in Nepal : Highlights of the Labour Act, 2017
1. Introduction
 Applicability of the Labour Act

Entities where Labour Act is Entities where Labour Act is not

applicable applicable

A company, private firm, partnership firm, Civil service,

cooperatives, association or other
organization (NGOs, INGOs) in operation, or Nepal Army, Nepal Police, Armed Police
established, incorporated, registered or Force,
formed under prevailing laws to undertake
industry or business or provide service with If services under other prevailing special
or without profit motive, laws and Special Economic Zones to the
extent separate provisions are provided,
Entities registered in foreign countries and 
engaged in the promotion of business, sale If there is an employment agreement by
of products or promotion of other works in the enterprises falling under Working
Nepal. Journalists Act, 2051 (1995).
2. Types of employment

Types of employment Description

a. Regular employment Persons hired for work or service other than
work-based, tine-based, and casual or piece
rate employment.
b. Work – Based employment Persons hired for rendering a specific service
c. Time –Based employment Persons hired for rendering service for a
definite period
d. Casual employment Persons hired for seven days or less than
seven days in a month
e. Part – Time employment  Persons hired for 35 hours or less than 35
hours in a week
 Such employees are remunerated based on
hours worked unless otherwise specified in
the employment contract
 Such employees cannot be prohibited from
working elsewhere and are entitled to social
security benefits
3. Terms of probation : The labour act provision for a maximum of 6 months period to
evaluate the work of an employee.

4. Provision related to intern and trainee : The intern should not be engaged at
work exceeding 8 hours a day and 48 hours a week. They are entitled to health and
safety arrangements, medical experts and compensation in case of an injury at work .
A trainee employee may be appointed for a period of training not exceeding 1 year
unless otherwise prescribed by law. All trainees shall be entitled to social security
benefits including provident fund, gratuity and minimum remuneration.

5. Working hours
Working hours Overtime
8 hours a day and 48 hours a week. Not exceeding 4 hours a day and 24
hours a week.

6. Remuneration

Nature of employees Time of payment

Engaged in work for less than a month Within 3 days from completion of work
Engaged in casual employment Upon the completion of work
Other employees payment period should not exceed1 month
7. Holidays and leave

8. Social security fund

9. Disciplinary action to employee

10.Employment termination

11.Retrenchment

12.Collective bargaining

13.Labour court

14.Sanctions for non-compliance