NEW EDITION

HRM- UNIT- I

As Per Updated Syllabus

 HRM- UNIT- I

PRINCIPLES AND PRACTICES OF MANAGEMENT: DEVELOPMENT OF MANAGEMENT

THOUGHT, CONTRIBUTIONS OF TAYLOR, FAYOL, MAYO, MARY PARKER FOLLETT AND C.I.
BARNARD
Management is essential for an organized life and necessary to run all types of management.
Good management is the backbone of successful organizations. Managing life means getting
things done to achieve life’s objectives and managing an organization means getting things
done with and through other people to achieve its objectives.
Whether management is an art or science, will continue to be a subject of debate. However,
most management thinkers agree that some form of formal academic management
background helps in managing successfully. Practically, all CEO’s are university graduates.
Hence, the reason for including business degree programs in all academic institutions.
Management is a set of principles relating to the functions of planning, organizing, directing
and controlling, and the application of these principles in harnessing physical, financial,
human, and informational resources efficiently and effectively to achieve organizational goals.
Definition of Management
Many management thinkers have defined management in their own ways. For example, Van
Fleet and Peterson define management, ‘as a set of activities directed at the efficient and
effective utilization of resources in the pursuit of one or more goals.’
Megginson, Mosley, and Pietri define management as ‘working with human, financial and
physical resources to achieve organizational objectives by performing the planning,
organizing, leading and controlling functions‘.
Kreitner’s definition of management:
‘Management is a problem-solving process of effectively achieving organizational objectives
through the efficient use of scarce resources in a changing environment.’
According to F.W. Taylor, ‘ Management is an art of knowing what to do when to do and see
that it is done in the best and cheapest way ‘.
According to Harold Koontz, ‘Management is an art of getting things done through and with
the people in formally organized groups. It is an art of creating an environment in which
people can perform and individuals and can co-operate towards attainment of group goals.‘
A leader has certain inherent qualities and traits which assist him in playing a directing role
and wielding commanding influence which others. Leadership is an integral part of
management and plays a vital role in managerial operations, while management is an integral
component of technical as well as social processes. The practice of management is as old as
human civilization. However, the study of management in a systematic and scientific way as a
distinct body of knowledge is only of recent origin.
For example, let us look at the managerial role of a simple housewife and how she uses the
managerial ingredients in managing the home. First, she appraises her household and its
needs. She forecasts the needs of the household for a period of a week or a month or longer.
She takes stock of her resources and any constraints on these resources.
Features of Management

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Management is Associated with Group Efforts

It is usual to associate management with a group.

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Although people as individuals manage many personal affairs, the group emphasis on
management is universal.
Every enterprise entails the existence of a group to achieve goals. It is now established that
goals are achieved more readily by a group than by any one person alone.
Management is Purposeful
Wherever there is management, there is a purpose. Management deals with the achievement
of something definite expressed as a goal or objective.
Management success is commonly measured by the extent to which objectives are achieved.
Management exists because it is an effective means of getting the necessary work
accomplished.
Management is Accomplished Through the Efforts of Others
Management is sometimes defined as “getting things done through others’ efforts.”
Besides the manager of a firm, there may be accountants, engineers, system analysts,
salesmen and a host of other employees working but it is the manager’s job to integrate all
their activities.
Thus it can well be said that participation in management necessitates relinquishing the
normal tendency to perform all things oneself and getting tasks accomplished through group
efforts.
Management is Goal-oriented
Managers focus their attention and efforts on bringing about successful action. Successful
managers have an urge for accomplishment.
They know when and where to start, what to do with keeping things moving, and how to
follow a goal-oriented approach.
Management is Indispensable
Management can neither be replaced nor substituted by anything else.
Even the computer which is the wonderful invention of the twentieth century can only aid but
not replace management.
We know that the computer is an extremely powerful tool for management.
It can widen a manager’s vision and sharpen his insight by supplying more and faster
information for making key decisions.
The computer has enabled the manager to conduct analysis far beyond the normal analytical
capacities of man.
But what happens, in reality, is that the computer can neither work by itself nor can it pass any
judgment.
The manager plays his/her role by providing judgment and imagination as well as interpreting
and evaluating what the information/data mean in each case.
Management is Intangible
Management is often called the unseen force; its presence is evidenced by the results of its
efforts – motivation among employees, discipline in the group, high productivity, adequate
surplus, etc.
Conversely, the identity of management may also be felt by its absence or by the presence of
its direct opposite mismanagement. The consequence of mismanagement is anybody’s guess.

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Management can Ensure Better Life

A manager can do much to improve the work environment, stimulate people to perform
better, achieve progress, bring hope and accomplish better things in life.
The study of management has evolved into more than just the use of means to achieve ends;
today it includes moral and ethical questions concerning the selection of the right ends
towards which managers should strive.
Management is the science and art of getting people together to accomplish desired goals and
objectives by coordinating and integrating all available resources efficiently and effectively.
Let’s understand the management definition and it’s basics in this infographic
Management is Pervasive:
Management is a universal phenomenon. The use of management is not restricted to business
firms only it is applicable in profit-making, non-profit-making, business or non-business
organisations; even a hospital, school, club and house has to be managed properly. Concept of
management is used in the whole world whether it is USA, UK or India.
Management is Multidimensional:
Management does not mean one single activity but it includes three main activities:
i. Management of work
ii. Management of people
iii. Management of operations

Management attempts to accomplish specific objectives which are the solicited outcome of
any action. They must be received from the fundamental view of the business. In any business,
there are several objectives and the administration has to complete all objectives in an
efficient and effective manner. Objectives can be categorised into organisational objectives,
social objectives and personal or individual objectives.

Vital Objectives of Management:

 Organisational Objectives: Management is accountable for establishing and attaining
objectives for the company. It has to deliver a variety of objectives in all operations

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contemplating the interest of all shareholders including, stakeholders, consumers, the

government and employees. The principal objective of any company must be to use
material and human resources to the maximum potential benefit, i.e., to meet the
financial objectives of a firm. And, they are survival, profit and growth.
 Survival: The essential objectives of any industry is survival. Management must
attempt to assure the continuation of the business. In order to survive, an
industry must gain enough funds to meet the costs that would be incurred.
 Profit: Poor survival is not sufficient for the industry. Management has to make
sure that the company earns the profit. Profit contributes to a necessary catalyst
for the sustained successful performance of the firm. Profit is crucial for meeting
the costs and uncertainties of the business concern.
 Growth: A firm requires to add to its chances, in the long run, for this it is
necessary for the concern to develop. To prevail in the business, management
must utilise adequately the growth potential of the firm.
 Social objectives: It includes the establishment of benefit for the community. As a part
of the community, every business whether it is a trade or non-trading concern has a
social responsibility to meet. This applies to consistently generating financial value for
many components of society. This includes using environmentally beneficial
technologies of production, providing job opportunities to the disadvantaged sections of
the community and furnishing the primary facilities like crèches and schools to
employees.
 Personal Objectives: Establishments are made up of resources who possess different
backgrounds, experiences, objectives and personalities. They all become part of the
establishment to meet their several demands. These differ from economic necessities
such as ambitious perks and salaries, social obligations such as equal attention and
higher level demands such as individual growth and progress.
5-6 MARKS QUESTIONS
Q1. AN ORGANISATION
SETS DIFFERENT
OBJECTIVES FOR ITSELF
AND OTHER
STAKEHOLDERS. EXPLAIN
SUCH OBJECTIVES
BRIEFLY.
ANSWER:
AN ORGANISATION SETS
AND ACHIEVES THE
FOLLOWING OBJECTIVES:
(a)ORGANISATIONAL OR  These objectives are set on the basis of the goals of the
ECONOMIC OBJECTIVES organisation.
 These objectives are set by keeping in mind the interests
of various stakeholders like owners, employees,
shareholders, employees etc.

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 The purpose of setting these objectives is to ensure

optimum use of all available resources.
 Management is responsible to set and achieve such
objectives.
These objectives are classified as:
(1)SURVIVAL:
 The basic objective of any organisation is survival.
 For this, an organisation must earn sufficient revenues to
cover the cost.
Example:
If Ram is running a shop and incurring a cost of Rs.50,000 per
month then he has to collect minimum revenue of Rs.50,000 to
cover all his costs otherwise his business won’t survive.
(2)PROFIT:
 Mere survival is not enough for any organisation
 An organisation needs to earn profit to face unforeseen
or contingent situations.
Example:
If the revenue of the shop is more than Rs.50,000, than Ram is
earning a profit. The more the gap between the cost of
production and revenue collected, the better the profit. It will
help him in reducing business risk.
(3)GROWTH:
 Regular earning of profits makes it possible for an
organisation to expand and stay in the industry and face
competition.
Growth of an organisation can be measured by:
 Increase in revenue.
 Increase in the number of employees.
 Increase in the number of products.
 Increase in the number of branches.

Example:
Patanjali is growing as it is dealing in a variety of products and
opening megastores in multiple cities.
(b) SOCIAL OBJECTIVES  Survival of any organisation whether it is private or
government, depends upon its commitment towards
society.
 The organisations which care for society enjoy long term
growth.
Some of the social objectives are:
 Using environment-friendly methods of production.

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 Producing quality products at reasonable rates

 Employment generation in society.
These objectives are related to the growth of the

(c) PERSONAL OR employees working in an organisation.
INDIVIDUAL OBJECTIVES Some of these objectives are:
 FINANCIAL NEEDS–Providing competitive salaries and
perquisites.
 SOCIAL NEEDS-Self-respect, peer recognition, respect for
colleagues.
 HIGHER END NEEDS or SELF DEVELOPMENT NEEDS.

Level of Management
The term “Levels of Management’ refers to a line of demarcation between various managerial
positions in an organization. The number of levels in management increases when the size of
the business and work force increases and vice versa. The level of management determines a
chain of command, the amount of authority & status enjoyed by any managerial position. The
levels of management can be classified in three broad categories:
Managers at all these levels perform different functions. The role of managers at all the three
levels is discussed below:

1. Top Level of Management

It consists of board of directors, chief executive or managing director. The top management is
the ultimate source of authority and it manages goals and policies for an enterprise. It devotes
more time on planning and coordinating functions.
The role of the top management can be summarized as follows -
a. Top management lays down the objectives and broad policies of the enterprise.
b. It issues necessary instructions for preparation of department budgets, procedures,
schedules etc.
c. It prepares strategic plans & policies for the enterprise.
d. It appoints the executive for middle level i.e. departmental managers.
e. It controls & coordinates the activities of all the departments.
f. It is also responsible for maintaining a contact with the outside world.
g. It provides guidance and direction.

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 HRM - UNIT – 1 MCQs
HRM - UNIT – 1 MCQs
1. Henry Fayol, F.W. Taylor belongs to (D) (I) discipline (ii) science
which of the following school of Answer: B
management? 5. “Principles help managers to take
(A) Neoclassical School decisions while performing functions of
(B) Modern School management.”
(C) Classical School (A) True, Principles are guidelines to take
(D) Early Perspective actions
Answer: C (B) False, Functions of management are
2. ________ involve a series of steps to be not related with Principles of
taken to accomplish desired goals. Management
Principles are guidelines to make decisions (C) Partly True, Principles denotes cause
or actions while practicing __________. and effect relationship which may
Fill in the above Blank with the following help functions
most suitable option? (D) False, Functions of management are
(A) Values just actions.
(B) Techniques Answer: A
(C) Programmes 6. The Principle of division of work is
(D) Actions applicable to a government office where
there is a diary/ dispatch clerk whose job is
Answer: B
to receive and send mail, a data entry
3. While practicing principles of
operator who’s task is to input data on the
management ____________ cannot be computer. Division of work is also
neglected as the business have to fulfill applicable to limited companies where
social and ethical responsibility towards
there are separate departments like
society.
productions, finance, research and
Fill in the above Blank with the following development etc.
most suitable option? Which Quality of Principles of management
(A) Values is highlighted above?
(B) Techniques (A) General Guidelines
(C) Programmes (B) Universal applicability
(D) Actions (C) Flexible
Answer: A (D) Contingent
4. Derivation of Principles of Management Answer: B
is a matter of (I)______________ and their
7. The degree of concentration of authority
application is a matter of _(ii)___________. or its dispersal depends upon the situation
(A) (I) art (ii) science and circumstances of each enterprise.
(B) (I) science (ii) art Principles give enough discretion to
(C) (I) art (ii) discipline

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 HRM - UNIT – 1 MCQs
managers to adjust according to the (A) Meeting changing environment
situation. requirements
Which Quality of Principles of management (B) Providing managers with useful
is highlighted above? insights into the reality
(A) General Guidelines (C) Fulfilling social responsibility
(B) Universal applicability (D) Management training, education, and
(C) Flexible research
(D) Contingent Answer: B
Answer: C 11. Which of the following statement
8. Principles of management do not provide justifies understanding of Principles of
the readymade solutions to any problem Management helps in taking scientific
but in dealing with a situation of conflict decisions:
between two departments, a manager may (A) Adherence to these principles add to
emphasize the primacy of the knowledge and understanding of
organizational goal. managerial situations
Which Quality of Principles of management (B) Principles emphasize logic rather
is highlighted above? than blind faith
(A) General Guidelines (C) Principles of management are at the
(B) Universal applicability core of the management theory
(C) Flexible (D) Principles are guidelines that can be
(D) Contingent modified as per the changing
environment
Answer: A
Answer: B
9. Employees deserve fair and just
remuneration but what is just, and fair is 12. In the words of ___________, “
determined by multiple factors. They ___________ means knowing exactly what
include the contribution of the employee, you want men to do and seeing that they
Paying capacity of the employer, and do it in the best and cheapest way”.
prevailing wage rate for the occupation Fill in the above blank with the right option.
under consideration. (A) Henry Fayol, Management
Which Quality of Principles of management (B) W. Taylor, Scientific Management
is highlighted above? (C) Harold Koontz, Administrative
(A) General Guidelines Management
(B) Universal applicability (D) W. Taylor, Management
(C) Flexible Answer: B
(D) Contingent 13. Even a small production activity like
Answer: D loading pigs of iron into boxcars can be
10. Management Principles increase scientifically planned and managed. This
managerial efficiency as manager leave can result in a tremendous saving of human
routine decision making to his subordinates energy as well as wastage of time and
and deal with exceptional situations which materials.
require his expertise by following the Which of the following Principle of
Principle of delegation. management emphasize on the above
What does the above case signify about situation?
management? (A) Harmony does not discord

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 HRM - UNIT – 1 MCQs
(B) Science not Rule of Thumb (D) Simplification of work
(C) Initiative Answer: B
(D) Development of each person to his or 18. According to Taylor there can be many
her greatest efficiency and prosperity hindrances in a good performance which
Answer: B may lead to fatigue. Identify the most
14. As per Cooperation, Not Individualism suitable cause of Fatigue among the
principle of management, Competition following options.
should be replaced with___________ (A) Long working hours
(A) Coordination (B) Doing unsuitable work
(B) Cooperation (C) Non-cordial relation with boss
(C) Management (D) All the above
(D) Harmony Answer: D
Answer: B 19. ________ among the following was the
15. Which of the following statements first to identify four functions of
justifies the Principle of Cooperation, not management.
Individualism. (A) Henry Fayol
(A) Management and workers should (B) W. Taylor
transform their thinking towards (C) Max Weber
each other (D) Harold Koontz
(B) There should be an equal division of Answer: A
work between Management and
workers 20. Fayol ‘s Principle of Division of work can
(C) Industrial efficiency depends to a be applied to the following kind of Work.
large extent on personnel (A) Technical
competencies
(B) Managerial
(D) There is only one best method to
(C) Both
maximize efficiency
(D) None of these
Answer: B
Answer: C
16. Which of the following technique of
21. “Authority is undermined, discipline is in
Scientific Management is a violation of
jeopardy, order disturbed, and stability
Unity of Command.
threatened”.
(A) Differential piece wage system
The above statement is a violation of one of
(B) Fatigue study
the principles of management.
(C) Functional Foremanship
(A) Unity of direction
(D) Simplification of work
(B) Discipline
Answer: C
(C) Unity of command
17. Which of the following technique of
(D) Stability of personnel
scientific management has the objective to
determine the number of workers to be Answer: C
employed: frame suitable incentive 22. Which of the following is the most
schemes and determine labor cost. suitable example for the principle of
Centralization and Decentralization’
(A) Differential piece wage system
(B) Time study
(C) Functional Foremanship
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 NEW EDITION
HRM- UNIT- II

As Per Updated Syllabus

 HRM- UNIT- II

HUMAN RESOURCE MANAGEMENT

Many great scholars had defined human resource management in different ways and with
different words, but the core meaning of the human resource management deals with how to
manage people or employees in the organisation.
Human Resource Development is the framework for helping employees develop their skills,
knowledge, and abilities, which in turn improves an organization's effectiveness.
Find out what types of activities are part of human resource development and the benefits
they can have for an organization.
Organizations have many opportunities for human resource development, both within and
outside of the workplace. Human resource development can be formal or informal, and it can
begin as soon as you onboard new employees.

Concepts and Perspectives in HRM

HRM is concerned with the human beings in an organization. “The management of man” is a
very important and challenging job because of the dynamic nature of the people. No two
people are similar in mental abilities, tacticians, sentiments, and behaviors; they differ widely
also as a group and are subject to many varied influences. People are responsive, they feel,
think and act therefore they cannot be operated like a machine or shifted and altered like
template in a room layout.
The first definition of HRM is that it is the process of managing people in organizations in a
structured and thorough manner. This covers the fields of staffing (hiring people), retention of
people, pay and perks setting and management, performance management, change
management and taking care of exits from the company to round off the activities. This is the
traditional definition of HRM which leads some experts to define it as a modern version of the
Personnel Management function that was used earlier.

The second definition of HRM encompasses the management of people in organizations

from a macro perspective i.e. managing people in the form of a collective relationship
between management and employees. This approach focuses on the objectives and outcomes
of the HRM function. What this means is that the HR function in contemporary organizations is
concerned with the notions of people enabling, people development and a focus on making
the “employment relationship” fulfilling for both the management and employees.
These definitions emphasize the difference between Personnel Management as defined in the
second paragraph and human resource management as described in the third paragraph. To
put it in one sentence, personnel management is essentially “workforce” centered whereas
human resource management is “resource” centered. The key difference is HRM in recent
times is about fulfilling management objectives of providing and deploying people and a
greater emphasis on planning, monitoring and control.
According to Decenzo and Robbins, “HRM is concerned with the people dimension” in
management. 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 is essential to achieve
organsational objectives. This is true, regardless of the type of organization – government,
business, education, health or social action”.

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The National Institute of Personal Management (NIPM) of India has defined human resources
– personal management as “that part of management which is concerned with people at work
and with their relationship within an enterprise. Its aim is to bring together and develop into
an effective organization of the men and women who make up enterprise and having regard
for the well – being of the individuals and of working groups, to enable them to make their
best contribution to its success”.

Human Resource Management: Nature

Human Resource Management is a process of bringing people and organizations together so
that the goals of each are met. The various features of HRM include:
 It is pervasive in nature as it is present in all enterprises.
 Its focus is on results rather than on rules.
 It tries to help employees develop their potential fully.
 It encourages employees to give their best to the organization.
 It is all about people at work, both as individuals and groups.
 It tries to put people on assigned jobs in order to produce good results.
 It helps an organization meet its goals in the future by providing for competent and
well-motivated employees.

Objectives of HRM
1. To help the organisation to attain its goals effectively and efficiently by providing
competent and motivated employees.
2. To utilize the available human resources effectively.
3. To increase to the fullest the employee’s job satisfaction and self-actualisation.
4. To develop and maintain the quality of work life (QWL) which makes employment in the
organisation a desirable personal and social situation.
5. To help maintain ethical policies and behaviour inside and outside the organisation.
6. To establish and maintain cordial relations between employees and management.
7. To reconcile individual/group goals with organisational goals.
Scope in HRM
The scope of Human Resource Management refers to all the activities that come under the
banner of Human Resource Management. These activities are as follows.

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Human resources planning :- uman resource planning or Human Resource Planning refers to a
process by which the company to identify the number of jobs vacant, whether the company
has excess staff or shortage of staff and to deal with this excess or shortage.
Job analysis design :- Another important area of Human Resource Management is job analysis.
Job analysis gives a detailed explanation about each and every job in the company.
Recruitment and selection :- Based on information collected from job analysis the company
prepares advertisements and publishes them in the newspapers. This is recruitment. A
number of applications are received after the advertisement is published, interviews are
conducted and the right employee is selected thus recruitment and selection are yet another
important area of Human Resource Management.
Orientation and induction :- Once the employees have been selected an induction or
orientation program is conducted. This is another important area of Human Resource
Management. The employees are informed about the background of the company, explain
about the organizational culture and values and work ethics and introduce to the other
employees.
Training and development :- Every employee goes under training program which helps him to
put up a better performance on the job. Training program is also conducted for existing staff
that have a lot of experience. This is called refresher training. Training and development is one
area where the company spends a huge amount.
Performance appraisal :- Once the employee has put in around 1 year of service, performance
appraisal is conducted that is the Human Resource department checks the performance of the
employee. Based on these appraisal future promotions, incentives, increments in salary are
decided.
Compensation planning and remuneration :- There are various rules regarding compensation
and other benefits. It is the job of the Human Resource department to look into remuneration
and compensation planning.

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Motivation, welfare, health and safety :- Motivation becomes important to sustain the
number of employees in the company. It is the job of the Human Resource department to look
into the different methods of motivation. Apart from this certain health and safety regulations
have to be followed for the benefits of the employees This is also handled by the HR
department.
Industrial relations :- Another important area of Human Resource Management is maintaining
co-ordinal relations with the union members. This will help the organization to prevent strikes
lockouts and ensure smooth working in the company.
The Human Resource Officer
The Human Resource Officer is responsible for providing support in the various human
resource functions, which include recruitment, staffing, training and development,
performance monitoring and employee counseling.

Human Resource Accounting

Human Resource Accounting (HRA) means to measure the cost and value of the people (i.e. of
employees and managers) in the organisation. It measures the cost incurred to recruit, hire,
train and develop employees and managers.
HRA also finds out the present economic value of its employees and managers. After
measuring the cost and value of its employees and managers, the organisation prepares a
report. This report is called HRA Report. It is shown to the top level management. It can also
be shown to the employees, managers and outside investors.
Advantages of HRA
Benefits, objectives, advantages of human resource accounting HRA:-
1. Information for manpower planning: HRA provides useful information about the cost
and value of human resources. It shows the strengths and weakness of the human
resources. All this information helps the managers in planning and making the right
decisions about human resources. Thus, it provides useful information for Manpower
Planning and Decision Making.
2. Information for making personnel policies: HRA provides useful information for making
suitable personnel policies about promotion, favorable working environment, job
satisfaction of employees, etc.
3. Utilization of human resources: HRA helps the organisation to make the best utilization
of human resources.
4. Proper placements: HRA helps the organisation to place the right man in the right post
depending on his skills and abilities.
5. Increases morale and motivation: HRA shows that the organisation cares about the
employees and their welfare. This increases their morale and it motivates them to work
hard and achieve the objectives of the organisation.
6. Attracts best human resources: Only reputed organisations conduct HRA. So,
competent and capable people want to join these organisations. Therefore, it attracts
the best employees and managers to the organisation.
7. Designing training and development programs: HRA helps the organisation to design
(make) a suitable training and development program for its employees and managers.

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8. Valuable information to investors: HRA provides valuable information to present and

future investors. They can use this information to select the best company for investing
their money.

Human Resource Planning

Human Resource Planning (HRP) is the process of forecasting the future human resource
requirements of the organization and determining as to how the existing human resource
capacity of the organization can be utilized to fulfill these requirements. It, thus, focuses on
the basic economic concept of demand and supply in context to the human resource capacity
of the organization.
It is the HRP process which helps the management of the organization in meeting the future
demand of human resource in the organization with the supply of the appropriate people in
appropriate numbers at the appropriate time and place. Further, it is only after proper analysis
of the HR requirements can the process of recruitment and selection be initiated by the
management.
Also, HRP is essential in successfully achieving the strategies and objectives of organization. In
fact, with the element of strategies and long term objectives of the organization being widely
associated with human resource planning these days, HR Planning has now became Strategic
HR Planning.
Though, HR Planning may sound quite simple a process of managing the numbers in terms of
human resource requirement of the organization, yet, the actual activity may involve the HR
manager to face many roadblocks owing to the effect of the current workforce in the
organization, pressure to meet the business objectives and prevailing workforce market
condition. HR Planning, thus, help the organization in many ways as follows:
 HR managers are in a stage of anticipating the workforce requirements rather than
getting surprised by the change of events
 Prevent the business from falling into the trap of shifting workforce market, a common
concern among all industries and sectors
 Work proactively as the expansion in the workforce market is not always in conjunction
with the workforce requirement of the organization in terms of professional experience,
talent needs, skills, etc.
 Organizations in growth phase may face the challenge of meeting the need for critical
set of skills, competencies and talent to meet their strategic objectives so they can stand
well-prepared to meet the HR needs
 Considering the organizational goals, HR Planning allows the identification, selection and
development of required talent or competency within the organization.
It is, therefore, suitable on the part of the organization to opt for HR Planning to prevent any
unnecessary hurdles in its workforce needs. An HR Consulting Firm can provide the
organization with a comprehensive HR assessment and planning to meet its future
requirements in the most cost-effective and timely manner.

HR Planning process
Current HR Supply: Assessment of the current human resource availability in the organization
is the foremost step in HR Planning. It includes a comprehensive study of the human resource

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strength of the organization in terms of numbers, skills, talents, competencies, qualifications,

experience, age, tenures, performance ratings, designations, grades, compensations, benefits,
etc. At this stage, the consultants may conduct extensive interviews with the managers to
understand the critical HR issues they face and workforce capabilities they consider basic or
crucial for various business processes.
 Future HR Demand: Analysis of the future workforce requirements of the business is the
second step in HR Planning. All the known HR variables like attrition, lay-offs,
foreseeable vacancies, retirements, promotions, pre-set transfers, etc. are taken into
consideration while determining future HR demand. Further, certain unknown
workforce variables like competitive factors, resignations, abrupt transfers or dismissals
are also included in the scope of analysis.
 Demand Forecast: Next step is to match the current supply with the future demand of
HR, and create a demand forecast. Here, it is also essential to understand the business
strategy and objectives in the long run so that the workforce demand forecast is such
that it is aligned to the organizational goals.
Demand forecasting is the process of estimating the future quantity and quality of people
required. The basis of the forecast must be the annual budget and long-term corporate plan,
translated into activity levels for each function and department. In manufacturing company,
the sales budget would be translated into a production plan giving the number and type of
products to be produced in each period. From this information, the number of hours to be
worked by each skilled category to make the quota for each period, would be computed. Once
the hours are available; determining the quality and quantity of personnel will be the logical
step.
Demand forecasting must consider several factors- both external as well as internal. Among
the external factors are competition (foreign and domestic), economic climate, laws and
regulatory bodies, changes in technology, and social factors. Internal factors include budget
constraints, production levels, new products and services, organizational structure, and
employee separations. Demand forecasting is common among organizations, though they may
not do personnel-supply forecasting.
There are several good reasons to conduct demand forecasting. It can help
1. Quantify the jobs necessary for producing a given number of goods, or offering an given
amount of services.
2. Determine what staff-mix is desirable in the future
 Assess appropriate staffing levels in different parts of the organization, so as to avoid
unnecessary costs
1. Prevent shortages of people where and when they are needed most
2. Monitor compliance with legal requirements with regard to reservation of jobs.
Forecating Techniques: Forecasting techniques vary from simple to sophisticated ones. Before
describing each technique, it may be stated that organizations generally follow more than one
technique. The techniques are:
1. Managerial Judgement
2. Ratio-Trend Analysis
3. Regression Analysis
4. Work Study Techniques
5. Delphi Technique

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6. Follow Models
Managerial Judgement: This technique is very simple. In this, managers sit together,
discussand arrive at a figure which would be the future demand for labour. The Technique
may involve a “Bottom-Up” or a “Top-Down” approach.
Ratio-trend analysis: This is the quickest forecasting technique. The Technique involves
studying past ratios, say, between the number of workers and sales in an organization and
forecasting future ratios, making some allowance for changes in the organization or its
methods.
Regression analysis: This is similarto ratio-trend analysis in that forecast is based on the
relationship between sales volume and employee size. However, regression analysis is more
statistically sophisticated.
Work-Study Techniques: It can be used when it is possible to apply work measurement to
calculate the length of operations and the amount of labour required.
Delphi Technique: The Delphi technique is a method of forecasting personnel needs. It solicits
estimates of personnel need from a group of experts, usually manager.
Flow Model: Flow models are very frequently associated with forecasting personnel needs.
The simplest one is called the Markov Model.
 HR Sourcing Strategy and Implementation: After reviewing the gaps in the HR supply
and demand, the HR Consulting Firm develops plans to meet these gaps as per the
demand forecast created by them. This may include conducting communication
programs with employees, relocation, talent acquisition, recruitment and outsourcing,
talent management, training and coaching, and revision of policies. The plans are, then,
implemented taking into confidence the mangers so as to make the process of
execution smooth and efficient. Here, it is important to note that all the regulatory and
legal compliances are being followed by the consultants to prevent any untoward
situation coming from the employees.
Hence, a properly conducted process of HR Planning by an HR Consulting Firm helps the
organization in meeting its goals and objectives in timely manner with the right HR strength in
action.

Types of Human Resource Planning

1. Future-Oriented.
2. Continuous Process.
3. Optimum Utilization of Human Resources.
4. Right Kinds and Numbers.
5. Determination of Demand and Supply.
6. Environmental Influence.
7. Related to Corporate Plan.
8. A Part of the Human Resource Management System.
1. Future-Oriented: Human resource planning is prepared to assess the future
requirement of the workforce in the organization. It helps identify the size and
composition of resources for future purposes.
2. Continuous Process: Human resource planning is a continuous process. The human
resource planning prepared today may not be applicable for the future due to the ever-

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 HRM UNIT- 2 MCQs
HRM - UNIT – 2 MCQs
1. Which of the following training (C) Measurement of HR through
programmes is meant for a new employee? balanced scorecard has taken shape.
(A) Sensitivity training (D) Performance and Knowledge
(B) Apprenticeship training Management are not related to
(C) Induction training strategic HRM.
(D) In-basket exercise Answer: (D)
Answer: (C) 6. Which of the following is not a method of
2. Which of the following statements is not dealing with resistance to change?
true about benchmarking strategy of TQM? (A) Education and Communication
(A) It is related to the efforts of Kaizen. (B) Participation
(B) It is related to the raising of criteria (C) Facilitation and Support
for selection. (D) Coercion and Punishment
(C) It is raising the performance Answer: (D)
standards of the organization. 7. Which performance appraisal methods
(D) It is a people driven activity. consumes a lot of time?
Answer: (B) (A) Essay method
3. Which of the following is not a type of (B) Rating Scales
HRM strategy? (C) Critical incident
(A) Task focused strategy (D) Tests And Observation
(B) Development oriented strategy Answer: (A)Essay method
(C) Turnaround HRM strategy 8. Which of the following is a benefit of
(D) Placating HRM strategy employee training?
Answer: (D) (A) Improves morale
4. Which of the following is not a ‘lab’ in the (B) Helps people identify with
sensitivity training, also known as organisational goals
Laboratory training? (C) Provides a good climate for
(A) Stranger lab learning, growth and co -
(B) Cousin lab ordination
(C) Organizational lab (D) None of these
(D) Family lab Answer: (B) Helps people identify with
Answer: (C) organisational goals
5. Which of the following statements about 9. Which of the following is a method used
the recent trends in HRM is not correct? in group or organisational training needs
(A) Employer branding is attempted to assessment?
be achieved through HRM practices. (A) Consideration of current and
(B) Competency mapping is a recent projected changes
trend in HRM. (B) Rating scales
(C) Interviews

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 HRM UNIT- 2 MCQs
(D) Questionnaires Answer: (A)Having a robust HR department
to carry out the process
Answer: (D)Questionnaires 15. Human Resource Information system
10. Which of these is a hindrance to (A) Integrates core process into
effective training? streamline systems
(A) Career planning workshop (B) Collaborates core process into
(B) Aggregate spending on training is streamline systems
inadequate (C) Plans core process into streamline
(C) Mentoring systems
(D) Career counselling (D) All of these
Answer: (B)Aggregate spending on training Answer: (D)All of these
is inadequate 16. e-HRM stands for
11. Which of the forecasting technique is (A) Electronic
the fastest? (B) Economic
(A) Work study technique (C) Equal
(B) Flow models (D) None of these
(C) Ratio trend analysis Answer: (A)Electronic
(D) HR demand Forecast 17. One of the most popular methods of
Answer: (C)Ratio trend analysis increasing employee responsibility and
12. When appraisals are made by superiors, control is ______________.
peers, subordinates and clients then it is (A) Outsourcing
called ______________. (B) "Military model" of management
(A) 360 degree feedback (C) Work teams
(B) 180 degree feedback (D) Manpower planning
(C) Self - appraisal Answer: (C) Work teams
(D) All of these 18. What are the main aims of Employee
Answer: (A) 360 degree feedback Assistance Programmes?
13. The human resource Manangement (A) To alter the organizational culture.
helps toi improve the ______________ (B) To address team and individual
(A) Production performance and well-being in the
(B) Productivity workplace.
(C) power (C) To focus the attention of
(D) Produce employees to the power
Answer: (B)Productivity structures of an organization.
(D) To establish effective methods of
14. The solution to many so-called 'people
care and support for everyone in
problems' is often associated with
an organization.
improving the effectiveness of the
recruitment process by: Answer: (D)To establish effective methods
of care and support for everyone in an
(A) Having a robust HR department to
organization.
carry out the process
(B) Outsourcing the HR department 19. The focuses of psychological appraisals
(C) Careful selection of the right are on ______________ .
people for the job (A) Future potential
(D) Devolving to line managers (B) Actual performance
(C) Past performance
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 HRM UNIT- 2 MCQs
(D) None of these 25. What do you understand "S" in the
Answer: (A)Future potential defining SMART Goals
20. Which of these is the benefit of needs (A) Solution
assessment? (B) specific
(A) Assessment makes training (C) standard
department more accountable (D) soft
(B) Higher training costs Answer: (B) specific
(C) Loss of business 26. Training increases the employees
(D) Increased overtime working (A) market value
Answer: (A) Assessment makes training (B) earning power
department more accountable (C) job security
21. What techniques are used while (D) All of these
analysing the internal supply? Answer: (B) earning power
(A) Inflows and outflows 27. Full form of HRD is
(B) Turnover rate (A) Human Resource Development
(C) Conditions of work and (B) Human Resource Department
absenteeism (C) Human Resource Division
(D) All of the these (D) None of these
Answer: (D) All of the these Answer: (A) Human Resource Development
22. Which of these is one of the seven 28. Which of the following is a need that
criteria for assessing performance? motivates human behaviour as per the
(A) Community service achievement motivation theory?
(B) Interpersonal contact (A) Power
(C) Need for supervision (B) Affiliation
(D) All of these (C) Achievement
Answer: (D) All of these (D) All of these
23. Recruitment and selection must be Answer: (D) All of these
effective to ensure it: 29. ______________ refers to the learning
(A) Offsets high labour turnover opportunities designed to help employees
(B) Delivers the highest calibre of grow.
individuals at optimum most (A) Training
(C) To have a surplus in case of (B) Development
sickness and absence (C) Education
(D) Encourages new blood into the (D) All of these
organization Answer: (D) All of these
Answer: (B) Delivers the highest calibre of 30. Which of these is an off - the - job
individuals at optimum most training method?
24. Performance appraisals are designed to (A) Television
motivate workers by providing them with (B) Job rotation
feedback, recognition, and what? (C) Orientation training
(A) Better work facilities (D) Coaching
(B) Equal opportunities Answer: (C) Orientation training
(C) Greater work autonomy 31. The ______________ refers incentives
(D) Praise to variable pay.
Answer: (D) Praise
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 NEW EDITION
HRM- UNIT- III

As Per Updated Syllabus

 HRM- UNIT- III

HUMAN RESOURCE DEVELOPMENT (HRD) CONCEPT

HRD is defined as activities and process undertaken by an organisation to formulate the
intellectual, moral, psychological, cultural, social and economic development of the individuals
in an organisation, in order to help them to achieve the highest human potential as a resource
for the community. It means to bring about a total all-round development of the working
human, so that they can contribute their best to the organisation, community, society and the
nation.
HRD does not cover only a set of mechanisms or techniques but it is a process by which
employees acquire or sharpen capabilities to perform the various functions, develop their
general capabilities as individuals and exploit their own inner potentials, develop team work
and collaboration. HRD coancept is much wider and embraces almost all areas of an
organisation.
In the context of banking, HRD means not only the acquisition of knowledge and skills but also
acquiring capabilities to anticipate and manage both internal and external environment and
obtaining, self- confidence and motivation for public service. Further, HRD is not a piecemeal
or a one-time exercise, it is a continuous process requiring to keep pace with the changes and
developments, taking place.

Importance of HRD
Human resource development (HRD) is an essential component for growth and economic
development. It can occur at both the nationwide level and the firm-wide level. The
enhancement of HRD of a country is dependent on the government and national policies,
while at the firm or micro level HRD can happen through training and efficient utilization of
resources. Resources are efficiently utilised to support HRD when the maximum benefit is
created at the lowest possible cost.
1. Economic Development: As the human resources of a country develop, the country
progresses and the benefits spread all over the country. Better skilled and well-trained
human resources attract a larger foreign direct investment into the country and improve
the brand image of the country internationally. HRD for an economy is dependent on the
economic policy of the government and the effort by the institutions in the economy to
actively participate in the development process.
2. Increase in Entrepreneurial Activity: Human resource development may occur as a result
or better education, training or development of vocational skills for individuals. This
activity results in an increase in entrepreneurial activity due to the creative process that is
encouraged by HRD. Moreover, even in an economy faced by high levels of
unemploynment, vocational training can generate substantial number of entrepreneurs
who look for self-employment.
Thus, HRD opens more options and wider avenues of success for individuals.
3. Increase in Productivity: HRD ieads to better and efficient utilization of the available
resources. The same numbers of individuals are able to improve their performance
through training or learning of more productive skills. This leads to an increase in
productivity in the same company at the firm-wide level and to an increase in the overall
value of goods produced at the country- wide level. An increase in productivity of
employees generates high economic progress for the Country.

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4. Counteracting Social Taboos: HRD can lead to a change in social perception of many
people and can result in the development of the society. Better educated and skilled
workers can think and act more constructively and result in a change of the social
environment. Improved education leads to self-awareness and prevents individuals from
embracing superstitions.
5. Human Rights: A better trained and educated workforce is well aware of its rights and is
bette- able to protect against human rights violations. Workplace environments improve
and worken rights are acknowledged with HRD.
6. Profitability At the firm-wide level: HRD leads to increased productivity and better service.
This leads to increased revenues at reduced costs for the company. Most compani today
are focused on hiring a well-trained and competitive workforce in order to develop unique
selling point and enhance their profitability.
7. Demographic Effect: HRD results in more households with two working parents. This
provide enhanced income for the household and at the same time reduces the time
available to pare for raising kids. As a result, a better educated workforce results in a
smaller increase in population of the country. For countries like India, HRD can help
prevent the population f increasing beyond control.

Aims and Objectives

i. Improve performance of individual on present job
ii. Improve competence of individual to perform future jobs
iii. Improve group dynamism and effectiveness
iv. Improve individual’s attitude
v. Integrate goal of individual with the goal of the organization
vi. Optimize the available human resource in an organization
vii. Encourage creativity
viii. Provide opportunities and facilities to individual for full expression of their talent
potential
The objectives of HRD are:
i. To prepare the employee to meet the present and changing future job requirements.
ii. To prevent employee obsolescence.
iii. To develop creative abilities and talents.
iv. To prepare employees for higher level jobs.
v. To impart new entrants with basic HRD skills and knowledge.
vi. To develop the potentialities of people for the next level job.
vii. To aid total quality management.
viii. To promote individual and collective morale, a sense of responsibility, co-operative
attitudes and good relationships.
ix. To broaden the minds of senior managers by providing them with opportunities for an
interchange of experiences within and outside.
x. To ensure smooth and efficient working of the organisation.
xi. To provide comprehensive framework for HRD.
xii. To enhance organisational capabilities.

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xiii. To create a climate that enables every employee to discover, develop and use his/her
capabilities to a fuller extent in order to further both individual and organisational goals.

Human Resource Development (HRD) Components

HRD includes the development of employees at the individual and organizational level. It also
comprises career development. The crux of HRD is that organizational growth can be achieved
only through the personal and collective development of the individual employees.
The main components of HRD are:
1. Individual Development: It refers to the development of new skills, knowledge and
improved behaviour that contribute to his productivity. As a result of this training, his job
performance is improved. Individual development mainly takes place through informal
activities like coaching or mentoring by an experienced senior. Some companies, may,
however provide formal programmes for such training.
2. Career Development: It is an approach to match employee goals with the requirements of
the organization. The interests, values, abilities and competencies of the individuals are
identified to analyse how their skills can be developed for future jobs. At an individual level,
career development includes career planning and career awareness. Mentoring, providing
career counselling, career development workshops, human resource planning are the steps
the organization takes for career development.
3. Organizational Development: Organizational development means an organization wide
effort to enhance organizational effectiveness. It includes making improvements to the
organizational structure, culture, processes, etc. through activities like performance
evaluation, change management, succession planning, process analysis and team building.
The first step in organizational development is to discover its internal problems and
weaknesses, and then work towards solving them. The organization should try to become a
more functional unit by fostering a close relationship among its various units.
Features of HRD
1. Planned and systematic Approach. HRD is a systematic and planned approach for the
development of individuals in order to achieve organisational, group and individual
goals. HRD is a continuous process for the development of technical, managerial,
behavioural and conceptual skills and knowledge HRD develops the skills and knowledge
not only at the individual but also at dyadic level, group level and organizational level.
2. HRD is Inter-disciplinary Approach. It draws inputs from Engineering, Technology,
Psychology, Anthropology, management, Commerce, Economics, Medicine etc. HRD is
embodied with techniques and processes HRD is essential not only for manufacturing
and service industry but also for information technology industry.
3. HRD Recruiting the employees within the dimensions and possibilities for developing
human resources Selecting those employees having potentialities for development to
meet the present and future organisational needs. Analysing, appraising and developing
performance of employees as individuals, members of a group and organisations with a
view to develop them 6Hby identifying the gaps in skills and knowledge.
4. HRD Changes in Economic Policies. Changing job requirements Need for Multi-skilled
Human Resources Organisational viability and transformation process Technological
Advances Organisational complexity, and Human Relations.

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5. HRD is Continuous Process. HRD isa continuous and dynamic process which believes in
the need for continues development of personnel to face the innumerable challenge in
the functioning of an organisation. It is based on the belief that there is no end to the
development of an individual and the learning process can continue throughout the life.
Both macro and micro aspects. HRD, at the macro level, HRD is described as the core of
all the development activities in the sense of improvement of the quality of work life of
a nation.
At the- micro level, HRD involves the improvement the quality of managers and workers so as
te achieve greater quality of managers and workers so as to achieve greater quality of
productivity
HRD in Indian Context
Some specific features of HRD in India are as follows:
1. At the macro level, there are plenty of educational institutions in India producing large
number of educated people every year. However, quality of majority of such people is
very low. Therefore, they are not employable.
According to National Employability Report, 2014, only 18.33 per cent engineering
graduates are employable. Similar is the case with management graduates. So far as
other educational disciplines are concerned, the situation is even worse except some
professional disciplines.
2. At the micro level, HRD efforts of individual organizations differ widely. There are many
organizations which pay very high attention to HRD. They spend lot of money in
developing their human resources. Such organizations believe in developing competitive
advantage through their human resources. As against this pattern, there are plenty of
organizations which give very low importance to HRD. Such organizations treat HRD
expenses as waste.

Difference between HRD and Personal

The main difference between Personnel Management and Human Resource Management lies
in their scope and orientation. While the scope of personnel management is limited and has
an inverted approach, wherein workers are viewed as tool. Here the behavior of the worker
can be manipulated as per the core competencies of the organization and are replaced when
they are worn-out.
On the other hand, human resource management has a wider scope and considers employees
as the asset to the organization. It promotes mutuality in terms of goals, responsibility, reward
etc. that will help in enhancing the economic performance and high level of human resource
development.
Comparison Chart
BASIS FOR
PERSONNEL MANAGEMENT HUMAN RESOURCE MANAGEMENT
COMPARISON
The aspect of management
The branch of management that focuses on
that is concerned with the
the most effective use of the manpower of an
Meaning work force and their
entity, to achieve the organizational goals is
relationship with the entity is
known as Human Resource Management.
known as Personnel

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Management.
Approach Traditional Modern
Treatment of
Machines or Tools Asset
manpower
Type of
Routine function Strategic function
function
Basis of Pay Job Evaluation Performance Evaluation
Management
Transactional Transformational
Role
Communication Indirect Direct
Labor
Collective Bargaining Contracts Individual Contracts
Management
Initiatives Piecemeal Integrated
Management
Procedure Business needs
Actions
Decision
Slow Fast
Making
Job Design Division of Labor Groups/Teams
Primarily on mundane
activities like employee hiring, Treat manpower of the organization as valued
Focus
remunerating, training, and assets, to be valued, used and preserved.
harmony.
Instruments or Mechanism of HRD
A well designed HRD programme should have the following sub-systems:
Performance Appraisal: Performance appraisal is the process of determining how well a
worker is performing his job. It provides a mechanism for identification of qualities and
deficiencies observed in an employee in relation to his job performance. The object of
appraisal is to determine the present state of efficiency of a worker in order to establish the
actual need for training. The process of performance appraisal consists of:
 Setting standards for performance
 Communicating the standard to the employees
 Measuring the performance
 Comparing the actual performance with the standards set
Potential Appraisal: Potential appraisal provides necessary data which helps in preparing
career plans for individuals. It aims at development of latent abilities of individuals. The HRD
function has a long way to go in introducing a streamlined potential appraisal system which
ensures a good match between the employees and the job.
Feedback Counselling: Feedback of performance data can be used to monitor individual
development and for indentifying training needs. Career counselling and verbal rewards are
integral parts of review discussions between the superior and the subordinate. Counselling
serves several purposes in any organisation. It helps in strengthening the superior and
subordinate relationship, helps the executives to understand the limitation of his seniors and
problems of his juniors, improves communication, thereby facilitating quality decision, helps

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employees in recognising their strengths and weakness and also help evaluate the impact of
their decisions and so on.
raining: Training is a process that involves the acquisition of skills, concepts and attitudes in
order to increase the effectiveness of employees in doing particular jobs. Training is expected
to provides the needful stimulus to initiate impulses of changes in management and to
improve efficiency, productivity and administrative effectiveness.
Role Analysis: Role analysis is a participatory process which aims at defining the work content
of a role in relation to all those with whom the role occupant has significant interaction in the
performance of his job
Career Planning: It is the planning of one’s career and implementation of career plans by
means of education, training, job search and acquisition of work experiences. It is aimed at
generating among employees an awareness of their strengths and weaknesses and at helping
them to match their skills and abilities to the needs of the organisation. Without development
of people in the organisation , the organisation cannot prosper. Individual career development
is considered to be a three step process:
 Identifying and organising skills, interests, work-related needs and values
 Converting these inventories into general careers, fields and specified job-goals and
 Testing the possibilities against the realities of the organisation or the job market
Job Rotation: The work-task should be rotated among the employees so as to broaden their
field of specialisation as well as their knowledge about the organisation’s operation as a
whole, one should be rotated once a year among the various employees depending upon their
qualifications and suitability to perform new works.
Quality Circle: A quality circle is a small group of employees doing similar or related work who
meet regularly to identify, analyse and solve product-quality problems and to improve general
operation. The quality circles are relatively autonomous units (ideally about 10 workers),
usually, led by a supervisor or a senior worker and organised as work units. The workers, who
have a shared area of responsibility, meet periodically to discuss, analyse, and propose
solutions to ongoing problems.
Reward system: Rewarding employees performance over and above their normal wages and
salaries is considered to be an important task of the HRD. To check frustration is rewarding the
efficient workers for their work which may be known as incentive. It will lead to better
utilisation of human resources at all levels which is easy, cheapest, quickest and surest means
of increasing productivity.
Organisation Development: Organisation development is an organisation-wide, planned
efforts managed from the top, placing emphasis on making appropriate intervention in the
ongoing activities of the organisation. OD provides a normative framework within which
changes in the climate and culture of the organisation towards harnessing the human
potential for realisation of organisational objectives.
Quality of Working Life: The condition under which the workers work and live, assume the
form of another important factor contributing to workers satisfaction or otherwise and
consequently the job satisfaction. In order of priorities, it comes next to the earning of a
worker in the Indian context. For an employee to be able to work at his best, it is necessary to
understand that inadequate working and living condition produce adverse mental and physical
effect on the employee, ultimately causing decline in the efficiency.

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 HRM- UNIT- III

Human Resource Planning: It is the process aimed at ensuring that the organisation will have
adequate number of qualified persons, available at proper time, performing jobs which would
meet the needs of the organisation and also provide satisfaction for the individuals involved.
Recruitment, Selection and Placement: Recruitment is generation of applications for specific
positions of ascertaining the qualification, experience, skills, knowledge, etc of applicants with
a view to appraising their stability for a job. Placement is the process of assigning the selected
candidate with the most suitable job. It underlines the need for placing right men at the right
job so that the best results could be obtained. These are explained in separate chapters in the
book.
Goals, Subsystems and Beliefs – HRD MECHANISMS
The goal of HRD systems is to develop:
1. The capabilities of each employee as an individual
2. The capabilities of each individual in relation to his or her present role
3. The capabilities of each employee in relation his or her expected future role(s)
4. The dynamic relationship between each employee and his or her supervisor
5. The team spirit and functioning in every organizational unit (department, group, etc)
6. Collaboration among different units of the organization
7. The organization’s overall health and self-renewing capabilities which, in turn, increase
the enabling capabilities of individuals, dyads, teams, and the entire organization
To achieve these objectives, HRD systems may include the following process
Mechanism or Subsystems:
 Performance appraisal
 Potential appraisal and development
 Feedback and performance coaching
 Career planning
 Training
 Organizational development (OD) or research and systems development
 Rewards like Lexington homes for sale
 Employee welfare and quality of work life
 Human resources information

HRD MATRIX
The HRD matrix shows the interrelationship between HRD instruments, processes, outcomes
and organizational effectiveness. HRD Instruments: These include performance appraisal,
counseling, role analysis, potential development, training, communication policies, job
rotations, rewards, job enrichment programmes, etc.
These instruments may vary depending on the size of the organization, the internal
environment, the support and commitment of the top management, the competitive policies
etc. HRD Processes: The HRD instruments lead to the generation of HRD processes like role
clarity, performance planning, development climate, risk-taking, dynamism in employees.
Such HRD processes should result in more competent, satisfied and committed people that
would make the organization grow by contributing their best to it. HRD Outcomes: HRD
instruments and processes make people more committed and satisfied, where they tend to
give their best to the organization enthusiastically.

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 HRM - UNIT – III MCQs
HRM - UNIT – 3 MCQs
1. Integrative framework of SHRM was Answer: a
given by 6. ___ gives correct identification of the
a. Young and Berman problem and its causes and determines the
b. Federick Taylor scope of future action
c. John Nadler a. Symptoms
d. None of the above b. Diagnostic
Answer: a c. Attributes
2. The integrative framework comprises:- d. Interviews questionnaires
a. By building original capabilities Answer: b
b. By improving employee satisfaction 7. ___ Management is a means of getting
c. By shaping the shareholder and better results from organization teams &
customer satisfaction individuals by understanding and managing
d. All of the above performance within an agreed framework.
Answer: d a. Performance management
3. ___ Allows anticipating the management b. Strategic management
of people through the organization due to c. Human resource management
retirement, promotion & transfers. d. Team management
a. HR planning Answer: a
b. HRM 8. Selecting the right reward is only the first
c. HRD half of the battle. The other half is.
d. HR strategy a. Delivering a reward correctly
Answer: a b. Calculating, reward
4. Rapid changing circumstances are forcing c. Both a & b
the organization to ___ on their HRD d. None of the above
strategies Answer: c
a. Rethink 9. The amount of out charity that will be
b. Enhance their performance developed to line managers to make pay
c. Leeway decision
d. None of the above a. Devolution
Answer: a b. Differentials
5. Who said, “OD is a complex educational c. Contingent pay
strategy designed to increase organizational d. Reward priorities
effectiveness and wealth through planned Answer: a
intervention. 10. Skill of ___ is an effective way of
a. Dale S beach compelling the other party to justify its
b. Walter claim on of compelling the other party to
c. Nadler justify its claim on the merits.
d. Frederick Taylor a. Questioning

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 HRM - UNIT – III MCQs
b. Arguments c. Galloping technology
c. Discussions d. All of the above
d. Contract Answer: a
Answer: a 17. Who said, “ companies that manage
11. What is the qualifying service to claim people right will outperform companies
gratuity? that don’t by 30 to 40 per cent”.
a. 15 years a. Federick Taylor
b. 10 years b. Nadler
c. 5 years c. Jefferey Pfeffer
d. No such prescription d. Rober Oven
Answer: (c) Answer: c
12. ___ Is a mechanism of maintaining good 18. “Layoff” better expressed as.
industrial relation. a. RIF
a. Negotiation b. Position elimination
b. Collective bargaining c. Both a & b
c. Both a & b d. None
d. None of the above Answer: c
Answer: b 19. Employee separation needs to be done
13. ___ Negatively affects innovation and with ___ by HRM.
courses major delays in the delivery of a. Human touch
services. b. Brain
a. Turnover c. Planning
b. Brain Drain d. Progressive discipline
c. Attrition rate Answer: a
d. Unskilled manpower 20. ___ of basic information in HR records
Answer: b are necessary to find out the performance
14. ___ is the underpinning of customer of the personal function
satisfaction with the organization. a. Feedback
a. Loyal employee b. Response
b. Enthusiastic employee c. Result
c. Nurtured employee d. Details
d. All of the above Answer: a
Answer: a 21. ___ types of records include cards,
15. Excessive turnover is an inevitable result charts etc.
of ___. a. Conventional
a. Poor interment b. Modern
b. Poor management c. Both a & b
c. Poor communication skills d. None of the above
d. Employee separations Answer: a
Answer: b 22. Reports provides ___ information
16. Managers with ___ vision experience a. Qualitative
excessive turnover. b. Quantitative
a. Myopic c. Both a & b
b. Cohesion d. All of the above

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 HRM - UNIT – III MCQs
Answer: c Answer: c
23. ___ is the first to start an integrated 29. Rewards paid for successful
HRDS. performance.
a. Jyoti ltd a. Pronouns
b. BOB b. Incentives
c. C & T c. Commission
d. CGL d. Allowances
Answer: c Answer: a
24. The most neglected group in HRD are 30. Employee benefits are also known as.
the. a. Sick pay
a. Line managers b. Insurance cover
b. Employees c. Company cases
c. Labour organization d. All of the above
d. None of the above Answer: d
Answer: a 31. HRM involves the.
25. In the presenter of liberalization ___ a. Individualization of the employment
identifies an organization relationship
a. Culture b. Participation
b. Business c. Individuals directly
c. People d. None
d. Environment Answer: a
Answer: b 32. ___ is possible only where unions and
26. Organization in the growth model their members share some goals in
requires employees with ___ behaviour common with management.
a. Creative a. Commonality
b. Innovative b. Dual loyalty
c. risk-taking c. Commitment
d. All of the above d. Employee loyalty
Answer: d Answer: b
27. Establishing HRD sensibility in the 33. It is a process of identifying and
organization is a challenging task because it measuring data about human resources.
deals with a. HR research
a. High complex fast-developing b. HR accounting
activities c. HRIS
b. Ever-changing activities d. All of the above
c. Expanding activities Answer: b
d. All of the above 34. In this stage the assessed knowledge is
Answer: d classified and adopted to organizations
28. ___ are the techniques created by the memory.
OD professional and others. a. Select stage
a. Interventions b. Store
b. Methods c. Share
c. OD intervention d. Apply
d. Procedures Answer: b

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 NEW EDITION
HUMAN RESOURCE MANAGEMENT - UNIT – IV AND ITS MCQs

As Per Updated Syllabus

 HUMAN RESOURCE MANAGEMENT - UNIT – IV AND ITS MCQs

ORGANISATIONAL BEHAVIOUR
The study of Organizational Behavior (OB) is very interesting and challenging too. It is related
to individuals, group of people working together in teams. The study becomes more
challenging when situational factors interact. The study of organizational behavior relates to
the expected behavior of an individual in the organization.
No two individuals are likely to behave in the same manner in a particular work situation. It is
the predictability of a manager about the expected behavior of an individual. There are no
absolutes in human behavior. It is the human factor that is contributory to the productivity
hence the study of human behavior is important. Great importance therefore must be
attached to the study.
Researchers, management practitioners, psychologists, and social scientists must understand
the very credentials of an individual, his background, social framework, educational update,
impact of social groups and other situational factors on behavior.
Managers under whom an individual is working should be able to explain, predict, evaluate
and modify human behavior that will largely depend upon knowledge, skill and experience of
the manager in handling large group of people in diverse situations. Preemptive actions need
to be taken for human behavior forecasting.
The value system, emotional intelligence, organizational culture, job design and the work
environment are important causal agents in determining human behavior. Cause and effect
relationship plays an important role in how an individual is likely to behave in a particular
situation and its impact on productivity.
An appropriate organizational culture can modify individual behavior. Recent trends exist in
laying greater stress on organizational development and imbibing a favorable organizational
culture in each individual. It also involves fostering a team spirit and motivation so that the
organizational objectives are achieved.
There is a need for commitment on the part of the management that should be continuous
and incremental in nature.
MEANING AND DEFINITIONS
In words of K Aswathappa, “OB is the study of human behaviour in organisational setting, of
the interface between human behaviour and organisation and of the organisation itself.”
In words of Stephen P. Robbins, “OB is a field of study that investigates the impact that
individuals, groups and structures have on behaviour within organisations for the purpose of
applying such knowledge towards improving an organisation’s effectiveness.”
According to L. M. Prasad, “Organisational behaviour can be defined as the study and
application of knowledge about human behaviour related to other elements of an organisation
such as structure, technology and social systems.”
According to Davis and Newstram, “Organisational behaviour is the study and application of
knowledge about how people act within organisations.”
According to Fred Luthans, “Behaviour is directly concerned with the understanding,
prediction and control of human behaviour in organisations. It is a human tool for human
benefit. It applies broadly to the behaviour of people in all types of organisation.”

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In words of John Newstram and Keith Devis, “Organisational behaviour is the study and
application of knowledge about how people as individuals and as groups act within
organisations. It strives to identify ways in which people can act more effectively.”
Moorhead/Griffin: “Organisation behaviour is the study of human behaviour in organisational
settings that interface between human behaviour and the organisation and the organisation
itself.”
Ramon J Aldag and Arthur P Brief: “Organisation behaviour is a branch of the social science
that seek to build theories that ca be applied to predicting, understanding and controlling
behaviour in work organisations.”
“Organisational behaviour is a subset of management activities concerned with understanding,
predicting and influencing individual behaviour in organisational setting.”—Callahan, Fleenor
and Kudson.
“Organisational behaviour is a field of study that investigates the impact that individuals,
groups and structure have on behaviour within the organisations for the purpose of applying
such knowledge toward improving an organization’s effectiveness.”—Stephens P. Robbins.
OB is the study of individual behaviour in isolation, when in group and as a part of an
organisation. The study of individual behaviour only, would be incomplete because behaviour
is affected by the people surrounding us as well as by the organisation, in which we work.
Studying only individuals or only organisations would be of no use. It is essential to study both
simultaneously.
Personality, perception, learning, attitude, family background, training, motivation, job
satisfaction, performance appraisal, leadership effectiveness, norms, values and ethics are the
factors which affect the individual behaviour. Group dynamics, communication, organisational
environment, individual and organisational culture affect group behaviour. Organisational
structure, power & politics, status, relation with juniors & seniors, conflicts and culture affect
the individual behaviour in the organisation.
These various factors relate to different disciplines including psychology, sociology, social
psychology, political science, anthropology, etc.
Study about individual behaviour, group behaviour and organisations give the inferences
about how different people react to different situations. It guides regarding the motivation
styles and the leadership styles to be adopted for different persons. Due to the individual
differences, diverse leadership styles, incentive schemes, motivators, communication styles
should be applied.
From The Above Definitions, The Following Features of Organisational Behaviour Emerge:
1. Behavioural Approach to Management: Organisational behaviour is that part of whole
management which represents the behavioural approach to management.
Organisational behaviour has emerged as a distinct field of study because of the
importance of human behaviour in organisations.
2. Cause and Effect Relationship: Human behaviour is generally taken in terms of cause
and effect relationship and not in philosophical terms. It helps in predicting the
behaviour of individuals. It provides generalizations that managers can use to anticipate
the effect of certain activities on human behaviour.

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3. Organisational Behaviour is a Branch of Social Sciences: Organisational behaviour is

heavily influenced by several other social sciences viz. psychology, sociology and
anthropology. It draws a rich array of research from these disciplines.
4. Three Levels of Analysis: Organisational behaviour encompasses the study of three
levels of analysis namely individual behaviour, inter-individual behaviour and the
behaviour of organisations themselves. The field of organisational behaviour embraces
all these levels as being complementary to each other.
5. A Science as well as an Art: Organisational behaviour is a science as well as an art. The
systematic knowledge about human behaviour is a science and the application of
behavioural knowledge and skills is an art. Organisational behaviour is not an exact
science because it cannot exactly predict the behaviour of people in organisations. At
best a manager can generalize to a limited extent and in many cases, he has to act on
the basis of partial information.
6. A Body of Theory, Research and Application: Organisational behaviour consists of a
body of theory, research and application which helps in understanding the human
behaviour in organisation. All these techniques help the managers to solve human
problems in organisations.
7. Beneficial to both Organisation and Individuals: Organisational behaviour creates an
atmosphere whereby both organisation and individuals are benefitted by each other. A
reasonable climate is created so that employees may get much needed satisfaction and
the organisation may attain its objectives.
8. Rational Thinking: Organisational behaviour provides a rational thinking about people
and their behaviour. The major objective of organisational behaviour is to explain and
predict human behaviour in organisations, so that result yielding situations can be
created.
Study of organisational behaviour helps in studying:
i. Why people behave in a particular way?
ii. Why one person is more effective than the other?
iii. Why one group is more effective than the other?
iv. Why one person is more effective in one organisation as compared to the other
organisations?
The study of above things gives sound knowledge about human behaviour and this knowledge
can be applied in shaping the behaviour and taking various decisions related to policy making
in human resource management.

NATURE
Organisational behaviour in the study of human behaviour in the organisations. Whenever an
individual joins an organisation he brings with him unique set of personal characteristics,
experiences from other organisations and a personal background. At the first stage
organisational behaviour must look at the unique perspective that each individual brings to
the work setting.
The second stage of organisational behaviour is to study the dynamics of how the incoming
individuals interact with the broader organisation. No individual can work in isolation. He
comes into contact with other individuals and the organisation in a variety of ways. The

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individual who joins a new organisation has to come into contact with the co-workers,
managers, formal policies and procedures of the organisation etc.
Over the time, he is affected by his work experience and the organisation as well as his
personal experiences and maturity. On the other hand, the organisation is also affected by the
presence or absence of the individual. Thus, it is essential that OB must study the ways in
which the individuals and organisation interact with each other.
The organisational behaviour must be studied from the perspective of the organisation itself
because an organisation exists before a particular individual joins in and continues to exist
after he or she has left the organisation. Thus, OB is the study of human behaviour in the
organisation, the individual-organisation interaction and the organisation itself. And these
factors are influenced by the external environment in which the individuals and the
organisation exist.
Thus, we can say that we cannot study individual behaviour completely without learning
something about the organisation. On the other hand, we cannot study the organisations
without studying the behaviour of the individuals working in it. This is because the
organisation influences and is influenced by the people working in it. Moreover, both the
individuals and the organisation are influenced by the external environment. Thus, the field of
organisational behaviour is a complex field. It seeks to throw light on the entire canvas of
human factor in the organisations which will include the causes and effects of such behaviour.
Organizational behaviour has emerged as a separate field of study.
The nature it has acquired is identified as follows:
1. A Separate Field of Study and Not a Discipline Only: By definition, a discipline is an
accepted science that is based on a theoretical foundation. But, O.B. has a multi-
interdisciplinary orientation and is, thus, not based on a specific theoretical background.
Therefore, it is better reasonable to call O.B. a separate field of study rather than a
discipline only.
2. An Interdisciplinary Approach: Organizational behaviour is essentially an interdisci-
plinary approach to study human behaviour at work. It tries to integrate the relevant
knowledge drawn from related disciplines like psychology, sociology and anthropology
to make them applicable for studying and analysing organizational behaviour.
3. An Applied Science: The very nature of O.B. is applied. What O.B. basically does is the
application of various researches to solve the organizational problems related to human
behaviour. The basic line of difference between pure science and O.B. is that while the
former concentrates of fundamental researches, the latter concentrates on applied
researches. O.B. involves both applied research and its application in organizational
analysis. Hence, O.B. can be called both science as well as art.
4. A Normative Science: Organizational Behaviour is a normative science also. While the
positive science discusses only cause effect relationship, O.B. prescribes how the
findings of applied researches can be applied to socially accepted organizational goals.
Thus, O.B. deals with what is accepted by individuals and society engaged in an
organization. Yes, it is not that O.B. is not normative at all. In fact, O.B. is normative as
well that is well underscored by the proliferation of management theories.
5. A Humanistic and Optimistic Approach: Organizational Behaviour applies humanistic
approach towards people working in the organization. It, deals with the thinking and

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feeling of human beings. O.B. is based on the belief that people have an innate desire to
be independent, creative and productive. It also realizes that people working in the
organization can and will actualise these potentials if they are given proper conditions
and environment. Environment affects performance or workers working in an
organization.
6. A Total System Approach: The system approach is one that integrates all the variables,
affecting organizational functioning. The systems approach has been developed by the
behavioural scientists to analyse human behaviour in view of his/her socio-psychological
framework. Man’s socio- psychological framework makes man a complex one and the
systems approach tries to study his/her complexity and find solution to it.
In short, organisational behaviour revolves around two fundamental components:
1. The nature of the man.
2. The nature of the organisation.
In other words, organisational behaviour may be organisation of individual’s behaviour in
relation to physical means and resources so as to achieve the desired objective of the
organisation.
Nature of People
In simple words, nature of people is the basic qualities of a person, or the character that
personifies an individual they can be similar or unique. Talking at the organizational level,
some major factors affecting the nature of people have been highlighted. They are −
 Individual Difference − It is the managerial approach towards each employee
individually, that is one-on-one approach and not the statistical approach, that is,
avoidance of single rule. Example− Manager should not be biased towards any
particular employee rather should treat them equally and try not to judge anyone on
any other factor apart from their work.
 Perception − It is a unique ability to observe, listen and conclude something. It is
believing in our senses. In short, the way we interpret things and have our point of view
is our perception. Example − Aman thinks late night parties spoil youth while Anamika
thinks late night parties are a way of making new friends. Here we see both Aman and
Anamika have different perception about the same thing.
 A whole person − As we all know that a person’s skill or brain cannot be employed we
have to employee a whole person. Skill comes from background and knowledge. Our
personal life cannot be totally separated from our work life, just like emotional
conditions are not separable from physical conditions. So, people function is the
functioning of a total human being not a specific feature of human being.
 Motivated behavior − It is the behavior implanted or caused by some motivation from
some person, group or even a situation. In an organization, we can see two different
types of motivated employees −
o Positive motivation − Encouraging others to change their behavior or say
complete a task by luring them with promotions or any other profits. Example −
“If you complete this, you will gain this.”
o Negative motivation − Forcing or warning others to change their behavior else
there can be serious consequences. Example − “If you don’t complete this, you
will be deprived from the office.”

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 Value of person − Employees want to be valued and appreciated for their skills and
abilities followed by opportunities which help them develop themselves.
Nature of Organization
Nature of organization states the motive of the firm. It is the opportunities it provides in the
global market. It also defines the employees’ standard; in short, it defines the character of the
company by acting as a mirror reflection of the company. We can understand the nature of
any firm with its social system, the mutual interest it shares and the work ethics.
Let us take a look at all these factors −
 Social system − Every organization socializes with other firms, their customers, or simply
the outer world, and all of its employees - their own social roles and status. Their
behavior is mainly influenced by their group as well as individual drives. Social system
are of two types namely −
o Formal − Groups formed by people working together in a firm or people that
belong to the same club is considered as formal social system. Example − A
success party after getting a project.
o Informal − A group of friends, people socializing with others freely, enjoying,
partying or chilling. Example − Birthday party.
 Mutual interest − Every organization needs people and people need organizations to
survive and prosper. Basically it’s a mutual understanding between the organization and
the employees that helps both reach their respective objectives. Example − We deposit
our money in the bank, in return the bank gives us loan, interest, etc.
 Ethics − They are the moral principles of an individual, group, and organization. In order
to attract and keep valuable employees, ethical treatment is necessary and some moral
standards need to be set. In fact, companies are now establishing code of ethics training
reward for notable ethical behavior.

SCOPE OF THE ORGANIZATIONAL BEHAVIOR

The scope of OB integrates 3 concepts respectively −
 Individual Behavior: It is the study of individual’s personality, learning, attitudes,
motivation, and job satisfaction. In this study, we interact with others in order to study
about them and make our perception about them.
Example − The personal interview round is conducted to interact with candidates to
check their skills, apart from those mentioned in the resume.
 Inter-individual Behavior: It is the study conducted through communication between
the employees among themselves as well as their subordinates, understanding people’s
leadership qualities, group dynamics, group conflicts, power and politics.
Example − A meeting to decide list of new board members.
 Group Behavior: Group behavior studies the formation of organization, structure of
organization and effectiveness of organization. The group efforts made towards the
achievement of organization’s goal is group behavior. In short, it is the way how a group
behaves.
Example − Strike, rally etc.
The scope of the organizational behavior is as under:

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 Impact of personality on performance

 Employee motivation
 Leadership
 How to create effective teams and groups
 Study of different organizational structures
 Individual behavior, attitude and learning
 Perception
 Design and development of effective organization
 Job design
 Impact of culture on organizational behavior
 Management of change
 Management of conflict and stress
 Organizational development
 Organizational culture
 Transactional analysis
 Group behavior, power and politics
 Job design
 Study of emotions
The field of the organizational behavior does not depend upon deductions based on gut
feelings but attempts to gather information regarding an issue in a scientific manner under
controlled conditions. It uses information and interprets the findings so that the behavior of an
individual and group can be canalized as desired.
Large number of psychologists, social scientists and academicians has carried out research on
various issues related to organization behavior. Employee performance and job satisfaction
are determinants of accomplishment of individual and organizational goals.
Organizations have been set up to fulfill needs of the people. In today’s competitive world, the
organizations have to be growth-oriented. This is possible when productivity is ensured with
respect to quantity of product to be produced with zero error quality. Employee absenteeism
and turnover has a negative impact on productivity.
Employee who absents frequently cannot contribute towards productivity and growth of the
organization. In the same manner, employee turnover causes increased cost of production.
Job satisfaction is a major factor to analyze performance of an individual towards his work.
Satisfied workers are productive workers who contribute towards building an appropriate
work culture in an organization.
Organizations are composed of number of individuals working independently or collectively in
teams, and number of such teams makes a department and number of such departments
makes an organization. It is a formal structure and all departments have to function in a
coordinated manner to achieve the organizational objective.
It is therefore important for all employees to possess a positive attitude towards work. They
need to function in congenial atmosphere and accomplish assigned goals. It is also important
for managers to develop an appropriate work culture. Use of authority, delegation of certain
powers to subordinates, division of labor, efficient communication.

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HUMAN RESOURCE MANAGEMENT - UNIT – IV AND ITS MCQs

1. "______________ are social inventions D. Philip Kotler
for accomplishing goals through group Answer: (A) Peter. F.Drucker
efforts" 7. Which dimension of Big 5 personality
A. Management traits represents artistically sensitive,
B. Organization refined etc.
C. Leadership A. Culture
D. Behavior B. Emotional stability
Answer: (B) Organization C. Conscientiousness
2. Which organization theory can be D. Extroversion
understood by IF and THEN relationship Answer: (A) Culture
A. System approach 8. If everyone who is faced with a similar
B. Contingency approach situation responds in the same way,
C. Process approach attribution theory states that the behaviour
D. Scientific approach shows ______________.
Answer: (B) Contingency approach A. Consensus
3. Which of the following is/are not job B. Similarity
related source of stress C. Reliability
A. Role ambiguity D. Consistency
B. Role overload Answer: (A) Consensus
C. Ethical dilemmas 9. What term is used for the extent to
D. Career concerns which an individual displays different
Answer: (D) Career concerns behaviours in different situations?
4. Which of the following is NOT an A. continuity
important issue relating to goal-setting B. integrity
theory? C. flexibility
A. Goal specificity D. distinctiveness
B. Equity among workers Answer: (D) distinctiveness
C. Feedback 10. As a manager, one of James's duties is
D. Defining the goal to present awards to outstanding
Answer: (B) Equity among workers employees within his department. Which
5. Raju believes that men perform better in Mintzberg managerial role is James acting
oral presentations than women. What in when he does this?
shortcut has been used in this case? A. leadership role
A. The halo effect B. liaison role
B. The contrast effect C. monitor role
C. Projection D. figurehead role
D. Stereotyping Answer: (D) figurehead role
Answer: (D) Stereotyping 11. Organization structure primarily refers
6. Concept of MBO was introduced by: to
A. Peter. F.Drucker a. how activities are coordinated &
B. Mary Parker controlled
C. Henry Fayol b. how resources are allocated

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c. the location of departments and c. Expert

office space d. Charismatic
d. the policy statements developed by Answer: d
the firm 17. Communication begins with
Answer: a a. encoding
12. The purpose of job enrichment is to b. idea origination
a. expand the number of tasks an c. decoding
individual can do d. channel selection
b. increase job efficiency Answer: b
c. increase job effectiveness 18. Functional managers are responsible
d. increase job satisfaction of middle a. for a single area of activity
management b. to the upper level of management
Answer: b and staff
13. Strategic planning as a broad concept c. for complex organizational sub-units
consists of d. for obtaining copyrights and patents
a. corporate strategy and business for newly developed processes and
strategy equipment
b. strategy formulation and strategy Answer: a
implementation 19. Policies are sometimes defined as a(n)
c. inputs and outputs a. shortcut for thinking
d. environmental analysis and internal b. action plan
analysis c. substitute for strategy
Answer: b d. substitute for management authority
14. According to Herzberg, which of the Answer: d
following is a maintenance factor? 20. The problem-solving process begins
a. Salary with
b. Work itself a. clarification of the situation
c. Responsibility b. establishment of alternatives
d. Recognition c. identification of the difficulty
Answer: d d. isolation of the cause
15. A major problem with a task force type Answer: c
of management is 21. A study of the culture and practises in
a. there is no logical basis for task force different societies is called
information a) Personality
b. its status is too inflexible b) Anthropology
c. accountability c) Perception
d. lack of planning d) Attitudes
Answer: b Answer: b
16. Individuals such as Albert Einstein, 22. ____________ is known as “the father
Edwin Land and Steven Jobs lead through of scientific management.”
which type of power?
a) Fredrick W. Taylor
a. Legitimate b) Henry Fayol
b. Reward

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c) Robert Owen a) Industrial revolution

d) None of these b) Scientific management
Answer: a c) Organisational behaviour
23. ___________ a young Welsh factory d) Human relations movement
owner was one of the first to emphasise the Answer: d
human needs of employees: He refused to 29. In present context, challenges for OB
employ young children are
a) Andrew Ure a) Employee expectation
b) J.N. Tata b) Workforce diversity
c) Robert Owen c) Globalization
d) None of these d) All of the above
Answer: c Answer: d
24. _____________ embodies a team 30. Meso organisation behaviour is related
concept, is based on the principle of mutual with
contribution by employer and employees a) Individual behaviour
a) Autocratic model b) Group behaviour
b) Custodial model c) Organisational behaviour
c) Supportive Model d) None of these
d) Collegial Model Answer: b
Answer: d 31. “Leadership motivates the people to
25. Contribution/s of human relations work and not the power of money”, this
movement is/are concept is related to
a) Great Depression a) Autocratic model
b) Labour Movement b) Custodial model
c) Hawthorne Studies c) Supportive Model
d) All of these d) Collegial Model
Answer: d Answer: b
26. Edward Tolman is related to 32. Organisational behaviour is a field of
a) Behaviourist Framework study backed by a body of associated with
b) Cognitive approach growing concern for people at workplace
c) Social Cognitive Framework a) Theory
d) None of these b) Research
Answer: b c) Application
27. Forces affecting organisational d) All of the above
behaviour are Answer: d
a) People 33. Organisational behaviour is
b) Environment a) A science
c) Technology b) An art
d) All of the above c) A science as well as an art
Answer: d d) None of the above
28. Hawthorne Studies is related to which Answer: c
stage of the organisational behaviour 34. The field of organisational behaviour
evolution examines such questions as the nature of

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As Per Updated Syllabus

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INDUSTRIAL RELATIONS

INDUSTRIAL RELATIONS: CONCEPT, SCOPE, EVOLUTION

The term ‘Industrial Relations’ comprises ‘Industry’ and ‘relations’. Industry means any
productive activity in which an individual is engaged. It includes-
(a) primary activities like agriculture, fisheries, plantation, forestry, horticulture, mining etc.
etc. and
(b) Secondary activities like manufacturing, construction, trade, transport, commerce,
banking, communication etc.
Economically speaking, industry means the secondary sector where factors of production
(land, labour, capital and enterprise or four M’s – men, materials, money and machines) are
gainfully employed for the purpose of production, and where a business organisation exists.
‘Relations’ means ‘the relations that exist in the industry between the employer and his work-
force. Different authors have defined the term industrial relations in somewhat different way.
Basically, IR sprouts out of employment relation. Hence, it is broader in meaning and wider in
scope. IR is dynamic and developing socio-economic process. As such, there are as many as
definitions of IR as the authors on the subject. Some important definitions of IR are produced
here.
Some of the very oft-quoted definitions are given below
According to Dale Yoder’, IR is a designation of a whole field of relationship that exists because
of the necessary collaboration of men and women in the employment processes of Industry”.
Armstrong has defined IR as “IR is concerned with the systems and procedures used by unions
and employers to determine the reward for effort and other conditions of employment, to
protect the interests of the employed and their employers and to regulate the ways in which
employers treat their employees”
According to Bethel and Others, “Industrial relation is that part of management which is
concerned with the manpower of the enterprise whether machine operator, skilled worker or
manager.”
Manpower of the enterprise can, thus, be classified as management and workers or employers
and employees and industrial relations can, thus, be treated as relations between the
employer and the workmen.
According to V. Agnihotri, “The term industrial relations explains the relationship between
employees and management which stem directly or indirectly from union-employer
relationship.”
According to V.B. Singh, “Industrial relations are an integral aspect of social relations arising
out of employer- employee interaction in modern industries, which are regulated by the State
in varying degrees, in conjunction with organised social forces and influenced by prevailing,
institutions. This involves a study of the State, the legal system, workers’ and employers’
organisations on the institutional level; and that of patterns of industrial organisation

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(including management), capital structure (including technology), compensation of labour

force and the forces of market on the economic level.”
Thus, it covers all types of relations arising out of employer-employee interaction in the
industry which are influenced by the power of the State and other social and economic
institutions.
According to Ordway, Tead and Metcalf, “Industrial relation is the composite result of the
attitudes and approaches of employers and employees towards each other with regard to
planning, supervision, direction and coordination of the activities of an organisation with a
minimum of human efforts and frictions with an animating spirit of cooperation and with
proper regard for the genuine well-being of all members of that organisation.”
According to T.N. Kapoor, “The term ‘Industrial Relations’ should be understood in the sense
of labour- management relations as it percolates into a wider set of relationship touching
extensively all aspects of labour such as union-policies, personnel policies and practices
including wages, welfare and social security, service conditions, supervision and
communication, collective bargaining etc., attitudes of parties and governmental action on
labour matter.”
Encyclopedia Britannica defined IR more elaborately as “The concept of industrial relations has
been extended to denote the relations of the state with employers, workers, and other
organisations. The subject, therefore, includes individual relations and joint consultation
between employers and workers at their places of work, collective relations between
employers and trade unions; and the part played by the State in regulating these relations”.
Thus, IR can now safely be defined as a coin having two faces: co- operation and conflict. This
relationship undergoes change from thesis to antithesis and then to synthesis. Thus, the
relationship starting with co-operation soon changes into conflict and after its resolution again
changes into cooperation. This changing process becomes a continuous feature in industrial
system and makes IR concept as dynamic and evolving one.
The following points emerge from the analysis of the above definitions:
(1) Industrial relations are the relations which are the outcome of the ’employment
relationship’ in an industrial enterprise. It is, thus, employer-employee relationship in an
industry. Two parties—employer and workmen are necessary without which such
relationship cannot exist and it is the industry which provides the setting for industrial
relations.
(2) Industrial relation is the relation in the industry created by the diverse and complex
attitudes and approaches of both management and workers in connection with the
management of the industry. Attitude refers to the mental state of a person, approach
can be the external expression of such an attitude. Attitudes are always not obvious and
the individual himself may not always be fully conscious of the attitudes.
Attitudes must be inferred from tone of verbal expressions or perhaps from the
individual’s overt behaviour. Attitude is the mental state of the individual which
prepares him to take a particular, (external) approach or make him behave in a

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particular manner. Attitudes of both—employer and employees influence each other

and determine natural relationship.
(3) This relationship emphasises on the process of accommodation whereby both the
parties develop skills and methods of adjusting to and cooperating with each other.
(4) Industrial relation is not a simple relationship between the two parties but is a set of
functional interdependence involving a number of factors, say, historical, economic
social, psychological, demographic, technological, occupational, legal and others etc. It,
therefore, requires an interdisciplinary approach for its study. In this context, industrial
relations are the relations and interactions between management and workers and as a
result of their composite attitudes and approaches.
(5) Every industrial relation creates a complex of rules and regulations to govern the work-
place, the work- community with the main purpose of maintaining harmonious relations
between the management and the workmen by solving their problems through the
process of collective bargaining.
(6) The Government/State also regulates the industrial relations in the country. It evolves,
influences and shape industrial relations through laws, rules, agreements, awards of the
courts, and emphasises on the usages, customs, traditions, implementation of its
policies and interference through executive and judicial machinery.
Industrial relations may, thus, be defined as the relations and interactions in the industry
particularly between the labour and management as a result of their composite attitudes and
approaches in regard to the management of the affairs of the industry, for the betterment of
not only the management and the workers but also of the industry and the economy as a
whole.

SCOPE
Industrial relations are relation between employee and employer in their day-to-day work.
Hence, it is continuous relationship.
Based on above definitions of IR, the scope of IR can easily been delineated as follows:
1. Labour relations, i.e., relations between labour union and management.
2. Employer-employee relations i.e. relations between management and employees.
3. The role of various parties’ viz., employers, employees, and state in maintaining
industrial relations.
4. The mechanism of handling conflicts between employers and employees, in case
conflicts arise.
The main aspects of industrial relations can be identified as follows:
1. Promotion and development of healthy labour — management relations.
2. Maintenance of industrial peace and avoidance of industrial strife.
3. Development and growth of industrial democracy.
The scope of industrial relations includes:
(a) Relationship among employees, between employees and their superiors or managers.

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(b) Collective relations between trade unions and management. It is called union-
management relations.
(c) Collective relations among trade unions, employers’ associations and government.
Scott, Clothier and Spiegel remarked that industrial relations has to attain the maximum
individual development, desirable working relationships between management and
employees and effective moulding of human resources. They have also asserted that either
industrial relations or personnel administration is primarily concerned with all functions
relating man effectively to his environment.
Thus, the scope of industrial relations seems to be very wide. It includes the establishment and
maintenance of good personnel relations in the industry, ensuring manpower development,
establishing a closer contact between persons connected with the industry and that between
the management and the workers, creating a sense of belonging in the minds of management,
creating a mutual affection, responsibility and regard for each other, stimulating production as
well as industrial and economic development, establishing a good industrial climate and peace
and ultimately maximising social welfare.

OBJECTIVES
Two-fold objectives of good industrial relations are to preserve industrial peace and to secure
industrial co-operation. If we have to establish industrial peace, the workers must be assured
of fair wages, good conditions of work, reasonable working hours, holidays and minimum
amenities of life. Industry can be defined as a venture of co-operation under the direction of
the management to secure the effective co-ordination of men, materials, and machinery and
money. The objectives of good industrial relations should be development and progress of
industry; through democratic methods, stability, total wellbeing and happiness of the workers;
and industrial peace. Industrial peace is the fruit of good industrial relations. It is the
harmonious atmosphere where there is no “inquilabs”, no strikes and no industrial disputes.
Regional prejudices, provincialism and clannishness have no place where good industrial
relations prevail.
The primary objective of industrial relations is to bring about good and healthy relations
between the two partners in the industry i.e., the management and the labour.
All other objectives revolve around it. Mr. Kirkaldy, has listed the following four objectives
of industrial relations:
(a) Improving the economic condition of the labour in the existing state of industrial
management and political government;
(b) Controlling industries by the State to regulate production and industrial relations;
(c) Socialization or nationalization of industries by making the state itself the employer; and
(d) Vesting the proprietorship of the industries in the worker.
He stated “The state of industrial relations in a country is intimately connected with the form
of its political government and the objectives of an industrial organisation may change from
economic to political ends.”

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The Labour Management Committee of the Asian Regional Conference of the ILO has
recognized certain fundamental principles as objectives of social policy in governing industrial
relations with a view to establishing harmonious labour management relations.
They are:
(i) Good labour management relations in an industry depend upon employers and trade
unions being able to resolve their problems mutually, freely, independently and
responsibly.
(ii) The trade unions and employers and their organisation must be desirous of resolving
their problems mutually through the process of collective bargaining. However, the
assistance of appropriate government agencies may be sought in resolving the
problem, whenever necessary in the public interest. Collective bargaining, therefore,
is the corner-stone of good relations and appropriate legislative measures must be
adopted to aid the maximum use of this process of accommodation.
(iii) The workers’ and employers’ organisations should be desirous of associating with
government agencies keeping in view the social public, economic and general
measures affecting the relations between the two parties.
The committee, therefore, emphasized the need for the management to acquire the fuller
understanding of human factor in production and must use the appropriate methods of
employees’ selection, promotion and training, wage administration work rules and labour
discipline, lay-off and dismissal procedures etc. and other policies and procedures and
practices to improve labour and personnel relations.
In short, the objectives of industrial relations are given below:
(i) To safeguard the interest of labour and management by securing high level of mutual
understanding and goodwill between all sections in the industry which are associated
with the process of production.
(ii) To raise productivity to a higher level by arresting the tendency of higher labour
turnover and frequent absenteeism.
(iii) To avoid industrial conflicts and develop harmonious relations between labour and
management for the industrial progress in a country.
(iv) To establish and maintain Industrial Democracy, based on labour partnership, not
only by sharing the gains of the organisation, but also by associating the labour in the
process of decision making so that individual personality is fully recognized and
developed into a civilized citizen of the country.
(v) To bridge about government control over such units which are running at losses or
where production has to be regulated in the public interest.
(vi) To bring down strikes, lockouts, gheraos and other pressure tactics by providing
better wages and improved working conditions and fringe benefits to the workers.
(vii) To bring the gap, by the state, between the imbalanced, disordered and maladjusted
social order (which has been the result of industrial development) and the need for
reshaping the complex social relationships adaptable to the technological advances
by controlling and disciplining its members, and adjusting their conflicting interests.

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The main theme behind the concept of industrial relation is to recognise the fact that labour is
a human being and not a commodity and, therefore, it should be treated as living being. Every
individual differs in mental and emotional abilities, sentiments and traditions. Human like
treatment only can improve the relations between the management and the labour. In its
absence, the whole edifice of organisational structure may crumble down.
Thus, the employees constitute the most valuable assets of any organisation. Neglecting this
important source may result in high cost of production in terms of wages and salaries, benefits
and services, working conditions, increased labour turnover and absenteeism, growing
indiscipline, strike and walkouts and the like besides deterioration of quality of goods and
strained labour- management relations.

TYPES
The industrial relations is chiefly concerned with the management and the workers relations
or employer-employees relations. But its scope is not limited only to this aspect. It also
includes labour relations i.e., relations between workers themselves or between various
groups of workers and public or community relations i.e., relations between the community or
society and the industry.
There are so many groups of workers in an industry like workmen, supervisory staff,
management and employer and harmonious relationship between various groups that affects
the social, economic and political life of the whole community. Thus, industrial life creates a
series of social relationships which regulate the relations and working together of not only
workmen and management but also of community and industry.
Good industrial relations not only indicate the cordial atmosphere in the industry but also
facilitate higher and quality production and industrial growth.
Thus, industrial relations include four types of relations:
(i) Labour relations i.e., relations between union- management (also known as labour
management relations);
(ii) Group relations i.e., relations between various groups of workmen i.e., workmen,
supervisors, technical persons, etc.
(iii) Employer-employee relations i.e., relations between the management and
employees. It denotes all management employer relations except the union-
management relations;
(iv) Community or Public relations i.e., relations between the industry and the society.
The last two are generally, not regarded the subject matter of study under industrial relations.
They form part of the larger discipline—sociology. The first two are studied under industrial
relations but these two i.e., labour management relations and employer-employee relations
are synonymously used.

CHARACTERISTICS
The salient characteristics of industrial relations are discussed herein below:

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1. Parties in the Industrial Relations Activities: Basically, two parties-workers and

management are involved in the process of establishing relations. However, the
government agencies regulate /maintain industrial relations.
2. Interactive Process: Industrial relations arise out interactions between different
persons/parties. They are supervisors, workers trade unions, employers’ associations.
So, interactive process takes place between –
i. Supervisors and industrial workers
ii. Supervisors and group/team members
iii. Management and trade union leaders
iv. Employers’ federations and workers’ unions.
3. Two-Way Communication: IRs is a two-way communication process. One party gives
stimuli, other party responds to the stimuli. So, the transaction occurring through such
mechanism is either complementary or cross. More the complementary transactions,
better will be the industrial relations situations.
4. HRM Practices: Effective human resource planning system, identification and
stimulating prospective employees, designing the most suitable selection technique to
choose the right kind of people help to organization to get a committed and willing
workforce that want to grow, develop and achieve. Such employees in the process like
to develop better relations with their bosses. So, HRM practices influence IRs pattern in
the industry.
5. Approaches to IRs: Various approaches contribute to shape IRs pattern in industrial
organizations. These approaches include sociological, psychological, socio-ethical,
human relations, Gandhian, system approaches etc.
6. State Intervention: State plays a vital role to influence industrial relations situations
through its activities as facilitator, guide, counsellor for both the parties in the industry.
7. Role of Trade Union: Behavioural manifestations of workers are mostly governed by the
trade unions to which they belong. Hence, trade union’s perception, attitudes towards
management influence workers to form their mind set that regulates/promotes
interaction with the management.
8. Organizational Climate: If, congenial and conducive organizational climate prevails,
workers feel homely, interact spontaneously, communicate boss about their problems,
difficulties directly and come close to him to exchange/share the views each other in
respect of work, change of job design, introduction of any operative system, process etc.
Under such situation, possibility of establishing healthy human relations develops and
these relations influence industrial relations pattern of organization.
9. Dispute Settlement Process: If, the management personnel believe on the philosophy of
settling workers’ grievances/ disputes through bi-lateral negotiation process, they give
much more emphasis on mutual talk, sharing responsibility, collaboration, partnership
dealing and mutual trust. In the process changes in workers’ attitudes, behaviour and
thought pattern are likely to occur which effect industrial relations.
10.Outcomes of IRs: Outcomes of IRs are reflected in production both in quantity and
quality, services, man days lost, wastes, accident rate, productivity, labour turnover

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1. Creation of a political fund by trade bearer of the registered trade union if he
unions under the Trade Union Act is attained the age of
(A) Compulsory (A) Fifteen years
(B) Optional (B) Eighteen years
(C) by donation from political (C) Twenty one years
parties (D) Twenty five years
(D) No such provision in the Act Answer - (B)
Answer - (B) 6. The registered trade union can collect
2. What will be the minimum number of political fund from its members as a
workers required for organizing a trade (A) General fund
union for registration according to the (B) Cannot collect political fund
latest amendment under the Trade Unions’ (C) Separate fund from the
Act, 1926? interested members
(A) 7 workers (D) Only from political parties
(B) 10 % Answer - (C)
(C) 100 7. Not more than 50% of members of the
(D) 10% or 100 or 7 office bears of Trade union can be
Answer - (D) outsiders, as per provisions of legislations.
3. The minimum subscription rate for (A) Industrial Dispute Act
members of trade unions of rural workers (B) Trade Union Act
shall not be less than (C) Mines Act
(A) Rs. 12 per annum (D) ESI Act
(B) Rs. 3 per annum Answer - (B)
(C) Rs. 1 per annum 8. Trade union means any combination
(D) No such provision formed primarily for the purpose of
Answer - (C) regulating the relations between
4. A union may claim recognition for an (A) Workmen and employers
industry in a local area, if it has membership permanently
of (B) Workmen and workmen
(A) 10% of the workers in that industry. permanently
(B) 15% of the workers in that area. (C) Workmen and employers,
(C) 25% of the workers of that industry in workmen and workmen,
that area. employers and employers
(D) 30% of the workers in similar temporary or permanent
industry. (D) Workmen and employers,
Answer - (C) workmen and workmen,
5. A person is qualified to be chosen as a employers and employers
member of the executive or any other office permanently
Answer - (C)

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9. The Trade Unions Act empowers a trade (A) Is an association of employers or the
union to create a General Fund for its employees or of the independent
administration and maintenance. A trade workers?
union purchased shares in the Unit Trust of (B) Is relatively a permanent
India to enhance its General Fund Account. combination but not temporary or
Which of the following is not correct as per casual.
law? (C) Is an association of workers who are
(A) The trade union can raise its engaged in not securing economic
fund by such type of benefits for their members?
investments. (D) Is influenced by a member of
(B) The trade union can raise its ideologies.
funds by such investments with Answer – C
the permission of appropriate 12. Which of the following cannot be said to
government. be a trade union in true sense?
(C) The trade union can raise its (A) Craft Union
fund by such investments with (B) Industrial Union
the consent of its general body. (C) Company Union
(D) The trade union cannot do so (D) Federation
as it is an attempt towards Answer – C
profit making.
13. Which Labour Legislation has been
Answer – (D) enacted on the basis of Right to Association
10. The basic principle underlying the as given under the Fundamental Rights of
enactment of the Trade Unions Act is: the Indian Constitution?
(A) To protect interests of workers (A) Minimum Wages Act
against disregard of human (B) Payment of Wages Act
elements in industries. (C) Trade Unions Act
(B) To regulate the relationship of (D) Industrial Disputes Act
workers and their organization Answer – C
by regulating the balance of
14. Which of the following statements is
power.
correct?
(C) To provide strength to workers
(A) There is a statutory provision
to settle the industrial
for recognition of Trade Unions
disputes.
(D) To provide security to workers in India at the Central level.
(B) There is no statutory provision
against the occupational
for recognition of Trade Unions
hazards.
in India at the Central level.
Answer – (B)
(C) Code of discipline provides
11. Which of the following is not a both for Registration and
characteristic of Trade Union? Recognition.

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(D) There is provision for (A) 20% of the workers

recognition under the Inter- (B) 150 workmen
Union Code of Conduct. (C) Minimum 17 persons
Answer – (B) (D) None of the above
15. Which one is not a right of a recognized Answer – (D)
union? 20. Identify the correct definition of
(A) A right of ‘Check-off’ industrial relations:
(B) To use notice board on the premises (A) Relations between or among human
of the undertaking beings
(C) To appear on behalf of the union on (B) Relations between employer and
domestic inquiry employees as individuals
(D) inspecting the undertaking (C) Relations between parties in an
Answer – (A) employment context
16. The following persons are considered as (D) Collective relationship between
insider of a registered trade union. management and trade unions
(A) Honorary member from the other Answer - (D)
organization. 21. An association of crane operators in an
(B) Honorary member from other industrial establishment is an example of:
profession. (A) General Union
(C) Politician who guides the registered (B) Craft Union
trade union. (C) Industrial Union
(D) Retired and retrenched members of (D) Industrial Federation
the trade union.
Answer - (B)
Answer – (D)
22. The factor, which does not include the
17. Recognition of trade union is made by substance of sound industrial relations
the provision of policy at the macro-level is
(A) Trade Unions Act of 1926 (A) Business proposition, project
(B) Industrial Dispute Act 1947 development
(C) Code of Discipline (B) Structure of economy and labour
(D) Factories Act of 1948 market
Answer – C (C) Structure of union and employers’
18. Which is not a structure of Trade Union organisations
of Industrial Organisation? (D) Policies of the Government
(A) Craft union Answer - (A)
(B) General union 23. The employee State Insurance Act was
(C) Industrial union enacted the basis of which committee’s
(D) Consumers’ union report?
Answer – (D) (A) B. R. Ambedkar Committee
19. A Trade Union should be registered as (B) B. P. Adarkar Committee
per the law must have (C) Royal Commission on Labour

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