1) What are the challenges facing HRM? / Explain the changing role of HRM?
The 1990s have brought a revolutionary change in our business. Post- liberalisation is marked by a shift from command economy to market driven economy; from sheltered market to competitive market; from monopoly to competition; and from domestic trade to global trade. Such a shift calls for a different approach to HR activities. During the preeconomic liberalization, the HR managers had aopted a reactive strategies to people’s problems. The need of the hour is proactive approach, a strategy which helps HR managers foresee events and take appropriate actions before the events occur.
The major challenges are:

Globalisation
Globalisation is increasingly viewed as a growth strategy by several companies. Growing internalisation of business has its impact on HRM functions. The HR department is required to cope with the problems of unfamiliar laws, languages, practices, competitions, attitudes, management styles, work ethics and more. HR managers are required to know that international operations have:
More functions, such as taxation and co-ordination of departments.
More heterogenous functions, such as co-ordination of multiple salary currencies
More involvement in the employee’s personal life, such as housing, health, education and recreation.
HR functions such as planning, staffing, remuneration and the like, therefore, will be affected by globalisation.

Corporate Reorganisations
The past three to four years brought us news about corporate mergers, takeovers and massive reorganizations to fend off hostile take-over bids. It is difficult to imagine circumstances that pose a greater challenge for HRM than reorganization resulting from acquisition, merger, divestiture or a take-over threat.
The reorganization will have impact on organizational levels and employees. The employees of both the ‘taking over’ as well as the ‘taken over’ companies will have anxious moments because of
1.
Fear of loss of jobs

2.
Job changes, including new roles and assignments
3.
Transfers to new geographic location
4.
Changes in remuneration
5.
Changes in career possibilities
6.
Changes in organisational power, status, an prestige,
7.
Staff changes, including new peers, supervisors, and subordinates, and
8.
Changes in corporate culture and loss of identity in the company.
There is little indication that the pace of mergers and acquisitions will slacken in the future. But an important key to the success of almost any merger or acquisition is the management of HR.
 New organizatioanl forms
The practice of HRM is shaped by the organisational forms in which people are employed. But the employment potential of these giant corporations is declining. Large production units have become increasingly a thing of the past, and large companies now tend to consist of business units managed relatively independently.
The consequence has been a higher profile of medium size and small sized firms as employers. A majority of the population are employed in units with fewer than 200 employees.
This trend affects HRM in various ways
Smaller firms and establishments means a more personalised style- not necessarily more progressive, but more fsce-to –face.
Smaller units may require less complex and sophisticated systems of personnel management, but may also be less able to sustain them in areas like management development.
Smaller unit are less able to sustain a specialist personnel management function.
On the other hand, the business and human challenges of operating in this kind of environment are becoming greater. The contribution of HRM will then be in facilitating

the processes, which support the development of the enterprise, rather than, as traditional personnel management has one, in administering systems for controlling people.
The basic challenge to HRM an enterprise management comes from the changing character of competition.Competition in many sectors is no longer between individual firms, large or small, but between constellation of firms.

Changing demographics of workforce
The major challenge that has resulted from changing workforce demographics concerns dual career couples, couples where both partners are actively pursuing professional careers. Organizations have been accustomed to using job moves and physical relocation as an important means of developing talent. The increasing number of dual career professionals limits individual flexibility in accepting such assignments.
Another change in the workforce demographics relates to the growing number of employees who are young. Dormitories, gymnasium, breakfast, these are the kind of facilities that need to be provided to the workforce which has more of young employees.

Changed employee expectations
With changes in work-force demographics, employee expectations and attitudes also have shifted. Traditional allurements such as job security, attractive remuneration,housing and the like do not attract and motivate today’s workforce.
Employees demand empowerment and expect quality with the management. Previous notions about managerial authority are giving way to employee influence and involvement along with mechanisms for upward communication and due process.
Another expectation by the employee is that the electronic and telecommunication revolution will improve the quality of work life. Innovations in communication and computer technology will accelerate the pace of change, and as a result, lead to many innovations in HRM. Also, today’s average worker demands better treatment, challenging jobs and career advancement.
The HR manager must, therefore, redraw the profile of the worker and discover new methods of hiring, training, remunerating and motivating employees.

Proactive industrial relations strategy

There is almost a metamorphosis at the industrial relations front. Strikes, lockouts and loss of mandays are declining considerably. This transformation is the result of socioeconomic and political reasons.
The challenge to the labour movement comes not so much from any destructive potential intrinsic in HRM but from its capacity to co-opt and integrate workers into the enterprise by building a relationship with them.
Not having to compete with the management for worker’s loyalty, trade unions behave towards their members exactly as any monopolistic organisation would. HRM comes as a threat to this cosy arrangement, for management is not only seeking to get back to the neglected employee, but doing so in an environment where there own unions had taken them for granted.
The need now is to adopt a proactive strategy towards industrial relations, an approach which should enable HR specialists to look into the challenges unfolding in the future and to be prepared to convert them into opportunities.
 Contribution to the success of the Organization
The biggest challenge to an HR manager is to make all employees contribute to the success of the organization in an ethical and socially responsible way. The society’s well being, to a large extent depends on its organisations, particularly business organisations.
It must be the endeavour of everybody to ensure success and stability of organizations.
Responsibility is more on the HR manager as it is he who co-ordinates people’s activities and it is the people who make or mar organizations.

Need for attitudinal change in PSUs
While success of organizations in general is vital for society’s well being, public sector undertakings tell a different story. It may be asserted that although most PSUs are strong in manpower, R&D, systems, manuals, principles, and procedures, they fail to use it and incur losses.
Behind this phenomenon is the role of the personnel. Employees of loss making units have wrong attitudes towards their work and their organizations. Consequences are low productivity, absenteeism, militancy and other similar evils.
These issues must be addressed by the HR manager.


Renewed focus on people
The good news for HR managers is that there is renewed focus on people in organizations. For too long, managers believed in structures, strategies and systems. But over the last decade, technological, competitive and market changes have eroded its effectiveness.
The top management must therefore nurture the ideas of the frontline engineers and sales representatives, encourage interpersonal relationship and self monitoring and develop personal communications with key people.
The role of HR manager in the unfolding scenario is clear. He or she must make the focus on people justifiable and sustainable.

Managing the mangers
Managing the managers is another challenge before the HR manager. Mangers believe they are a class apart and expect remuneration which may be unreasonable and highly expensive.
Managers instead of managing their allotted functions, assume the role of the employer and fire those whom they feel are too smart.
Yet, managers are the individuals who run the show and an organisation cannot do without them.

Protect the interests of weaker sections
Another important challenge for HRM is to protect the interest of weaker sections of the society. The dramatic increase of women, minorities and other backward communities in the workforce has resulted in the need for organisations to re-examine their policies, practices and values.

2) What is the role of Strategic HRM?
The role of HRM in formulating and implementing strategies is crucial. It is the people who formulate and implement strategies and the people are supplied by HRM.

Role in Strategy Formulation:
HRM is in a unique position to supply competitive intelligence that may be useful in strategy formulation. Details regarding advanced incentive plans used by competitors, opinion survey data from employees that give information about customer complaints and information about pending legislation like labour laws or mandatory health insurance are some examples.
The strengths and weaknesses of a company’s human resources can have a determining effect on the viability of a company’s strategic options. A company may build its new strategy around a competitive advantage stemming from its human resource.

Role in Strategy Implementation:
HRM supplies the company with a competent and willing workforce, which is responsible for executing strategies. HRM supports strategy implementation in other ways too. For example, human resource today is heavily involved in the execution of the company’s downsizing and restructuring strategies, through out placing employees, instituting performance-linked pay plans, reducing health-care costs and retraining employees. And, in an increasingly competitive global market place, instituting HR practices that build employee commitment can help improve an organisation’s responsiveness.
A well-designed strategy can fail if sufficient attention is not paid to the HR dimension. HR problems that arise when executing strategies may be traced to one of the following 3 causes: a.
Disruption of social and political structures b.
Failure to match individuals’ aptitudes with implementation tasks; and c.
Inadequate top-management support for implementation activities.

Strategic implementation poses a threat to many managers and employees in an organisation. Guidelines which help ensure that human relationships facilitate but not disrupt strategy implementation include open communication, co-opting as many managers and employees in the strategic management process and matching managers with strategies through transfers, promotions, job enlargement and job enrichment.

3) What is job evaluation? What are its objectives?
Job Evaluation
Concept
Job Evaluation is the process of analysis and assessment of jobs to ascertain reliably their relative worth, using the assessment as a basis for a balanced wage structure. Job
Evaluation is used to establish a wage structure which is acceptable to both Management and Labour by providing a relative value of every job in a plant or industry.
Definition
Job Evaluation may be defined as “an attempt to determine and compare demands which the normal performance of a particular job makes on normal workers without taking into account into the individual abilities or performance of the workers concerned.
Objectives of Job Evaluation
The major objectives of job evaluation are to help management achieve:
1.
Equitability of wage structure within the firm, and
2.
Consistency of the firm’s overall wage structure with that of the industry in which the firm operates.
Apart from these primary two objectives, job evaluation serves the following objectives as well:
1.
Establishment of a sound wage foundation for incentive and bonus programmes.
2.
Maintenance of a consistent wage policy.
3.
Enable the management to gauge and control its payroll cost more accurately.
4.
Provide a framework for periodic review of wages and salaries.
5.
Classify functions, authority and responsibility which in turn aids in work simplification and elimination of duplicate operations.

6.
Reduce grievances and labour turnover and, thereby, increase employee morale and improvement management – employee relationships.
7.
Serve as a basis for negotiation with the union or employees.
8.
Help in selecting, promoting, transferring and training employees.
Thus, we can say that job evaluation plays a key role in wage and salary administration and assists managers in meeting day-to-day problems.

4) What are the methods of job evaluation?
Job evaluation methods are of two categories – non analytical and analytical
Non-Analytical Methods: These methods make no use of detailed job factors. Each job is treated as a whole in determining its relative ranking.

Ranking Method

Job – Grading Method
Analytical Methods: -

Point Ranking Method
 Factor Comparison Method
Ranking Method :
This is the simplest and the most inexpensive method of evaluation. The evaluation is done by assessing the worth of each job on the basis of its title or on its contents, if the latter is available. The job is not broken down into elements or factors. Each job is compared with others and its place is determined.
Drawbacks – Job evaluation may be subjective, as the jobs are not broken into factors. It is hard to measure whole jobs.
Job – Grading method :
This method does not call for a detailed or quantitative analysis of job factors. It is based on the job as a whole. Under this method the number of grades if first decided upon, and the factors corresponding to these grades are then determined.

Facts about jobs are collected and are matched with the grades, which have been established. The essential requirements of this method are to frame grade descriptions to cover discernible differences in degree of skill, responsibility and other job characteristics. Job grades are arranged in the order of their importance in the form of a schedule. The lowest grade may cover jobs requiring greater physical work under close supervision, but carrying little responsibility. Each succeeding grade reflects a higher level of skill and responsibility, with less and less supervision.
Advantages –
It’s simple and inexpensive.
In organizations where number of jobs is small, this method yields satisfactory results.
Disadvantages –
Job description are vague and are not quantified.
Difficulty in convincing employees about the inclusion of a job in a particular grade because of vagueness of grade descriptions.
More job classification schedules need to be prepared because the same schedule cannot be used for all types of jobs.
Point Ranking Method:
this system starts with the selection of job factors, construction of degrees for each factor, and assignment of points to each degree. Different factors are selected for different jobs, with accompanying differences in degrees and points. The range of grades and scores is also predetermined- for example, from 210 to 230 points, the 5 th
grade; 231 to 251 points the 6 th grade and so forth. A given fob is placed on a particular grade, depending on the number of points it scores.
Advantages –

A job is split into a number of factors. The worth of each job is determined on the basis of its factors and not by considering the job as a whole.
The procedure adopted is systematic and can easily be explained to the employees.
The method is simple to understand and easy to administer.
Disadvantages –
Employees may disagree with the points allotted and to factors and their degrees identified.
Serious doubts are expressed about the range of points allotted and matching them with the job grades, for example- a score range of 238 to 249 is grade seven and the next range of 250 to 271 is grade six. A variation of one point makes all the difference.
Factor Comparison Method :
Under this method one begins with the selection of factors usually five of them- mental requirements, skill requirements, physical exertion, responsibility and job conditions.
These factors are assumed to be constant for all the jobs. Each factor is ranked individually with other jobs. For example – all jobs may be compared first by the factor
‘ mental requirements’. Then the skills factor, physical requirements, responsibility and working conditions are ranked. Thus a job may rank near the top in skills but low in physical requirements. The total point values are then assigned to each factor. The worth of a job is then obtained by adding together all the point values.
Advantage-
Jobs of unlike nature – for example, manual, clerical, and supervisory may be evaluated with the same set of factors.
Disadvantage-
The method is complicated and expensive.
5) Describe any method of job evaluation.

Job evaluation methods are of two categories - non analytical and analytical. The non – analytical methods include methods like ranking method job grading method. Whereas the analytical methods include methods like point - ranking method and factor – comparison method.
1.
It is based on the job as a whole and does not call for detailed or quantitative analysis.
2.
Under this method a number of grades is decided upon and the factors corresponding to this grade are decided upon.
3.
Then the facts about the jobs are collected and matched with the grades which have been established.
4.
This classification can be done in the following manner.
1
2
3
4
5
6
7
Very simple Largely physical in nature
Small no. of clearly defined
Simple tasks rules and short training period
Straight – forward tasks
Independent arrangements of work
Routine work
Non – routine work
More complicated routines, requiring knowledge & alertness on the worker’s part.
Exercise of some initiative & detailed familiarity with other such established procedures.
Involving individual degree of responsibility & control over a small group of staff.
Involving co-ordianation of several lower grade functions, recognised individual knowledge & control over a small group of staff.
Inidividual tasks
Specialists knowledge
No follow up
Close supervision
Checked & closely supevised
Subject to occasional checks
Require little supervision
Answerable to non – routine queries.

5.
The essential requirement of job – grading method is to frame grade descriptions to cover discernible differences in degree of skill, responsibility and other job characteristics. Job grades are arranged in the order of their importance in the form of a schedule.
6.
Each suceeding grade reflects a higer level of skill and responsibility with less and less supervision.
Advantages of Job – grading method
1.
Simplicity and inexpressiveness
2.
Effective in organizations where number of jobs is small.
Disadvantages of Job – grading method
1.
The job grade descriptions are vague and not quatified.
2.
Difficulty in convincing the employees about inclusion of a job in a particular grade because of the vagueness of the grade descriptions.
3.
More job classification shcedules need to be prepared because the same schedule cannot be used for all types of jobs.

6) What is Job Design?
Meaning:
Job Design involves conscious efforts to organise tasks, duties, and responsibilities into a unit of work to attain certain objectives.
Definition:
Job design integrates work content (tasks,functions,relationships),the rewards (extrinsic and intrinsic), and the qualifications required (skills,knowledge,abilities)for each job in a way that meets the needs of employees and the organisations.
Three Steps of Job design:
1.
Specification of individual tasks
2.
Specification of the method of performing each task
3.
Combination of tasks into specific jobs to be assigned to individuals.
Key to successful job design lies in balancing the requirements of the organisation and the job holder.
Job design results in making the job specialised which could leads to boredom and degradation of job holder.
Factors affecting Job Design
Characteristics of Tasks: Complexity in a job may be a reflection of the number and variety of tasks to be carried out, or the range and scope of the decisions that have to be made, or the difficulty of predicting the outcome of decisions.
Work Flow: The flow of work in an organisation is strongly influenced by the nature of the product or service. The product or service usually suggests the sequence and balance between jobs if the work is to be done efficiently.
Ergonomics: Ergonomics is concerned with designing and shaping jobs to fit the physical abilities and characteristics of individuals so that they can perform their jobs effectively.
Ergonomics does not alter the nature of the job tasks, but the location of tools, switches and other facilities, keeping in view that the handling of the job is the primary consideration.

Work Practices: Work practices are set ways of performing work. These methods may arise from tradition or the collective wishes of the employees. Either way, the HR department’s flexibility to design jobs is limited, especially when such practices are part of a union – management relationship. Failure to consider work practices can have undesirable outcomes.

Environmental Factors
Employees’ Abilities and Availability:
Efficiency consideration must be balanced against the abilities and availability of the people who are to do the work. When Henry Ford made use of the assembly line, for e.g., he was aware that most potential workers lacked any automobile – making experience. So, jobs were designed simple and required little training.
Social and Cultural Expectations: Literacy, knowledge and awareness among workers have improved considerably, so also their expectations from jobs. Hence, jobs must be designed to meet the expectations of workers. Also, when designing jobs for international operations, the organisation should not neglect national and cultural differences like hours of work, holidays, religious beliefs, management styles, and worker sophistication and attitudes which can affect the design of jobs across international borders, or it can lead to dissatisfaction, low motivation and a low quality of work life.

Behavioural Elements
Higher level human needs are more significant in this context. Individuals inspired by higher level needs find jobs challenging and satisfying which are high on the following dimensions:
Feedback: Individuals must receive meaningful feedback about their performance, preferably by evaluating their own performance and defining the feedback. This implies that they should ideally work on a complete product or on a significant part of it.

Autonomy: Autonomy is being responsible for what one does. Jobs that give workers authority to make decisions will provide added responsibilities, which tend to increase the employee’s sense of recognition and self – esteem.
Use of Abilities: The job must be perceived by individuals as requiring them to use abilities they value in order to perform the job effectively.
Variety: Lack of variety may cause boredom. Boredom, in turn, leads to fatigue, which causes mistakes. By injecting variety into jobs, personnel specialists can reduce errors caused by fatigue.
Techniques of Job Design
1.
Work Simplification: In this technique, the job is simplified or specialised. A given job is broken down into small sub – parts and each part, is assigned to each individual. Work simplification involves i) mechanical pacing of work, ii) repetitive work processes, iii) working on only one part of the product, iv) predetermining tools and techniques, v) restricted interaction among employees and vi) few skill requirements.
2.
Job Rotation: Job rotation is one answer to boredom which implies movement of employees from job to job. With job rotation, a given employee performs different jobs, but more or less, jobs of the same nature.
3.
Job Enlargement: Job enlargement involves expanding the number of tasks or duties assigned to a given job. It is naturally opposite to work simplification. Adding more tasks or duties to a job does not mean that new skills and abilities are needed to perform it.
4.
Job Enrichment: Job enrichment seeks to improve both task efficiency and human satisfaction by building into people’s jobs, quite specifically, greater scope for personal achievement and recognition, more challenging and responsible work, and more opportunity for individual advancement and growth. An enriched job will have

more responsibility and autonomy (vertical enrichment), more variety of tasks
(horizontal enrichment), and more growth opportunities.
5.
Autonomous or Self-Directed Team: A self – directed work team is a group of committed employees who are responsible for a ‘whole’ work process or segment that delivers a product or service to an internal or external customer.
6.
High-Performance Work Design: It is a means of improving performance in an environment where positive and demanding goals are set. It starts from the principle of autonomous group working and develops an approach which enables groups to work effectively together in situations where the rate of innovation is high.
Employees are needed to gain and apply new skills quickly with minimum supervision for operational flexibility.
Positive and Negative Outcomes of Job Design Approaches:
Job Design Approach Positive Outcome
1. Work Simplification Job is highly specialised, so that
2. Job Rotation less trained and less paid employee can perform.
Job’s intrinsic reward potential is likely to increase.
Negative Outcome
Over simplification results in boredom with attendant risks of errors and resignations.
Jobs do not improve. Workers may feel rootless and alienated.
3. Job Enlargement
4. Job Enrichment
5. Autonomous Work
Team
Organisation too stands to gain because of the versatility of its employees. Worker’s self image will grow. There is enhanced interdepartmental cooperation.
Claims to have motivational impact.
Increased motivation, reduced absenteeism, psychological needs of employees are met.
Brings about empowered teams.
There is greater involvement of employees in decision – making,
Mere adding one zero to another zero – adding one more boring task to another. Likely to be resisted by employees.
People may not like to accept new responsibilities. Union resistance adds to the problem.
Job enrichment, if not accompanied by other job inputs, will fail in its goal.
There is resistance from employees, unions, and

6. High-Performance
Work Design which brings in commitment. managers and supervisors.
Works in an environment of high rate of innovation and operational freedom.
May not work in large bureaucratic organisation.

II.
1.
What is the meaning and definition of Human Resource Planning?
Meaning:
 HRP is the process of forecasting an organisation’s future demand for, and the supply of, the right type of people in the right number. It is only after this that the
HRM department can initiate a recruitment and selection process.
 It is a sub-system in the total organisational planning.
 It facilitates the realisation of the company’s objectives by providing the right
 type and the right number of personnel.
HRP is variously called manpower planning, personnel planning or employment planning.
A few definitions of HRP are:
 HRP includes the estimation of how many qualified people are necessary to carry out the assigned activities, how many people will be available, and what, if anything must be done to ensure that personnel supply equals personnel demand at the appropriate point in the future.
 Human resources planning is the process by which an organisation ensures that it has the right number and kind of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organisation achieve its overall objectives. Human resources planning, then, translates the organisation’s objectives and plans into the number of workers needed to meet those objectives. Without a clear-cut planning, estimation of an organisation’s human resource need is reduced to mere guesswork.

2. What is the importance of HRP?
Human Resource Planning (HRP) is understood as the process of forecasting an organization’s future demand for, and supply of, the right type of people in the right number. It is only after this that the HRM department can initiate the recruitment and selection process. Human resource planning translates the organization’s objectives and plans into the number of workers needed to meet those objectives. Without a clear cut planning, estimation of an organisation’s human resource need is reduced to mere guesswork. The following points highlight the importance of HRP.
1.
Future Personal Needs: Planning is significant as it helps determine future personnel needs. Surplus or deficiency in staff strength, is the result of the absence of or defective planning. All public sector enterprises find themselves overstaffed now as they never had any planning of their personnel requirements.
They went on a hiring spree upto the late 1980’s. Since then, recruitment and selection have been banned, but the ban came too late. The private sector is no exception. As many as 76.5 per cent of Indian organizations have surplus labour.
The problem of excess staff has become so heavy that many units are resorting to
“voluntary retirement schemes” (VRS) to remove the excess staff. Such surplus labour would not have been there if there were HRP. Moreover, there is lack of succession planning in most public sector units. Absence of succession planning has resulted in a situation where many organizations function without chief executives. Indian Airlines has been headless for a period of 10 months and Gas
Authority of India has been headless for 27 months. The anomaly of surplus labour, juxtaposed with the lack of top executives stems from the absence of or a defective HRP.
2.
Coping with Change: HRP enables an enterprise to cope with changes in competitive forces, markets, technology, products, and government regulations.
Such changes generate changes in job content, skill demands, and number and type of personnel. Shortage of people maybe noticed in some areas while surplus in other areas may occur.
3.
Creating Highly Talented Personnel: Jobs are getting highly intellectual and incumbents are getting vastly professionalized. L&T, an engineering giant, has
MBA’s, engineers and technicians who collectively constitute 70% of the total employee strength of 20,000. The HR manager must use his ingenuity to attract and retain qualified and skilled personnel. These people are known for job hopping, thereby creating frequent shortages in the organization. Manpower planning helps prevent such shortages.

4.
Protection of Weaker Sections: In matters of employment and promotion, sufficient representation needs to be given to SC/ST candidates, physically handicapped, children of the socially and politically oppressed, and backward class citizens. These groups enjoy a given percentage of jobs, notwithstanding the constitutional provision, which guarantees equal opportunities to all. A wellconceived personnel planning programme would protect the interests of such groups.
5.
International Strategies: International expansion strategies depend upon HRP.
The departments ability to fill key jobs with foreign nationals and the reassignment of employees from within or across national borders is a major challenge facing international businesses. With a growing trend towards global operation, the need for HRP will grow, as well as the need to integrate HRP more closely into the organization strategic plans. HRP will grow increasingly important as the process of meeting staffing needs from foreign countries and the attendant cultural, language, and developmental considerations grow complex.
Without effective HRP and subsequent attention to employee recruitment, selection, placement, development and career planning, the growing competition for foreign executives may lad to expensive and strategically- disruptive turnover asmong key decision makers.
6.
Foundation for Personnel Functions: Manpower planning provides essential information for designing and implementing personnel functions, such as recruitment, selection, personnel movement (transfers, promotions, layoffs) and training and development.
7.
Increasing Investment in Human Resource: Another compelling reason for
HRP is the investment an organization makes in its human resources. Human assets as opposed to physical assets, can increase it value. An employee who gradually develops his/her skills and abilities becomes a more valuable resource.
Because an organization makes investments in its personnel either through direct training or job assignments, it is important that employees are used effectively throughout their careers. An increasing number of executives are acknowledging that the quality of the workforce can be responsible for significant differences in short-run and long-run performances.
8.
Resistance to Change and Move: There is a growing resistance among employees to change and move. There is also a growing emphasis on selfevaluation and on evaluation of loyalty and dedication to the organization. All these changes are making it more difficult for the organisation to assume that it can move its employees around anywhere and anytime it wants, thus increasing the importance and necessity of planning ahead.
9.
Other Benefits: Following are other potential benefits of HRP:-

Upper management has a better view of the HR dimensions of business decision.

Personnel costs may be less because the management can anticipate imbalances before they become unmanageable and expensive.


More time is provided to locate talent

Better opportunities exist to include women and minority groups in future growth plans.

Better planning of assignments to develop mamanagers can be done

Major and successful demands on local labour markets can be made.
What are the objectives/specific goals of HRP?
HR plans need to be based on organizational objectives. In practice, this implies that the
HR plan must be derived from organizational objectives. Specific requirements in terms of numbers and characteristics of employee’s should be derived from the organizational objectives.
Organizational objectives are stated by the top management and the role of HRP is to subserve the overall objectives by ensuring availability and utilization of human resources.
For example, if a modernization of the plant is planned by the top management in their strategic planning for the next five years, the human resources department has to start from this objective and plan for human resources and for the modernization, premodernization, and post modernization periods. HR planning must take care of recruitment, selection, training and development to meet the modernisation and post modernisation as well as for additional recruitment wherever necessary. Separating redundant labour and training and updating the existing labour must also include the human resource planning. Modernisation plan is bound to fail unless proper man power is envisaged to cope with the modernisation.
Once the organizational objectives are specified, communicated and understood by all concerned, the HR department must specify its objectives with regard to HR utilization in the organization. They must focus on


Ensuring optimum use of human resources.
Keeping the organizational workforce to cope with the technological development and modernisation.
 Streamlining uninterrupted supply of workforce to the functional needs of
 business from time to time.
Union constraints encountered in HRP and develop policies needed to handle the constraints.




Automation of production and operations and what can be done of those displaced.
Cutting down surplus, redundant manpower and retraining and redeploying the manpower appropriately.
Ensuring a career planning for every employee of the organization and making succession programs. It means that human resource planning must include objectives for accomplishing organizational goals and individual aspirations of the employees.
If the estimated results fall short of the objectives, reasons for failure must be determined through performance evaluation and the defects rectified. Also, the plan or the objective must be revised whenever needed. Once the plan is finalized, efforts must be made to implement it and make periodical evaluation of the results.
4.
What are the limitations and challenges of HRP?
Planners face a few challenges while formulating an HRP. The major ones are the following:
1) People question the importance of making HR practices future oriented and the role assigned to HR practitioners in formulation of organizational strategies. Their argument is – there are people when needed. Offer attractive packages of benefits to them to quit when you find them in surplus. When the task is so simple, why elaborate time consuming planning for human resources? Surprisingly this perception about HRP is also held by the top management.
2) HR practitioner perceived as experts in handling personal matters, but are not experts in managing business. The personnel plan conceived and formulated by
HR practitioners when enmeshed with the organizational plan, might make the overall strategic plan itself defective.
3) HR information often is incompatible with the information used in strategy formulation. Strategic planning efforts have long been oriented towards financial forecasting often to the exclusion of other types of information. Financial forecasting takes precedence over HRP.
4) Conflicts may exist between long term and short term HR needs. For example, there arises a conflict between the pressure to get the work done on time and long term needs, such as preparing people for assuming greater responsibilities. Many managers are of the belief that HR needs can be met immediately because skills are available in the market as long as wages and salaries are competitive. These managers fail to realize that by resorting to hiring or promoting depending on short term needs alone, long term issues are neglected.

5) There is a conflict between quantitative and qualitative approaches to HRP. Some people view HRP as a numbers game designed to track the flow of people across departments. These people take a strictly quantitative approach to planning.
Others take a qualitative approach and focus on individual employee concerns such as promotability and career development. Best results would accrue if there is a balance between quantitative and qualitative approaches.
6) Non involvement of operating managers renders HRP ineffective. HRP is not strictly an HR department function. Successful planning needs a co-ordinated effort on the part of operating mangers and HR personnel.
5.
What are the steps for a successful integrated HRP?
Steps for an integrated HRP
An integrated Human Resources Planning requires a human resource information system.
A human resource information system (HRIS) is a systematic procedure for collecting, storing, maintaining, retrieving and validating data needed by an organization about its human resources. The HRIS is usually a part of the organization’s larger management information system (MIS). The HRIS need not be complex or even computerized. But computerization has its own advantage of providing more accurate and timely data for decision making.
The steps in implementing an HRIS
As with any major change, proper planning is an absolute necessity for successful implementation of an HRIS. The steps outlined below describe the specific procedures involved in successfully developing and implementing an HRIS.
Step 1. Inception of idea.
The idea for having an HRIS must originate somewhere.
The originator of the idea should prepare a preliminary report showing the need for an
HRIS and what it can do for the organizations.
Step 2. Feasibility study.
Feasibility study evaluates the present system and details the benefits of an HRIS. It evaluates the costs and benefits of an HRIS.

Step 3. Selecting a project team .Once the feasibility study has been accepted and the resources allocated,a project team should be selected. The project team should consist of an HR representative who is knowledgeable about the organisation’s HR functions and activities and about the organization itself and representatives from both management information systems and paytoll. As the project progresses, additional clerical people from the HR department will be needed to be added.
Step 4. Defining the requirements.
A statement of requirements specifies in detail exactly what the HRIS will do. A large part of the statement of requirements normally deals with the details of reports that will be produced. Naturally, the statement also describes other specific requirements. This typically includes written descriptions of how users collect and prepare data, obtain approvals, complete forms, retrieve data and perform other non technical tasks associated with HRIS use.
Step 5. Vendor analysis.
This step determines what hardware and software are available that will best meet the organizations needs for the lowest price. This is a difficult task. The best approach is usually not to ask vendors if a particular package can meet the organizations requirements but how it will meet those requirements. The results of this analysis will determine whether to purchase and “off –the-shelf” package or develop the system internally.
Step 6. Package contract negotiation . After a vendor has been selected, the contract must be negotiated. The contract stipulates the vendors responsibilities with regard to software, installation, service maintenance, training and documentation.
Step 7. Training . Training usually begins as soon as possible after the contract has been signed. First, the members of the project team are trained to use the HRIS. Towards the end of the implementation, the HR representative will train managers from other departments in how to submit information to the HRIS and how to request information from it.
Step 8. Tailoring the system.
This step involves making changes to the system to best fit the needs of the organization. A general rule of thumb is not to modify the vendor’s package because modifications frequently cause problems an alternative approach is to develop programs that augment the vendors program rather than altering it.
Step 9. Collecting the data.
Prior to start-up of the system data must be collected and entered into the system.
Step 10. Testing the system.
Once the system has been tailored to the organizations needs and the data entered a period of testing follows. The purpose of the testing phase is to verify the output of the HRIS and to make sure it is doing what it is supposed to do. Al reports should be critically analysed for accuracy.
Step 11. Starting up.
Start-up begins when all the current actions are put into the system and reports are produced. It is wise to attend start-up during a lull period so that

maximum possible time can be devoted to the HRIS. Even though the system has been tested some additional errors often surface during start-up.
Step 12. Running in parallel.
Even after the new HRIS is tested it is desirable to run the new system in parallel with the old system for a period of time. This allows for the comparison of outputs of both the system and examination of any inaccuracies.
Step 13. Maintainance . It normally takes several weeks or even months of the HR people to feel comfortable with the new system. During this stabilization period any remaining errors and adjustments should be handled.
Step14. Evaluation . After the HRIS has been in place for a reasonable lengthy of time the system should be evaluated. Is the HRIS right for the organization and is it being properly used?
Following the above steps when implementing an HRIS will not guarantee success but it will increase the profitability.
Employees exchange work for rewards. Probably the most important reward and certainly the most obvious is money. The goals of compensation administration are to design the lowest-cost pay structures that will attract, motivate and retain competent employees, and that also will be perceived as fair by these employees.
OBJECTIVES OF COMPENSATION ADMINISTRATION
The basic purpose of wage and salary administration is to establish and maintain an equitable wage and salary structure. Its secondary objective is the establishment and maintenance of an equitable labour-cost structure, i.e., an optimal balancing of conflicting personnel interests so that the satisfaction of employees and employers is maximized and conflicts minimized. A sound compensation administration tries to achieve the following objectives:

a) For Employees

Employees are paid according to requirements of their jobs, i.e., highly skilled jobs are paid more compensation than low skilled jobs. This eliminates inequalities.

The chances of favoritism are greatly reduced.

Job sequences and lines of promotion are established whenever they are applicable.
 Employees’ morale and motivation are increased because a wage programme can be explained and id based upon facts. b) To Employers

They can systematically plan for and control their labour costs.

In dealing with a trade union, they can explain the basis of their wage programme because upon a systematic analysis of job and wage facts.

A wage and salary administration reduces the likelihood of friction and grievances over wage inequities.

It enhances an employee’s morale and motivation because adequate and fairly administered wages are basic to his wants and needs.

It attracts qualified employees b ensuring and adequate payment for all the jobs.
Basically wage and salary programmes have four major purposes:

To recruit persons for a firm.

To control payroll costs;

To satisfy people, to reduce the incidence of quitting grievances, and fractions over pay, and

To motivate people to perform better.

FACTORS AFFECTING COMPENSATION STRUCTURE
The compensation policies different organizations vary somewhat. A sound policy is to adopt a job evaluation programme in order to establish fair differentials in wages based upon differences in job contents. Besides the basic factors provided by a job description and job evaluation, those that are usually taken into consideration are: a) The Organization Ability to pay: Wage increases should be given by those organizations, which can afford them. Companies that have good sales and, therefore, high profits tend to pay higher wages than those which running at a loss or earning low profits because of the high cost of production or low sales. In the short run, the economic influence on the ability to pay is practically NIL. All employers, irrespective of their profits or losses, must pay no less than their competitors and need pay no more if they wish to attract and keep workers. In the long run, the ability to pay is very important.
During the time of prosperity, employers pay high wages to carry on profitable operations and because of their increased ability to pay. But during a period of depression, wages are cut because funds are not available. Marginal firms and non-profit organizations (like hospitals and educational institutions) pay relatively low wages because of low or no profits. b) Supply and Demand of Labour: The labour market conditions or supply and demand forces operate at the national, regional and local levels, and determine organizational wage structure and level.
If the demand for certain skills is high and the supply is low, the result is a rise in the price to be paid for these skills. When prolonged and acute, this labour market pressures probably force most organizations to "reclassify hard-to-fill jobs at a higher level" than that suggested by the job evaluation. The other alternative is to pay higher wages if the labour supply is scarce; and lower wages when it is excessive. Similarly, if there is great

demand for labour expertise, wages rise; but if the demand for manpower skill is minimal, the wages will be relatively low. The supply and demand compensation criterion is very closely related to the prevailing pay, comparable wage and on-going wage concepts since, in essence, all of these remuneration standards are determined by immediate market forces and factors. c) Prevailing Market Rate: This is also known as the 'comparable wage' or 'going wage rate', and is the widely used criterion. An organization’s compensation policies generally tend to conform to the wage-rates payable by the industry and the community. This is done for several reasons. First, competition demands that competitors adhere to the same relative wage level. Second, various government laws and judicial decisions make the adoption of uniform wage rates an attractive proposition. Third, trade unions encourage this practice so that their members can have equal pay, equal work and geographical differences may be eliminated. Fourth, functionally related firms in the same industry require essentially the same quality of employees, with the same skills and experience.
This result in a considerable uniformity in wage and salary rates. Finally, if the same or about the same general rates of wages are not paid to the employees as are paid by the organization’s competitors. It will not to be attract and maintain a sufficient quantity and quality of manpower. Some companies pay on the high side of the market in order to obtain goodwill to insure an adequate supply of labour, while other organizations pay lower wages because economically they have to, or because by lowering hiring requirements they can keep jobs adequately manned.
The Living Wage criterion means that wages paid should be adequate to enable an employee to maintain himself and his family at a reasonable level of existence. However, employers do not generally favour using the concept of a living wage as a guide to wage determination because they prefer to base the wages of an employee on his contribution

rather than on his head. Also, they feel that the level of living prescribed in a worker's budget is open to argument since it is base on subjective opinion. d) Trade Union's Bargaining Power: Trade unions do affect rate of wages. Generally, the stronger and more powerful the trade union, the higher the wages. e) Job Requirements: Generally, the more difficult a job, the higher are the wages,
Measures of job difficulty are frequently used when the relative value of one job to another in an organization is to be ascertained. Jobs are graded according to the relative skills, effort, responsibility, and job conditions required. f) Managerial Attitudes: These have a decisive influence on the wage structure and wage level since judgement is exercised in many areas of wage and salary administration --- including whether the firm should pay below average, or above average rates, what job factors should be used to reflect job worth, the weight to be given for performance or length of service, and so forth, both the structure and level of wages are bound to be affected accordingly. These matters require the approval of the top executives. Top management's desire to maintain or enhance the company's prestige has been a major factor in the wage policy of a number of rims. Desires to improve or maintain morale, to attract high-caliber employees, to reduce turnover, and to provide a high living standard for employees as possible also appear to be factors in management's wage-policy decisions. g) Psychological and social Factors: These determine in a significant measure how hard a person will work for the compensation received or what pressure he will exert to get his compensation increased. Psychologically, persons perceive the level of wages as a

measure of success in life; people may feel secure; have an inferiority complex, seem inadequate or feel the reverse of all these. They may not take pride in their work, or in the wages they get. Therefore, these things should not b overlooked by the management in establishing wage rates. Sociologically and ethically, people feel that "equal work should carry equal wages," that "wages should be commensurate with their efforts," that "they are not exploited, and that no distinction is made on the basis of caste, colour, sex or religion." To satisfy the conditions of equity, fairness and justice a management should take these factors into consideration. h) Skill Levels Available in the Market: With the rapid growth of industries business trade, there is shortage of skilled resources. The technological development, automation have been affecting the skill levels at a faster rates. Thus the wage levels of skilled employees are constantly changing and an organization has to keep its level upto suit the market needs. i) Cost of Living: Next in importance market is the cost of living. This criterion matters during periods of rising prices, and is forgotten when prices are stable or falling. The justification for cost of living as a criterion for wage fixation is that the real wages of workers should not be allowed to be whittled down by price increases. A rise in the cost of living is sought to be compensated by payment of dearness allowance, basic pay to remain undisturbed. Many companies include an escalatory clause in their wage agreement in terms of which dearness allowance increases or decreases depending upon the movement of consumer price index (CPI). j) Labour Laws: We have a plethora of labour laws at the central as well as the state levels. Some of the central laws which have a bearing on employee remuneration are the
Payment of Wages Act, 1936; the Minimum Wages Act, 1948. The payment of Bonus
Act, 1965; Equal remuneration Act, 1976; and the Payment of Gratuity Act, 1972.

EXECUTIVE COMPENSATION
The pay of executives is merely a special case within the topic of compensation, but it does have several twists that deserve attention. First, the base salaries of executives are higher than those of low-level-managers or operative personnel. Second, executives frequently operate under bonus and stock option plans that can dramatically increase their total compensation. A senior executive at General motors, IBM, Data General, or General
Electric may in good year earn $500000 or $1000000 or more on top of his base salary.
Executives receive perquisites or special benefits that others do not.
How do organizations justify such extraordinary salaries for their executives? The answer is simple: economics and motivation. In economic terms, we know that top managers are expected to demonstrate good decision making abilities. This skill is not widely held in our society. As a result, the supply of qualified senior executives is scarce, and organizations have bid up the price for this talent. High salaries also act to motivate both top level-managers to perform well in order to keep their jobs.
COMPONENTS OF EXECUTIVE COMPENSATION a) Base salaries: Base salaries for CEOs are typically determined through competitive
“benchmarking,” based primarily on general industry salary surveys and supplemented by detailed analyses of selected industry or market peers.
b) Annual Bonus Plans: Virtually every for-profit company offers an annual bonus plan covering its top executives and paid annually based on a single-year’s performance. The bonus is mostly computed using a formula, usually taking into account increases in sales and profits. This bonus although earned in the current period, is distributed over several years.

c) Stock options: Stock options have been common incentive offered to executives. They generally allow executives to purchase, at some time in the future, a specific amount of the company’s stock at a fixed price. Under the assumption that good management will increase the company’s profitability and, therefore, the price of the stock, stock options are viewed as performance based incentives. d) Perquisites: Executives are frequently offered a smorgasbord of perquisites not offered to other employees. The logic of there perks is to attract and keep good managers and to motivate them to work hard in the organization’s interests. e) Golden Parachute: A popular benefit that accrued to top executives in the early 80s was the “golden parachute”. It was designed by top executives as a means of protecting themselves if a merger took place. These parachutes provide either a severance salary to the departing executive or a guaranteed position in the newly created (merged) organization.