Professional Documents
Culture Documents
developing the full potential of the employees through training, job rotation, etc. j) It is an integrating
function: It helps in maintaining cordial relationship between people at each level of the organisation.
k) It is an inter-disciplinary function: HRM is multidisciplinary. It utilises the (concepts) and
knowledge derived from subjects like psychology, economics, anthropology, accounting, sociology, etc.
current crisis.
b) It is a part of strategic planning: Business today is strategic. Carefully designed strategies are
essential for the survival and wellbeing of organisations. Human resource planning is central to
strategic planning because the accomplishment of the mission, vision and goals of the organization
highly depends on the quality of its human resource. When the strategies are made, input from human
resource planning helps it by taking into account the quality and kind of man-power needed. On the
other hand, once the strategy has been made, executives need to make resource allocation decisions.
HR managers are, consequently, essential facilitators of the strategic planning process.
c) Creating highly talented personnel: Nature of jobs has changed dramatically in the last 30 years.
Today we require highly qualified, versatile professionals to do day to day work. There was a time
when an organisation would be having hundred unskilled workers for every five qualified engineers
and managers. Today IT organisations like Infosys and TCS have absolutely no unskilled staff. All their
employees are highly qualified and skilled personnel. Such skilled people keep on changing jobs
rapidly. Thus organisations face shortage of man power on regular basis. Human resource planning
helps in preventing such
shortages by developing appropriate retention strategies. Further, there is a constant need to train and
retrain such workers in order to make them competent as per the market requirement. Human resource
planning helps in identifying training needs and creating highly talented personnel.
d) Succession planning: Human resource planning is essential to facilitate succession planning.
Retirement of a chief executive is full of uncertainties. Many organisations died once their successful
Chief Executive Officer retired. Through planning we can identify suitable candidates much before any
eminent executive retires so that the candidates can be provided with the required knowledge, skill,
ability and exposure. This ensures that the organisation keeps on moving in its well defined course
despite any retirements/exits.
e) Foundation for personnel functions: All the functions of human resource such as recruitment,
selection, transfer, promotion, training and development evolve from human resource planning. It is the
information provided by the human resource planning that should be the base for designing and
implementing such functions.
f) Increasing cost of human resource: Few decades back, the capital cost of any organisation (land,
building, machinery) was a major component of the total cost with manpower cost being minimal.
Today, capital costs have reduced but the cost of human resource has gone very high. An organisation
invests heavily in providing training and development to its employees. It therefore, is essential that
these employees are used effectively throughout their career.
g) International strategies: Globalisation and liberalisation has resulted in growing trends towards
global operations. This has enhanced the need for, as well as the need to blend human resource
planning more closely with organisations strategic plans. The increasing staffing needs from foreign
countries, employees speaking different languages and with different cultural norms have resulted in
complexities that make human resource planning even more important.
h) Emergence of challenging personnel: Personnel today have new definitions of self-evaluation,
loyalty and dedication. This has resulted in greater difficulty for the organisations to move its
employees around
anywhere and anytime it wants. This also makes human resource planning important which should
come up with handy strategies to tackle the challenging personnel.
i) Uncertainties and changes: Human resource planning overcomes uncertainties and changes to
maximum extent and facilitates organisations to have right men at right time and in right place.
j) Redundant employees: Because of changing needs for knowledge and skill, employees are getting
redundant at a fast pace. Throwing them out of job is inhuman as well as illegal. Human resource
planning helps in identifying such redundancies and also in providing alternative employment.
Quest3-Discuss the characteristics of an effective incentive system? Discuss any two types of
incentive schemes/plan?
The characteristics of an effective incentive system are stated below:
1:Approval of Management, Workers and Trade Union: All the interested parties must accept, support
and co-operate in the incentive plan. In the absence of employee support, the programme of incentive
can not be implemented smoothly. The plan should be formulated through discussion and participation
between management and workers. Workers should get full explanations about the programme and they
should be trained by the management to ensure smooth working of the plan.
2: Organisation and Methods Analysis: Before a work standard is established, a standardised procedure
or method should be evolved on the basis of organisation and methods analysis of each operation and
activity. Employees must be taught how to perform the work according to the standard methods and
procedure and how they can earn more incentives by performing more than the standards.
3 Work Standard: The norm or standard upon which incentive is based should be fixed through careful
work measurement devices e.g., time and motion studies, work sampling etc.
4 Guaranteed Base Wage: To provide security of income, the wage or salary levels should be fixed so
that the worker is sure about his regular earnings. Only then does the worker get motivated to work
more for extra earnings in the form of incentives.
5 No Unwarranted Rate Cutting: The work standard or quota should be guaranteed by the management
against unjustified and unwarranted or groundless rate cutting. The practice of rate cutting by the
employers at their will during the early days of scientific management killed the very purpose of
incentive plans, i.e, higher productivity and lower unit cost of
labour. A change in the work standard is justifiable only when there is a change in the method, tooling,
equipment or design of the product.
6 Easy Calculation of Earnings: An incentive plan should facilitate ready and easy calculation of the
employees earnings. This builds up the confidence and trust of the workers in the programme.
Management should try to simplify the calculations as for as possible and communicate the same to
workers so that they too calculate their earnings and can rely on their remuneration systems.
7 Grievance Procedure: An incentive plan of payment should have effective grievance procedure to
deal with complaints and dissatisfaction experienced by employees. The work standard or the incentive
rate that are too difficult to be met can be adjusted through grievance procedure.
The chances of full success of a new incentive system are very poor unless mutual confidence and good
relationship exist between management and workforce in an organization. Thus, attempts should be
made to build up harmonious relationships between the workers and management and to have open
communication between the two.
Types of Incentive Schemes There are a number of different types of incentive plans. Some of the
important ones are:
i)
ii)
Halsey Premium Plan: This is a bonus plan which is ordinarily used when accurate performance
standards have not been established, where the employee is rewarded based on the time saved. The
employee is assured of a minimum wage. A standard output within a standard time is fixed on the basis
of previous experience. This plan is based on time rate basis. The bonus is based on the amount of the
time saved by the worker. The minimum premium is 33.33 per cent of the time saved. Under this plan it
is optional for a worker to work on the premium plan or not.
Example: Suppose the standard time is 8 hours, the number of units to be completed is 16 and the
hourly rate is Rs 40. Mr. Akash completed producing the 16 units in 6 hours. Then, the working of the
scheme will be as follows: Standard time to complete the work 8 hours Standard number of units to be
completed 16 Standard rate of wages per hour Rs. 40 Standard wage for eight hours 8 x 40 = Rs. 320
Number of hours saved 8 - 6 = 2 hours Bonus payable to Mr. Akash 33.33% x 2 x 40 = Rs 26.66 Total
wages payable to Mr. Akash 320 + 26.66 = Rs 346.66
Merits: The merits of this plan are:
It guarantees a fixed time wage to slow workers and at the same time offers extra pay to efficient
workers.
Keeps the motivation of employees high as there is a guaranteed opportunity to earn extra bucks.
The cost of labour is reduced because of the percentage premium system; the piece rate of pay
gradually decreases with increased production.
The plan is simple in design and easy to introduce.
As the wages are guaranteed, it does not create any panic among such workers who are unable to
reach the standard.
Demerits: the disadvantages of the plan are:
It depends upon past performance instead of making present new standards.
The workers can defeat the purpose by restricting themselves to the guarantee of their daily wages.
In this plan, the worker is left alone to decide whether or not to produce more after the standard has
been reached thus, management does not have a control over the worker.
Gantt Task and Bonus Plan: This plan was introduced by H.L. Gantt. Under this plan, fixed time
rates are guaranteed. Workers completing their job within the standard time or less receive the wages
for the standard time plus a bonus that ranges from 20 to 50 percent of the time allowed performing the
task. When any worker fails to produce the required quantity, the worker simply gets the time rate
without any bonus.
Under this plan there are three stages of payment:
(a) Minimum guaranteed wage below the standard performance.
(b) 20 percent of time-rate as a bonus when standard performance is achieved.
(c) Higher piece rate but with no bonus when the standard is exceeded.
Merits:
It guarantees hourly base rate. Substandard worker gets guaranteed wage.
It is simple to understand and easy to be introduced.
It offers both- security and incentive. It facilitates planning and supervision.
Ques4:- What are the various benefits of Training? Discuss the Principles of wage and salary
administration?
Ans- Benefits of Training :existing employees not only benefit the individual employee but also the
organisation at large. No organisation can get employees who perfectly fit their job and organisational
requirements. Training them makes it possible for the employees to meet the requirements. Some of the
benefits of training are:
i.
It helps the organisation to stay ahead of competition.
ii.
. It improves morale of the workforce.
iii.
Helps people identify with organisational goals.
iv.
Increases productivity and performance of employees.
v.
Wage policy should match the needs of all the stakeholders of the organisation such as
employer, employees, consumers and the society.
Wage and salary plans and policies should be adequately flexible. It should adapt to changes in
the environment.
. Wage and salary administration plans should be formulated in such a way it matches to the
plans and programmes of the organisation.
. Wage and salary administration plans must be compliant to the economic and social situations.
It must be structured in such a way that the costs are in balance to the profits made by the
organisation.
. The wage plans should help in simplifying and accelerating other administrative processes.
It enhances the employees morale and motivates them to contribute towards organizational
development positively.
ii) It has a positive impact on productivity that results in higher wages for workers, higher
profits for the organisation and lower price of goods for the customers.
iii) It reduces internal conflicts and ensures industrial peace and harmony.
v) It also reduces employee turnover as employees do not prefer to leave organisations that
provide them with authority and freedom.
vi) It encourages implementation of innovative ideas and concepts as the organisation does not
exercise undue control.
vii) It helps in discovering and utilising latent human resource. This is the key to build great
organisations and a great nation.
cultural perceptions of the employees. Family pressures also affect the success of deployment of
employees. The HR department also has to ensure that all arrangements are carried out for the
employee to ensure smooth transition of the employees.
ix. Managing safety of employees: The HR department is responsible for the safety of all the
employees in the parent and off-shore organisations. With increasing terrorist activities and also
internal wars in many of the countries it is difficult for the HR personnel to ensure the safety of
all the employees. They are also responsible for emergency evacuations of employees from
dangerous situations.
x. Auditing human resource activities: Auditing HR activities across the organisation is a
challenge as the organisation will not have the same HR activities in all the countries.
Consolidating the activities and auditing it is a difficult task. Performance standards of the HR
department of the different countries itself varies. Analysing the challenges and initiatives taken
up by the HR departments across the organisation can also call for expert knowledge in the area.