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Society, Management and Accounting

Key Points at a Glance

Human Resource Management: Planning, Recruitment, Selection, Training, Appraisal & Modern Trends

Paper I · Unit 3 Section 1 of 12 0 PYQs 22 min
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Key Points at a Glance

  1. HRM (Human Resource Management) is the strategic approach to the effective management of people in an organisation to help the business gain a competitive advantage. Defined by Gary Dessler: "The policies and practices involved in carrying out the 'people' aspects of a management position, including recruiting, screening, training, rewarding, and appraising."
  2. Human Resource Planning (HRP) is the process of forecasting the organisation's future HR demand and supply to ensure the right number of people with the right skills are available at the right time. It involves: Demand forecasting (Delphi method, trend analysis, work-study method) and Supply forecasting (skills inventory, succession planning).
  3. Recruitment is the process of identifying and attracting potential candidates from within and outside the organisation. Sources: Internal (promotion, transfer, employee referrals); External (job portals, campus recruitment, employment agencies, advertisements). India's largest job portal is Naukri.com (Info Edge, 80M+ registered CVs as of 2024).
  4. Selection is the process of choosing the most suitable candidate from the pool of recruits. Steps: Application screening → Preliminary interview → Tests (aptitude, personality, trade) → In-depth interview → Medical examination → Reference check → Job offer. The selection ratio = Number selected ÷ Number who applied; lower ratio = more selective process.
  5. Training vs. Development: Training is short-term, job-specific skill building for present roles (e.g., machine operation, sales technique). Development is long-term, broader growth for future roles (e.g., leadership development, MBA sponsorship). The National Skill Development Corporation (NSDC) has trained 1.4 crore+ youth since 2009 under Skill India Mission.
  6. Training methods: On-the-job — Job rotation (moves employee across roles), Coaching (supervisor guidance), Apprenticeship (structured 1-4 year programs, regulated under Apprentices Act 1961); Off-the-job — Classroom lectures, Case studies, Role-playing, Simulation, E-learning (online modules).
  7. Performance Appraisal is the formal evaluation of an employee's job performance against pre-set standards. Methods: Graphic Rating Scale (most common); 360-Degree Feedback (peers, subordinates, supervisors, customers rate the employee); Management by Objectives (MBO) (Peter Drucker, 1954 — goals set jointly); Balanced Scorecard (Kaplan & Norton, 1992 — 4 perspectives).
  8. Compensation & Benefits — Total rewards include: Direct pay (basic salary, overtime, incentives) and Indirect pay (provident fund, health insurance, paid leave). India's 7th Pay Commission (report submitted November 2015, implemented January 2016) restructured central government pay; minimum basic pay increased from ₹7,000 to ₹18,000 per month.
  9. Industrial Relations (IR) covers employer-employee relationships. Key laws in India: Industrial Disputes Act 1947 (layoffs, strikes, lockouts); Trade Union Act 1926; Code on Industrial Relations 2020 (one of four labour codes). India has approx. 12 central trade unions including INTUC (Congress), BMS (BJP-affiliated), CITU (CPM-affiliated).
  10. Modern HRM Trends: (a) HR Analytics / People Analytics — data-driven HR decisions using AI/ML (Workday, SAP SuccessFactors); (b) Remote/Hybrid Work — post-COVID-19 shift, with 35% of Indian IT sector employees working hybrid in 2024 (NASSCOM); (c) Employee Well-being Programs — mental health support, EAP (Employee Assistance Programs); (d) Diversity, Equity & Inclusion (DEI) — structured efforts to improve representation.
  11. Talent Management encompasses attracting, retaining, and developing high-potential employees. Succession planning identifies and develops internal candidates for key leadership roles. India's attrition rates: IT sector saw 23% attrition in FY2022 (highest in a decade, NASSCOM) before stabilising to 13–15% in FY2024.
  12. Labour legislation reforms — Four Labour Codes (2019-2020): The central government consolidated 44 labour laws into 4 codes: (1) Code on Wages 2019 (minimum wages, equal pay); (2) Code on Industrial Relations 2020 (disputes, unions, retrenchment); (3) Code on Social Security 2020 (EPF, ESI, gratuity, maternity); (4) Code on Occupational Safety 2020 (factories, mines, construction).