The Valued Asset Of Manpower In Organisations Commerce Essay


"The most valuable asset of any organization is Manpower". If an organization holds everything i.e. all the factors of production like land, capital, technology and organization and no manpower then it won't be able to function. Nearly all business organizations large and small are inspired to carry on business across the globe. This inspiration may require purchase of raw materials from various foreign suppliers, assembling products from different companies, or selling goods and services to customers of other countries. As the international business is growing at a faster pace the emphasis which is placed on several Human Resource activities is changing. The need to change emphasis in Human Resource activities as a foreign subsidiary matures is clearly a factor that provides broader responsibilities for local Human Resource activities, (Jackson, 2007).

Human resource activities includes three broad activities namely procuring, allocating and utilizing which covers all the six activities of domestic Human Resource Management. The basic six activities of Human Resource Management are human resource planning, employee hiring, training and development, remuneration, performance management and industrial relations which include trade union relationship. The success of any business depends upon its Human Resource management, if skilful and talented employees are appointed then the organization would work to its fullest capacity and will make optimum utilization of resources and sometimes beyond it which would ultimately lead to the increase in the profits of the organization and also the reputation of the firm reaches great heights, (Jackson, 2007).

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These are few key competencies that an organization requires in Human resource and these requires for the management of the competencies. They are:

Human resource planning.

Recruitment and selection.

Training and development.

Performance management.



Employee relations.

1. Human resource planning:

Human resource planning is the process of forecasting an organization's future demand for supply of the right type of people in the right numbers. Human resource planning assumes greater importance in business due to the efficient use of human resource which helps in achieving the objectives of an organization, (Jackson, 2007). But the implementation of Human resource planning programs may be difficult in few of the organizations which are located in other countries. There may be a difficulty due to existence of different cultures. The implementation of extensive human resource planning in such cultures would be met with bemusement at best and significant resistance at worst. The organizations which are not opting for long term survival will not go for effective human resource planning and will not consider human resource planning as valuable. Those organizations which are oriented towards past will pay much attention towards the historical data and will make use of this historical data for predicting their future needs and demands. This approach can be followed by those organizations which are functioning in the stable environment where as this approach would be a failure in the environment where there are unstable changes taking place, where in the past has nothing to do with the future, (Jackson, 2007).

Few other important issues related with Human resource planning are as follows:

To identify the potentiality of the top management in the very initial stages.

To identify the most significant factors for success for the future international managers.

To provide several developmental opportunities.

To track and maintain commitments of an individual employee in international career path.

Preparing strategic business plan for Human resource planning.

To deal with multiple business units in order to achieve different business strategies. (Tzafrir, 2005).

2. Recruitment and selection:

Once the Human resource planning is done the next step which the manager needs to follow is to appoint the right kind of people in the right place and also in right number. The Human resource management should not only select right people with skills but also the people who can mingle up and jell with the organization's culture, (Nkomo,, 2007). The best example is GE, which is not only hiring people with the required skills but also whose styles, beliefs and value system are consistent with that of the firm. Any organization which is working at an international level will follow three approaches for staffing that is ethnocentric, polycentric and geocentric, (Batt, 2002).

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Ethnocentric approach is an approach where in all the vital roles and positions are held by the parent-company nationals. This type of approach can be followed in the initial stages where the firm is concerned with establishing their business unit in the other country. Few companies which followed ethnocentric approach were P & G, Phillips NV, and Matsushita. In Japanese and South Korean countries all the important positions are held by their country nationals only in Toyota, Matsushita and Samsung. The reasons why organizations opt for ethnocentric approach are:

Due to lack of qualified host country nationals.

Trying to maintain and develop a united culture.

Efforts to maintain good communication with headquarters.

Efforts to maintain good coordination with headquarters.

Efforts to maintain good control with headquarters.

Polycentric approach is an approach where in all the key positions are held by the nationals of the parent company at corporate headquarters. Sometimes the top positions are filled by the home-country people but this is not always a case, (Nkomo,, 2007). For example, Hindustan Unilever Limited (HUL) has all the locals in the top positions in an organization. Unless and until the government intervenes in the direct selection process till then there is no preference given for home country citizens. Hiring staff from other countries will help in removing the barriers from language, eliminates expensive training period and cross culture adjustment problems of the mangers and their families, (Brewster, Larsen, 1992).

Geocentric approach is an approach where in the key positions are given to those people who are capable enough and acre competent enough irrespective of their nationality. Colgate Palmolive is a very good example for this approach which is operating since fifty years within 170 countries, (Randall,, 2008).

3. Training and development:

Soon after the selection of the right candidate is done the next step to follow is to provide them with right kind of training which would help the employees to develop. Training basically aims at enhancing the present working skills and behaviour whereas development seeks to improve the overall skills of the manager through a mix of ongoing management education and rotations of managers through a number of jobs within the firm to give them different experience, (Brewster, Larsen, 1992). Different types of trainings are provided such as cultural training, expatriate training, language training, practical training etc.

4. Performance management:

Performance management has become a very important part of any organization. Performance management helps in identifying those employees who are highly potential and rewards them for further development, (Walsworth, 2007). Performance management helps in enabling an organization to carry out evaluation and improve continuously its business unit, subsidiary unit, and its corporate performance against their well defined goals and objectives. Performance management is more and more comprehensive as it includes assessment of the performance of not only individuals but also the activities of the firm and its subsidiaries, (Batt, 2002).

5. Remuneration:

Remuneration must be in accordance with the capability of the employee. Various benefits should be provided such as incentives, Taxes, tax equalization, tax protection, allowances, which include education allowance, relocation allowance, home-leave allowance, cost of living allowance etc. The long term benefits can also be provided such as employee stock option schemes etc.

6. Repatriation:

Repatriation is a process of bringing back the expatriates to their home country. Repatriation requires careful handling. Expatriates face new challenges in their home country which are called as re-entry shock or reverse culture shock. An organization may view repatriation as a final phase in the expatriation process, but its ability to attract future expatriates depends upon how well the firm handles its repatriation. The repatriation process includes the following stages preparation, physical relocation, transition and readjustment. There are various repatriation strategies which are being followed by the organizations, (Batt, 2002).

7. Employee relations:

The last competency that an organization requires is labour or employee relations. A firm's capability to integrate and consolidate its operations to meet the experience curve and location economies can be stopped by organized labour becoming a hurdle in the way of achieving its strategy, (Batt, 2002). The best example with this connection is GM which has bought peace with labour unions by agreeing not to integrate and consolidate operations, in the most efficient manner. The other example is Daewoo which was bankrupted due to the resistance from labour to the management's action to downsize its labour force. The major issues or trends in the labour market which affect the organizations labour force are as follows:-

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Who should handle the labour relations?

Strategic choices before firms.

Strategic choices before unions.

Union tactics

Evaluation of strategic approaches to HRM, which can improve organizational performance:

Strategic approaches to Human resource management can improve organization's performance. The objective of a Human resource management's strategy is to manage labour and design jobs so that people are effectively and efficiently utilized. Organizations in the current present competitive scenario are faced with the need of generating and practicing the value creation process. The survival and existence of the organizations depends largely upon creating outputs that mathematically outweigh the value of their inputs, which in turn gives it the competitive advantage over its competitors, (Baird, Meshoulam, 1988).

The strategic approaches are:

Developing competitive advantage of organizations by proactively developing the business strategy.

Contributing to generating and catering of shareholder value and for this purpose generating short, medium and long term strategies to facilitate cash creation.

Developing the Human resource strategy as an important part of the organizations strategy.

Gaining top level management's confidence or CEO's confidence while making the human resource strategy.

Process re-orientation, importance, skills and talents of the human resource department to facilitate and extend support to the human resource as to create value.

The essential components of a human resource strategy are its plans and programmes which are related to human resource projects. Intentions that crystallize into specific plans, projects, formal and informal arrangements in organizations to facilitate work processes, economic value creation etc, (Baird, Meshoulam, 1988). Often, human resource professionals tend to author the human resource strategy independently. The human resource managers must generate acceptance and credibility for its inputs by taking from different departments for the success of the strategy.

Human resource managers should involve themselves in the business planning and execution to apprehend the essentials of the business and make the human resource strategies to go in tune with the emerging business realities, (Eaton, 2001). The human resource professionals should participate in the business planning strategies, tuning human resource strategies to the business strategy requirements, initiating various change management programmes to bring in cultural change, coordinating with the business heads to follow human resource strategies, policies, rules and regulations, promotion of active ownership of human resource policies by business heads to improve credibility of the policies and also for their successful implementation, (Baird, Meshoulam, 1988).

One can understand that human resource manager's function are becoming more and more challenging and demanding and it is not just concerned with personnel, training, or administrative functions, in fact the role has become a hybrid one, consisting of all these functions which requires new skills and attitudes from the human resource personnel, (Baird, Meshoulam, 1988). As a human resource manager one should possess the following requisites which are considered to be essential to carry out the human resource activities. The human resource manager must have the following skills:

1. He must be a strategic planner wherein he needs to have a broad knowledge about global human resource strategies. He should develop strategic planning and should show the direction where the firm should move ahead and also critically examine the present day position and also keep in consideration the past of the organization. In other words a strategic plan is a goal statement, (Baird, Meshoulam, 1988). One can improve the value of the human resource by linking it with the goals of the organization. A strategic plan helps the organization to achieve its goals. The following steps are required to implement a strategic plan:

a. Set measureable and achievable objectives.

b. Place the right person in the planning process.

c .Conduct communication process after planning.

2. The Human resource manager must have the ability of comprehending the business requirements and realities. It is quite often found that human resource managers are not aware of their business requirements and follow the wrong direction. This can be explained with the help of an example, if top management is putting all their efforts to achieve annual targets and the human resource manger comes up with an innovative idea it is most likely to get rejected by the top management. Thus, it is essential for a human resource manager to know the business jargons, (Brewster, Larsen, 1992).

3. He must be a leader and should be capable enough to build a team. Managers need to be highly motivated and proficient. The most essential requirement for achieving goals is team building skills and team commitment, (Baird, Meshoulam, 1988).

4. He should hold the managing capabilities. In spite of several IT tools like that of Intranet, Learning Management Systems, etc. the efficiency of a manager lies in motivating the people to share their knowledge and expertise with their peers, (Baird, Meshoulam, 1988).

5. He must be facilitator and coordinator.


Selection is a process of hiring the suitable candidates from the pool of job applicants to fill the various positions in an organization. Selection is a long process; it starts with small interview and ends up with the agreement with an employee, (Baird, Meshoulam, 1988). The selection is must for any organization, as selection is very important to hire a suitable candidate for the job. If candidate qualify the first round, they go to the second round, if in case they fail to clear the first round then their names will not be short listed for the next round. There are steps involved in selection procedure which are as follows:-

1. Application: This is one of the methods wherein information is collected from the applicant regarding the applicant's history, personal activities, skills, talents and achievements of the applicants. The application may contain the following details biographical information, educational information, work experience and references.

2. Interview: After gathering information from the applicant the next step is to conduct an interview. Interview is of following types;-

a. Preliminary interview: This is also called as screening interview .The very purpose of it s conducting is to eliminate non eligible candidates from the list of job seekers.

b. Structured interview: Structures interview is the type of interview where in the queries to be asked are already prepared well in advance only that is they are structured. These questions will be related to the subject and the job which will be logical in manner.

c. Stress interview: The stress interview will create tensions; fear and pressure where in the candidate will be forced to panic .The real intention of conducting such interview is to determine the stability of the applicant against tensions and pressure. It is quite similar to rapid fire round where the candidate is posed with questions one after the other without and gap or within short span of time.

d. Depth interview: This interview is conducted to get detailed information from the applicant. More emphasis is laid on the education, co-curricular activities and some good and bad experiences. Usually this type of interview is best suited for executive selection rather than white collars and blue collars jobs.

3. Selection test: Individuals possess different skills, talents, abilities, knowledge, experience, idea, mentalities. So it is quite essential to select a right candidate for the right job. For this purpose a selection test is conducted. With the help of selection test the skills, talents and abilities of an individual can be assessed. The candidate who gets selected in the selection test will go for further rounds, (Baird, Meshoulam, 1988). A selection test can be rightly said as a test which is a systematic process for comparison between the behaviours of two or more individuals.

4. Group discussion: Most of the companies adopt this as a selection technique. The group may consist of six to ten candidates. It is a time saving method because simultaneously six to ten candidates are being interviewed by the interviewer. The topic is being given by the interviewer and the candidates are allowed to speak on the topic. With this the candidates' skills and abilities are judged.

5. Reference checks: It is one of the selection steps where in additional information is obtained from the candidate. The candidate is supposed to write at least three to four references. The references can be given of friends, organizations, neighbours, family members and so on. Referees are supposed to speak about the candidate.

6. Physical Examination: This is the last technique in the selection process. The main purpose of this technique is to check the physical fitness of the candidate. Usually medical or physical examination is conducted. This is must, as the candidate may carry infection along with him in the organization which may be dangerous to the existing employees. Any organization for that matter will not appoint any candidate with ill health, (Baird, Meshoulam, 1988). The physical examination is done by the specialists.

7. Final selection: This is the last step in the selection process. The candidates who clear all the above mentioned stages will appear in the final selection. The candidates who have cleared all the rounds will be given a job offer. The job offer may contain the details about the salary, allowances, and other rules and regulations regarding the organization, (Baird, Meshoulam, 1988).


To appraise an employee is to assess their value or worth. Performance appraisal is a systematic evaluation of personnel performance by their superiors or supervisors. In other words it can be said as a process of assessing or evaluating the performance and potential of an employee or group of employees for future development, (Batt, 2002). Performance appraisal and merit rating are often used synonymously but they are different terms. Performance appraisal is a broader concept where in it focuses on performance and future potential of an employee where as merit rating on the other hand focuses on judging the calibre of an employee so as to decide salary increment. Performance appraisal is conducted in a sequential order; it is a continuous process wherein evaluations are arranged periodically according to the defined plans and objectives, (Becker, Gerhart, 1996). Performance appraisal is a scientific approach. The reasons for conducting Performance appraisal are:

To evaluate the employee performance and provide feedback, so that the employee can assess themselves that where they stand and what is their position in an organization.

To provide organized information for making and taking decisions like that of placement, transfer, reward, development etc.

To determine employee's strengths and weaknesses to enhance the training program.

To improve communication process.

To test effectiveness of HR activities such as recruitment, selection, training and placement.

To provide coaching to the employees.

To provide counselling to the employees.

To provide motivation to the employees.

There are various approaches which are being used by the organizations to conduct performance appraisal. Three approaches which are most commonly used are:-

1. Casual approach

2. Traditional approach and

3. Mutual goal approach which is also called ad MBO i.e. management by objectives.

The process of performance appraisal can be completed in the following six steps:-

1. Creating the performance standards: The very first step of performance appraisal is to generate the performance standards that is on what parameters are the employees going to be appraised that may be the output, skills and achievements and so on. The performance standards cab is decided on with the help of job analysis and job description. The performance standards must be clearly understandable and also measureable, (Baird, Meshoulam, 1988).

2. Making employees aware of the performance standards: The next step is to create awareness among the employees about the performance standards i.e. the performance standards should be communicated to the employees, so that the employees know what is expected out of them. There can be modifications made to the performance standards both by the employees and the employers.

3. Measurement of the employees' actual performance: After the performance standards are communicated the next step is to measure their actual performance. Measuring the right performance means identifying the right techniques for measuring performance i.e. both internal and external performance. The data can be collected either by written reports or interviews.

4. Comparison between actual performance and standard performance: This step involves the comparison of the actual performance with the standard performance. This step will result in identifying the differences.

5. Announcing the result of the comparison: The results of the appraisal are then made known to the employees. This step helps the employees in knowing their strengths and weaknesses, which holds great effect in the performance of the employees.

6. Proceeding for taking corrective actions: After the results are known then the next best alternative is to improve the strengths and work on weaknesses which can be done with the help of coaching, counselling, training and development.

These are the steps to be followed to carry out the performance appraisal of the employees. Different methods of performance appraisal are ranking method, grading method, paired comparison method, forced choice method, forced distribution method, checklist method, critical incidents method, free form essay method, group appraisal method, graphic rating method; all these are the traditional methods. Few modern methods are MBO i.e., Management by objectives, BARS i.e., Behaviourally Anchored Rating Scales, Assessment centres, 360 degree appraisal, human asset accounting method .Various organizations use various methods which they feel flexible enough to carry out easily with their organization, (Baird, Meshoulam, 1988). For any performance appraisal method the following things are required, clear and specific goals, mutual trust, standard techniques and procedures, training the evaluators, maintaining reports, effective feedback and participation. Some of the problems in performance appraisal are as follows; rating errors such as halo effect, stereo typing, central tendency, and spill over effect, lack of knowledge, resistance by trade unions, negative approach, multiple objectives of performance appraisal, etc, (Becker, Gerhart, 1996).

The performance appraisal of the employees is done by the performance management and the performance management is paid for it. The incentive plans for the performance management is divided into three i.e. individual, group and enterprise. Under the individual incentive plan these are different incentive plans such as piece work, straight piecework and differential piecework, standard hour plan, bonuses, merit pay, lump sum pay, incentive awards and recognition, sales incentives includes straight salary plan, straight commission plan, combined salary and commission plan, incentives for professional employees, the executive pay package consists of base executive salaries, executive short term incentives, executive long-term incentives, executive benefits and executive perquisites. Group incentive plans include team compensation; gain sharing incentive plan, the scan on plan, the rucker plan of the share -of-production plan (SOP). The enterprise incentive plans include the profit-sharing plans, stock options and employee stock ownership plans (ESOP), (Batt, 2002).


Employee development is more concerned with education than employee job specific training. Employee's personal growth purely depends upon employee's development. Providing training to the managerial employees may be critical but also at the same time non-managerial employees also requires the skills. Employee development may be reducing the supervisory roles and encouraging team work, (Becker, Gerhart, 1996). There are various methods for the employee development which are divided into on-the-job method and off-the-job method. The on-the-job methods are namely job rotation which means to change the job of the employee periodically, assistant to positions which means posting employees under the supervision of successful managers through this, the employees will gain lot of experience, committee assignment which allows the employees to participate in decision making process by observing others and also by investigating various specific problems of the organization, (Baird, Meshoulam, 1988).

The off-the-job methods are lecture courses and seminars, which helps the employees to gain knowledge and develop their analytical abilities, simulations which create artificial environments for the employee to deal with and outdoor training which is used as a trend in employee development, (Batt, 2002). It involves emotional and physical challenges.


Rewards to employees may be in the form of incentives, promotions, bonuses, appreciation, honorary awards, increase in responsibility, considerations, increment in salary, providing infra- structural facilities, giving more amount of authority, improvement in placement, making team leader, etc. Reward to the employees are one of the ways to motivate the employees to move further and provide their hundred per cent to the organization, by which they are also benefited and at the same time the organization is also benefited, (Batt, 2002). So the organizations must encourage the employees to put in more efforts. Different activities require different competency levels in the discharge of responsibilities and duties in the organization which are associated with the functions. Several competencies like behavioural competency, knowledge competency, motivational competency, language, value competency are required for increasing effectiveness and efficiency in the employees, (Baird, Meshoulam, 1988).

The behavioural competency involves member's attitude and feeling towards the work and work performance that results in good or poor performance. The behavioural competency is closely related to motivational competency. How an individual worker thinks about the work organization and work performance? The knowledge competency involves the awareness, knowledge and expertise related to the job, technology and procedure related to work. The language competency is related to individual workers ability to understand and communicate the things precisely in a two way process, (Batt, 2002).

Conclusions and Recommendations:

Human resource activities includes three broad activities namely procuring, allocating and utilizing which covers all the six activities of domestic Human Resource Management. The objective of a Human resource management's strategy is to manage labour and design jobs so that people are effectively and efficiently utilized. The essential components of a human resource strategy are its plans and programmes which are related to human resource projects. Human resource managers should involve themselves in the business planning and execution to apprehend the essentials of the business and make the human resource strategies to go in tune with the emerging business realities. One can understand that human resource manager's functions are becoming more and more challenging and demanding.

Employee development is more concerned with education than employee job specific training. Employee's personal growth purely depends upon employee's development. Rewards to employees may be in the form of incentives, promotions, bonuses, appreciation, honorary awards, increase in responsibility, considerations, increment in salary, providing infra- structural facilities, giving more amount of authority, improvement in placement, making team leader, etc. The behavioural competency involves member's attitude and feeling towards the work and work performance that results in good or poor performance. The behavioural competency is closely related to motivational competency.

The employee's performance can be enhanced by providing training to the employees by teaching them about their skills which are required for the job. Every organization needs well trained and experienced employees to carry out the functions that have to be accomplished for achieving the goals of the organization. Once the employees have been recruited and selected, the next step involved in human resource process is to transform the employees to meet the future requirements of the organization. These transformation can be done in the way of training and development which means that training helps in improving the skills of the employees , their knowledge is enhanced and abilities of an employees to perform their activity.

Thus, training refers to the teaching and learning activities of the new employees in an organization to acquire required knowledge, skills and attitudes to perform their jobs effectively and efficiently. The organization will be benefitted by training in the following ways their productivity will be enhanced, quality of work will be improved, costs and wastage would be reduced, there will be less need of supervision, accidents at the work place will be reduced, employees will grow at a faster pace and will develop a high morale levels, their organizational climate will be developed and improved. Besides these advantages the employees will be benefitted in the following way they will experience a tremendous increase in their personal growth, theirs self confidence level will be enhanced, they would experience higher earning and the accidents at the work place would be reduced which would save the employee from any sort of physical loss