In this article we will discuss about the functions and responsibilities of human resource management: 1. Recruitment and Selection Process 2. Sourcing of Potential Candidates 3. Guidelines for Salary Negotiation 4. Conducting Reference Check 5. Conducting Induction Training 6. Tracking Work 7. Performance Management 8. Bonus 9. Motivating the Employees 10. Deciding Work Timings and a Few Others.

Function # 1. Recruitment and Selection Process:

Following steps must be followed while recruiting new employees. Some academic HR books mention recruitment and selection as separate activities. However, for simplicity, I am including them here as one. Here are the steps involved in the recruitment process.

1. Identifying the Need:

Find out why an employee resource is needed.


Generally, it begins when a department gives a manpower requisition to the HR Department.

Check whether the position has become vacant due to someone’s exit or we are adding a new position.

If it is a replacement, check if we would like to change or revise any tasks or responsibilities of that position than what is was earlier, i.e. are there any new responsibilities that they should fulfill? Is there any change of role?

2. Preparing the Job Description:


A job description should describe the following, even though the format or content may vary from company to company-

The duties and responsibilities of the position to be filled

The designation and department

Minimum qualification, skills and experience required


Reporting relationship (Who will he be reporting to and who will be reporting to him, if any.)

3. Sourcing of Potential Candidates:

Based on the urgency and type of the vacancy, appropriate internal or external sources are tapped to find potential candidates. Details of different sources are given ahead.

4. Screening the Candidates:


After receiving the applications from one or multiple sources, we should screen the ones which may fit our requirement.

The screening may be done on the basis of the education qualification, relevant experience, age, salary expectations etc.

Sometimes, screening is also done based on the result of one or more tests, which are generally taken before a personal interview.

5. Scheduling the Interviews and/or Tests:


Fix a day, time and place of the interviews. If appropriate, also arrange for the tests to be taken before or along with the interview schedule. Sometimes, if the candidate is from another city, first a telephonic interview is scheduled and conducted. If all goes well, then the personal interview is scheduled next.

6. Conducting Interviews and/or Tests:

Conduct interviews and tests as per the schedule.

Ensure the adherence to time schedules allotted for both the activities.


Guidelines for interviews and tests are given in one of the following sections.

7. Preparing the Shortlist:

After the interviews and tests, a shortlist of candidates is prepared.

This is a ranked list as per the candidates’ merit and suitability to the job, as found by the selection panel. The most suitable candidate is ranked first and then others are listed as per their relative suitability.


The final shortlist may have more names than the actual requirement, because sometimes the candidate whom we select may not join and we have to try getting the next one on board.

8. Reference Check:

Before going ahead with the final selection of the candidate, her references are checked.

9. Salary Negotiation:

Once a candidate is selected for finalization, the HR department starts negotiating salary with the candidate.

10. Issuing Offer Letter:


After interview, selection and salary negotiation, the candidate is given an offer letter which states the offered salary package, designation, grade, department etc. It is a brief document which invites the candidate to join the company by a specified date. The offer letter is valid for a specific period.

The candidate may accept or reject the offer. Sometimes, candidates use the offer letter to renegotiate salary at their current companies or at some other company where they are currently negotiating. All offer letters are not accepted always.

11. Appointment Letter:

Generally when the candidate joins the company, she is given an appointment letter.

It confirms the appointment, the designation, role and responsibilities, the salary structure, benefits and privileges etc.

It is an elaborate document and is much more detailed than an offer letter.


It also states the rules, timings, terms and conditions of the employment.

12. Employee Joining Formalities:

An employee information form should be designed to capture the details of the new candidate.

Get copies of the supporting document and details related to the new employees’ residential address, identification, bank details, provident fund account etc.

Also, get a photo of the candidate.

If needed, get the address verified by a proper channel. If the job requires police verification certificate, insist on getting that, too, done.


File the documents properly.

Initiate the induction and training of the employee.

13. Induction Training:

When a new person joins the company, he must be given formal and detailed introduction about the company, the department and the job. This process is called “Induction Training”. Also, this can be coupled with the initial job training.

Function # 2. Sourcing of Potential Candidates:


There are various internal or external sources from where potential candidates for any employment position can be found.

I. Internal Sources:

1) Inter-Department Transfers:

For job-rotation or individual preferences basis, employees can be redeployed into newer roles based on their skills, experience and preferences.

2) Employee Reference:

We can ask our existing employees if they know somebody who can fit the profile of the person we are looking for. Many companies use such “employee referral” scheme and also award some remuneration to the employees who provide a reference which finally gets selected in the company.


3) Promotions:

Instead of finding an outsider for some senior position, somebody from within the company who is suitable for the position is elevated to the bigger responsibility.

4) Demotions:

As a part of an organizational restructuring or to avoid retrenchments, some candidates are offered lower roles with lesser remuneration and privileges. It works on mutually agreeable terms. Sometimes, such practices help in correcting hiring mistakes and benefit both the parties eventually.

5) Retired Employees:

Some retired employees who are still ready, able and willing to work can be tapped for positions they can fill.

6) Old Employees:

Those who have worked with us earlier, and left us because of any reason, can be called again if we found them good.

7) Resume Bank:

We may have interviewed or evaluated some candidates earlier and due to some reasons did not finalize with them even though they were suitable. Our HR department must maintain the resumes of all those candidates whom we evaluate and who are found to be promising, for such a future reference.

II. External Sources:

1) Advertisements:

Advertisements in publications like newspapers and magazines can be used for a response from a wider group. It is suitable when either you have very urgent requirement or you are looking for a bigger number of candidates to choose from.

2) Job Sites:

There are many web sites which provide databases of almost all categories of manpower. Access to such databases is available through some paid subscription scheme.

3) Industry Portals:

There are some industry-specific portals which specialize in screening and listing manpower required for that particular industry. If such a portal exists for our industry, it should be checked for potential candidates.

4) Placement Consultants:

These agencies shortlist candidates on our behalf and then send us those who are found to be matching our requirements. This process saves the time of filtering or shortlisting candidates from a larger lot. These consultants generally charge some percentage of the annual salary package of the employee as their fees.

They also offer some replacement assurance, which means that if an employee selected through them leaves within a specified period (which is few months); they provide a free replacement for a new candidate.

5) Headhunters:

These are a different type of placement consultants, who find and pick up suitable candidates from competitors or other similar organizations. They seek the candidates (who may not be looking for changing their job), evaluate them and if all goes well, offer them a new position on our behalf.

6) Social Media:

These days, LinkedIn, Twitter, Facebook, Google+ and other Social Media platforms are good alternative recruiting sources. They give a lot of information about the potential candidates, their career paths, achievements, references etc. The time-line of a person on any social media platform provides a wealth of information about him.

7) Campus Placements:

Many educational institutes invite companies to come to their campus and seek fresher candidates for recruitment. This is one efficient method of evaluating a big number of candidates quickly. It is cost-effective and it also helps building a good employer brand among the potential candidates.

8) Employment Exchanges:

Some government or semi-government organizations work as a mediator between the candidates and the employers. These employment exchanges maintain databases of candidates and supply the information from them to the companies looking for manpower.

9) Labor Contractors:

Many skilled or unskilled workers can be sourced from labor contractors who specialize in that type of manpower.

10) Walk-In Recruitment:

Many factories and offices put a sign on their gate inviting candidates to walk- in for some job vacancies. Such practices are useful for unskilled workers who can be deployed quickly into some waiting task.

11) Job Fairs:

Some job portals or some other organizations arrange job fairs to facilitate employee-employer interaction. This gives the company exposure to a diverse set of candidates and can be used for attracting applications.

Function # 3. Guidelines for Salary Negotiation:

The process of negotiating salary starts when the company decides to hire the candidate. The purpose of this negotiation is to strike a balance between the candidate’s salary expectations and the company’s offer. The candidate is generally looking at getting a higher salary than the previous job (unless she is a fresher), and the company is trying to control its own manpower cost as well as existing internal salary levels.

Giving a higher salary to a newcomer may raise the expectations of the existing employees, which, if not satisfied, will create dissatisfaction among them. On the other hand, generally, a candidate will not join at a salary which is less than his current salary (except if he is removed from the company). A successful salary negotiation keeps the interests of both the parties fairly intact.

So, salary negotiation has to be done very tactfully for creating a Win-Win situation both for the company as well as the candidate.

While negotiating salary, one should take care of the following-

Explain the complete break-up of the salary to the candidate, i.e. what is his Basic salary, what will be the other components like HRA (House Rent Allowance), DA (Dearness Allowance) etc.

Also explain various other allowances, which she will be getting, e.g. Conveyance, Medical, Food, Fuel, Mobile expenses etc.

Different companies use different methods and terms to finalize salaries of employees. However, annual gross salary, salary breakup, deductions and withholdings, monthly take home, bonus etc. are part of this negotiation.

Some companies treat Cost to Company (CTC) as the final package for negotiation. The CTC includes various benefits and allowances (like mobile bill reimbursement, conveyance allowance, food allowance etc.) in addition to the regular components (Basic, HRA, DA etc.) of salary. Every company has its own formula of calculating the CTC.

Whatever the method, we must clarify everything that is negotiated to avoid confusion later.

For some employees (e.g. Sales staff), some part of the total package may be variable in the form of incentives or commission. The terms of calculating such a variable pay and other conditions related to the same must be clearly explained. (E.g. how and on what basis will the incentives be calculated? What if the target is not achieved? When will such incentives be paid?)

For senior positions, other benefits and perks are also a part of this negotiation process along with salary and allowances. Some top level executives may get company owned car, driver, fuel, accommodation, paid holidays etc. All such benefits and perks must be clarified.

In some companies, employees are also given the company’s shares through Employee Stock Options (ESOP). The process, timing and proportion of allotting and using this ESOP must also be a part of the salary negotiation process.

We must clarify the conditions applicable for employees and the company while terminating the employment. (E.g. minimum notice period, severance pay, proper handover etc.)

At the end of the negotiation, the candidate must get a clear idea about:

How much minimum money (take home salary) will he get in hand every month?

How much money will he get at the end of the year (i.e. disbursed once a year, e.g. bonus, incentives etc.)?

How much minimum total money will he get in hand in one full year? (I.e. what will be his total annual income in hand?)

Is there any variable part in the payment? How will that be calculated?

How much will be deposited to his Provident Fund/Insurance etc. accounts?

How much will be the deductions other than PF/Insurance etc. (e.g. Professional Tax etc.)?

What will be the perks and benefits given to him, if any?

We must put various numbers on paper and get the confirmation of the candidate in writing. Market rates of prevailing salaries keep changing (generally rising). So, we must keep a watch over the existing market rates and maintain our own salary bands accordingly.

Sometimes, if some new employee joins at a higher salary than the other existing employees in that grade or position, we may have to increase the salaries of the existing employees (subject to their qualification for the criteria) either immediately or at the time of next appraisal. This is called Salary Band Correction.

Function # 4. Conducting Reference Check:

It is advisable to conduct a reference check on the candidates, before giving them a job offer.

Reference check helps in avoiding hiring mistakes which are difficult and time consuming to recover from.

Generally, work related true feedback may come from the people with whom the candidate has worked earlier. Hence it is an HR practice to seek reference from the previous employers.

But, while doing so, remember that we should never contact their current employer for a reference check, unless the candidate has already resigned from that company or he has been asked to leave.

We can contact some or all of the previous employers (prior to the current one) for checking the reference.

If possible, get the information from the candidates about the persons whom we can contact for reference checks.

If we wish to conduct an anonymous reference check on our own, we should inform the candidate about the same in advance.

For their work related feedback, some past employer, manager or supervisor has to be contacted. Remember, genuine work performance related reference can only come from persons with whom the candidate has worked.

The relatives, acquaintances etc. provided as references by the candidate may help us establish an idea about their general and social conduct.

The reference checking must be done gracefully and in the positive spirit.

It must be done keeping in mind the interest of the candidate also. Our actions should not create any difficulty to the candidate, regardless of whether he joins us or not.

Function # 5. Conducting Induction Training:

Whenever a new employee joins the company, she must be properly introduced to the company. A company has its own rules, regulations, culture, priorities, systems and processes. We should take care of formally introducing all this to the new employees.

If we leave this introductory training to chance, they will only learn by observation and by making mistakes. Such a process will be slow. They will not understand the company properly and hence will not be able to adjust easily.

We should keep a carefully designed induction training program ready to take care of this.

Induction training should be designed as a detailed introduction provided to the new employees to help them adjust to their new job, people and environment quickly. Try should be made to make the newcomers comfortable as fast as possible, so they can adapt to the new environment faster. Induction should begin with the employee’s introduction. On the first day, somebody should go along with the new employee and introduce her with others who need to know her.

All the policies of the company, various processes, rules and regulations, terms and conditions of service, amenities and welfare facilities etc. must be explained to them in detail. They should know about the grievances procedure, discipline handling, opportunities, promotions etc.

Give them all the relevant informative documents, web site etc. which will enable them to know about the job, the company, its history, products, culture, organization structure, the functions of various departments etc. as soon as possible. If required, keep a document, booklet or a presentation file ready which will serve this purpose.

The employees should be explained about accessing the sources from where they can refer to the documents related to policies, rules and regulations etc. If the job requires interacting with some external agencies (e.g. vendors, customers, banks, dealers etc.), then the employee should be informed about the contact details, protocols, dos and don’ts about such interactions.

We should periodically update the induction process and relevant documents, if required. Designate somebody in the HR department to take care of the induction training. If the job requires some job related training, plan the training in advance and execute it when the person joins.

The job related training is generally provided by the department where the person is finally going to work in. E. g. a person joining the accounts department must be trained by somebody in accounts, for various processes and software or tools being used in the department.

Each department must be equipped with the job training content and human resources who will provide the training to new employees. The people within the department, who will periodically assume such trainer’s role, must have those responsibilities in their KRAs.

Function # 6. Tracking Work:

As per the KRAs of the employee, her immediate supervisor (as per the organization structure) must ensure regular tracking of the work done by the employee. Tracking of work keeps the employee alert and interested in her work. Also, any errors or misunderstanding about work are identified early. If the supervisor does not check the work and track the progress, the employees’ interest and attention are likely to reduce. This will damage the quality of work in the long run.

Tracking enables the supervisor to evaluate the performance of the employee. It also facilitates the relative performance evaluation of an employee through comparison of two or more employees doing the similar kind of work. Regular tracking will also help identify skill or knowledge gap in the employees. Training or some other corrective mechanism can be initiated to fill this gap.

Tracking also facilitates discovery of process improvement requirements, if any. Every employee’s work in the company must be tracked periodically, in some pre-defined manner. Such tracking can be done daily, weekly or monthly as per the nature of the task involved and the role of the employee.

For Example:

If an employee makes invoices or challans in the company, her supervisor must track the level of accuracy and efficiency on a daily basis.

The field sales person’s daily visit record must be tracked by the supervisor every day.

The monthly stock summary prepared by the inventory executive must be checked every month.

A sales manager’s progress with reference to the sales target given to him must be tracked monthly.

Function # 7. Performance Management:

Regularly, the work of an employee must be evaluated with respect to the expectation from her. This process is called “Appraisal”. It is an objective evaluation process jointly conducted by the employee and her supervisor or manager. It involves a summary evaluation of the progress made by the employees in their work, their skills and knowledge.

This is not only the usual KRAs based tracking regularly done by the supervisor. It is more detailed and also covers the employees’ performance in other areas like punctuality, discipline, inter personnel relationships, attitude, communication, team work, skills improvement, initiative, leadership etc. Appraisal may happen quarterly, half yearly or yearly.

It provides a chance to the employee and the supervisor to evaluate the responsibilities given to the employee, her performance and mid-way course correction, if required. In a typical appraisal process, an employee first fills the self-appraisal form and gives self-rating. This form is then jointly evaluated by the employee and the supervisor and the supervisor gives her rating by explaining reasons for the variation, if any. The supervisor’s evaluation remains final.

The supervisor gives her suggestions for improvement to the employees individually to help them improve their performance. The appraisal may or may not become the basis for the increment or promotion, if any. Generally, annual appraisal is linked with increments, promotions etc.

Sometimes, appraisal also covers reviews from the other departments, employees working at the same level in the same department and may be from those working under the person whose work is being appraised.

Function # 8. Bonus:

Bonus is a reward that is paid to an employee for his good work towards the organization. It is in addition to his monthly salary and is generally paid annually. Nowadays, it is mentioned in the annual package or CTC (Cost to company) negotiated with the employee at the time of giving him an offer.

There are two types of bonus:

1. Compulsory Bonus:

Originally, the basic objective to give bonus was to share the profit earned by the organization amongst the employees. But gradually, it has become a matter of right and so sometimes it is also an issue of contention between the business leaders and the labor unions. Hence, some rules are implemented to clarify the bonus payment.

The laws governing the bonus payment specify-

To which type of establishments’ bonus payment will be applicable.

To which size of establishments it is applied. Bonus is applicable to companies with some minimum number of employees. This number is different for factories and for other businesses.

There is also a monthly salary limit to which bonus is applicable.

It specifies when the bonus is payable.

The components of a salary (e.g. Basic, Dearness allowance etc.) which are considered for calculating bonus are clarified.

The minimum and maximum percentage limits of bonus are also specified.

The rules have some exemptions for the first few years to newly established businesses.

There is some penalty for non-compliance of the rules.

Periodically, some changes are made in the rules. The HR department must check the latest provisions of the rules regarding bonus and guide the business leaders in complying with the same. The business leaders must ensure that their company follows the rules and performs its commitments as specified in the law. Remember, the law is made to provide some assured benefits to the employees, and to regulate deviances on the part of the business leaders. But, bonus must be given in good spirit.

2. Voluntary Bonus:

There are three types of voluntary bonus:

i. Performance Bonus

ii. Joining Bonus or Signing Bonus

iii. Discretionary Bonus

i. Performance Bonus:

Some companies give a bonus as per the performance of the employee. They structure the overall annual compensation given to the employee in such a way that the employees get a significant part of their package in the form of such performance bonus.

The performance in question may be the employee’s own performance or the group or the overall company performance. Such a bonus acts as a motivation to the employees to perform better.

ii. Joining Bonus or Signing Bonus:

Joining or signing bonus is an amount paid to a new employee by a company as an incentive to join that company. This is often given as a way of making a compensation package more attractive to the employee. Here are some reasons for giving a joining bonus- In some industries, where talent is scarce, companies pay the new employees a joining bonus to attract them to join or join sooner. The main reason for offering a joining bonus is to ensure that the company gets the right talent at the right time.

If the employee is relocating from another city or country, companies give a joining bonus to help the employee cover his relocation expenses. Sometimes, it is given to compensate for the amount the employee has to pay to his current company for leaving before the minimum notice period.

Also, the employee may have to lose some benefits (e.g. pending incentives payout, bonus or other such payments) from his current company if he joins our company now. We may offer a joining bonus to cover such losses to him. When a company tries to pick up an employee working with a competitor, they may lure him with a joining bonus to convince him to leave that company.

When a new employee demands a higher salary which he is getting in his current job and we can’t match that salary because our internal salary bands are lower, we can offer to compensate for the difference through some mechanism like a joining bonus, so that we don’t disturb the salary levels at our own company and at the same time, we compensate the new employee financially as per his expectation. Finally, a joining bonus is a mutual give-and-take arrangement when the employee is important to the company and the company is ready to compensate for filling that position urgently.

iii. Discretionary Bonus:

To recognize some exemplary achievement by an employee or a group, some companies announce special, one-time bonus.

The reason for such a discretionary bonus could be something like:

a. Exceptional performance

b. Completion of a significant project

c. Implementing a new idea or development of an innovative process

d. Excellent customer services

e. Helping the company win an award or a big order

f. Some other action which helped the company’s business in a positive way

This is a good motivation to those who get it to continue doing good work. It also inspires others to strive harder. It sends good signals to the employees that the company recognizes and appreciates good work.

Function # 9. Motivating the Employees:

Routine takes its toll on an employee’s mental and emotional health because of the boredom it causes. Long work hours, conflicts at the workplace, deadlines, stress etc. strike their blow on the employee’s morale. All this leads to occasional demotivation. Periodically, the employee feels “down”. She lacks enthusiasm. Her energy is sapped. She loses her interest in work. Her drive is missing. To help the employees continue to perform at their cheerful best, the company must take care to keep their motivation levels high. How can we improve or maintain our employees’ motivation?

Here are some suggestions-

1. The Biggest Motivation:

Work can become the best motivator if it is the right one. If a person loves his work, he will never feel bored. His enthusiasm will always be high. If one does not like his work, he will resent it and will feel demotivated. So, we must provide the right work to people, as per their abilities and liking. We must try to accurately establish employee-job fit as much as possible.

While evaluating new candidates, we must try to find out whether the qualification and the passion of the candidate match or not. Passion about work is the ultimate motivation. Also, we must take care that we assign clear and right responsibilities to our employees such that there is no confusion in their minds and they enjoy working.

2. Meaningful Work:

If employees feel that their work contributes significantly to some larger purpose, they feel a sense of pride. They find their work meaningful. We should help them find a true meaning to their work beyond doing mundane things and filling hours. For this, we must show them the larger purpose of our business.

We can explain the larger purpose by articulating the mission of our business to all. E.g. A nurse attending patients in a hospital is bringing relief to them, helping them in their recovery process. A waiter in a restaurant brings happiness to people by helping them enjoy their meals.

3. Recognition:

Recognition is a basic need of every human being. When their efforts are appreciated and recognized, it gives one big boost to employees’ morale. We must provide generous, regular appreciation and positive feedback to our people. We must acknowledge their every good action and encourage such behavior.

4. Employee Engagement:

Our employees are human beings. They are not machines. We must engage them with our business as human beings. We should help them build an emotional connection with their work. They must be made to feel like a part of the business. We must make them feel pride in working with us and must involve them in activities beyond work also. Regular activities other than work must be a part of the schedule to break the monotony of work.

Some employee engagement ideas are- Birthday celebrations, Wishing on anniversaries, Internal newsletter or magazine, Festival celebrations, Sports events, Competitions, Theme days, Training programs, Picnics and Trips, Celebration events with family, Creating a knowledge sharing system, Employee suggestion scheme, Yoga sessions, Meditation sessions, Talent contests, Fun fairs, Film shows.

5. Development of the Employees:

Non-monetary recognition is one of the most effective solutions to improve employee motivation. Recognition in the form of training and development works wonders for employee motivation because it’s a proof that the company is investing the necessary time and resources for helping the employees to acquire new skills.

An employee who believes her employer is genuinely concerned about her career development is likely to exhibit an increased level of job satisfaction and ultimately, better performance as a team player.

6. Work-life Balance:

We must recognize that just like us, our employees also have a life beyond work. They also have a family, they also have to attend social commitments and they also have to take care of their health. We are the boss, so we can attend to our life beyond business easily because we may get various exemptions and we don’t have to follow the rules which our employees have to follow. We should give them enough free time. We should refrain from the belief that only physical presence ensures good performance.

An unhappy, anxious and worried employee can’t perform to her fullest. We should not exploit our employees. Of course, we must make and follow rules so that employees with negative work attitude don’t take undue advantage of our liberal approach, but we should make sure that genuine, sincere employees don’t suffer due to the rules which are made to control some undisciplined and misguided employees.

7. Positive Feedback:

Almost everybody wants to learn, to improve, to be better and to do better. Everybody needs feedback. If our employee makes a mistake, we must point it out to him, but the manner in which this is done must be inoffensive. We must not criticize their actions or errors in public. We should take care that they do not feel insulted. No negative feedback must be given in public, in the presence of others, because it hurts the person’s self-esteem and confidence.

We must provide such a negative feedback only in private. Yes, if we wish to provide some positive feedback, it must be done in public. Always remember that feedback is given to improve their work performance and not to make them feel inadequate or small. So, always praise in public and preach in private, with positive objectivity.

8. Acceptance:

We must accept that our employees are also human beings. All human beings have different strengths and weaknesses. No two people are same. We must never compare one employee with another such that it undermines one. By comparing two unique people and making one feel inferior does not improve that person. On the contrary, it demotivates them immensely. We must accept their individuality and try to make use of their strengths.

9. Respect:

People love to be there where they are respected. We must make sure that our employees get their due respect. We must take care that all in the company behave with each other respectfully and their self-respect is not hurt. We must respect their time, contribution, opinions and suggestions.

We must speak with them politely. Anger destroys people’s peace of mind. We must not get angry on our employees without proper reasons or beyond reasonable limits. Also, anger must be targeted towards their actions and not towards themselves.

10. Listening:

Everybody wants to be listened. So do our employees. We must listen to them truly and empathically. When an employee tells us something, we must also try to understand her feelings. Sometimes, even if we are not able to solve their problems, simply listening to them relieves a lot of their anxiety and stress.

11. Proper Compensation:

Money is not always a good motivator. Its motivating impact does not last longer. If we give handsome increment to someone this year, he will be very happy now. But, next year also his expectation will be for a similar raise. If we don’t fulfill that expectation, he will be unhappy. In the long run we realize that nobody is always happy with their salary increments. So, money motivates, but temporarily.

At the same time, we must remember that everybody needs money. Of course, it is wrong to think that everybody works for money alone. Money may not motivate always, but it may become a cause of demotivation, if not given as per merit and right expectations. We must pay people properly, as per the prevailing market rates and their qualification and experience.

Sometimes, we don’t recognize the value of our old employees. We take them for granted and give them much lower salary than the newcomers. Such discrimination kills the employees’ motivation. We should be just and fair in giving compensation to our employees. We must remember that right manpower is the biggest asset and sometimes, we realize its value only when it is gone. Generally, we have to pay higher salary for finding a new employee who replaces an old one.

It is said that if we pay peanuts, we will only get monkeys. The mediocre people, however old or experienced, are not welcome anywhere. They will stick with us even if we pay less because they don’t have any other option. If the person has talent, he will get good money elsewhere and he may leave. We should not compare good employees with mediocre ones while deciding compensation. In short, we should not discourage the good employees by paying them less. We should take care of our human assets and not neglect them by ignoring their worth.

Function # 10. Deciding Work Timings:

Work timings of all members in a company must be as uniform as possible. In the initial days of the company, we may be very flexible. So, we may have allowed different people to come and go at different timings.

But as the company grows, this flexibility results into a very confusing time schedules of various members in a team. E.g. in a workplace where the regular time is from 9 am to 6 pm, some person is “allowed” to come at 10 or 11 and sit late.

Such type of discrepancies must be avoided as far as possible. Keep the timings uniform for everybody and insist that people come on time. In factory setup if there are work shifts, the timings are automatically uniform for all workers and their supervisors. The similar uniformity must be established for the office staff also.

If different people come and go at different times, a lot of communication and coordination issues arise. This can only be avoided by uniform timings. For the staff members to come on time, it is necessary that the boss himself comes on or before that time. Otherwise, he can never establish punctuality and discipline in the team.

In companies where the physical presence of the employee is not very important, flexi-time or “work from home” may be allowed. But, such facilities require high levels of systems and processes which ensure proper tracking of work. So, this is possible within a matured setup where the employees are given clear targets and deadlines to complete some work and don’t need physical supervision or monitoring.

There are some guidelines regarding maximum working hours and timings in labor and employment related laws. They also impose some restrictions on timings for women and physically challenged workers. We must study the rules applicable to us and abide by them.

Function # 11. Employees Welfare Facilities:

Every company provides some or other facilities to its employees. Some common facilities provided by the companies to their employees are tea-coffee, snacks, subsidized meals, mobile phone expenses, transportation, canteen,’ medical aid, medi-claim (health insurance), insurance etc.

The purpose of the facilities must be-

a. To provide pleasant and convenient work environment to the employees

b. To motivate the employees

c. To save their time

d. To let them focus on work rather than worrying about other things

e. To encourage social interaction of employees within the company

Guidelines for Employee Welfare Facilities:

i. We must provide facilities which align with our employees’ requirements, our values, cost structure and industry norms and practices.

ii. Every facility is good for the employees. It is a good motivation for employee retention. It adds positively to our employer brand. Employees stay longer at companies which provide them with many facilities.

iii. In today’s times, many new age companies make a range of innovative services and facilities available to their employees which were not imaginable earlier. That may be extreme, but common facilities like a clean and conductive workplace, clean drinking water, toilets etc. are basic necessities which are a must for attracting good employees. If we can’t provide decent working conditions to employees, we won’t get quality manpower.

iv. Right employee welfare activities improve the physical and mental health of the employees. That increases productivity.

v. Every facility costs money, so we must budget properly before deciding to provide it.

vi. We must remember that any facility once given can’t be taken back painlessly. It is a sort of a one-way street. Starting a facility may be in our hands, but stopping it may not remain in our hands. So, we must be very careful before starting any new facility.

Function # 12. Salary Disbursement:

Disburse salary on a fixed date, as per the convenience of the company. Fixing a salary date is very important. We must ensure that we are not delaying the salary payment, unless there is an impossible situation which prevents us doing so. Take the interest of the employees in mind when deciding this date. If the date of salary is fixed, the employees can plan their payments. This is really helpful to them, as they can make commitments with surety.

On its part, the company also can plan its own cash flow based on this fixed date. Once decided, stick to this date as far as possible and ensure that the salary is given by this date. Make exceptions only if it is impossible to manage the scheduled date.

If the salary payment is delayed beyond the regular date, we must inform the employees in advance. Remember, delaying the salary payment does not save any significant money for the company, but it creates a very unreliable image of the company in addition to causing inconvenience to the employees.

Also, being able to disburse salary on a specific date demands proper coordination and cooperation between various departments like HR, Accounts and Admin etc. It also instills a culture of discipline among the teams responsible for salary calculation and payment.

Give a note clarifying the salary calculation and deductions (if any) along with the salary to enable the employee to understand how his salary figure is arrived. If there is any loan given to the employee, organize the agreed deduction of repayment installment from the salary after getting the confirmation from the employee. Ensure proper updating of the balance loan receivable from the employees.

Many companies have a practice of allowing a payment of advance against salary after 15-20 days of the month. Such an advance must always be less than the salary earned by the person till that day and such an advance must be adjusted against the salary payment of the same month.

Proper vouchers and records of such advance payments must be prepared and maintained. Nowadays, banks offer special salary accounts to employees of a company, which do not require maintenance of any minimum balance. The company can directly deposit money to such salary accounts. This is a very efficient alternative of salary disbursement. In this case also, the company must keep the salary date same every month.

Function # 13. Employee Exits:

Employees may join and may leave on their own accord. Sometimes, we also may have to tell them to leave. In any case, we must ensure that the event is handled properly.

Guidelines for Employee Exits:

1. Abide by Agreed Notice Period Requirements:

While finalizing the employment, we must have agreed upon a minimum notice period, which is applicable to both the sides (i.e. the company and the employee). If we are asking the employee to leave, we must give her a notice for leaving well before the notice period and must allow her to work till she completes that period.

If we wish them to leave immediately, we must pay their full compensation for that period. Similarly, if the employee resigns, she has to give the resignation well before the notice period. Here also, if she wishes to leave immediately, she has to pay the compensation.

2. Ensure Proper Hand-Over:

Assign a person who will take charge of all the KRAs that the outgoing person handles. Arrange the proper hand-over to the new person by the outgoing one. Get all data, files and important information etc. from the person. Recover and reset passwords of all types of accounts which they access on behalf of the company.

Recover all company belongings which were given to them for use (e.g. gadgets, storage drives, keys etc.). Reset the password of their email account and redirect the email to some other account or hand-over the password to someone to take care of the emails. Inform the customers (whom the person is handling) about the change and ensure that somebody else is introduced and takes charge of those customer accounts before the person leaves.

3. Conduct an Exit Interview:

An interview of the outgoing employee during his last working days is called an “exit interview”. The purpose of such an interview is to know the feedback of the employee about the company, its working conditions, its management, its strength and weaknesses etc. Such a feedback may help us to improve the operations of our company. Generally, an exit interview is taken by the HR department.

An outgoing employee can say a lot of significant and secret things about the company without fear because now she has nothing to lose. If properly conducted, an exit interview can reveal a lot of useful information about the company, its managers, business leaders, culture, policies and practices.

Keep a format of exit interview ready with the HR department and ensure that they take an exit interview of everybody who is leaving the company. In such an exit interview, most of the feedback from the employee must be captured in his writing only, so as to maintain its originality and spirit. The business leaders must examine the feedback received through such exit interviews closely, because that may provide a wealth of really useful and actionable information.

4. Full and Final Payment:

Make all payments to the employee after deducting any receivables (e.g. loans, advances, notice period compensation etc.) from them. Include severance pay, if applicable, due to the removal before notice period. Give them all their due receivables, including the salary up to the last day of work. Take a written confirmation from the employee about the full and final payment received by him.

5. Leave on a Good Note:

We must make sure that the employee leaves cordially. Try to make the exit as painless as possible for both the sides, even if we have removed the employee suddenly due to an unacceptable conduct or another similar reason. Maintain dignity and grace of all during the process. It may be an end of the employment, but it should not be an end of the relationship. The relationship should be paused in such a way that it may be able to restart someday, if need arises.

Function # 14. Managing Designations:

Even though designations do not mean much by themselves, they mean a lot to some people who hold them. Designations denote the relative pecking order within a company. Those who aspire to be promoted to higher levels within the company, take the designations seriously. Designations can be used as a method to motivate people.

The allotment of designations should follow from the organization structure of the company. The designations should follow a logical method. They should be designed in such a way that there is always a room for growth for an individual. If everybody is given very high designations, their promotion becomes difficult.

So, do not make everybody a General Manager of a Vice President because where will they all rise above this? Due to the absence of standardization in designations, difference in designations across different companies may create very peculiar and sometimes funny situations when people change jobs.

E.g. one small company was very generous with designations. So, all the employees were given very lofty designations. When a General Manager of that small firm went for an interview at one huge company, the person interviewing him was an Assistant General Manager (AGM).

That company had a very mature and detailed method of designations coupled with a multi-layered hierarchy, where designations were not doled out liberally. So, the interviewer felt very awkward, as if he was interviewing his senior. That discomfort finally led to the rejection of the candidate, because the readiness of the candidate to work at lower designation was not understandable by the company, because it was not usual.

Function # 15. Managing Promotions:

A company is a dynamic organization. People join and leave companies. A company may also expand its operations, add new products and services or start new branches, divisions, subsidiaries etc. Along with the growth of the company, its employees’ careers also should grow. The right employees must get opportunities to grow within the organization, if they have proven their ability to take up and fulfill responsibilities given to them.

Promotion is a tool to recognize the right talent and motivate them through higher responsibility, status and of course, higher remuneration. It offers the opportunity to the employees to advance their career. A possibility of a promotion motivates the employees to do better and prove their abilities through improved performance. It gives rise to a competitive spirit in the company. It also helps the company fill up higher positions with the experienced employees who have been with the company for a significant amount of time.

Promotions should be carried out in a systematic, predictable and transparent manner. Generally, promotions happen at the time of an appraisal or when some position becomes vacant due to the retirement or exit of an existing employee. Alternatively, when the company starts something new, the promotions of existing employees may happen.

The company management should ensure that this tool is not misused. When a newcomer joins a company at a higher position to which some existing employees were aspiring to be promoted, it gives rise to discontent among the existing employees. Sometimes, when family members or relatives are given undue promotions, it demotivates the other employees. Ideally, promotions should be given only on merit.

Function # 16. Cross-Training and Job Rotations:

The key to a company’s performance lies within the quality and skills of its current workforce. The work related skills possessed by the employees is one big source of the company’s potential performance. This skill pool must be preserved carefully and enhanced regularly with proper planning.

Generally, each employee is given specific KRAs to perform. With time, the employees gather the expert level skills related to those KRAs. Many of the operation processes within the company are unique to the company and are well known to its employees. If a person conducting a critical process leaves the organization suddenly or becomes unavailable for a long period, it may hamper the business processes.

Sometimes, it may lead to a nightmarish scenario also. Of course, new employees can be trained into these processes, but that requires time and hence they can’t be plugged in soon. For continuous and smooth business operations, succession planning is a must to minimize risk.

To improve the organization’s productivity and team performance, more and more employees must be trained for the company’s work related specific processes. So, in addition to the skills possessed by the employees who are currently looking after that activity, an additional pool of employees must be created who are also trained in those skills. These people can be helpful in case of a sudden breakdown in the process. This leads to the creation of a pool of manpower which can act as a backup.

Such trained employees can be ready to perform many processes and can help the company immensely in the long run. Creation of such a backup talent pool can be accomplished by Cross-Training or Job Rotation. These approaches can ensure that enough number of backup employees is trained to undertake the company’s various processes all the time and there is no dependence on a single individual to perform that activity. The resultant redundancy lends immense flexibility to the organization in managing the workforce to get work done and in ensuring continuity of its business operations without major interruption or breakdown.


Through cross-training, employees are exposed to additional skills which are currently outside their current responsibilities or KRAs. It prepares the employee for a relatively new skill, beyond her current work responsibilities. We may cross-train the employees to learn new skills within their current department.

For examples:

i. A person in accounting who looks after accounts receivables only is also trained in invoicing,

ii. A machine operator in the production team is trained for quality assurance skills.

Alternatively, the employees are trained for skills of different departments.

For example:

i. An accounts person is trained in inventory management,

ii. A graphic artist in the company may be trained for admin skills.

Job Rotation:

The employees within a department are given different jobs after every fixed time interval. This is called job rotation. They take up more than one assignments one-by-one in a cyclic fashion. The whole exercise is done in a planned manner to expose the employees to different processes and learn various skills.

It enhances their job satisfaction and helps in cross-training them. Generally, job rotation is implemented within the same department.

For example:

i. All accounts persons are rotated in activities like banking, billing, payments, compliance etc.

ii. A marketing team is exposed to telemarketing, back office operations, sales coordination, customer support etc. on turn- by-turn basis.


With the help of cross-training and job rotation, the availability of skilled manpower for quick deployment improves performance and also reduces the cost of the company, because the company won’t need to recruit new employees from outside for short periods. Also, the cost related to recruitment and initial training of new employees can also be saved.

Done right, cross-training or job rotation can be good for the employees also. It lets them learn new skills, makes them more valuable to the organization and helps them fight boredom in work.

These practices also help us in determining the right employee-job fit. The additional skills learned by the employees can be useful to them in their current as well as future jobs also. So, cross-training and job rotation positively affect overall performance and career development of the employees. After being exposed to work outside their own current KRAs, the employees become more aware of the greater scope of their work. This surely improves their level of responsibility.

Moreover, inclusion of an employee in cross-training or job rotation improves her confidence, motivation and overall job satisfaction because she realizes that her work is more meaningful to the company now. All employees can’t be cross-trained equally because of their own limitations or preferences. The employees’ level of participation and success in these skill exchange efforts also expose their own competencies and shortcomings.

This training helps us identify the more versatile employees in the company who are able and willing to learn new things and who can be more dependable, by fitting into different roles quickly.

Function # 17. Loans to the Employees:

Employees can be given loans for their emergency requirements or important life events, if the financials of the company permit the same. Life circumstances or emergencies generate the requirements of such loans. It is surely a good thing to do, but care should be taken to make sure that it does not burden the company financially and also it is not misused.

Following guidelines may help:

i. A loan policy must be framed, communicated and implemented in the company. Any loan to the employees may be given only based on this policy. Make exceptions only in the exceptional cases.

ii. The purpose of the loan must be ascertained. Loan may be given for the needs and not for the wants.

iii. Also, it must be made clear to the employees that the loan will be at the discretion of the company and it is not a matter of right.

iv. The highest amount payable to an employee as a loan must be communicated clearly.

v. If required, some interest must be charged on the loan given.

vi. Ideally, a loan should be given to the employees who have completed at least a specific number of years in the company.

vii. Repayment of the loan must be fixed at the time of giving the loan and it must be executed as agreed.

viii. If possible, automatic deduction of such a recovery installment from the salary every month must be arranged and executed.

ix. A regular update of the balance loan amount must be given to the employee.

x. Some valid security document or some other such thing must be procured as a guarantee to ensure seriousness of the repayment. Also, somebody must be entrusted with the safe custody of such security documents.

xi. At the time of the employee leaving the company, his balance loan amount must be checked and it must be deducted from the full and final payment to be given to him.

xii. We can hold his final clearance till he repays the loan completely.

xiii. It is observed that if an employee leaves with some unpaid loan, the chances of a recovery of that loan become very slim. So, it is better that it is claimed back when the employee is still accessible to the company.

Function # 18. Setting Policy for Dress Code and Uniform:

The appearance of our employees is a reflection of our organization and our work culture. We must stipulate a minimum standard of dress that we expect from our employees on a day-to-day basis. It is important that all the employees are aware of the dress code expectations.

We should frame a policy in this regard to ensure compliance. Some questions to be answered while framing a dress code policy are listed in the section on Policies.

When drafting a dress code policy, following should also be kept in mind:

i. The dress code should be appropriate to our type of work, our industry norms and practices.

ii. It should abide by both the company and the social culture. We must be sensitive to religious, caste and race cultural preferences also.

iii. The dress code must also take into consideration our customer preferences.

iv. Generally, companies disallow employees from wearing jeans, short skirts, casuals, tight-fitting clothes etc. in the workplace. Also, they may prohibit their employees from having visible tattoos or body piercings, displaying funky hair etc. depending upon their own company cultural preferences and industry norms.

v. Even though there may be different dress code guidelines for male and female employees, we should not discriminate for rules on gender basis (i.e. the rules should be same for both the genders for a specific type of clothing. For example, if we restrict female employees from wearing tight clothes, t-shirts or denims at work, the same clothes should not be allowed to male workers.)

vi. We should consider inputs from employees while drafting a dress code related policy.

vii. There may be some difference in the dress code standards for employees when they work on behalf of us outside the company, interacting with customers, vendors etc.

viii. Also, we may allow some liberty in dress code on some specific days (e.g. Friday dressing) for in-house employees.

ix. Along with a dress code, we must also issue some guidelines about basic grooming requirements for all employees, to ensure some minimum decency level in the people’s appearance while they are at our workplace.

x. In case of a dress code, we may gradually learn what to include or exclude in the policy, because fashion keeps changing and the interpretation of what is appropriate or not in a workplace sometimes rests with the individual judgment, which may not be same for all. We may have to modify the policy from time to time as our collective understanding evolves.

xi. The bottom line about a dress code is that anything which is provocative, inappropriate or distracting must be avoided.

xii. However, today’s new businesses like software, gaming, call centers allow much liberal and casual dressing. The same need not apply to all businesses.

xiii. Our business has to decide what is appropriate for us based on our own cultural preferences and our understanding.


i. Employees working at many industries (e.g. Hotels, restaurants, airlines, healthcare, manufacturing plants, and logistics) have to wear their specific company uniforms, while at work.

ii. This uniform lends a distinct identity both to the employee and to the employer.

iii. It can significantly contribute to employer brand building.

iv. Remember, a uniformed employee acts as a brand ambassador of the company, so we must give a proper thought to the design of such a uniform.

v. Our uniform must be designed in line with our company brand identity, carrying a symbol or logo which uniquely identifies our company.

vi. The colors must align with our corporate color schemes followed everywhere.

vii. The uniform must be such that the employee must feel a sense of pride and belonging when he moves about in such a uniform.

viii. If we have such a uniform as a dress code, we must prepare clear policy and guidelines regarding that.

ix. We must provide some remuneration to the employees for procuring this uniform, if we are not providing it directly to them.

x. If they want more sets of the uniform, they must be made available at some pre-determined rates.

xi. Depending upon our company preferences, we may or may not give laundry allowance for the uniforms to the employees.

Function # 19. Training and Development:

Training and career development are very important in any company that wants to grow. Employees come from various backgrounds and with different skill and experience levels. To make sure that all our employees have sufficient knowledge and skills required for performing their work, it is essential that we train them properly.

Generally, there are three broad areas in which training is imparted by companies to their employees:

1. Training Topics:

i. Job Skills/Processes Training:

This training is a process of equipping the employees with the essential skills required for doing a specific job, e.g. training for using a specific software or operating a machine or training for conducting quality checks or our sales order process training.

ii. Soft-skills Training:

These are development activities aimed at helping the employees acquire broader skills which prepare them for newer responsibilities. E.g. leadership, communication, emotional intelligence, selling skills, presentation skills, conflict resolution, problem solving, time or stress management etc.

iii. Workplace Safety Training:

Trainings like fire prevention and fire-fighting, safety precautions, emergency action, first-aid etc. also should be given to the employees to ensure workplace safety and emergency handling.

2. Why Training?

Information technology companies spend a lot of money and time in training their employees. But in most of the other companies, this is generally neglected. Training is sometimes considered as wastage of time or an unnecessary expense and hence is discouraged by the business leaders. Actually, training should be given the right attention and it should be treated as an investment because the long term benefits of training are great.

Here are some of the benefits of a planned training initiative:

i. It helps in improving the employees’ skills and knowledge and addresses their weaknesses.

ii. Training and Development help in improving the performance of the company by enhancing the skills and confidence of the employees.

iii. It also increases the job satisfaction levels of the employees, because their performance improves.

iv. The quality of the services of the company gets a boost by training and development because employees make lesser mistakes and can learn to provide a consistent quality of product or service.

v. The cost of manufacturing the product or providing the service of the company reduces because the employees’ productivity and efficiency improve with training.

3. Training Guidelines:

i. Because of all the benefits, training and development must be given a priority and sufficient budget must be allocated for the same.

ii. The business leaders must take active interest in ensuring properly planned training and development activities and also make time and resources available for the training activities.

iii. The objectives of the training activity must be determined and we must prepare a comprehensive training plan. It should identify various skills required by different sets of employees and ensure that everybody goes through the required training to learn or refine those skills.

iv. Considering each employee’s work profile, we must make sure that our employees are thoroughly trained about our products or service, support, our internal processes and also about their job related skills.

v. Some companies prepare a yearly training calendar, in which some training programs are scheduled every month and employees are informed about the same in the beginning of the year. Every type of training program is made available at least 2-3 times in a year. Every employee is given a list of trainings that he must attend. He is supposed to take trainings as per his convenience, before the year ends.

vi. The in-house training can be given by the concerned departments or by specialized external experts of the subject hired by the company.

vii. If the number of employees to be trained is less and in-house training is not feasible or seems expensive, employees can be sent to external training institutes.

viii. Also, there are some online training solutions available for various types of skills. Many of them are free while others are charged.

ix. The HR department must track all the training activities in the company and evaluate their effectiveness. As per the feedback and the outcome, training approach must be appropriately altered.