Human Resource Management (HRM)

Difference between key HR terms from the examination point of view:

1. Lay off & Retrenchment:

a.      Layoff refers to the provisional termination of the employee, at the instance of the employer. Retrenchment means involuntary separation of an employee due to the replacement of labour by machines or the close of the department.

b.      The layoff is an action step, whereas retrenchment is a business strategy to reduce company’s expenses.

c.      The layoff is of a temporary nature, i.e. it is for a definite period, in which the employees are recalled after the expiry of the term. As opposed to retrenchment, is permanent in nature.

d.      After the declaration of layoff, the company’s operations stops because of the shortage of raw material, the breakdown of machinery, economic recession and so on. On the other hand, the operations of the company continue even after retrenchment is declared.

e.      As soon as the layoff period is over, the employees are re-appointed to their previous posts. Unlike Retrenchment, in which the employees are not taken back by the company, once they are terminated.

2. Recruitment & Selection:

Basis	Recruitment	Selection
Meaning	It is an activity of establishing contact between employers and applicants.	It is a process of picking up more competent and suitable employees.
Objective	It encourages large number of Candidates for a job.	It attempts at rejecting unsuitable candidates.
Process	It is a simple process.	It is a complicated process.
Hurdles	The candidates have not to cross over many hurdles.	Many hurdles have to be crossed.
Approach	It is a positive approach.	It is a negative approach.
Sequence	It proceeds selection.	It follows recruitment.
Economy	It is an economical method.	It is an expensive method.
Time Consuming	Less time is required.	More time is required.

3. Training & Development:

a.      Training is a learning process for new employees in which they get to know about the key skills required for the job. Development is the training process for the existing employees for their all round development.

b.      Training is a short-term process i.e. 3 to 6 months, but development is a continuous process, and so it is for the long term.

c.      Training focuses on developing skill and knowledge for the current job. Unlike, the development which focuses on the building knowledge, understanding and competencies for overcoming with future challenges.

d.      Training has a limited scope; it is specific job oriented. On the other hand, development is career oriented and hence its scope is comparatively wider than training.

e.      In training, the trainees get a trainer who instructs them at the time of training. In contrast to development, in which the manager self-directs himself for the future assignments.

f.       Many individuals collectively attend the training program. Development is a self-assessment procedure, and hence, one person himself is responsible for one’s development.

g.      Training focuses upon the technical and mechanical concept whereas Development focuses upon the conceptual knowledge and skills.

4. Efficiency & Effectiveness:

a.      The ability to produce maximum output with limited resources is known as Efficiency. The level of the nearness of the actual result with planned result is Effectiveness.

b.      Efficiency is ‘to do the things perfect’ while Effectiveness is ‘to do perfect things’.

c.      Efficiency has a short run perspective. Conversely, the long run is the point of view of Effectiveness.

d.      Efficiency is yield-oriented. Unlike Effectiveness, which is result oriented.

e.      Efficiency is to be maintained at the time of strategy implementation, whereas strategy formulation requires Effectiveness.

f.       Efficiency is measured in operations of the organisation, but Effectiveness of strategies is measured which are made by the organisation.

g.      Efficiency is the outcome of actual output upon given the number of inputs. On the other hand, Effectiveness has a relationship with means and ends.

5. Salary & Wages:

a.      Salary is the fixed amount of compensation which is paid for the performance of an employee. Wage is the variable amount of compensation which is paid on the basis of hours spent in finishing a certain amount of work.

b.      Salary is given to the skilled persons who apply their proficiencies in respective fields and generate the revenues for the firm. Whereas wages are paid to the semi-skilled or unskilled worker such as carpenter, welder, electrician, etc. who work on hourly basis.

c.      In the case of salary, the cost incurred is fixed i.e. fixed amount is paid monthly. Whereas in wages, the cost is variable, because it can vary with the day to day performance of an individual.

d.      Salary once decided, in the beginning, remains fixed throughout. Whereas in wage system, there is a wage rate that keeps on changing and an individual is paid on the basis of prevailing wage rate.

e.      Salary is generally paid at fixed intervals i.e. monthly. Whereas wages are paid on a daily basis for the number of hours spent.

6. Job enlargement & Job Enrichment:

·   A job design strategy in which the number of tasks performed by a single job is increased is known as Job Enlargement. Job Enrichment is defined as a motivational tool, used by the management in which the range of activities performed by a single job is increased to make it better than before.

·        Job Enlargement involves quantitatively extending the scope of activities carried out by the job whereas in Job Enrichment improvements are made in the existing job to increase its quality.

·        Job Enlargement reduces boredom and monotony while performing a single task, on and on. Conversely, Job Enrichment makes the job more challenging, exciting as well as creative.

·        Job Enlargement does not require additional skills but job enrichment does.

·        In job enlargement, the expansion of tasks is made horizontally, i.e. at the same level. On the other hand, job enrichment involves vertical expansion of activities like controlling and doing the task.

·        Job enlargement requires more supervision as compared to job enrichment.

·        The consequence of introducing job enlargement is not always positive, but job enrichment will produce positive outcomes.

·         Job Enlargement makes employees feel more responsible and valuable, while Job Enrichment brings satisfaction and efficiency in employees.

7.  Induction & Orientation:

a.      Induction is a process takes place to welcome newcomer to the organisation, to make them ready for their job. A process which involves the assimilation of new joinee into the organisation to rehabilitate him at the new workplace and provided with basic information about the company.

b.      Induction involves the planned introduction of the employee with the organisation. Conversely, Orientation is the integration of the employee in the organisation.

c.      Induction is a short term process, whereas orientation lasts for a longer period.

d.      Induction is done at the introductory stage, which is then followed by the orientation.

e.      Induction is in the form detailed presentation or brochure of the company’s rules, policies and employee benefits are provided. On the other hand, orientation includes the interaction of employee to different people of the organisation.

8. Mediation & Conciliation:

a.   The process of dispute resolution in which a third party intervenes in an attempt to resolve it, by enabling communication between parties is called mediation. On the other hand, conciliation implies a process of settling the dispute between the parties, in which a neutral third party provides potential solutions to the parties so as to resolve the issue.

b.   Mediation is governed by Code of Civil Procedure Act, 1908. Conversely, Arbitration and Conciliation Act, 1996 regulates conciliation.

c.   Both mediation and conciliation are premised on confidentiality. However, in mediation, confidentiality relies on the trust and in conciliation, the law determines the extent of confidentiality.

d.   In mediation, the role of the third party is a facilitator, who facilitates interaction between the parties. As against, in conciliation, the role played by the third party is beyond facilitator, who not only facilitate communication but also provide solutions to their problem as an expert.

e.   Mediation process completes with an agreement between the parties concerned, whereas conciliation ends with a settlement agreement between the parties.

f.    The contract of agreement between the parties under mediation is enforceable by law. On the contrary, the settlement agreement between the parties is binding upon parties like an arbitral award.

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