Personnel Management

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Personnel Management can be defined as obtaining, using and maintaining a satisfied workforce. It is concerned with employees at work and with their relationship within the organization.

Personnel management is not a one-man responsibility nor can it ever by achieved by one individual. It is a corporate, co-operative endeavor that should stem from a common feeling and concept and should progress in unified coordinated manner.

According to Flippo, “Personnel Management is the planning, organizing, compensation, integration and maintenance of people for the purpose of contributing to organizational, individual and societal goals.”

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According to Breech, “Personnel management is that part which is primarily concerned with human resource of organization.”

Learn about:-

1. Meaning of Personnel Management 2. Definitions of Personnel Management 3. Nature 4. Concepts 5. Scope 6. Objectives 7. Characteristics and Features

8. Importance 9. Principles 10. Status 11. Functions 12. Philosophy 13. Factors Responsible for the Growth of Personnel Management 14. Personnel Management in India.

Personnel Management: Meaning, Definitions, Concept, Scope, Objectives, Characteristics, Principles, Functions and Other Details


Personnel Management – Meaning

Personnel management is defined by the Indian Institute of Personnel Management as a responsibility of all those who manage people as well as being a description of the work of those who are employed as specialists. It is that part of management which is concerned with people at work and with their relationships within an enterprise. It applies not only to industry and commerce but to all fields of employment.

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Personnel management is the plan, organization, direction, and control of the procurement, development, compensation, integration, and maintenance of employ­ees for the purpose of contributing to the organizational goals, according to Flippo.

According to the National Institute of Personnel Management (NIPM), New Delhi, personnel management is the science of catering human relationships in an organization. It deals with welfare, personnel, and industrial relations or aspects.

This definition highlights the following aspects:

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i. Personnel management is a responsibility of all line managers in an organization.

ii. Personnel management is a part of management, i.e., it is concerned with the people and their relationship within an organization.

iii. Finally, personnel management applies to all industries/organizations in the world.

Personnel management can be defined as the process of managing people with the objective of preparing them to give in their best so that goals of the organization are achieved. A personnel manager caters to the human relationships within an organization.

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But, changes in the industrial economy in the world required the personnel manager to perform more. The industrial relations function was supplemented. The relations between the employees and the management are what we call industrial relations. Good industrial relations are necessary if we want to ensure industrial peace and productivity in the industry at a microcosmic level and in the country at a macrocosmic level.


Personnel Management – Definitions

The work of a personnel department deals specifically with procuring, hiring, training, placing, utilizing and maintaining an effective work force that will aid in the accomplishment of the firm’s objectives. This does not mean to imply that other members of the administration team do not have a part in the administration and development of personnel. To the contrary, the responsibility for good personnel management rests on every supervisor and manager in the organisation.

Personnel management is not a one-man responsibility nor can it ever by achieved by one individual. It is a corporate, co-operative endeavor that should stem from a common feeling and concept and should progress in unified coordinated manner.

There is no standard definition of the term ‘Personnel Management’. Different writers have given different definitions of the term.

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Some of these are reproduced below:

M. J. Jucis, “Personnel Management is that field of administration which has to do with planning, organising, and controlling various operative activities of procuring, developing, maintaining and utilizing a labour force in order that the objectives and interests for which the company is established are attained as effectively and economically as possible and the objectives and interest of all levels of personnel and community are served to the highest degree.”

Edwin B. Flippo, “The Personnel function is concerned with the procurement, development, compensation, integration and maintenance of the personnel of an organisation for the purpose of contributing towards the accomplishment of that organization’s major goals or objectives. Therefore, Personnel Management is the planning, organising directing, and controlling of the performances of those operative functions.”

Dale Yoder, Manpower Administration effectively describes, “The processes of planning and directing the application, development, and utilization of human resources in employment.”

E.F.L. Breech, “Personnel Management is that part of administration process which is primarily concerned with the human constituents of an organisation.”

Society for Personnel Management of America, “Personnel Management is that art of acquiring developing and maintaining a competent work force in such a manner as to accomplish with maximum efficiency and economy, the functions and objectives of the organisation.”

On the basis of above definitions, it may be concluded that Personnel Management is that part of administration which is related with human resources of an enterprise. The object of Personnel Management is to recruit, develop and to retain the employees in the organisation. It includes planning, organising, directing and controlling of the performance of employees and workers in the organisation.


Personnel Management – Nature

Main object of an industrial enterprise is to get the maximum possible production of best possible quality at minimum possible price. This object can be achieved only when all the employees of the enterprise co-operate in desired direction. Personnel Management, is of the highest importance in this regard because this part of administration is related with the recruitment, training, remunerating and motivating the employees.

There is significant difference in the opinion of scholars regarding nature of Personnel Management. Some of the scholars feel that it is a job and a departmental responsibility, while some other scholars recognize it as a profession. Many other scholars have described it as universal activity of administration.

Important views about the nature of Personnel Management may be summarized as follows:

1. The Utility of Personnel Management is Universal:

Personnel Management is useful in all the field of life such as industrial, social, political and religious. In every field of life, support of man-power is essential and no work can be done without manpower as a train cannot move without engine. Personnel department is responsible for planning, organisation, control, direction, co-ordination and control of man-power thus, utility of Personnel Management is universal.

2. Personnel Management is a Profession:

According to modern philosophy of administration, personnel management is a profession. Professional persons are the persons who have complete and deep knowledge of their field and adopt a scientific approach. This way, a personnel manager is professional because he has complete and detailed knowledge of personnel management. He knows how to recruit the employees, how to provide the training to them, how to place them on their jobs, how to motivate them to work more and how to control their activities.

3. Personnel Management is a Departmental Responsi­bility and a Staff Function:

Personnel Management is departmental responsibility. It is responsible for recruitment of employees, providing training to them, placement of employees on work, to fix there remuneration, to determine the code of conduct for them and to motivate them to work more and more. Personnel Management is also considered as a staff function.

All the departments of enterprise such as Production Department etc., all require employees. Personnel Management is responsible for recruitment of suitable employees for all the departments. Thus, it is clear that the nature of Personnel Management is related with all the departments of the enterprise.

Personnel Management has been recognized as a science as well as an art. A science is an “exact and systematic” classification of knowledge of some subject. In view of this definition, personnel management may definitely be regarded as a science, for its principles, concept, laws, rules and procedures, methods and techniques have been presented in a systematic way. They are not static and rigid, but flexible and adaptive; they can meet the changing circumstances of an organisation.

On the other hand, “art is an application of skill or knowledge in a unique and creative manner.” To identify personnel management as a career implies that artistic qualities are associated with personnel practices, which are recognized as a result of unique creative administration styles rather than as a result of set personnel rules and procedures.


Personnel Management – Concepts

A study of the evolution of the Management concepts as enunciated by the president of American Management Association, Mr. Lawrence Appley, indicates the changing concepts of Management regarding “the other fellow”.

(1) Savagery – The other fellow is my enemy and is to be destroyed.

(2) Slavery – The other fellow is to be conquered and put at my service.

(3) Servitude – The other fellow is to serve me for a consideration and ask no more.

(4) Welfare – The other fellow should be helped up when down without too much concern for what got him down.

(5) Paternalism – The other fellow should be cared for, and I will decide to what extent.

(6) Participation – The other fellow has something to contribute to my efforts and can help me.

(7) Trusteeship – That for which and responsible is not mine, I am developing and administering it for the benefits of others.

(8) Statesmanship – The other fellow is capable of being for more than he is and it is my responsibility to help him develop to his fullest potential.

Assisting top management in realising the last concept of states­manship is the central task and fundamental purpose of dynamic Personnel Management. There are three fundamental concepts of dynamic per­sonnel management recognised in contemporary times. – (1) Develop­ment of people to their fullest potentialities. (2) To facilitate working together of groups of people toward definite predetermined ends. (3) That personnel management is a profit-cum-growth engineering.

In case of terminology of various words like Manpower Manage­ment, Personnel Administration, Industrial Relations etc. Prof. Yoder describes ‘Manpower Management’ includes all functions, its two major subdivisions are “Personnel Management” – representing the employer’s relationship with individual employees and “Labour Relations” repre­senting the relationship between the management and organised unions and indicating the negotiations and administrations of collective agree­ments or labour contracts”.


Personnel Management – Scope

At the initial stage of development, the scope of Personnel Management was very limited. With the growth and development of business and industrial enterprise, the activities of these enterprises became more and more complicated and diversified. With this, the scope of Personnel Management also continued to increase.

Indian Institute of Personnel Management (I.I.P.M.) has described the scope of personnel management as follows:

(i) To determine personnel policies,

(ii) To determine the methods of recruitment, training, placement and promotion etc.

(iii) To determine the wage system and the conditions of employment,

(iv) To provide good working conditions and facilities to the workers and employees,

(v) To establish harmonious relations between labour and capital.

Strauss and Sails have described the following functions in the scope of personnel management:

(i) Recruitment selection and placement of employees,

(ii) Specialized services, such as – safety, supervision and control etc.

(iii) Job analysis, job description and job evaluation,

(iv) Scheme of compensation payable to the employees,

(v) Maintenance of Personnel Accounts,

(vi) Personnel welfare programs,

(vii) Programs of workers education and training,

(viii) Labour relations,

(ix) Public relations,

(x) Personnel planning and evaluation.

On the basis of above study, it can be said that following are the functions included in the scope of personnel management:

1. To Adopt Suitable Wage System:

An important function of Personnel Management is to adopt a suitable wage system to remunerate the employees so that they may be motivated to extend their full co-operation in the achievement of objectives of the organisation. The wage system must be of the nature that may motivate them to work more and more.

2. Recruitment, Selection and Job Determination for the Employees:

The Workers are motivated to apply for jobs in the organisation with the help of advertisement and other measures. The best workers and employees are selected through written test and interview. After selecting them, they are placed on a suitable job.

3. Education and Training of Employees:

Another very important function of Personnel Management is to provide the best possible facilities of education and training to the employees. The programs of education and training may be started for the benefit of both the old and new employees. During training period employees are paid an allowance at a fixed rate. After completing training they are placed on a job according to their ability.

4. Job Analysis, Job Distribution and Job Evaluation:

All the works to be done in business and industrial enterprise are critically analyzed so that it may be determined that which job should be assigned to an individual employee.

5. Public Relations:

Personnel Management has to perform some activities for public relations also. These activities include to maintain contacts with social welfare organisations, to provide necessary information about the organisation, to publish magazines etc.

6. Labour Welfare Activities:

Personnel Management has to perform many activities for the sake of the labour welfare. It includes health and safety programs, recreation facilities and educational activities etc. These activities increase efficiency and ability of employees.

7. Personnel Accounts:

Personnel Management has to maintain all the relevant accounts regarding employees of the organisation, such as – the number of workers, absenteeism, work done by employees, wage roll etc.

8. Personnel Planning and Evaluation:

It includes following activities to determine personnel policies and programs, to evaluate these policies and programs, to conduct personnel audit etc.


Personnel Management – Objectives of Personnel Management in an Organisation

The objectives of an organisation are guidelines of its policies, procedures and functions and the principles are the tools to accomplish these objectives. The main objective of an organisation is to get maximum satisfaction out of its available resources. For this personnel management is primarily concerned with the organisation of men, therefore, the main objective of personnel management may be summarized as to utilize the available human resources in such a way so as to get the work done effectively to the maximum satisfaction of the individual worker to seek their co-operation in accomplishing the general goals of the organisation.

According to Michael. J. Jucius, personnel management should aim at:

(i) Attaining economically and effectively the organisation goals,

(ii) Serving to the highest possible degree to the individual goals, and

(iii) Preserving and advancing the general welfare of the community.

To put it in another way, personnel management has three-pronged obligations. It must satisfy the employees by supplying them income, power, prestige, creative satisfaction or a combination of these. It must satisfy the owners by maximizing their economic efficiency. And it must satisfy the community and society at large by supplying goods and services as efficiently as possible and by presenting and advancing goodwill, morale, loyalty and its reputation. This is not an easy task for the three sets of goals are interviewed in such a way that the neglect of any one can destroy or injure the others.

Ralph C. Davis has divided the objectives of personnel management in an organisation into two categories:

(1) Primary Objectives:

In the first instance, relate to the creation and distribution of some goods or services. The Personnel Department assists those who are engaged in production, in sales, in distribution and in finance. The goal of personnel function in the creation of a work force with the ability and motivation to accomplish the basic organisational goals. Secondly, they relate to the satisfaction of the personal objectives of the members of an organisation through monetary and non-monetary devices.

Monetary objectives include profits for owners; salaries and other compensation for executives; wages and other compensation for employees; rent for the land-owners and interest for share/stock-holders. Non­monetary objectives include prestige, recognition, security, status, or some other psychic income. Thirdly, they relate to the satisfaction of community and social objectives, such as – serving the customers honestly, promoting a higher standard of living in the community, bringing comfort and happiness to society, protecting women and children, and providing for aged personnel.

(2) The Secondary Objectives:

The Secondary Objectives aim at achieving the primary objectives economically, efficiently and effectively.

The fulfilment of the primary objectives is contingent upon:

(i) The economic need for, or usefulness of, the goods and services required by the community/society.

(ii) The effective utilization of people and materials in productive work.

(iii) Conditions of employment for all the members of an organisation which provide for satisfaction in relation to their needs, so that they may be motivated to work for the success of the enterprise.

(iv) The continuity of the enterprise.

According to the professional personnel executives, the objectives of personnel management are:

(i) To utilize human resources effectively;

(ii) To establish and maintain a productive and self-respecting relationship among all the members of an organisation; and

(iii) To bring about maximum individual development of the members of an organisation.

In the opinion of Scott, “The objectives of personnel management in an organisation are to obtain maximum individual development, desirable working relationships between employers and employees and to effect the molding of human resources as contrasted with physical resources.”

The objectives of personnel management may also be classified into two:

(1) General objectives and

(2) Specific objectives.

(1) General Objectives:

The statement of general objectives expresses the basic philosophy of top administration towards the labour force engaged on the work and its deep underlying conviction as to the importance of the people in the organisation. It must, therefore, formulate and adopt a basic creed and make it known to its employees and the public.

The statement of basic objectives, inter alia, should include the following as the most important objectives:

(i) Maximum Individual Development:

The employer should always be careful in developing the personality of each individual. If an act of the employer can adversely affect the personality of the individual, he should avoid such act. Employer should establish and support such human values that may have social recognition and importance. They should always be regarded as co-owners or partners of the organisation and given a due importance in the organisation. Each individual differs in nature and therefore administration should recognize their individual ability and make use of such ability in an effective manner.

(ii) Desirable Working Relationship between Employer and Employees:

It is the main objective of personnel management to have a desirable working relationship between employer and employees so that they may co-operate the administration. It is possible only when there is complete mental revolution. It means both employer and employees should rely upon each other. The personnel administrator should get it realized to the top administration that labour is human being and humanly treatment should be given to it and on the other hand he should get it realized to the workers also that it should co-operate the administration in accomplishing the goals of the administration.

(iii) Effective Molding of Human Resources as Contrasted with Physical Resources:

Man is the only active factor of production which engages the other factors of production to work. Therefore, administration should emphasize the effective utilization of human resources as contrasted with other physical resources so that maximum production at minimum cost is possible. Other factors of production will be ineffective without effective molding of human resources.

(2) Specific Objectives:

The statement of specific objective would generally refer to the various activities of the personnel department.

Following are some of the important activities:

(i) Selection of Right Type and Number of Persons – Required to the organisation concerned.

(ii) Proper Orientation and Introduction of New Employees to the organisation to their jobs.

(iii) Organisation of Suitable Training Facilities for better job performance and to prepare the man to accept the challenge of higher job.

(iv) A Full and Fair Consideration should be given to an employee when his services are terminated or he leaves the organisation. He should hold a good impression of the administration at the time of retirement.

(v) Provisions of Better Working Conditions and Other Facilities such as – medical facilities, facilities of provident fund, gratuity, and leave with pay etc., so as to help the competent and qualified personnel in the service of the organisation.

(vi) Trade Unions Today Play an Important Role in the industrial life and therefore good relations should be maintained with representative trade unions on mutual confidence and respect.

(vii) Provision of Sound, Fair and Effective Wages and Salary Administration and other incentives which will result in the highest possible productivity of workers.

(viii) Provisions of Continuous Personnel Research which keeps the administration equipped with recent development and trends essential to take sound decisions without any further delay as regards personnel matters.

Therefore the main object of Personnel Management is to manage the workers and employees of an industrial enterprise in the best possible manner. In the process of Personnel Management, the employees are recruited, trained and developed so that they may contribute to achieve the objectives of the enterprise.

Following are the important objectives of Personnel Management in an industrial enterprise:

(i) Development of Employees:

Second important object of Personnel Management is the development of employees working in an enterprise. Employees are provided the facilities of training and education so that the efficiency and ability of the employees may be increased.

(ii) To Establish Harmonious Relations between Labour and Capital:

The very first objective of Personnel Management is to establish harmonious and friendly relations between labour and capital in the enterprise. The philosophy of modern administration is that the contribution of labour is not less important than that of the capital. Managers realize that they cannot make the best use of capital without co-operation of the labour. Therefore, it stresses upon the development of trust and faith between employees and employers.

(iii) To Arrange for Effective Communication with Employees:

Another very important object of Personnel Management is to maintain effective communication with employees so that the orders and directions of administration may be passed to the employees and the problems and grievances of workers may also be communicated to the administration.

(iv) To Increase the Welfare of Human Resources:

Another very important object of Personnel Management is to increase the welfare of workers and employees engaged in an enterprise. Best working conditions should be provided and many other welfare programs must be launched so that employees may get the facilities of health and recreation.

(v) Other Objects:

Other objects of Personnel Management are:

(i) To arrange for the sufficient number of efficient, capable and expressed employees in all the departments and at all the levels of administration,

(ii) To increase the morale of employees,

(iii) To motivate the employees so that the productivity of enterprise may be increased,

(iv) To provide best working conditions to the employees so that they may complete their work in most efficient manner.

Some Other Objectives of Personnel Management:

The objective of Personnel Management is the maintenance of the relationship between the Management and the managed on a basis which, by consideration of the well-being of the individual, en­ables all those engaged in the undertaking, to make their maximum personal contribution to its effective working.

The British Institute of Personnel Management has defined per­sonnel Officers as follows:

“Personnel Officers are those persons specially qualified by train­ing and experience to advise in the formation of personnel policy, to secure understanding and application of that policy at all levels of the organisation and to be responsible for the appropriate executive duties arising therefrom”.

Personnel Managers are essentially social workers within an in­dustry:

(1) To properly relate the man to the job and the job to the man,

(2) To promote proper human relations between various levels of per­sonnel employed in the industry, and

(3) To administer welfare servic­es. Human approach and social work skills are required for the suc­cessful discharge of these duties.

Personnel Management requires scientific approach to human re­lations. A Personnel Manager is a human engineer. He is the lubricat­ing shaft between the Management and the labour in industry.

Different designations, such as Labour Officer, Personnel Officer, Welfare Officer, Labour Relations Officer, etc., are being used in dif­ferent organisations. The term “Welfare Officer”, as laid down in the Factories Act 1948, does not clearly convey the idea of the duties and functions expected to be performed by a Personnel Officer.

The cor­rect designation and comprehensive one is Personnel Manager, espe­cially in industries, where there is only one person for Personnel Management. The latest trend is to make the role of the Personnel Manager more comprehensive and designate him as Human Re­source Development (H.R.D.) Manager.

A Personnel Manager is a connecting link between the Labour and Capital. He has pledged himself for service. “By love, serve one another”, is his guiding motto.

Personnel Management is a relatively new profession, of human engineering and scientific management of human beings, endowed with the dignity of statutory recognition. Appointment of Welfare Offi­cer in industrial establishments and plantations is mandatory. We can proudly claim that India is the only country, among the industrially advanced countries of the world, which has promulgated a law for the appointment of Welfare Officers.

Philosophy of Personnel Management is based on the right of each person to be judged on his own merits. So Personnel Manager must have respect for human personality which transcends all distinc­tions of language, race, religion, custom, class or caste.


Personnel Management – Characteristics and Features

Following are the important characteristics of personnel management:

1. The Part of General Administration – Personnel Management is a part of General Administration because personnel management is the administration of workers and employees of an organisation and these workers and employees are a part of the whole organisation.

2. Development of Human Resources – Personnel Management is the development of human resources working in an organisation. In this part of administration, efforts are made to provide best education and training facilities to the workers.

3. It Deals with Labour Unions also – Personnel Management deals with labour unions also. Labour Unions help in preventing industrial disputes, strikes, and lock-outs etc. These unions help in solving the labour problems also.

4. Harmonious Relations between Human and Other Resources of the Organisation – Personnel Management establishes harmonious relations between human and other resources of an organisation. It stresses upon the establishment of sweet relations between labour and capital on one hand and between labour and administration on the other.

5. Departmental Responsibility – A very important characteristic of Personnel Management is that it has a particular Departmental Responsibility. It is responsible only for the matters related with employees.

6. Uses of Principles of General Administration – Personnel Management is based upon the same principles that are used in General Administration.

To conclude, it may be said that characteristics of personnel management are as follows:

(i) It is a management of human resources,

(ii) Its object is to achieve the personnel objects in the best possible manner,

(iii) It helps in the maximum development of personnel abilities so that they may feel satisfied with their work,

(iv) It provides maximum opportunities to the employees of an organisation to increase their ability and efficiency so that they may earn maximum wages,

(v) It presents valuable suggestions to the top administration,

(vi) It stresses upon personnel groups in place of an individual employee. Thus, it helps in the development of co-operative feeling,

(vii) It established human relations at all the levels of organisation,

(viii) It discharges departmental responsibilities,

(ix) It follows certain principles and practices,

(x) It includes planning, organisation, control and direction of man-power,

(xi) It is a process, a view, a technique and a philosophy.

Features of Personnel Management:

i. Employees working at all levels of the organization are managed.

ii. Employees are considered as both individuals and collective entities.

iii. Employees are helped to look for and determine and thereafter nurture their abilities.

iv. Employees are inspired to concentrate on their ability so that the organization achieves its aim.

v. Methods are devised to resolve the issues related to the management of human resources that the organization faces, intelligently and equitably.

vi. Personnel management is a mode of thinking and philosophy of management that ensures human resources are used more efficiently.

vii. The personnel manager is the authority who provides personnel management solution in every organization.


Personnel Management – Importance: From the Standpoints of Professional Enterprise, Social Enterprise and Individual Enterprise

The importance of personnel management can be discussed from three standpoints, viz.:

1. Professional enterprise

2. Social enterprise, and

3. Individual enterprise.

1. Professional Significance:

By providing healthy working environment it promotes team work in the employees.

This it does by:

(a) Maintaining the dignity of the employee as a ‘human-being’;

(b) Providing maximum opportunities for personnel development;

(c) Providing healthy relationship between different work groups so that work is effectively performed;

(d) Improving the employee’s working skill and capacity;

(e) Correcting the errors of wrong postings and proper-reallocation work.

2. Social Significance:

Proper administration of personnel enhances their dignity by satisfying their social needs.

This it done by:

(a) Providing suitable and most productive employment, which might bring them psychological satisfaction;

(b) Maintaining a balance between the jobs available and the jobseekers, according to the qualification and needs;

(c) Making maximum utilization of the resources in an effective manner and paying the employee a reasonable compensation in proportion to the contribution made by him;

(d) Eliminating work or improper Use of human resources, through conservation of their normal energy and health; and

(e) By helping people to make their own decisions, that are in their interests.

3. Significance for Individual Enterprise:

It can help the organisation in accomplishing it by:

(a) Creating right attitude among the employers through effective motivation;

(b) Utilising effectively the available human resources; and

(c) Securing willing co-operation of the employees for achieving goals of the enterprise and fulfilling their own social and other psychological needs of recognition, love, affection, belongingness, esteem and self-actualisation.

In the last two centuries, rapid industrial development had changed the face of the industrial world. A new industrial culture had emerged out of the rapid industrial development which undermined the human values in the industrial field. Moreover, other physical resources are given undue importance resulting in more and more complexities and new personnel problems began to creep in.

From the very beginning, labour had been an important factor of production. The main reason behind it is that labour is the only active factor of production which only can employ the other factors in the best possible manner, otherwise no production is possible. The main objective of firm or an organisation (maximum production at minimum cost) cannot be achieved if labour force is not motivated in the right direction. And, therefore, in order to get the work done by the people, it is necessary to direct, motivate, develop and manage their activities.

Otherwise labour relations will worsen and may jeopardize the growth and stability of the enterprise because growth and stability cannot be imagined without the wholehearted co-operation of the people at work. The importance of labour has rather increased in industries where most sophisticated machineries are used because the efficiency and profitability of the organisation is mostly concerned with the best efforts of the labour force to make the best utilization of such costly plant and machinery.

In the words of Appley, “Administration is the development of the people and not the direction of things…. administration and personnel management are one and the same thing”. Pigours and Myers have observed, “Good administration means getting effective results with people.”

The behavioral school of administration has realized the significance of human factor and behaviour in industry, and it has introduced the concepts of psychology, sociology and other behavioral sciences to extend the managers’ knowledge of human behaviour in the work environment. As a matter of fact, the more complex organisation and creation of complex industrial structures, the understanding of human behaviour has assumed great significance. Every manager who wants to get success in managing must possess the skill to deal with human behaviour at work, this is an important part of personnel functions.

Labour force is a non-wasting asset for the industry. It increases with the lapse of time rather than to decrease like other assets. The appreciation in this asset is only possible under effective leadership of the personnel manager. The personnel department is responsible for training and development of the people working in the enterprise. It develops various programs for increasing the knowledge and skill of the employees in consultation with line managers. It also helps the other department in evaluating the performance of the employees for their use in future at suitable places and chalk out the programs for their development.

Though personnel department does not produce anything tangible but it helps the other departments to contribute towards organisational objectives. The one aspect of personnel function is procurement, development, compensation and motivation of the personnel at work which has been recognized as the speciality of the personnel department.

The concept of personnel management is applicable not only to factories and wage-earners, but it is also equally important in offices, sales department, laboratories and in the ranks of administration itself, where top administration must win the co-operation of their subordinates. Nor is good personnel management something needed by private industry alone. Industries in public sector, non-profit institutions, government and the armed services required personnel managers.

The importance of personnel management in modern business and industrial enterprise be explained as follows:

i. It encourages the Tendency of socialism in the modern society.

ii. It facilitates in the earliest possible solution of the problems and complications of a business and industrial enterprise.

iii. It helps in the fulfilment of objectives of labour unions.

iv. It facilitates the rapid economic development of a country.

v. Employees and workers feel themselves a part of the enterprise because of personnel management.

vi. It develops the feeling of unity between labour and capital.

vii. It provides to the recognition to the workers of the enterprise, which is necessary for the success of enterprise.

viii. It establishes sweet human relations in the enterprise.

ix. It enables the best possible utilization of labour and material resources of the enterprise.

We can conclude that the role of personnel management cannot be undermined. It is the key to the whole organisation and related to all other activities of the administration. Personnel Management is a part of all functional administrations, i.e., financial administration, production administration, marketing administration etc. Every functional manager has some responsibility towards the maintenance of personnel.

But not it has been recognized that the performance of functions of personnel management requires some particular type of skill, and so the charge of personnel department should be entrusted to such a person who possesses these skills and have the qualities of character and personality. In the present day industrial set-up, there is no choice but to set up the personnel department.


Personnel Management – 9 Important Principles

From the philosophy are derived the guidelines or bench­marks, which are generally flexible. These principles change as conditions change, including human behavioral patterns.

The main principles of personnel management may be set forth as follows:

Principle # 1. Employees should be made to Feel Worthwhile:

“Men do not live by bread alone”. There is something other than money which motivates them to work toward organisational goals. Personnel feeling of accomplishment, price in one’s work, harmonious relations with other co­workers and co-operation with the administration – all these factors need to be taken into consideration by the administration if the efficiency and productivity of the employees is to be maintained and increased.

Principle # 2. Supply Employees with Relevant Information:

An organisation should have a properly developed two-way communication channel so that the necessary information, instructions, orders and rules are passed on to employees and a proper response is evoked. Information must be given at the right moment, otherwise much harm may result secrecy often breeds suspicion in the minds of employees.

Principle # 3. People are to be dealt with as Complete Individuals:

Persons are recruited because they possess the requisite technical, professional and other qualities. But whether they co-operate with one another, with the group and with the administration is largely governed by their personal feelings, cultural and social attitudes, ethical standards and family background. These and technical factors should be pro­grammed into organisational operations. The administration should be quick to understand how employees feel about contemplated work assignments, personnel policies, and decisions which affect their interests. Employees should, therefore, be treated as a whole and not piecemeal.

Principle # 4. Fairness and Justice:

Fairness and justice, should guide administration’s policies and actions. Fairness in dealing with his employees would win for the employer the confidence of his employees.

Principle # 5. Equal Wage for Equal Work:

All the employees irrespective of their sex or community but doing similar type of work, must be paid equally, and the wages paid must be adequate.

Principle # 6. Judge the Strength or Intelligence of the People Properly:

A knowledge of the strength of its employees will always bring administration their co-operation. If proper opportunities are not made available to employees, resentment and frustration may result; or they may leave the organisation or resort to coercion. Therefore, employees should be associated with the decision-making process.

Principle # 7. Rewards should be earned, not given:

The rewards to be given should be commensurate with the efforts put into win them. Such rewards should be given to an employee because of what he has accomplished and not merely as a gift are not as well appreciated as rewards for work well done.

Principle # 8. Sell the Personnel Program:

Sell the Personnel program, because if employees are not made aware of it, they will learn it from some other source. The selling of a program should be done either orally or in writing.

Principle # 9. Set Examples:

Preaching alone will not bring the desired results “Actions are louder than words”; and these convince the employees that the administration really does what it says or means.


Personnel Management – Status

Till recently, personnel managers were considered to be of a lower status than other administration executives.

Their low status was due to certain causes, namely:

(1) Low Position in the Organisation:

The personnel function was given a low status in the organisational structure, as a result of which line managers were discouraged from seeking help for the personnel department, mainly because personnel executives were contacted from the solution of a single problem.

An ineffective department generally has the following characteristics:

(i) Personnel functions are not too well coordinated

(ii) There is no special planning section in the organisation; and

(iii) There is no justification, written or stated, for using the existing organisational structure.

(2) Disrespect for the Function and for Those Performing it:

Personnel managers have been viewed as contributing little to the essential functioning of an organisation. This was due to the fact that they were entrusted with such tasks as did not offer challenges; they generally prepared routine plans, programs and procedures, handled employment details, did wage and salary surveys, and handled employee welfare programs; while the other executives were involved in such challenging tasks as financing and looking after complex production schedules.

This lack of involvement on the part of personnel managers often led to frustration; the personnel function itself was placed at a lower level in the organisational structure and untrained persons, who were not needed anywhere else, were employed on personnel jobs. The inevitable result was the low status and prestige of the personnel manager and his department.

(3) Lack of Expertise in Performing the Function:

Frequently, a mediocre line manager was required to perform personnel functions. Sometimes this was done “to kick him upstairs” or “to reward him for his good performance elsewhere.” As a result, he did not command the respect of his subordinate or the line personnel. Moreover, incompetent managers could not anticipate the problems of an organisation; and often they underestimated their possible effects. Some did not even have sufficient knowledge of, or interest in broader organisational matters.

(4) A Poor Self-Image by Personnel Managers:

Since personnel managers felt that they held low level positions, or were not fairly treated by other executives, they did not take any lively interest in their work, and often performed a static role.

The weaknesses influenced the status of personnel managers to a very great extent. But the situation has now changed, and top executives have begun to realize that to meet the changing needs, there should be “human resource experts” well versed in the diverse aspects of personnel management. These experts are knowledgeable, competent and committed personnel specialists who are capable of making meaningful contributions to their organisation and utilizing personnel departments very effectively.

In terms of status, “the Personnel Relations Director today often serves as a key member of the top administration team. A vice-presidential position is usually assigned to the top personnel man in a large company. He has the ultimate responsibility for all personnel and labour policies. He also assists in decision-making, organisational planning, executive development and community relations policy.”


Personnel Management – Functions: Managerial Functions, Staff Functions and Line Functions

Personnel Management is the most important field of management. The importance of Personnel Management has increased in modern times with the growth and development of business and industrial activities. With the increase in its importance, the problems of Personnel Management have also increased immensely. In a big industrial and business enterprise, thousands of workers work together. In such a unit, it is not possible for a General Manager to look after the interests of each individual.

Therefore, this responsibility is entrusted to a separate department under the charge of a Personnel Manager. Personnel Manager is responsible for recruiting, developing and maintaining the labour force in an organisation. All the aspects of human relations are covered in the scope of Personnel Management. Human relations problems are multifarious and for this reason, different authors have described different functions of Personnel Management.

E.F.L. Breech has divided the functions of Personnel Management into four parts – (i) To formulate the policies, (ii) To advise, (iii) Welfare activities, (iv) Controlling activities. Edwin B. Flippo has divided the functions of Personnel Management into two parts – Managerial functions and Co­operative functions. Managerial, such as – planning, organising, directing and controlling. Co-operative functions are the functions which are of routine nature of Personnel Management.

On the basis of above discussion, it can be concluded that the Functions of personnel management can be divided into three parts:

1. Managerial Functions,

2. Staff Functions and

3. Line Functions.

Details of these functions are as follows:

1. Managerial Functions:

These are the functions which help the administration in discharging its primary duties.

Main functions under this category are as follows:

i. Organising:

Personnel Administration is responsible for organising the human resources in the best possible manner. It is responsible for establishing harmonious relationship between various factors of production so that the employees may prove helpful in achieving the objectives of organisation.

ii. Planning:

Personnel Management has to prepare the plans regarding the workers and employees required in an organisation. The plans are prepared as to how many employees and of which calibre are required.

iii. Coordinating:

Personnel Management is responsible for establishing effective co-ordination between labour and capital resources of the enterprise.

iv. Directing:

It involves motivation and leadership. In the absence of effective direction, the organisation cannot achieve the desired results. Direction includes issuing instructions to the workers, developing communication network and integrating workers.

v. Controlling:

Personnel Management is responsible for controlling and regulating the activities of Personnel Department also. It includes the deter­mination of targets, analyzing actual performance, comparing the results with pre-determined targets and correcting deviations, if any.

vi. Motivating:

Personnel Management motivates the employees of the organisation by providing monetary and non-monetary incentives. This enables the administration to get the maximum advantage out of their capability and efficiency.

2. Staff Functions:

These are the functions which help the administration in discharging its duties and primary functions properly in indirect manner. These functions do not contribute in the accomplishment of organisational objective directly.

Main functions under this category are as follows:

i. Policy Determination and Formation:

An important function of Personnel Management is to determine the personnel policies and to advise top administration in the formation of policies and in the renewal of old policies.

ii. Advise:

Personnel Management has to advise all the departments of the enterprise regarding the selection, placement, transfer, promotion and remuneration of employees. This department has also to deal with the labour problems of various departments.

iii. Control:

Personnel Management is liable to control the affairs of enterprise regarding employees. It has to see whether the policies, rules and strategies regarding employees are being implemented in all the departments or not.

iv. Service:

Personnel Department renders the valuable services to all other departments of the enterprise by making the selection of employees required for these departments and by providing proper training to them.

3. Line Function:

Line functions are the functions which directly help the administration in discharging its duties. These functions contribute in the accomplishment of organisational objectives in direct manner.

Main functions under this category are as follows:

i. Planning of Labour:

Personnel Management plans requirements of labour force of the enterprise and estimates the number of workers and employees that may be required by the enterprise in the future. It also determines the abilities of the employees to be appointed.

ii. Recruitment of Labour:

Main functions of Personnel Management is to recruit the labour force for the enterprise.

It includes the following functions:

a. To study the source of supply of labour;

b. To collect the data regarding the needs of job and the rates of wage etc.

c. To invite applications;

d. To hold the written tests;

e. To hold the interviews;

f. Checking of references;

g. Appointment of workers and employees; and

h. To estimate present and future needs of employees.

iii. Training Functions:

It is not sufficient to recruit the best employees. Proper development of employees is equally important. For this proper training must be given to the employees and workers.

It includes the following functions:

a. To prepare the rules regarding training of new workers;

b. To arrange for the training;

c. To supervise the arrangement of training;

d. To train the workers regarding the policies of enterprise.

iv. Security of Workers:

Personnel Management is responsible for the security of workers of the enterprise. For it, provisions of security of workers under Factory Act are implemented.

v. Welfare Activities:

Personnel Management provides the welfare facilities to the workers. Various schemes are prepared and implemented for the welfare of workers such as refreshment house, club, schemes of savings, facilities of recreation, facilities of residence, facilities of conveyance, scheme of pension after retirement etc.

vi. Wages and Salaries Administration:

These functions include the following functions:

a. Evaluation of work;

b. To prepare and implement the program;

c. Analysis of job;

d. To hold the periodical surveys regarding wages and salaries;

e. Amendment in levels of remuneration.

vii. Organisation Chart:

This function includes the preparation and implementation of organisation chart relating to Personnel Department.

viii. Personnel Research:

Personnel research is becoming an important function of personnel management these days because the personnel problems are becoming more and more complicated. This function includes the study, analysis, interpretation and research on the behaviour of workers, the behaviour of a group of workers, the designing of working organisation and employee’s motivation etc.

ix. Communication:

Communication is an important function of Personnel Management. It includes to arrange for the effective communication between workers and administration. The orders and directions of administration are communicated to the workers so that they may implement these orders and directions. On the other hand, the suggestions, feelings, opinions and problems of workers are communicated to the administration.

x. Administrative Functions:

Administrative functions of Personnel Department include the dealing with the problems, grievances and feelings of workers. It includes the discussions with the labour union and to arrive at different compromises.

xi. Other Functions:

In addition to the above functions, personnel management has to perform some other functions also as under:

a. Determination of the work to be allocated to the workers and to allocate it to them,

b. To advise the administration in determining the principles of promotion,

c. To maintain necessary report so that the principles of personnel management may be implemented effectively,

d. To help the administration in the implementation of personnel policies,

e. To remove the possibilities of termination from services as far as possible,

f. Determination of the policy of termination and to take the necessary action at the required time,

g. To communicate the personnel policies to the supervisors and workers,

h. To scrutinize all the voluntary retirements,

i. To take necessary actions.


Personnel Management – Philosophy

Personnel actions in any company are guided by the philosophy which is a company may profess for dealing with people. Such a policy may or may not be in writing, but it does exist, if not openly, at least in an informal or subconscious manner.

Personnel Philosophy May tend in Many Directions:

First, labour may be viewed as a technical factor, which more or less passively or actively resists managerial leadership. Therefore, it is necessary to mold, control and closely supervise the people so that company goals may be achieved in a manner beneficial for individuals, groups and even the organisation on itself.

Second, “administration is getting work done by and through other.” In other words, it is a human relations job which is handled through several major activities – planning, organising, directing and controlling. Employee performance can best be achieved by recognizing and enhancing the human dignity of each employee.

Third, the modern view is that labour is not a commodity of exchange, but a precious asset which has inherent constructive potentials. These potentials may be utilized in an efficient manner if the administration has an enlightened attitude towards labour and encourages participative administration. In this way, employees may be assisted to grow and advance in the same manner as the business grows and advances. The quality of human resources can be effectively increased by implementing programs of education, training and personnel development.

To get work done, various measures have to be adopted – mutual involvement or participation can be allowed; proper incentives or motivating devices can be used; the right things at the right moment are communicated to bring home to employees an awareness of the issues involved in the functioning of an organization; authority to command or take decisions is delegated within certain limits; and a provision is made for career planning and development opportunities.

Factors Influencing Personnel Philosophy:

(1) Top Administrations Philosophy:

To some extent personnel management philosophy is preordained, based mostly on the experiences, education and background of the top administration. It may or may not be stated, it is usually communicated by their actions and permeate every level and department of the organization.

For example, Thomas J Watson Jr says that “I firmly believe that any organization, in order to service and achieve success, must have a sound set of beliefs on which it premises all its policies and actions. Next, I believe that the most important single factor in corporate success is faithful adherence to those beliefs, finally, I believe that if an organisation is to meet the challenge of the changing world, it must be prepared to change everything about itself except those beliefs as it moves through corporate life.”

“I.B.M.’s philosophy is largely contained in three simple beliefs – (i) our respect for the individual, (ii) IBM means success. We want to give the best customer service of any company in the world, (iii) An organisation should pursue all task with the idea that they can be accomplished in a superior performance from its people in whatever they do.”

“The Philosophy of the Tata Steel has been – in India, (i) Realistic and generous understanding and acceptance of their needs, rights and an enlightened awareness of the social responsibility of industry; (ii) Adequate wages, good working conditions, job security, an effective machinery for speedy redressal of grievances and suitable opportunity for promotion and self-development; (iii) Promoting feelings of trust and loyalty through a humane and purposeful awareness of their needs and aspirations; and (iv) creating a sense of belonging and team spirit through their closer association with administration at various levels”.

(2) Changing Environment:

Fundamental changes occurring the environment also influence personnel management philosophy.

Such factors are:

(a) New changes in law require that no discrimination should be made in providing equal employment opportunity on the basis of age, sex, caste, religion, etc.

(b) People are getting more interested in choosing a life style and career than just a job. This needs that personnel philosophy should be so changed as to make the career development and to make the work force more consistent with the changing interests of the workers.

(c) Dissatisfaction among the workers due to their getting such employment for which they are over qualified. This not only affects the quality of work but also compels the administration to learn how to motivate a better educated worker.

(d) Basic work values are changing. Previous “work ethics” motivated workers to work hard. With the decline of the ethics, motivating employees is becoming a difficult task.

(3) The Need to Motivate People:

Managers get things done through others and, therefore, if they cannot motive employees to get their job done, they are destined to fail as a manager. So methods of motivation also influence administration philosophy.

(4) Influence of One’s Assumption about People:

Personnel Management philosophy is also influenced by the basic assumptions one make about people, i.e., whether one believes in Theory X or Theory Y of Mc Gregory or in Linkerts System I or System IV. Accordingly the philosophy is framed.


Personnel Management – 8 Main Factors Responsible for the Growth of Personnel Management

The development of scientific administration and the awakened sense of social responsibility evinced in the countries of the West at the end of 19th century gave rise to the problem of how the available labour resources could be engaged to work effectively to minimize the cost and maximize the production and profits of the organisation by reducing the cost of wastage and implementing the new techniques and methods in men, materials and machines.

The problems relating to personnel also increased with the increase in the size of the industrial units. At that time the condition of workers was not satisfactory. They were regarded as slaves. But now there is a great change in the attitude of industrialists towards labour since the beginning of the twentieth century. They have now realized that labour is a partner in the functioning of the industry.

On the other hand workers are also skilled, educated and united. The sense of social responsibility has developed among workers. Moreover, Government also came forward and took various steps in improving the conditions of the labour force since then. The mounting pressure of labour problems, rise of labour union, changed attitude of administration towards labour and the lenient view of various governments towards the work force were some of the developments which were responsible for the growth and development of personnel management.

The following are some of the factors which may be held responsible for the growth of personnel management:

Factor # 1. Technical:

The following factors were responsible for the growth of personnel management:

(i) Industrial Revolution:

Industrial Revolution played an important role in the development of industries. It brought in revolutionary changes in the methods and techniques of industrial production. The industries were shifted from the former workshop to new mills and factories. Steam and power supplemented or were substituted for the efforts and energy of people. Though production processes were simplified by the use of new and new developed machineries and techniques, but on the other hand, other problems relating to men, materials and machines were emerged. In order to reconcile the situation, the existing principles of administration were suitably changed or amended or new principles were developed.

(ii) Use of Science in Industries:

With the advent of science new and new products, methods, techniques and processes were developed in the fields of production, communication and marketing which affected the industrial development and the personnel relations. To cope with the problems of industrial development, new offices were created such as – engineers, production manager etc.

(iii) Experiments in Other Social Sciences:

New experiments and research in other social sciences also contributed to the growth of personnel management. Hawthorn experiment field of psychology affected the attitudes of the employers to a great extent. Researches in behavioral science also subscribed to the development of personnel management. These experiments developed new techniques and methods which are being used in selecting the right person on the right job and developing them very scientifically by introducing new methods of training.

Factor # 2. Government Attitude:

The Government attitude towards labour, administration and business had changed considerably.

The change in Government attitude was mainly due to:

(i) The change in the concept of labour from the commodity concept to the human concept was given a wide recognition. He is now regarded as a human being and master of all the industrial activities. The idea of workers participation in administration has been recognized by almost all the Governments of the world,

(ii) Widespread acceptance of physiocratic or laissez-faire view-point which was popularized by Roussean, Bentham and Hobbes and was further advanced by Malthus, Adam Smith and other so- called classical school of economists. This view point proposed a minimum of public intervention in economic activities. But the political interests of the countries could not be safeguarded by this policy in World War I, hence the protection policy was introduced by nearly all the countries in the world. Businessmen could get an opportunity to earn huge profits as the rescue of the employees in getting them ride of exploitation by the employers,

(iii) Establishment of welfare states in most of the countries of earth which enacted various labour laws for the welfare of the industrial force.

Factor # 3. Cultural and Social Changes:

The following cultural and social charges also contributed to the development of industrial relations:

(i) Education:

Education brought the change in the attitude of labour towards their work. They realised that work is worship and they would be more benefited if they worked hard. They could very easily understand what was right and what was against their interest. They could no longer be exploited.

(ii) Change in Social Value of the Labour:

Social values of workers affect the efficiency of worker on the job. If a worker is given due regard in the society or by his fellow workers, he will be the most contented man in the society and his efficiency will be increased thereby. Large-scale production and advanced means of transportation and communication increased the social value of labour. Personnel problems have increased thereby. Therefore, new personnel principles were developed.

(iii) Population Problem:

Population problem also had impact to the problem of personnel management. The problem of active utilization of men arises most in the countries having a vast population like China and India. Problems of unemployment and wage fixation had their direct link with the population.

Factor # 4. Awakening among Workers:

After World War I, workers began to become united and a new industrial labour movement soon became an important element in this structure. The unions emerged in the early stages of industrialization as means of protesting the changing careers – opportunities open to employees and questioning the concentration of power and authority in the hands of owners. They expressed the concern of industrial employees about working conditions – levels of wages, stability of employment and status in the new industrial society of work. At later stages some other factors also subscribed to their causes.

They were:

(i) Economic hardship to workers due to inflation after World War I;

(ii) Political movements and success of Russian Revolution in 1917;

(iii) Emergence of International Labour

Organisation in 1919. The union movement succeeded in improving the labour relations in industries.

Factor # 5. Change in the Attitude of Administration:

Development of scientific administration, Industrial Revolution, awakening of workers, favorable attitude of Government towards labour and change in the social value of workers were some of the factors which compelled the administration to make a change in its attitude towards labour. The workers which were regarded as slave in earlier years, are now regarded as partners in the administration.

Factor # 6. Change in Size of the Business:

Industrial Revolution and technical changes in methods and machines proposed the large-scale production. By the use of technically-developed machines and simplification of methods, large-scale production became possible. Division of labour and specialisation functions were developed requiring a large number of technical and non-technical works. In order to get the work done by these people efficiently the need of personnel management was felt.

Factor # 7. Change in the Form of Business Organisation:

In earlier years business was carried on under sole proprietorship. With the advent of joint stock companies as a form of business organisation, the size of the business has increased exorbitantly. So new administration techniques were developed to cope with the problems of personnel in large industrial houses.

Factor # 8. Problem of Co-Ordination and Control:

Large scale production created the problem of control over the thousands of persons working in unit. The need of co-ordination between personnel objectives, developed methods and techniques and overall objectives of the organisation was realized. New structural relationship were developed. The problems of control and co-ordination cannot be solved unless an intensified study is made in the nature of working personnel.

The present day scene on personnel relations is the result of these technical, social and scientific changes in the field of industrial economy.


Personnel Management – In India

While the evolution and development of personnel administration in U.K. and U.S.A. was largely voluntary, in India personnel administra­tion had to be prodded along by governmental intervention and coercion.

While in the west the pioneering work in the field of personnel manage­ment was motivated by the managerial preoccupation with the concept of welfare, in India a combination of the disquieting recruitment prac­tices, growing labour unrest resulting in strikes and loss of production and a consideration of numerous grievances initiated some interest in personnel management especially in the textile mills in the year prior to Second World War. A rare industrialist adopted it voluntarily, the expe­rience being good. Now-a-days number of engineering, textile, auto-mobiles etc. they justified the need.

Hurdles in the Path of Personnel Management:

Till recently in India, Management, let alone the functional area in it, did not receive much attention. The role of management was realised only recently in India and efforts are made to understand and utilise the managerial concepts.

(1) A fallacious notion was that managers are born, and you can’t teach or train.

(2) It was through trial and error methods, would convert men into managers.

(3) As firm grow in size and complexity personnel management will come to play important role.

(4) There was lack of awareness.

(5) Master-servant relationships.

(6) Paternalistic attitude.

(7) Legalistic attitude.

(8) Weak labour movement

(9) Abundant labour supply.

(10) Migrant worker, indebtedness, various languages and customs have complicated the problem.


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