Culture, Diversity, Stress and Justice; HRM Concept, Planning, Staffing, Training, Job Analysis and Compensation

The second half of Unit 2 finishes organisational behaviour at the organisation level — culture and climate, diversity and cross-cultural behaviour, emotions and stress, justice and whistle-blowing — and then opens human resource management: what it is and how it is changing, and the operating cycle from planning through recruitment, selection, induction and training to job analysis, job evaluation and pay. The paper asks the OB half as models and dimensions (Schein's levels, Hofstede's five, Selye's stages) and the HRM half as processes and their methods, and this chapter gives each as the list the examiner draws from.

1. Organisational culture and climate; workforce diversity and cross-cultural OB

Organisational culture is the system of shared meaning — values, beliefs, assumptions and norms — that distinguishes one organisation from another and tells members how things are done. Edgar Schein's three levels are artefacts (visible structures, dress, rituals, stories), espoused values (stated strategies and philosophies) and basic underlying assumptions (unconscious, taken for granted, the real source of behaviour). Culture is created by founders, sustained by selection, top management and socialisation (Van Maanen and Schein's pre-arrival, encounter and metamorphosis stages), and transmitted through stories, rituals, material symbols and language. Typologies the paper names: Charles Handy's four — power (a web around a central figure), role (bureaucratic pillars), task (a matrix net), person (a cluster of professionals); Deal and Kennedy's tough-guy macho, work-hard play-hard, bet-your-company and process cultures; Cameron and Quinn's competing values — clan, adhocracy, market, hierarchy; and Goffee and Jones's sociability-solidarity grid. A strong culture is widely shared and intensely held, cutting turnover but risking rigidity and institutionalisation. Organisational climate is the members' shared perception of the work environment at a point in time — warmth, support, reward, risk, structure, conflict (Litwin and Stringer) — the weather where culture is the geology: climate is measurable by survey and changes quickly, culture is deep and slow.

Cross-cultural frameworks
FrameworkDimensionsIndia's placing and the point tested
Hofstede (IBM study, 1980; extended 1991, 2010)Power distance, individualism versus collectivism, masculinity versus femininity, uncertainty avoidance, long-term versus short-term orientation (added from Bond's Chinese Values Survey), indulgence versus restraint (added with Minkov)India scores high on power distance, moderate on individualism, moderate-high on masculinity, low-moderate on uncertainty avoidance; the original four are asked most
Trompenaars and Hampden-Turner (1997)Universalism versus particularism, individualism versus communitarianism, neutral versus emotional, specific versus diffuse, achievement versus ascription, sequential versus synchronic time, internal versus external controlSeven dimensions; particularist cultures bend rules for relationships
GLOBE study (House and others, 2004)Nine dimensions including performance orientation, assertiveness, future orientation, humane orientation, institutional and in-group collectivism, gender egalitarianism, power distance, uncertainty avoidance62 societies; links culture to leadership expectations
Hall (1976) and Kluckhohn-StrodtbeckHigh-context versus low-context communication; monochronic versus polychronic time; relation to nature, time, activity, human nature, relationships, spaceIndia, Japan and Arab cultures are high-context; Germany and the United States low-context
ℹ️ Workforce diversity, and why it is managed rather than merely tolerated
Diversity is the mix of surface-level differences (age, gender, race, ethnicity, disability, religion) and deep-level differences (values, personality, work preferences) in a workforce, and inclusion is the climate in which each member is valued. Its management runs from equal-opportunity compliance — in India the Rights of Persons with Disabilities Act 2016 (4% reservation in government posts, 21 disabilities), the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 with its Internal Committee for every workplace of ten or more, the Transgender Persons Act 2019, and the Code on Wages 2019 restating equal pay — to diversity training, mentoring, flexible work and employee resource groups. The business case: wider talent pools, better decisions from diverse perspectives, market insight, creativity; the risks: communication problems, faultlines, tokenism and stereotype threat. Cross-cultural OB studies how behaviour, motivation and leadership differ by national culture — Hofstede's finding that American theories such as Maslow's and Herzberg's do not travel unchanged, expatriate adjustment and culture shock (Oberg's honeymoon, crisis, recovery, adjustment U-curve), and cultural intelligence (Earley and Ang) as the individual competence for working across cultures.

2. Emotions and stress management; organisational justice and whistle blowing

Emotions are intense, short-lived feelings directed at someone or something; moods are less intense and diffuse; affect covers both. Emotional labour (Hochschild) is the display of organisationally desired emotions, with surface acting (faking) and deep acting (trying to feel), and emotional dissonance is the gap between felt and displayed. Emotional intelligence — Salovey and Mayer's four branches (perceiving, using, understanding, managing emotions) and Goleman's five components (self-awareness, self-regulation, motivation, empathy, social skills) — predicts leadership and service performance. Affective events theory (Weiss and Cropanzano) links workplace events to emotions to attitudes and behaviour. Stress is an adaptive response to a demand (stressor) that exceeds the person's resources, and Hans Selye's general adaptation syndrome runs alarm, resistance, exhaustion. Stressors are environmental (economic, political, technological), organisational (task, role — ambiguity, conflict, overload — interpersonal, structure, leadership) and personal (family, finance, personality); Type A personality and an external locus of control heighten vulnerability. Eustress is the positive, energising form; distress the harmful one, and the Yerkes-Dodson inverted U says moderate stress raises performance while too little or too much lowers it. Consequences are physiological, psychological (burnout — Maslach's emotional exhaustion, depersonalisation, reduced accomplishment) and behavioural (absenteeism, turnover, accidents). Management is individual — time management, exercise, relaxation, meditation and yoga, social support, cognitive restructuring — and organisational — selection and placement, realistic goals, job redesign, participation, communication, sabbaticals, wellness and employee assistance programmes.

Organisational justice and whistle blowing
ConceptMeaningNames, law and institutions
Distributive justicePerceived fairness of outcomes — pay, promotion — judged by equity, equality or needAdams's equity theory is its root; Homans
Procedural justiceFairness of the process — consistency, bias suppression, accuracy, correctability, representativeness (voice), ethicality (Leventhal's rules)Thibaut and Walker; Leventhal (1980); Greenberg coined 'organisational justice' (1987)
Interactional justiceFairness of treatment — interpersonal (dignity, respect) and informational (explanations, honesty)Bies and Moag (1986); Colquitt's four-factor measure (2001)
Whistle blowingDisclosure by a member of illegal, immoral or illegitimate practices under the employer's control to persons or organisations able to act (Near and Miceli); internal or external; the dilemma between loyalty and dutyWhistle Blowers Protection Act 2014 (public servants; complaints to the CVC); Companies Act 2013 s. 177(9) vigil mechanism for listed and prescribed companies; SEBI LODR whistle-blower policy; SEBI's informant mechanism for insider trading (2019); Sarbanes-Oxley in the US; Satyam (2009) and the Ranbaxy case as Indian illustrations
⚠️ Selye's three stages, not four, and burnout's three dimensions
The general adaptation syndrome is alarm, resistance, exhaustion — three. Maslach's burnout inventory has three dimensions — emotional exhaustion, depersonalisation or cynicism, and reduced personal accomplishment. Goleman's emotional intelligence has five components in the 1995 book and four clusters in the later competency model; a question quoting 'self-awareness, self-regulation, motivation, empathy, social skills' wants the five. Eustress is not the absence of stress; it is stress that helps.

3. HRM: concept, perspectives, influences, trends; HR planning, recruitment, selection, induction, training and development

Human resource management is the process of acquiring, developing, motivating and retaining people so that the organisation and its members achieve their goals — Armstrong's strategic and coherent approach to the management of the organisation's most valued assets. It grew from welfare officers (Rowntree, Cadbury, and in India the Factories Act welfare officer), through personnel management (record-keeping and industrial relations, reactive, staff-driven) to HRM (proactive, integrated with strategy, line-driven, treating people as assets) and now human capital and talent management. The perspectives are hard HRM (people as a resource to be deployed for profit — the Michigan matching model of Fombrun, Tichy and Devanna, with selection, appraisal, rewards and development fitting strategy) and soft HRM (people as valued partners — the Harvard model of Beer and colleagues, with stakeholder interests and situational factors shaping HR policy choices toward commitment, competence, congruence and cost-effectiveness); Guest's model and Storey's 27 points of difference complete the set. Influences on HRM are economic (growth, labour markets), technological, legal (labour codes), social and demographic (a young workforce, women's participation, ageing in other countries), political and cultural, and the strategy and structure of the firm itself. Recent trends: strategic HR and the HR business partner, HR analytics and people analytics, HR technology (HRIS, AI in recruitment, learning platforms), the gig and platform workforce, remote and hybrid work after 2020, employee experience and wellbeing, diversity and inclusion, agile HR, skills-based organisations, and India's four labour codes of 2019–20, in force from 21 November 2025, with their central and state rules being notified in stages.

The staffing cycle and its methods
StageWhat it isMethods and terms the paper asks
Human resource planningForecasting demand for and supply of people and reconciling them — the right number and kind at the right time and placeDemand: managerial judgement, ratio-trend, work-study, regression, Delphi, Markov analysis; supply: skills inventory, management inventory, replacement charts, succession plans, Markov flows, labour-market analysis; gap closed by recruitment, training, redeployment, overtime, contract labour, or by VRS, layoffs, attrition, redundancy; Vetter's definition; macro versus micro planning
RecruitmentGenerating a pool of qualified applicants — a positive process; Flippo's 'searching for prospective employees and stimulating them to apply'Internal (promotion, transfer, job posting, employee referrals, former employees) versus external (advertising, campus, employment exchanges, agencies, e-recruitment and job portals, social media, walk-ins, poaching); yield ratio and time-lapse data; realistic job preview; employer branding; the Employment Exchanges (Compulsory Notification of Vacancies) Act 1959
SelectionChoosing from the pool — a negative process of rejection; matching the candidate to the job specificationSteps: application blank, screening, tests (aptitude, achievement, intelligence, personality, interest, situational judgement, work sample, assessment centre — in-basket, leaderless group discussion), interviews (structured, unstructured, stress, panel, behavioural, situational, group), reference checks, medical, final offer; reliability (consistency) versus validity (measures what it should — content, criterion: predictive and concurrent, construct); halo, contrast and similarity errors; false positives and negatives
Placement and induction (orientation)Assigning the selected person to a job; introducing the newcomer to the organisation, the job and colleaguesFormal and informal induction; the buddy system; reduces reality shock and early turnover; socialisation stages; probation and confirmation
Training and developmentTraining is short-term, job-specific skill building for non-managers; development is long-term growth of managers; education is generalProcess: needs assessment (organisational, task, person analysis), objectives, design, delivery, evaluation; on-the-job — coaching, mentoring, job rotation, apprenticeship, understudy, committee assignments, JIT; off-the-job — lectures, case study, role play, in-basket, business games, simulation, sensitivity training, programmed and e-learning, vestibule training; Kirkpatrick's four levels — reaction, learning, behaviour, results — and Phillips's fifth, return on investment; the Apprentices Act 1961; learning curve and transfer of training

4. Job analysis, job evaluation and compensation management

Job analysis is the systematic study of a job to determine its tasks, duties, responsibilities and the knowledge, skills and abilities it needs. Its two products are the job description (what the job is — title, duties, working conditions, reporting relationships, tools) and the job specification (what the holder must be — qualifications, experience, skills, physical and personality requirements). Methods of collection are observation, interview, questionnaire — the Position Analysis Questionnaire of McCormick with its 194 items, Functional Job Analysis of Fine with its data-people-things hierarchy, the critical incident technique of Flanagan, diaries and logs, and the US Department of Labor's O*NET. Job analysis feeds HR planning, recruitment and selection, training, appraisal, job evaluation and job design. Job design decides how tasks are combined into jobs: job simplification (Taylor), job rotation, job enlargement (horizontal loading — more tasks at the same level), job enrichment (vertical loading — Herzberg, adding planning and control), and the Hackman-Oldham job characteristics model whose five core dimensions produce the critical psychological states of experienced meaningfulness, responsibility and knowledge of results; flexitime, job sharing, telecommuting and compressed weeks are the scheduling redesigns.

Job evaluation methods
MethodTypeHow it worksMerit and limit
RankingNon-quantitative, whole-jobJobs ordered from most to least valuable, often by paired comparisonSimple and cheap; subjective, no measure of distance between ranks; small firms
Classification or gradingNon-quantitative, whole-jobGrades defined first, jobs slotted into themUsed by governments (the Indian pay-commission grades); broad and rigid
Point ratingQuantitative, factor-basedCompensable factors (skill, effort, responsibility, working conditions) split into degrees with points; the job's total points set its gradeMost widely used; consistent and defensible; costly to install; the Hay Guide Chart-Profile method (know-how, problem solving, accountability) is its best-known proprietary form
Factor comparisonQuantitative, factor-basedBenchmark jobs ranked factor by factor and their pay apportioned among factors, giving a money scale on which other jobs are placedBenge, Burk and Hay (1926); yields a wage directly; complex, and ties evaluation to existing pay

Compensation is everything an employee receives in return for work: direct financial (basic pay, dearness allowance, incentives, bonus, commission), indirect financial (benefits — provident fund, gratuity, insurance, leave, housing) and non-financial (recognition, growth, work environment). The wage theories the paper names are the subsistence theory (Ricardo — the iron law), the wages fund theory (Adam Smith, Mill), the residual claimant theory (Walker), the marginal productivity theory (Clark, Marshall), the bargaining theory (Davidson) and the behavioural theories that tie pay to equity and expectancy. Wage concepts: minimum wage (bare subsistence plus efficiency), fair wage (between minimum and living, tied to capacity to pay — the Committee on Fair Wages, 1948) and living wage (comfort and provision for the future); nominal versus real wage; time rate versus piece rate, and incentive plans — Halsey and Rowan premium plans, Taylor's differential piece rate, Gantt task and bonus, Emerson efficiency, Bedaux point, Scanlon and Rucker gain-sharing, profit-sharing, employee stock options. Compensation management designs the structure through job evaluation (internal equity), wage surveys (external competitiveness), pay grades and ranges, broadbanding, and the 3-P approach — pay for position, person and performance — with competency-based pay, skill-based pay, variable pay and executive compensation (Companies Act limits under Schedule V, SEBI's disclosure of the CEO-to-median ratio). Indian law: Minimum Wages Act 1948, Payment of Wages Act 1936, Payment of Bonus Act 1965 (8.33% minimum, 20% maximum), Equal Remuneration Act 1976 — all four subsumed by the Code on Wages 2019, in force from 21 November 2025, which also provides for a national floor wage fixed by the Centre; the Payment of Gratuity Act 1972 (15 days' wages per year after five years); the Employees' Provident Funds Act 1952 (12% each from employer and employee); dearness allowance linked to the CPI for industrial workers.

🧠 Job analysis, job evaluation, performance appraisal — three different objects
Job analysis studies the job and produces the description and specification. Job evaluation rates the worth of the job relative to other jobs, to set pay grades — it evaluates the job, never the person, and it is done once for a structure. Performance appraisal rates the person doing the job, and is done every cycle. Merit rating is an older name for appraisal; a question that says 'systematic determination of the relative worth of jobs' wants job evaluation, and one that says 'the process of determining the tasks that make up a job' wants job analysis.

Key takeaways

  • Schein's three levels are artefacts, espoused values and basic assumptions; Handy's four cultures are power, role, task and person; climate is the measurable, changeable perception, culture the deep, slow substance.
  • Hofstede's original four dimensions are power distance, individualism, masculinity and uncertainty avoidance, with long-term orientation and indulgence added later; India is high on power distance; Trompenaars has seven, GLOBE nine.
  • Selye's GAS is alarm, resistance, exhaustion; Goleman's EI has five components; Maslach's burnout three dimensions; justice is distributive, procedural and interactional; the Whistle Blowers Protection Act is 2014 and the Companies Act vigil mechanism is section 177.
  • Hard HRM is the Michigan matching model, soft HRM the Harvard model; recruitment is positive and selection negative; reliability is consistency, validity is measuring what it should; Kirkpatrick's levels are reaction, learning, behaviour, results.
  • Job analysis yields the description and specification; job evaluation ranks jobs (ranking, classification, points, factor comparison — points most used) never people; enlargement is horizontal and enrichment vertical loading; the Code on Wages 2019 subsumes the Minimum Wages, Payment of Wages, Bonus and Equal Remuneration Acts.

Practice questions (9)

Attempt each one before opening the answer. Every explanation names the tempting wrong option as well as the right one, because that is where marks are lost.

  1. In Edgar Schein's model of organisational culture, the deepest and least visible level consists of:

    1. Basic underlying assumptions
    2. Artefacts
    3. Espoused values
    4. Rituals and ceremonies
    Show answer

    Answer: A — Basic underlying assumptions

    Artefacts are visible, espoused values are stated, and basic assumptions are unconscious and taken for granted — the level that actually drives behaviour and is hardest to change. Rituals are artefacts.
  2. Which of the following was NOT among Hofstede's original four dimensions of national culture?

    1. Long-term versus short-term orientation
    2. Power distance
    3. Uncertainty avoidance
    4. Individualism versus collectivism
    Show answer

    Answer: A — Long-term versus short-term orientation

    The 1980 IBM study yielded power distance, individualism-collectivism, masculinity-femininity and uncertainty avoidance. Long-term orientation was added from Bond's Chinese Values Survey (1991) and indulgence-restraint with Minkov (2010).
  3. Hans Selye's general adaptation syndrome describes the body's response to stress in three stages:

    1. Alarm, resistance, exhaustion
    2. Denial, anger, acceptance
    3. Unfreezing, changing, refreezing
    4. Forming, storming, norming
    Show answer

    Answer: A — Alarm, resistance, exhaustion

    Alarm mobilises, resistance copes, and exhaustion follows if the stressor persists. Unfreezing-changing-refreezing is Lewin's change model, forming-storming-norming is Tuckman, and denial-anger-acceptance belongs to Kübler-Ross.
  4. The fairness of the process used to arrive at a pay or promotion decision — its consistency, freedom from bias and opportunity for voice — is called:

    1. Procedural justice
    2. Distributive justice
    3. Interactional justice
    4. Restorative justice
    Show answer

    Answer: A — Procedural justice

    Procedural justice (Leventhal's rules) concerns how the decision was made; distributive justice concerns the fairness of the outcome itself; interactional justice concerns the dignity and explanations given to the person. Restorative justice is a criminal-law concept.
  5. The 'matching model' of HRM, which fits selection, appraisal, rewards and development to business strategy and is associated with 'hard' HRM, comes from:

    1. The Michigan school (Fombrun, Tichy and Devanna)
    2. The Harvard school (Beer and colleagues)
    3. Guest's model
    4. Ulrich's business-partner model
    Show answer

    Answer: A — The Michigan school (Fombrun, Tichy and Devanna)

    The Michigan model (1984) is the hard, strategy-driven view. Harvard's map of HRM territory (1984) is the soft, stakeholder view aiming at commitment, competence, congruence and cost-effectiveness; Guest's model bridges the two; Ulrich describes HR roles.
  6. Recruitment is described as a positive process and selection as a negative process because:

    1. Recruitment seeks to attract as many suitable applicants as possible, while selection rejects the unsuitable
    2. Recruitment is done internally and selection externally
    3. Recruitment costs less than selection
    4. Selection precedes recruitment in the staffing cycle
    Show answer

    Answer: A — Recruitment seeks to attract as many suitable applicants as possible, while selection rejects the unsuitable

    Recruitment builds the pool (Flippo's 'stimulating them to apply'); selection screens the pool down by eliminating candidates at each step. Recruitment precedes selection and both may use internal or external sources.
  7. In Kirkpatrick's model of training evaluation, the level that measures whether trainees actually apply what they learned on the job is:

    1. Level 3 — behaviour
    2. Level 1 — reaction
    3. Level 2 — learning
    4. Level 4 — results
    Show answer

    Answer: A — Level 3 — behaviour

    Reaction asks whether trainees liked it, learning whether they acquired knowledge or skill, behaviour whether they transfer it to the job, and results whether the organisation gained. Phillips adds a fifth level, return on investment.
  8. Adding planning and control responsibilities to a job so that the holder gains autonomy and growth — 'vertical loading' — is called:

    1. Job enrichment
    2. Job enlargement
    3. Job rotation
    4. Job simplification
    Show answer

    Answer: A — Job enrichment

    Enrichment (Herzberg) loads vertically; enlargement loads horizontally by adding more tasks at the same level; rotation moves the person between jobs; simplification (Taylor) breaks the job into narrower tasks.
  9. Which job evaluation method assigns points to degrees of compensable factors such as skill, effort, responsibility and working conditions, and is the most widely used?

    1. Point rating method
    2. Ranking method
    3. Classification (grading) method
    4. Factor comparison method
    Show answer

    Answer: A — Point rating method

    Point rating is quantitative and factor-based, producing a total score that places the job in a grade; the Hay method is its best-known form. Ranking and classification are whole-job, non-quantitative methods; factor comparison is quantitative but yields a money value directly from benchmark jobs.