MBOO27 – Human Resource Management

SET – 1

SOLVED ASSIGNMENT
Q1 .Write a short note on Hawthorne Studies?

Ans : Hawthorne studies: The experiments which inspired Elton Mayo and others to
develop the Human Relations Movement. From 1924 the Western Electric Company of
Chicago, influenced by scientific management theories, measured the impact of different
working conditions (such as levels of lighting, payment systems, and hours of work) on
output. The researchers, Fritz Roethlisberger and William J. Dickson, concluded that
variations in output were not caused by changing physical conditions or material rewards
but partly by the experiments themselves. The special treatment required by experimental
participation convinced workers that management had a particular interest in them. This
raised morale and led to increased productivity. The term ‘Hawthorne effect’ is now
widely used to refer to the behaviour-modifying effects of being the subject of social
investigation, regardless of the context of the investigation. More generally, the
researchers concluded that supervisory style greatly affected worker productivity.

Later work, involving covert observation of working practices, showed how the pace and
organization of work is regulated by informal social norms and organization among
workers. These studies led Mayo to claim that workers are not primarily motivated by
economic factors but by management styles and informal work organization. Enhanced
productivity therefore depends on management sensitivity to, and manipulation of, the
‘human relations’ of production. Critics point to methodological defects in the Hawthorne
experiments and question the key conclusion drawn from them—that economic factors
are less important in determining productivity than the degree of psychological
satisfaction which work provides.
Individual behaviors may be altered because they know they are being studied was
demonstrated in a research project (1927 - 1932) of the Hawthorne Plant of the Western
Electric Company in Cicero, Illinois. This series of research, first led by Harvard
Business School professor Elton Mayo along with associates F.J. Roethlisberger and
William J. Dickson started out by examining the physical and environmental influences
of the workplace (e.g. brightness of lights, humidity) and later, moved into the
psychological aspects (e.g. breaks, group pressure, working hours, managerial
leadership). The ideas that this team developed about the social dynamics of groups in the
work setting had lasting influence - the collection of data, labor-management relations,
and informal interaction among factory employees.
The major finding of the study was that almost regardless of the experimental
manipulation employed, the production of the workers seemed to improve. One
reasonable conclusion is that the workers were pleased to receive attention from the
researchers who expressed an interest in them. The study was only expected to last one
year, but because the researchers were set back each time they tried to relate the
manipulated physical conditions to the worker's efficiency, the project extended out to
five years.

Four general conclusions were drawn from the Hawthorne studies:

The aptitudes of individuals are imperfect predictors of job performance. Although

they give some indication of the physical and mental potential of the individual, the
amount produced is strongly influenced by social factors.

Informal organization affects productivity. The Hawthorne researchers discovered

a group life among the workers. The studies also showed that the relations that
supervisors develop with workers tend to influence the manner in which the workers
carry out directives.

Work-group norms affect productivity. The Hawthorne researchers were not the first
to recognize that work groups tend to arrive at norms of what is "a fair day's work,"
however, they provided the best systematic description and interpretation of this
phenomenon.

The workplace is a social system. The Hawthorne researchers came to view the
workplace as a social system made up of interdependent parts.

For decades, the Hawthorne studies provided the rationale for human relations within the
organization. Then two researchers used a new procedure called "time-series analyses."
Using the original variables and including in the Great Depression and the instance of a
managerial discipline in which two insubordinate and mediocre workers were replaced by
two different productive workers (one who took the role of straw boss - see below). They
discovered that production was most affected by the replacement of the two workers due
to their greater productivity and the affect of the disciplinary action on the other workers.
The occurrence of the Depression also encouraged job productivity, perhaps through the
increased importance of jobs and the fear of losing them. Rest periods and a group
incentive plan also had a somewhat positive smaller effect on productivity.
Researchers from Western Electric and Harvard University led the Hawthorne studies.
(General Electric originally contributed funding, but they withdrew after the first trial
was completed.) The studies were intended to examine the influence of environmental
variables on a group of production workers. The group of workers was divided into two
subgroups: a test group, which would undergo environmental changes, and a control
group. The members of the control group would work under normal, constant
environment conditions.
The researchers began by manipulating the lighting of the test group. When lighting for
the test group was increased, their productivity increased--but the productivity of the
control group increased, as well. This result was somewhat unexpected, since the lighting
at the workstations of the control group had not been altered.

The researchers then decreased the lighting at the test group’s workstations. Surprisingly,
both the test group and the control group continued to improve their productivity. There
were no decreases in productivity until the light was reduced to the point where the
workers could barely see. The researchers concluded that light did not have a significant
impact on the motivation of production workers. This led General Electric, a light bulb
manufacturer, to withdraw their funding.

The next experiment utilized a mainstay of scientific management: incentive-based,

piecework system. The researchers expected, according to the conventional wisdom of
the day, that this would inspire the employees to dramatically increase their pace.
However, rather than working as fast as they could individually, the workers calibrated
themselves as a group. Employees who worked more slowly than average were derided
as “chiselers.” Employees who attempted to work faster than the group were called “rate
busters.” In other words, any significant deviation from the collectively imposed norm
was punished.

These results were, of course, a major blow to the position of scientific management,
which held that employees were only motivated by individual economic interest. The
Hawthorne studies drew attention to the social needs as an additional source of
motivation. Taylor’s emphasis on economic incentives was not wholly discredited, but
economic incentives were now viewed as one factor--not the sole factor--to which
employees responded

Q2. Trace the growth of Trade Union Movement from Factories Act 1881 to Factories Act
1948 ?

Ans : The growth of trade unions in India started way back in 1850 when the economic
conditions of labor was poor, The industry was dominated by the Capitalism, and the
industrialists were more concerned about the productivity. Long working hours, Low
wedges, poor living conditions and exploitation by the management was common in the
industry. Slowly in many parts of the country the workforces united and Factories Act
1881 was incorporated with a ban on Child labor, and conditions in working hours and
improved working conditions.

In next phase many trade unions were incorporated in the country under the leadership of
Mahatma Gandhi in other parts of the country like West Bangal, Ahamdabad, Punjab and
others. All India trade union federation was formed. After independence this took the
shape of Indian Factory Act 1948 with regulation on working conditions, working hours,
and other facilities at workplace. According to the Act, the workers employed in the
factories were allowed a eek off-day and provisions were also made for inspection as well
as limiting he hours of work for women workers to eleven per day. The act further
provided that the minimum age of children for employment should be seven ears and that
the maximum working hours for them should not exceed seven ours a day and that too in
the day-shift. In 1890, the first labour organization designated as Bombay Mill Hands
Association was established. Subsequently, in 1905, the printers' Union at Calcutta and in
1907, the Postal union at Bombay was established.

The Madras Labour Union was organized thereafter in 1918. In 1922, the indentured
labour system involving migration of Indian labour to other countries on contract basis
was abolished as a result of a strong National movement. In the same year, the Central
Labour Board was established to federate the different unions in the Bombay city and the
All India Trade Union Congress was organized. It may be noted that the reliable statistics
of trade union growth are not available for the period before the formal implementation
of the Indian Trade Unions Act, 1926, a landmark in the history of industrial relations in
this country. The early thirties witnessed a highly-weakened trade union movement.
However, the conditions prevailing five years before as well as during the Second World
War, were conducive to the rapid growth of the trade unionism. Between 1939-40 and
1944-45 the number of registered trade unions increased from 666 to 865 (i.e., by 29.7
percent) and the total membership of union submitting returns increased from 511, 134 to
889, 388 (i.e., by 70.4 percent). There was a large scale expansion of the trade union
movement after the Second World War - especially after the independence. As
Subramanian observes, there existed four-fold reasons for this rapid growth.

These were as follows: (1) the cumulative impact of the acute economic distress
stemming from war conditions and the removal of the war-time restrictions on strikes, (2)
the development of three more central labour organizations and the competition among
them, (3) the labour policy of the Government based on adjudication rather than
collective bargaining, and (4) the growth of the spirit of trade unionism among the
workers. Accordingly, during the period 1947-1960 while, industrial employment rose by
2.8 times, the total claimed union membership also went up by 2.3 times. In 1960, 45
percent of the total industrial workforce was claimed to be unionized. Today, the total
membership is estimated to be around 4.3 million i.e., 28 percent of total workforce.

Explicitly, during post-independence period, the activities of Personnel Department in

different public and private sectors have multiplied. According to the provisions of
section 49 of the Factories Act, 1948, it became obligatory for the-employers to employ a
Welfare Officer in a factory employing 500 or more workers. Likewise, section 58 of the
Mines Act, 1952, empowers the Government to specify employment of welfare
officer/officers. However, it does not mean that the functions of Personnel Department
are entirely limited to welfare activities. Management of human resources is being
regarded as a specialized profession such as that of medicine and law. In addition to the
industrial relations functions (although sometimes the industrial relations forms a
separate department), the Personnel Department is responsible for other varied functions
including employment, safety, training, wage and salary administration and research and
development. The Head of the Personnel Department is associated with top management
and helps it in the formulation of personnel policies for the company. Indeed, the
activities involved in Personnel Department are akin to those performed in this
department in any other western countries.
The Role of Trade Union

Trade unions are unique organisations whose role is variously interpreted and understood
by different interest groups in the society. Traditionally trade unions role has been to
protect jobs and real earnings, secure better conditions of work and life and fight against
exploitation and arbitrariness to ensure fairness and equity in employment contexts. In
the wake of a long history of union movement and accumulated benefits under collective
agreements, a plethora of legislations and industrial jurisprudence, growing literacy and
awareness among the employees and the spread of a variety of social institutions
including consumer and public interest groups the protective role must have undergone, a
qualitative change. It can be said that the protective role of trade unions remains in form,
but varies in substance.

There is a considerable debate on the purposes and role of trade unions. The predominant
view, however, is that the concerns of trade unions extend beyond 'bread and butter'
issues. Trade unions through industrial action (such as protests and strikes) and political
action (influencing Government policy) establish minimum economic and legal
conditions and restrain abuse of labour wherever the labour is organised. Trade unions
are also seen as moral institutions, which will uplift the weak and downtrodden and
render them the place, the dignity and justice they deserve.

Trade Unions in India

The trade union movement in India is over a century old. It is useful to take stock to see
whether the trade unions in India are at the centre stage or in periphery. In order to do
that, one may peruse the following relevant, though selective, statistics.
The Indian workforce 31.479 Crore (314.79 million) constitutes 37.3 percent of the total
population. Of the total workforce, 91.5 percent is accounted for by the informal sector,
while the formal sector accounts for 8.5 percent. Further, only abut 3 Crore (30 million)
(i.e. 9.5 percent of the workforce) are employed on permanent basis, implying 90.5
percent being employed on casual basis. It has also been reported that by December 1991,
the claimed membership of the Indian trade union movement was 3.05 Crore (30.5
million) (i.e. 9.68 percent of the workforce) with 82.24 percent of the trade union
membership being accounted for by the organised sector. Thus the unorganised sector is
meagerly represented.

The World Labour Report summarises the trade union situation in India "Indian unions
are too very fragmented. In many work places several trade unions compete for the
loyalty of the same body of workers and their rivalry is usually bitter and sometimes
violent. It is difficult to say how many trade unions operate at the national level since
many are not affiliated to any all- India federation. The early splits in Indian trade
unionism tended to be on ideological grounds each linked to a particular political party.
Much of the recent fragmentation, however, has centered on personalities and
occasionally on caste or regional considerations.”
Apart from the low membership coverage and fragmentation of the trade unions, several
studies point to a decline in membership, growing alienation between trade unions and
membership particularly due to changing characteristics of the new workforce and
waning influence of national federations over the enterprise unions. New pattern of
unionisation points to a shift from organising workers in a region or industry to the
emergence of independent unions at the enterprise level whose obsession is with
enterprise level concerns with no forum to link them with national federations that could
secure for them a voice at national policy making levels. Several studies also point to a
shift in employment from the organised to the unorganised sector through subcontracting
and emergence of a typical employment practice where those work for the organisation
do not have employment relationship, but a contractual relationship.
Unfortunately trade unionism in India suffers from a variety of problems such as
politicisation of the unions, multiplicity of unions, inter-union rivalry, uneconomic size,
financial debility and dependence on outside leadership.

Q3. Elaborate the HR planning System?

Ans : Human Resource Planning :

Human resource or manpower planning is defined as ‘the process by which a

management determines how an organization should move from its current manpower
position to its desired manpower position.’

HRP is a forward looking function and an organisational tool to identify skill and
competency gaps and subsequently develop plans for development of deficient skills
and competencies in human resources to remain competitive. HRP is influenced by
technological changes and other global business compulsions. HRP ensures benefits to
the organisations by creating a reservoir of talent, preparing people for future costcutting
and succession planning besides creating a back-up plan in case of
diversification and expansion.

Human resource planning should be an integral part of business planning. The

planning process defines projected changes in the types of activities carried out by the
organisation and the scale of those activities. It identifies the core competencies
required by the organisation to achieve its goals. Human resource planning interprets
people requirements in terms of stalls and competencies. As Quinnmills indicates,
human resource planning is a decision making process that combines three important
activities (1) identifying and acquiring the right number of people with the proper
skills, (2) motivating them to achieve high performance, and (3) creating interactive
links between business objectives and resource planning activities.

Human resource planning is indeed concerned with broader issues about the
employment of people than the traditional quantitative model approach of manpower
planning. But it specifically focuses on those aspects of human resource management
that are primarily about the organisation’s requirements for people from the viewpoint
of numbers, skills and how they are deployed.
Through HR planning, a management strives to have the right number and the right kind
of people at the right places, at the right time, to do things which result in both the
organization and the individual receiving the maximum long range benefit.’

Human resource planning consists of the following activities:

a) Forecasting future manpower requirement
b) Making an inventory
c) Anticipating manpower problems
d) Planning the necessary programmes of requirement.

Manpower planning consists in projecting future manpower requirements and developing

manpower plans for the implementations of the projections.

Needs for HRP :

The need for planning arises mostly due to the fact that modern organisations have to
survive, operate and grow in highly competitive market economics where change is the
order of the day. The change may be either revolutionary (sudden) or evolutionary
(slow). The different areas of change include: change in technology, change in
population, change in economic structures and systems, change in policies of
government, change in employee attitudes behaviour. etc. These changes create
problems for the management through threats and challenges. Managers have to bear
the problems caused due to the changes and act upon them tactfully in order to avoid
or reduce the effects of these problems on the survival, operation and growth of the
organisation.

Efficient managers can foresee the problems likely to occur and try to prevent them.
As pointed by Terry, successful managers deal with foreseen problems and
unsuccessful managers struggle with unforeseen problems. The difference lies in
planning. Managers have to foresee to make the future favourable to the organisation
in order to achieve the goals effectively. They introduce action, overcome current
problems, prevent future uncertainties, adjust the goals with the unforeseen
environmental conditions and exert all their resources to achieve their goals.
According to Megginson, et al “to have an organisation that looks forward to the
future and tries to stay alive and prosper in a changing world, there must be active,
vigorous, continuous and creative planning”.

Thus, there is a greater need for planning in order to keep the organisation dynamic in
a changing situation of uncertainty.

More specifically, HRP is required to meet following objectives:

1) Forecast HR requirement.
2) Cope-up with the change — in market conditions, technologies, products,
government regulations and policies, etc.
3) Use existing HR productivity.
4) Promote employees in a systematic manner.
If used properly, it offers a number of benefits:
1) Create reservoir of talent.
2) Prepares people for future.
3) Expand or contract.
4) Cut cost.
5) Succession planning.

Organisational Objectives and Policies

HR plans to be made based on organisational objectives implies that the objectives of

the HR plan must be derived from organisational objectives. Specific requirements in
terms of number and characteristics of employees should be derived from the
organisational objectives.

Organisational objectives are defined by the top management and the role of HRP is to
subserve the overall objectives by ensuring availability and utilization of human
resources.

Q4. Discuss the Multiple Person Evaluation Methods?

Ans : The above-discussed methods are used to evaluate employees one at a time. In this
section let us discuss some techniques of evaluating one employee in comparison to
another. Three such frequently used methods in organization are – ranking, paired
comparison and forced distribution.

Ranking method

This is a relatively easy method of performance evaluation. Under this method, the
ranking of an employee in a work group is done against that of another employee. The
relative position of each employee is tested in terms of his numerical rank. It may also be
done by ranking a person on his job performance against another member of the
competitive group. The quintessence of this method is that employees are ranked
according to their levels of performance. While using this method, the evaluator is asked
to rate employees from highest to lowest on some overall criterion. Though it is relatively
easier to rank the best and the worst employees, it is very difficult to rank the average
employees. Generally, evaluators pick the top and bottom employees first and then select
the next highest and next lowest and move towards the average (middle) employees. The
longstanding limitations of this method are:

 The ‘whole man’ is compared with another ‘whole man’ in this method. In
practice, it is very difficult to compare individuals possessing varied behavioral
traits.
 This method speaks only of the position where an employee stands in his group. It
does not tell anything about how much better or how much worse an employee is
when compared to another employee.
  When a large number of employees are working, ranking of individuals becomes
a tosticating issue.
 There is no systematic procedure for ranking individuals in the organization. The
ranking system does not eliminate the possibility of snap judgments.

In order to overcome the above limitations a paired comparison technique has been
advanced by organizational scholars.

Paired comparison method

Ranking becomes more reliable and easier under the paired comparison method. Each
worker is compared with all other employees in the group; for every trait the worker is
compared with all other employees. For instance, when there are five employees to be
compared, then A’s performance is compared with that of B’s and decision is arrived at as
to whose is the better or worse. Next, B is also compared with all others. Since A is
already compared with B, this time B is to be compared with only C, D and E. By this
method when there are five employees, fifteen decisions are made (comparisons). The
number of decisions to be made can be determined with the help of the formulae n (n-2).
Ranking the employees by the paired comparison method may be illustrated as shown in
the Table 10.7.

For several individual traits, paired comparisons are made, tabulated and then rank is
assigned to each worker. Though this method seems to be logical, it is not applicable
when a group is large. When the group becomes too large, the number of comparisons to
be made may become frighteningly excessive. For instance, when n=100, comparisons to
be made are 100 (100-2) = 100 (98) = 9800.

Trait: ‘Quantity of work’

Table: Employee Rated

As compared to A B C D E
A + – + –
B – + – +
C + – + –
D – + – –
E + – + +

Forced distribution method

Under this system, the rater is asked to appraise the employee according to a
predetermined distribution scale. The rater’s bias is sought to be eliminated here because
workers are not placed at a higher or lower end of the scale. Normally, the two criteria
used here for rating are the job performance and promotability. Further, a five point
performance scale is used without any mention of descriptive statements. Workers are
placed between the two extremes of ‘good’ and ‘bad’ performances. For instance, the
workers of outstanding merit may be placed at the top 10% of the scale. The rest may be
placed as – 20% —good, 40% —outstanding, 20% —fair and 10% —fair. To be specific,
the forced distribution method assumes that all top grade workers should go to the highest
10% grade; 20% employees should go to the next highest grade and so on.

Job performance as the criterion apart, another equally important factor in this method is
promotability. Employees may be classified according to their promotional merits. The
scale for this purpose may consist of three points – namely, quite likely promotional
material, may/may not be promotional material and quite unlikely promotional material.

One strong positive point in favor of the forced distribution method is that by forcing the
distribution according to predetermined percentages, the problem of making use of
different raters with different scales is avoided. Further, this method is appreciated on the
ground that it tends to eliminate rater bias. The limitation of using this method in salary
administration however, is that it may result in low morale, low productivity and high
absenteeism. Employees who feel that they are productive, but find themselves placed in
a lower grade (than expected) feel frustrated and exhibit, over a period of time, reluctance
to work.

Other methods of appraising performance include: Group Appraisal, Human Resource

Accounting, Assessment Centre, Field Review, etc. These are discussed in the following
sections:

Group appraisal

In this method, an employee is appraised by a group of appraisers. This group consists of

the immediate supervisor of the employee, other supervisors who have close contact with
the employee’s work, manager or head of the department and consultants. The head of
the department or manager may be the Chairman of the group and the immediate
supervisor may act as the Coordinator for the group activities. This group uses any one of
multiple techniques discussed earlier. The immediate supervisor enlightens other
members about the job characteristics, demands, standards or performance, etc. Then the
group appraises the performance of the employee, compares the actual performance with
standards, finds out the deviations, discusses the reasons therefor, suggests ways for
improvement of performance, prepares an action plan, studies the need for change in the
job analysis and standards and recommends changes, if necessary.

This method eliminates ‘personal bias’ to a large extent, as performance is evaluated by

multiple rates. But it is a very time consuming process.

Human resource accounting

HRA is a sophisticated way to measure (in financial terms) the effectiveness of personnel
management activities and the use of people in an organization. It is the process of
accounting for people as an organizational resource. It tries to place a value on
organizational human resources as assets and not as expenses. The HRA process shows
the investment the organization makes in its people and how the value of these people
changes over time. The acquisition cost of employees is compared to the replacement
cost from time to time. The value of employees is increased by investments made by the
company to improve the quality of its human resources such as training, development
skills acquired by employees over a period of time through experience, etc. When
qualified, competent people leave an organization; the value of human assets goes down.
In this method, employee performance is evaluated in terms of costs and contributions of
employees. Human resource costs include expenditure incurred by the company in hiring,
training, compensating and developing people. The contributions of human resources is
the money value of labour productivity. The cost of human resources may be taken as the
standard. Employee performance can be measured in terms of employee contribution to
the organization. Employee performance can be taken as positive when contribution is
more than the cost and performance can be viewed as negative if cost is more than
contribution. Positive performance can be measured in terms of percentage of excess of
employee contribution over the cost of employee. Similarly negative performance can be
calculated in terms of percentage of deficit in employee contribution compared to the cost
of employee. These percentages can be ranked to ‘Zero Level’ as shown in the Table
below.

Rank Rating Percentage of surplus/Deficit of

contribution to cost of employee
1. Extremely good performance Over 200
2. Good performance 150 – 200
3. Slightly good performance 100 – 150
4. Neither poor nor good 0 – 100
5. Slightly poor performance 0
6. Poor performance 0 to (— 50)
7. Extremely poor performance (—50) to (—100)

This technique has not developed fully and is still in the transitionary stage.

Assessment centre

This method of appraising was first applied in German Army in 1930. Later business and
industrial houses started using this method. This is not a technique of performance
appraisal by itself. In fact it is a system or organization, where assessment of several
individuals is done by various experts using various techniques. These techniques include
the methods discussed before in addition to in-basket, role playing, case studies,
simulation exercises, structured in sight, transactional analysis, etc.

In this approach individuals from various departments are brought together to spend two
or three days working on an individual or group assignment similar to the ones they
would be handling when promoted. Observers rank the performance of each and every
participant in order of merit. Since assessment centres are basically meant for evaluating
the potential of candidates to be considered for promotion, training or development, they
offer an excellent means for conducting evaluation processes in an objective way. All
assessees get an equal opportunity to show their talents and capabilities and secure
promotion based on merit. Since evaluators know the position requirements intimately
and are trained to perform the evaluation process in an objective manner, the performance
ratings may find favor with majority of the employees. A considerable amount of
research evidence is available to support the contention that people chosen by this
method prove better than those chosen by other methods. The centre enables individuals
working in low status departments to compete with people from well-known departments
and enlarge their promotion chances. Such opportunities, when created on a regular basis,
will go a long way in improving the morale of promising candidates working in less
important positions.

Field Review Method

Where subjective performance measures are used, there is scope for rater’s biases
influencing the evaluation process. To avoid this, some employees use the field review
method. In this method a trained, skilled representative of the HR department goes into
the ‘field’ and assists line supervisors with their ratings of their respective subordinates.
The HR specialist requests from the immediate supervisor specific information about the
employees performance. Based on this information, the expert prepares a report which is
sent to the supervisor for review, changes, approval and discussion with the employee
who is being rated. The ratings are done on standardized forms.

Since an expert is handling the appraisal process, in consultation with the supervisor, the
ratings are more reliable. However, the use of HR experts makes this approach costly and
impractical for many organizations.
Q5. Write a note on different theories for Managing Compensation?

Ans : Human Resource is the most vital resource for any organization. It is responsible
for each and every decision taken, each and every work done and each and every result.
Employees should be managed properly and motivated by providing best remuneration
and compensation as per the industry standards. The lucrative compensation will also
serve the need for attracting and retaining the best employees.

Compensation is the remuneration received by an employee in return for his/her

contribution to the organization. It is an organized practice that involves balancing the
work-employee relation by providing monetary and non-monetary benefits to employees.
Compensation is an integral part of human resource management which helps in
motivating the employees and improving organizational effectiveness.

Paying your employees the right amount is challenging at best - too little and you lose
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Types of Compensation

Compensation provided to employees can direct in the form of monetary benefits and/or
indirect in the form of non-monetary benefits known as perks, time off, etc.
Compensation does not include only salary but it is the sum total of all rewards and
allowances provided to the employees in return for their services. If the compensation
offered is effectively managed, it contributes to high organizational productivity.

Direct Compensation

Indirect Compensation

Need of Compensation Management

 A good compensation package is important to motivate the employees to increase

the organizational productivity.

 Unless compensation is provided no one will come and work for the organization.
Thus, compensation helps in running an organization effectively and
accomplishing its goals.

 Salary is just a part of the compensation system, the employees have other
psychological and self-actualization needs to fulfill. Thus, compensation serves
the purpose.

 The most competitive compensation will help the organization to attract and
sustain the best talent. The compensation package should be as per industry
standards.

Certain theories were propounded for determination of wages but these could not stand the test of
time. A few theories are discussed below :

Subsistence Theory : The Subsistence Theory of Wages, also known as the Iron Law of
Wages, was a law of economics that asserted that real wages in the long run would tend
toward the value needed to keep the workers' population constant. The theory was named
and popularized by the German socialist Ferdinand Lassalle in the mid-19th century.

According to Lassalle, wages cannot fall below subsistence level because without
subsistence, laborers will be unable to work for long. However, competition among
laborers for employment will drive wages down to this minimal level. This followed from
Malthus' demographic theory, according to which the growth rate of population was an
increasing function of wages, reaching a zero for a unique positive value of the real
wages rate, called the subsistence wage. Assuming the demand for labor to be a given
monotonically decreasing function of the real wages rate, the theory then predicted that,
in the long-run equilibrium of the system, labor supply (i.e. population) will be equated to
the numbers demanded at the subsistence wage. The justification for this was that when
wages are higher, the supply of labor will increase relative to demand, creating an excess
supply and thus depressing market real wages; when wages are lower, labor supply will
fall, increasing market real wages. This would create a dynamic convergence towards a
subsistence-wage equilibrium with constant population.

As David Ricardo first noticed, this prediction would not come true as long as a new
investment or some other factor caused the demand for labor to increase at least as fast as
population: in that case the equality between labor demanded and supplied could in fact
be kept with real wages higher than the subsistence level, and hence an increasing
population. In most of his analysis, however, Ricardo kept Malthus' theory as a
simplifying assumption.

Standard of Living Theory: This theory is a modified form of subsistence theory. According to
this theory, wages are determined not by subsistence level but also by the standard of living to
which a class of labourers become habituated.

Residual Claimant Theory: The residual claim and theory has been propounded by the
American economist, Walker. According to him, "Wages are the residue left over, after
the other factor of production has been paid". According to Jevon's words, "The wages of
a working man are ultimately coincident with what he produces, after the deduction of
rent, taxes and the interest on capital." Therefore, the remainder of the total output goes
to the workers as wages after rent, interest and profit have been paid. The efficiency of
laborers has important role to increase wages due to increase in production.

The Wage Fund Theory : The wage-fund theory held that wages depended on the relative
amounts of capital available for the payment of workers and the size of the labour force.
Wages increase only with an increase in capital or a decrease in the number of workers.
Although the size of the wage fund could change over time, at any given moment it was
fixed. Thus, legislation to raise wages would be unsuccessful, since there was only a
fixed fund to draw on

Demand and supply Theory: According to this theory, wages depend upon the demand and
supply of labour.

Marginal Productivity Theory: The marginal productivity theory of wages, formulated in

the late 19th century, holds that employers will hire workers of a particular type until the
addition to total output made by the last, or marginal, worker to be hired equals the cost
of hiring one more worker. The wage rate will equal the value of the marginal product of
the last-hired worker.

The bargaining theory of Wages: In the bargaining theory of wages, there is no single
economic principle or force governing wages. Instead, wages and other working
conditions are determined by workers, employers, and unions, who determine these
conditions by negotiation.
Q6. Write the advantages and limitations of Job Evaluation Method?

Ans : Job evaluation provides a systematic assessment of the relative demands of

different jobs within an organization. It’s a technique that strives to provide a systematic,
rational, and consistent approach to defining the relative worth of jobs within an
organization. Job evaluation is a system for analyzing and comparing different jobs and
placing them in a ranking order according to the overall demands of each one. It is not
concerned with the volume of work, or with the person doing it, or with determining pay.
It is used in order to provide the basis for an equitable and defensible pay structure,
particularly in determining equal pay for equal value. Job evaluation programs can be
divided into two main categories: non-analytical and analytical. In non-analytical
programs a job is compared with others as a whole, but such programs have a limited use,
because they are unlikely to succeed as a defense against an equal value claim. In an
analytical program, a job is split up into a number of different aspects and each factor is
measured separately. The main types of analytical programs are factor comparison, point-
factor rating, competency-based programs, and the profile method.

ADVANTAGES :

1. Job evaluation is a logical and objective method of ranking jobs relatively to each other.
It may thus help in removing inequities in existing wage structures and in maintaining
sound and consistent wage differences in a plant or an industry.
2. The method replaces accidental factors occurring in less systematic procedures of wage
bargaining by more impersonal and objective standards, thus establishing a clearer basis
for negotiation.
3. The method may lead to greater uniformity in wage rates and simplify the process of
wage administration.
4. Information collected in a process of job description and analysis can be used for
improvement of selection, training, transfer and promotion, procedures on the basis of the
comparative job requirement.

LIMITATIONS : The Technique of job-evaluation has following limitations :-

1. Though there are many ways of applying job evaluation in a flexible manner, rapid
changes in technology and in the supply of and demand for particular skills, create
problems of adjustment that may need further study.
2. When job evaluation results in substantial changes in the existing wage structure, the
possibility of implementing these changes in a relatively short period may be restricted
by the financial limits within which the firm has to operate.
3. Where there are a large proportion of incentive workers, it may be difficult to maintain a
reasonable and acceptable structure of relative earnings.
4. The process of job rating is, to some extent, inexact because some of the factors and
degrees can be measured with accuracy.
5. Job evaluation takes a long time to complete, requires specialized technical personnel and
is quite expensive.
 MBOO27 – Human Resource Management

SET – 2

SOLVED ASSIGNMENT
Q1. Mention and briefly explain different sources of recruitment?

Ans : Recruitment is an important part of an organization’s human resource planning and

their competitive strength. Competent human resources at the right positions in the
organisation are a vital resource and can be a core competency or a strategic advantage
for it.

The objective of the recruitment process is to obtain the number and quality of employees
that can be selected in order to help the organisation to achieve its goals and
objectives. With the same objective, recruitment helps to create a pool of prospective
employees for the organisation so that the management can select the right candidate for
the right job from this pool.

Recruitment acts as a link between the employers and the job seekers and ensures the
placement of right candidate at the right place at the right time. Using and following the
right recruitment processes can facilitate the selection of the best candidates for the
organisation.

Sources of Recruitment:

Every organisation has the option of choosing the candidates for its recruitment processes
from two kinds of sources: internal and external sources. The sources within
the organisation itself (like transfer of employees from one department to other,
promotions) to fill a position are known as the internal sources of recruitment.
Recruitment candidates from all the other sources (like outsourcing
agencies etc.) are known as the external sources of recruitment.

Internal Sources of Recruitment:

1. PRESS ADVERTISEMENTS
Advertisements of the vacancy in newspapers and journals are a widely used source of
recruitment. The main advantage of this method is that it has a wide reach.

2. EDUCATIONAL INSTITUTES
Various management institutes, engineering colleges, medical Colleges etc. are a good
source of recruiting well qualified executives, engineers, medical staff etc. They
provide facilities for campus interviews and placements. This source is known as Campus
Recruitment.
3. PLACEMENT AGENCIES
Several private consultancy firms perform recruitment functions on behalf of client
companies by charging a fee. These agencies are particularly suitable for recruitment of
executives and specialists. It is also known as RPO (Recruitment Process Outsourcing)

4. UNSOLICITED APPLICANTS
Many job seekers visit the office of well-known companies on their own. Such callers are
considered nuisance to the daily work routine of the enterprise. But can help in
creating the talent pool or the database of the probable candidates for the organisation.

5. EMPLOYEE REFERRALS / RECOMMENDATIONS

Many organisations have structured system where the current employees of the
organisation can refer their friends and relatives for some position in their organisation.
Also, the office bearers of trade unions are often aware of the suitability of candidates.
Management can inquire these leaders for suitable jobs. In some organizations these are
formal agreements to give priority in recruitment to the candidates recommended by the
trade union.

External Sources Include:

Campus Recruitment: Different types of organizations like industries , business firms,

service organizations, social or religious organizations can get inexperienced candidates
of different types from various educational institutions like Colleges and Universities
imparting education in Science, Commerce, Arts, Engineering and Technology,
Agriculture, Medicine, Management Studies etc,
Trained candidates are recruited with different specialization in subjects, like
engineering, medicine from the training institutes of State Government or National
Industrial Training Institutes for Engineers or vocational training centers.
Most of the Universities and Institutes imparting technical education in various
disciplines like engineering technology, management studies provide facilities for
campus recruitment and selection. They maintain the bio-data and performance required
of the candidates. Organizations seeking to recruit the candidates from this source can
directly contact the institutes either in person or by post and stimulate the candidates to
apply for jobs. Most of the organizations using the source perform the function of
selection after completing recruitment in the campus of the Institute itself with a view to
minimizing time lapse and to securing the cream before it is attracted by some other
organizations.

Campus Recruitment Techniques:

Companies realize that campus recruitment is one of the best sources for recruiting the
cream of the new blood. The techniques of cam pus recruitment include:
1.Short listing the institutes based on the quality of students intake, faculty facilities and
past track record.
2.Selecting the recruiting team carefully.
3.Offering the smart pay rather than high pay package.
4.Presenting a clear image of the company and the corporate culture.
5.Present the company but do not oversell the company.
6.Getting in early. Make early bird flu.
7.Focusing on career growth opportunities that the company offers to the recruits.
8.Include young line managers and business school (B-school) and engineering School
(E-school) alumni in the recruiting team.
9.Build the relationships with the faculty, administrators and students to grab them before
the rivals do.

Private Employment Agencies / Consultants: Public employment agencies or

consultants like ABC. Consultants in India perform the recruitment functions on behalf of
a client company by charging fee. Line managers are relieved from recruitment functions
so that they can concentrate on their operational activities and recruitment functions is
entrusted to a private agency or consultants. But due to limitations of high cost,
ineffectiveness in performance, confidential nature of this function managements
sometimes do not depend on this source. However, these agencies function effectively in
the recruitment of executives. Hence, they are also called executive search agencies.
Most of the organizations depend on this source for highly specialized positions and
executive positions.

Public Employment Exchange: The Government set-up Public Employment Exchanges

in the country to provide information about vacancies to the candidates and to help the
organizations in finding out suitable candidates. The Employment Exchange
(Compulsory Notification or Vacancies) Act, 1959 makes it obligatory for public sector
and private sector enterprises in India to fill certain types of vacancies through public
employment exchanges. These industries have to depend on public employment for the
specified vacancies.

Professional Organizations: Professional organizations or associations maintain

complete bio-data of their members and provide the same to various organizations on
requisition. They also act as an exchange between their members and recruiting firms in
exchanging information, clarifying doubts etc. Organizations find this source more useful
to recruit the experienced and professional employees like executives, managers,
engineers.

Data Banks: The Management can collect the bio-data of the candidates from different
sources like Employment Exchange, educational Training Institutes, candidates etc, and
feed them in the computer. It will become another source and the company can get the
particulars as and when it needs to recruit.

Casual Applicants: Depending upon the image of the organization, its prompt response,
participation of the organization in the local activities, level of unemployment, candidates
apply casually for jobs through mail or hand over the applications in Personnel
Department. This would be a suitable source for temporary and lower level jobs.
Similar Organizations: Generally, experienced candidates are available in organizations
producing similar products or engaged in similar business. The management can get most
suitable candidates from this source. This would be the most effective source for
executive positions and for newly established organization or diversified or expended
organizations.

Trade Unions: Generally, unemployed or underemployed persons or employees seeking

change in employment put a word to the trade union leaders with a view to getting
suitable employment due to latter’s intimacy with management. As such the trade union
leaders are aware of the availability of candidates. In view of this fact and in order to
satisfy the trade union leaders, management enquires with trade unions for suitable
candidates. Management decides about the sources depending upon the type of
candidates needed, time lapse period, etc. It has to select the recruitment technique(s)
after deciding upon source.

Q2. Write a note on guided and unguided interview?

Ans : Management is genuinely interested in high production and higher productivity of

workers to achieve the desired results, it should know the impact of its policies and
practices on the attitude of he workers about work and be ready in promoting the good
feelings about the work, policies, practices and about the organisation among workers
and stimulate them to get the predetermined objectives willingly. Higher productivity is
the direct result of the attitude of the workers about work i.e high morale will yield more
production and better quality at lower cost and is an index of good feelings about the
fellow-workers and the organisation. If workers appear to feel enthusiastic optimistic
about the groups activities and mission and friendly to each other, they are described as
having good or high morale. If they seem dissatisfied, irritated, cranky. Critical restless
and pessimistic, these reactions are described as evidence of poor or low morale,'
Therefore, form the view point of the management, the problem of employee morale, is
always at the top priority. They consistently and persistently make the efforts for
stimulating a feeling of togetherness, a sense of identification with the elements of one['s
job, working conditions, fellow workers, supervisors and the company which is
conductive to the achievement of the company's goals. It is essentially a responsibility of
the management to maintain high morale.

Morale has been recognized by military authorities as one of the most important factors
in winning or lossing wars. Napolean rated morale so high to say that more conditions
made up 95 per cent of success or failure in a military situation. High morale leads to
success and low morale brings defeat in its wake. The place of morale is no less
important for an industrial undertaking. The success or failure of he industry must
depends upon the morale of its employees. Kelth Davis has rightly compared the morale
with the woman according to him “.....never under-estimate the power of a woman,
and the same certainly must be said about morale, never under estimate the power
of morale.”
High morale assists the management to overcome the several labour problems such as
labour turnover, absenteeism, indiscipline, grievance etc.It also helps to seek cooperation
of the workers in the running of the organisation and thus getting higher production to
minimum possible cost by reducing the wastage of time, man, machines and materials. It
is, in other sense, an index of good industrial relations.

In modern times the psychological researchers have increased the importance of the
morale in the industrial field. They showed remarkable progress in output by improving
morale among the industrial workers. The government is also taking interest in this
direction and have introduced several labour welfare an social security measures to
improve the morale of the industrial workers. The management has also recognized the
importance of high morale and realized that low morale has long-range effects which are
even more damaging to the organisation. The investigators analyses the records and bring
out the variations in output, rat of absenteeism, labour turnover and accident, grievances
and complaints and their severity. By analyzing the records, he checks the extent to
which organisation is achieving results. The extent of increase or decrease in profitability,
productivity or any other direct benefits to the enterprise. It is the indirect method of
measuring the employee morale.

The above methods of the measurement of the employee morale present only the
tendencies or the attitude of the employee morale. The statistical measurement of morale
is not possible because it relates to the inner feelings of human beings. We can say that
morale is increasing or decreasing but cannot measure how much it decreased or
increased.

Interview may be of two types-guided and unguided. Guided interview emphasizes

mainly on the questions set out before hand in consultation with the higher management.
Under this method, the investigators go to the respondent with printed questionnaires,
explaining them the general objects and provide explanation, if asked for. The interview
asks a series of formal questions with simple choice responses, similar to those included
in the printed questionnaire which answered orally.

Under unguided interview, the participants are encouraged to talk freely about what he
thinks about the organisation and its people. There are no specific or formal questions.
The interviewer listens to and encourage the employees to take freely with an assurance
that talk will remain secret and confidential. It may be held individually or in groups. The
interviewer may ask questions of general interest and should avoid specific questions.

Q3. Discuss the techniques to motivate employees?

Ans : Man is by nature constantly motivated and is an organic system, not a mechanical
one. The inputs of energy such as food, water etc., are converted by him into outputs of
behaviour. His behaviour is determined by relationships between his characteristics as
organic system and the environment in which he moves. Management involves creation
and maintenance of environment for performance of individuals working together in
groups towards accomplishment of common objectives and therefore the manager cannot
perform his functions without knowing what motivates people.
Concept of Motivation
The personnel function is all about motivation and unless individuals are motivated to
make sufficient potential to perform effectively, they may not achieve the level of
performance that is desired from them. Managerial people are always facing the problems
of motivating their subordinates to release their potential most effectively and thereby
permit the desired goals of the organization and the needs of employees to be achieved.
Knowledge of the motivational process provides the basis for understanding why people
do what they do.

Motivation is positively correlated with concepts of (1) level of aspiration, (2) degree of
commitment, and (3) inclination towards action.

It is rightly said, “You can buy a man’s time, you can buy a man’s physical presence at a
given place, but you cannot buy his enthusiasm, initiative and loyalty.” Motivation aims
at transforming the ‘ability to do’ into ‘the will to do’. Motivated employees are in a state
of tension. To relieve this tension, they engage in activity. The greater the tension, the
greater shall be the activity to bring about relief. When we see someone working hard at
some activity, we can conclude that the individual is driven by a desire to achieve some
goal which perceives as having value to him.

Motivation has been defined as the act of stimulating someone to take a desired course of
action-to push the right button to get a desired reaction. It includes a stimulus and desired
results. Motivation concerns itself with the will to work. It seeks to know the motives for
work and to find out ways and means, by which their realisation can be helped and
encouraged.

Mr. Urwick has called it the dynamic aspect of management. According to Michael
Jucius, motivation is an ‘act of stimulating someone to get a desired course of action’.
James Driver says that, motivation means the phenomena involved in the operation of
incentives and drives. In the words of P.T.Young, motivation is the process (a) of
arousing or initiating behaviour, (b) of sustaining an activity in progress, and (c) of
channeling of activity in the given course.

A man’s performance on a specific task is a function of his skill and motivation. Thus it
can be said that p=f(S,M), where P is for performance, S for skill and M for motivation.
Skill does not guarantee that the individual will put forth his best effort. There is another
variable, namely motivation which finally determines the effort which can be expected
from such employee. That difference in motivation affects performance has been
demonstrated very conclusively. In laboratory experiments it was found that other things
being equal, performance level is higher if the motivation level is higher.
The key to understand motivation lies in the meaning and relationships between needs,
drives and goals. This demonstrated through ‘the motivation cycle’ given below:
1. Needs: The best one word definition of a need is efficiency. In the domestic sense,
needs are created whenever there is a physiological or psychological imbalance. For
example, a need exists when a cell in the body is deprived of food and water or when the
human personality is deprived of other persons who serve as friends or comparisons.

2. Drives: Drives are set up to alleviate needs. A drive can be defined as deficiency with
direction. Drives are action-oriented and provide an energizing thrust toward goal
accomplishment. The examples of the needs for food and water are translated into hunger
and thirst drives, and need for friends becomes a drive for affiliation.

3. Goals: At the end of the motivation cycle is the goal. A goal in the motivation cycle
can be defined as anything which will alleviate a need and reduce a drive.
Motivation may range from a threatening gesture to a tradition inspired activity. Thus the
atmosphere of working situation, the past history of human relations in a company,
expectations about the future as well as a wage incentive plan be stimuli to action, It is
believed that the full force of motivation lies in the person doing the motivation. In the
case the management, it is the magnetic personality of the executive which induces high
loyalty and production. If the executive does not have this quality, he is obviously at a
disadvantage. However, he can develop effective plans of motivation.

Motivation Techniques

Following Michael Jucius, let us see how management may proceed to motivate
employees. This activity may be divided into two parts: (a) what is to be done and (b)
how and why what is done. The former are steps in motivation and the latter are rules
governing the steps. Both are performed simultaneously. The steps of motivation are
listed below:

1. Size up situation requiring motivation: The first stage of motivation is to make sure of
motivational needs. Every employee needs motivation. However, all people do not react
in exactly the same way to the same stimuli. Keeping this in mind the executive shall size
up how much and what kind of motivation is needed and when and by which individuals.

2. Prepare a set of motivating tools: Having determined the motivational needs of a

particular person or group an executive must have a list from which he should select and
apply specific tools of motivation. An executive from his personal experience should
prepare a list of what devices are likely to work with what type of people and under what
circumstances.

3. Selecting and applying the appropriate motivator: Proper application of motivational

plan is very important. This involves selection of the appropriate technique, the method
of application and the timing and location of applications. Having selected appropriate
techniques, thought must be given to its application.

4. Follow-up the results of the application: The last stage of motivation is to follow-up
the results of the application of the plan. The primary objective is to ascertain if an
employee has been motivated or not. If not, some other technique should be tried. A
secondary purpose of follow-up is to evaluate motivation plans for future guidance.

Rules of Motivating: In following the steps of motivation a manager should be guided by

some fundamental rules which should be based upon the following principles:

1. Self-interest and Motivation: Undoubtedly, motivation is mainly built on selfishness.

Psychologically speaking, selfishness is a part and parcel of life. To deny this is to build
the theory on unrealistic foundation. To seek some other basis of motivation would be to
ignore the real nature of man. The aim should be to learn more about selfishness.

2. Attainability: Motivation must establish attainable goals. What is prescribed for a

particular person must be attainable by him. This does not mean that the goal is realised
at once. Such goals as promotion or desirable transfer may take years to attain. But it
must be within reach.

Eight Ways to Motivate Plant Employees: Based on a fact-finding study conducted at

several manufacturing plants of the General Electric Company, Sorcher and Meyer have
made the following recommendations for improving the motivation of employees in
routine jobs.

1. Provide assembly line employees with more than minimum training. Providing some
sort of formal training for a factory employee beyond the required minimum should result
in greater personal involvement in the job.

2. Create sub-goals to measure accomplishment. A sense of competition is important to

good motivation. When people work towards clearly defined goals they perform better.
Moreover, they are likely to be more interested in the work which will reduce monotony
and mental fatigue.

3. Provide regular feedback on performance. Psychological studies show that people

perform better when they receive positive as well as negative feedback about their
performance on a regular basis.

4. Maintain a neat and orderly work area. If the foreman does not care about neatness,
employees may feel that they need not care about it and this attitude may also affect the
quality of their work.

5. Arrange work situations so that conversation between employees is either easy or

impossible. Experienced workers can do routine jobs with little attention to the task.
Conversation while working may reduce monotony and fatigue and thus have a
favourable effect on output.

6. If possible, increase the number of operations performed by one employee. This can be
done by the simplification of manual operations. It offers several advantages, viz.,
i) the risk of errors is reduced;
ii) training costs are minimized;
iii) Management can hire employees at lower wages.
iv) Structure jobs, so that workers can, at least occasionally move about the work area.
Besides job rotation, there are other ways to provide for physical movement such as
setting employees secure their own tools or by adding operations which require some
physical activity.
v) Explore ways to assign greater personal responsibility. Increased responsibility means
greater self-esteem and greater job meaningfulness. One way to enlarge responsibility is
to let an employee inspect his own work.

Q4. Explain in detail the disciplinary –Action Penalties?

Ans : There are varying penalties for first, second, and third offences of the same rule. Among
the penalties available in business are :
1. Oral Reprimand
2. Written reprimand
3. Loss of Privileges
4. Fines
5. Lay off
6. Demotion
7. Discharge
The penalties are listed in the general order of severity, from mild to severe. For most cases, an
oral reprimand is sufficient to achieve the desired result. The supervisor must know his or her
personnel in determining how to give a reprimand. For one person, a severe “chewing out” may
be necessary in order to get attention and co-operation; another person may require only a casual
mention of a deficiency. If the offence is more serious, the reprimand may be put in written form.

Since a written reprimand is more permanent than an oral one, it is considered a more severe
penalty.

For such offences as tardiness or leaving work without permission, fines or loss of various
privileges can be used. The fines usually have some relationship to the work time actually lost.
The loss of privileges includes such items as job assignments, right to select machine or other
equipment, and freedom of movement about the workplace or company.

The more severe penalties of lay off, demotion and discharge are usually outside the grant of
authority to the immediate supervisor. Disciplinary layoffs can vary in severity from one to
several days loss of work without pay. The use of demotion as a penalty is highly questionable. If
the employee is properly qualified for the present assignment, he or she will be improperly placed
on a lower job. Discharge is the most severe penalty that a business organization can give and
constitute “industrial capital punishment”

Q5. Explain the importance of grievance handling ?

Ans : Maintaining quality of work life for its employees is an important concern for the
any organisation. The grievance handling procedure of the organisation can affect the
harmonious environment of the organisation. The grievances of the employees are related
to the contract, work rule or regulation, policy or procedure, health and safety regulation,
past practice, changing the cultural norms unilaterally, individual victimization, wage,
bonus, etc. Here, the attitude on the part of management in their effort to understand the
problems of employees and resolve the issues amicably have better probability to
maintain a culture of high performance. Managers must be educated about the importance
of the grievance process and their role in maintaining favorable relations with the union.
Effective grievance handling is an essential part of cultivating good employee relations
and running a fair, successful, and productive workplace. Positive labor relations are two-
way street both sides must give a little and try to work together. Relationship building is
key to successful labor relations.

Precautions and Prescriptions

The management should take care of following aspects to develop a culture of trust and
confidence upon the employees.

1. Always ensure that the managers involved in the grievance handling procedures have a
quiet place to meet with the complainant.

2. Always ensure that managers have adequate time to be devoted to the complainant.

3. Explain manager's role, the policy and the procedures clearly in the grievance handling
procedure.

4. Fully explaining the situation to the employee to eliminate any misunderstanding and
promote better acceptance of the situation complained of.

5. Try to let employee present their issues without prejudging or commenting

6. Do use a positive, friendly ways to resolve the crisis than punitive steps, which disturb
the system.

7. Do remain calm, cool, collected during the course of the meeting.

8. Always focus on the subject of the grievance than allied issues.

9. Don't make threats manage the grievances.

10. Never make use of allegations against personalities.

11. Beware of the staff member's potential concerns to the possible repercussions of
raising a grievance.

12. Don't become angry, belligerent, or hostile during grievance handling procedure.

13. Do listen for the main point of arguments and any possible avenue to resolve the
grievance.
14. Listen and respond sensitively to any distress exhibited by the employees.

15. Eliminating the source of the irritation or discomfort being complained of.

16. Reassure them that the managers will be acting impartially and that your hope is to
resolve the matter if possible.

17. Don't "horse trade" or swap one grievance for another (where the union wins one,
management wins one). Each case should be decided on its merits.

18. Avoid usage of verbosisms like "it will be taken care of."

19. Ensure effective, sensitive and confidential communication between all involved.

20. Take all possible steps to ensure that no victimization occurs as a result of the
grievance being raised.

21. The investigator or decision maker acts impartially, which means they must exclude
themselves if there is any bias or conflict of interest.

22. All parties are heard and those who have had complaints made against others are
given an opportunity to respond.

23. Try to look upon the problem on different angles for appropriate understanding.

24. Ensuring that there is proper investigation of the facts and figures related the problem
under concern.

25. Consider all relevant information in the investigation process.

26. Ask the staff member their preferred resolution option, although it is important to
make it clear that this may not be a possible outcome.

27. Be aware of the limits of authority of the person who involved in the grievance
handling procedures.

28. If the manager feels that he/she is not the appropriate person (senior manager) to deal
with the issue refer the complainant to the appropriate person as soon as possible.

29. Try to get a better idea of whether the alleged discrimination or harassment happened
or didn't happen.

30. Tell them exactly what they are supposed to have done, to whom and explain, why
this may be seen as discrimination/harassment or as inappropriate.

31. Grievances are preferably to be settled informally at the level of the employee's
immediate supervisor.

32. Try the level best to involve team members to resolve the crisis at unit level itself.

33. Avoid as far as possible the union involvement in conflict resolution situation
process.

34. Follow documentation the procedures, of all necessary steps taken to resolve the
problem/complaint.

IMPORTANCE :

1. Receive and define the nature of the dissatisfaction: The manner and attitude
with which the supervisor receives the complaint of grievance is important. As a
principal applicable to this step, the supervisor should assume that the employee
is fair in presenting the complaint or grievance. Statements should not be
prejudged on the basis of past experience with this or other employees. The
supervisor should not be too busy to listen and should not give an impression of
condescension in doing so. Thus supervisors who were nearly task oriented, as
contrasted with people-oriented, tended to experience a significantly greater
number of grievance being filed in their units.
2. Get the Facts : In gathering facts, one quickly becomes aware of the importance
of keeping proper records such as performance rating, jo ratings, attending
records and suggestions. In addition, with the increasingly legalistic bent that is
characteristic of modern labour-management relations, the supervisor is wise to
keep records on each particulars grievance. It is also important that the supervisor
possesses and exercises some skill in interview conference, and discussion.
3. Analyze and divide: With the problem defined and the facts in hand, the manager
must now analyze and evaluate them, and them come to some decision. There is
usually more than one possible solution. The manager must also be aware that the
decision may constitute a precedent within the department as well as the
company.
4. Apply the answer: Though the solution decided upon by the superior is adverse
to the employee, some answer is better than none. Employees dislike supervisors
who will take no stand, Good or bad. In the event of an appeal beyond this stage
of the procedure, the manager must have the decision and the reasons for his
decision should be properly recorded.
5. Follow up : The objective of the grievance procedure is to resolve a disagreement
between an employee and the organization. Discussion and conference are
important to this process. The purpose of its follow-up phase is to determine
whether the clash of interest has been resolved. If follow up reveals that the case
has been handled unsatisfactorily or that the wrong grievance has been processed,
then redefinition of the problem, further fact-finding, analysis, solution and follow
up are requesired.
Q6. Explain Managerial grid in detail?
Ans :The Managerial Grid Model (1964) is a behavioral leadership model developed by
Robert Blake and Jane Mouton. This model identifies five different leadership styles
based on the concern for people and the concern for production. The optimal leadership
style in this model is based on Theory Y.

A graphical representation of the Managerial Grid As shown in the figure, the model is
represented as a grid with concern for production as the X-axis and concern for people
as the Y-axis; each axis ranges from 1 (Low) to 9 (High). The five resulting leadership
styles are as follows:

The impoverished style (1,1)

In this style, managers have low concern for both people and production. Managers use
this style to avoid getting into trouble. The main concern for the manager is not to be
held responsible for any mistakes, which results in less innovative decisions.

The country club style (1,9)

This style has a high concern for people and a low concern for production. Managers
using this style pay much attention to the security and comfort of the employees, in
hopes that this would increase performance. The resulting atmosphere is usually friendly,
but not necessarily productive.

The produce or perish style (9,1)

With a high concern for production, and a low concern for people, managers using this
style find employee needs unimportant; they provide their employees with money and
expect performance back. Managers using this style also pressure their employees
through rules and punishments to achieve the company goals. This style is based on
Theory X, and is commonly applied by companies on the edge of failure.
The middle-of-the-road style (5,5)
Managers using this style try to balance between company goals and workers' needs. By
giving some concern to both people and production, managers who use this style hope to
achieve acceptable performance.

The team style (9,9)

In this style, high concern is paid both to people and production. As suggested by the
propositions of Theory Y, managers choosing to use this style encourage teamwork and
commitment among employees. This method relies heavily on making employees feel
as a constructive part of the company.

Leaders may be concerned for their people and they also must also have some concern
for the work to be done. The question is, how much attention to they pay to one or the
other? This is a model defined by Blake and Mouton in the early 1960s.

Country Club Team

High
management management
Middle of the
Concern for Mediu
road
People m
management
Impoverished Authority-
Low
management compliance
Low Medium High
Concern for Production (Task)

Grid theory makes behaviors as tangible and objective as any other corporate commodity.
They can explore types of critique that work best for them and why. They can openly
discuss how to improve decision-making and conflict resolution skills.