Master of Business Administration-MBA Semester I

MB0043-Human Resource Management-3 Credits

(Book ID: B0909)

Assignment Set- 2

Q.1 It is assumed that high morale leads to high productivity. Explain what
morale is and how it is related to productivity?
A.1 Morale is also known as employee engagement in the modern day
technology companies.

Morale Defined: Morale has been variously defined by different authors.

Professor Ralph C. Davis says, "Good organizational morale is a condition in
which individuals and groups voluntarily make a reasonable subordination of
their personal objectives for their organization". According to Dale Yoder and
Paul D. Standohar, "Morale means evident commitment, that is,
demonstrated spirit, enthusiasm, and confidence in the organization's
policies, programmes, and accomplishments.

Morale is revealed by what individuals and groups say and do to show an

interest in, understanding of, and personal identification with work-team
survival and success.” Edwin B. Filippo has described morale as “a mental
condition or attitude of individuals and groups which determines their
willingness to co-operate.
Good morale is evidenced by employee enthusiasm, voluntary
conformance with regulations and orders, and a willingness to co-operate
with others in the accomplishment of an organization's objectives. Poor
morale is evinced by surliness, insubordination, a feeling of discouragement
and dislike of the job, company and associates."

According to Haimann, "It is a state of mind and emotions affecting the

attitude and willingness to work, which in turn, affect individual and
organizational objectives." Joseph D. Mooney describes morale as "the sum
total of several psychological qualities which include courage, fortitude,
resolution, and above all, confidence."
MORALE AND PRODUCTIVITY

It is assumed that high morale and high productivity/ high quality and
creative work all go hand in hand. Since morale manifests itself in the
attitudes of employees, it is important to know about the results of high and
low morale. One of the most unpredictable effects of the level of morale is its
impact on employee productivity. The productivity of a group is a composite
of many factors, at least one of which is the general state of mind or the
commitment of the group. Formerly it was thought that high morale resulted
in high productivity. Research is repeatedly proving that this correlation is not
as simple. Various studies have revealed that the group having the highest
morale need not always be the highest in productivity. As morale is made up
of so many factors, so is productivity, the result of a series of complex
factors. When a group is convinced that high productivity will result in its
getting the things it wants most, it is reasonable to believe that productivity
will be high. It is likewise reasonable to believe that if the group's satisfactions
in the work situation are high and high productivity will enable it to get the
things it wants most, the productivity may be high.

Though high morale may not be the single cause of the high productivity, a
high-producing group nearly always has a reasonably high morale, in terms of
the company as a whole. Morale development is almost certain to
accompany successful operations where the individuals can relate their
respective endeavours and objectives to the success of the enterprise as a
whole. "A morale-building organization tends to utilize fully the skill, initiative,
judgement, and training of its members, and through such utilization
succeeds in building up these and other qualities in everyone, so that the
abilities of all constantly expand, and the organization thus is able to
succeed and grow."
Q.2 “Coxen” is a medium size, plastic manufacturing company. In this
Company, workers have developed grievances against management. For past
2 years, in spite of making profit, company is not paying bonus to workers. It
is expected that, if the grievances are not dealt with, it might lead to severe
consequences. Imagine this situation and explain the grievance handling
procedure, list each steps of the procedure. Suggest few measures to avoid
grievances.

A.2 IMPORTANCE OF GRIEVANCE HANDLING

What might happen if an organization does not provide some method by

which a employee can voice his complaints and obtain a explanation? The
employee will be unhappy, his productivity is impacted, and he openly begins
to share his discontent with not just his colleagues but also outsiders, friends,
relatives, maybe even customers and vendors.

Just as the employee has all the right to voice a grievance, as employer (or the
management) owes it to the employee to respond suitably to the grievance. It
is but commonsense that the resolution of a problem rests on management.
The earliest and clearest opportunity for issue resolution is found at the first
stage, before the grievance has left the jurisdiction of the manager. For this
reason, many firms have specifically trained their managers on how to handle
a grievance or complaint properly. If the dispute or grievance constitutes a
managerial problem it can often be resolved by the manager himself with the
help of the HR team.

GRIEVANCE HANDLING

The details of the grievance procedure vary from industry to industry and
from trade union to trade union because of the variations in the size of
organizations, trade union strength, the management philosophy, the
company traditions, industrial practices and in the cost factor. An important
aspect of the grievance machinery is the reassurance given to an individual
employee by the mere fact that there is a mechanism available to him which will
consider his grievance in a dispassionate and detailed manner, and that his point
of view will be heard and given due consideration. An employee's conception of
his problem(s) may be quite biased. Venting his grievance and being heard gives
him a feeling of being cared for. He gets it "off his chest", so to say, and it does a
lot of good for his morale as revealed by the famous Hawthorne Studies.
THE GRIEVANCE HANDLING PROCEDURE

Principles suggested by the Indian Institute of Personnel Management for

addressing the grievance are as follows:

a) A grievance should be dealt within the limits of the first line manager.
b) The appellate authority should be made clear to the employee so that if he
cannot get satisfaction from his immediate manager, he should know the next
step.
c) The grievance should be dealt with speedily.
d) In establishing a grievance procedure, if the grievance is against an
instruction given by a superior in the interest of order and discipline, the
instructions must be carried out first and then only employee can register
his protest. There should be no recourse to official machinery of conciliation
unless the procedure has been carried out without reaching any solution.

THE FOLLOWING STEPS DISCUSS HOW A GRIEVANCE CAN BE REDRESSED:

1. RECEIVING THE GRIEVANCE: The manner and attitude with which the
manager receives the complaint of grievance is important. The basic
premise is that the manager should at the outset assume that the
employee is fair in presenting his/her opinion/complaint. The complaint
should not be prejudged on the basis of past experience with this or
other employees. When a employee approaches the manager with a issue
the manager needs to make himself available to listen it all out and provide
him/her the undivided attention. Research confirms that managers who
were more task-oriented, as contrasted with managers who were more
people-oriented, tended to experience a significantly higher number of
grievances being filed in their units.

2. REVIEWING THE GRIEVANCE: Once a complaint is received all facts

supporting the issue needs to be gathered. Proper record keeping such as
performance ratings, job ratings, attending records, and suggestions are
reviewed. In addition, with the increasingly legal implications of modern
labour-management relations, the manager should keep records on each
particular grievance. All action taken, discussions with the employee,
summary and what is agreed to all of it needs to be recorded.
3. ANALYSIS AND DECISION: With the problem defined and the facts in hand,
the manager must now analyze and evaluate them, and come to some
decision. It is important for the manager to involve others in the process to
ensure that it is fair and is the best solution. The manager must include
the views of his own manager as he might not be aware of all the implications
of the problem and its resolution. Involving HR too is a recommended process
in all organizations. HR can then seek finance or legal counsel if required,
before any decision is taken. All involved in the decision making process need
to be aware that the decision may create an undesirable precedence within
the department as well as the company.

4. RESPONSE: Often it might not be possible to provide a positive resolution to

the problem. If the solution decided is adverse to the employee s views,
attention needs to be given to the method of communication. Employees
dislike managers who will take no stand, good or bad. Clearly
communicating the message and sharing as much information as possible
about the decision making process helps in establishing credibility to the
process used to make the decision. The manager can also invite HR or his
manager to sit-in on the conversation with the employee. As far as
possible this should happen in a face-to-face meeting. In the event an
employee wishes to take the appeal beyond to the next stage of the
procedure he must be allowed to do so. The manager must have the
opportunity to explain his decision to the other members so they can take a
well-informed decision.

5. FOLLOW UP: The objective of the grievance procedure is to resolve a

disagreement between an employee and the organization. Open
communication is important for this process. The purpose of phase is to
determine whether the employee feels that the problem has been
sufficiently redressed. If follow up reveals that the case has been handled
unsatisfactorily, then redefinition of the problem, further fact-finding,
analysis, solution and follow up are required. At this stage the manager can
step aside and allow someone else in a position of authority like the HR or
the manager s manager to lead the process and close it.

Q.3 Write a brief note on Succession planning.

A.3 Business succession planning involves planning for the smooth
continuation and success of a business which depends greatly on the
availability of competent staff. Be it profit or non-profit organization, one of
the concerns is there may be no successor to drive it once the leader or key
person leaves – either by choice or other circumstances. This concern has been
repeatedly expressed in the papers by leaders from the private and
government sector. It is people, or more aptly, the right people that make
things happen. If the leader or key person does not retire (whether by old age,
disability or choice) he will end his time of service when he dies. And when
they do, problems often set in.

What is likely to happen to the organization when a key leader is eliminated

without succession planning in place? Here are some things to expect. First,
there would be either no able successor or where there is, the successor is
often either unprepared to handle the heavy responsibilities placed upon them
or he/she simply does not have the ability to manage the organization in the
way it used to be. Whatever the case may turn out to be, the situation can be
dire for the organization. Profit may be lost. Business can become untenable to
continue. In the case of the unplanned death of an owner, the remaining co-
owners and the heirs may be embroiled in a relationship crisis that threatens
to wreck the business.

In an unplanned situation, ineffective quick-fixed solutions are the only

answers left. If no able successor can be found, a temporary replacement is
often the only choice left, and the ultimate result may still be the downfall of
the organization. It is difficult enough to run an organization with experience
and ability. Without the requisite qualities in the new leader, the root of the
organization is almost likely to set in immediately; unless it is lucky to have a
replacement that happens to be suitable and motivated. If not, an
unmotivated successor is equally bad news for the set-up. Without the drive,
the organization will stay stagnant and more than likely, to slide.

Without succession planning, a business that has become successful can just as
easily fail. The business grows because there is a leader with experience, drive
and ability. Without proper succession planning, the future success of the
business is left to chance once that leader is gone. Under such a circumstance,
if it succeeds at all, it is by default rather than planned. That is not all. The
passing of the baton from one generation to the next is often clouded by the
stakeholders’ differing views and agendas. Without proper planning, the
clashes of views and agendas can pull the business in several directions and
this may wreck an otherwise viable business.
With so much at stake, business succession planning has to be a priority and
should be part of every business planning. There are two main options
available to business succession planning, which are:

1. Retention Planning: Retention of the business within the family circle; and

2. Buy-sell Planning: Selling of the establishment to other business owners or

key employees or interested outsiders.

It is a norm in many parts of Asia that succession planning is a sensitive issue to

discuss amongst partners or shareholders. This is despite the fact that a
successful transition minimizes disruption, ensures continuous profitability and
guarantee satisfactory returns to the partners and shareholders.

Q.4 Think of a situation in which an employee is to be dismissed from the

organization, what will be the fair steps of dismissal followed by the
organization?
A.4 Dismissal of an Employee

According to Article 311 of the Indian Constitution, which states that “no
person shall be dismissed or removed from service until he has been given a
reasonable opportunity to show cause as to why the proposed action
should not be taken against him?"

The Model Standing Orders, similarly states that, "before an employee is

dismissed, he should be given an opportunity to explain the circumstances
against him."

The following steps are followed for dismissal of an employee:

a) CHARGE SHEET IS FRAMED AND ISSUED:

The first step in the procedure is to have in-place a written complaint

against the employee in question, and which contains details of the
offence with which he is charged, policy breach and the allegation of
misconduct made against him, and indicating the time limit within which a
reply to the charge sheet should be submitted to the due authorities. The
employee is called to put forth his case why a disciplinary action should not be
taken against him.
The contents and implications of the complaint/charge sheet may be
explained to him in his own language and in the presence of some
reputable witness, before a copy of it is handed over to him. If he
refuses to accept it, it should be sent to his residential address
"registered post with acknowledgement due". If the employee refuses to take
delivery of the registered letter, or when it has been returned
undelivered, it should be published in a local paper to ensure its wide
publicity.

b) EXPLANATION RECEIPT:

The employee provides his explanation within the scheduled time allotted. He
can also ask for an extension of time for its submission, all in good faith.

c) ISSUE OF NOTICE OF ENQUIRY:

Upon receipt of the explanation from the employee it is reviewed. If

found unsatisfactory, a notice of enquiry, mentioning the time, date and place,
has to be given to him in which the name of the person or officer conducting
the enquiry would also be mentioned. The employee is required to be present
at the appointed time and place, together with his witness, if he has any.

d) CONDUCTING THE ENQUIRY:

On the appointed day and at the appointed place and time, the enquiry is held
by the Enquiry Officer in the presence of the employee. The contents of
the charge sheet and an explanation of the procedure to be followed at the
enquiry are communicated to the worker. If he pleads his innocence, the
enquiry proceeds; but if he pleads guilty, unconditionally and in writing, the
enquiry is dropped.

e) SHARING FINDINGS:

Once the enquiry is over, the Enquiry Officer has to give his findings,
which should invariably contain the procedure which was followed, the
employee s statements, all of the documents produced and examined, the
charges made and the explanations given and the evidence produced. The
officer should then record his own findings on each of the charges and the
grounds on which he has come to a particular conclusion. He should
specifically mention which charges have been proved and which have not been
proved. He then submits his findings to the authorities empowered to take the
disciplinary action against the employee. He, however, is not required to make
any recommendations.

a) On receiving the report, the executive authorized to take a decision thereon

passes an order of action

b) Communication of the decision - A copy of the orders is then handed over

to the employee. In terminating the employment of an employee the following
conditions must necessarily be complied with for misconduct.

Q.5 Describe the process of wage fixation and the machinery available for it
A.5 Managing Wages

The main purpose of wage and salary administration is to establish and

maintain equitable wage and salary programs. The secondary objective is to
design and implement an equitable labour-cost structure. Therefore payout
cannot be out-of -sync with the organizations ability to pay it needs to
be able to satisfy the employees as well as employers, profits maximised and
conflicts minimised.
Wage and salary administration is concerned with the financial aspects of needs,
motivation and rewards. Managers, therefore, analyse and interpret the needs of
their employees so that reward can be suitably designed to satisfy these needs.
We will now review a few of the important theories that support the design of wage
systems. The word 'salary' is defined in the Oxford Dictionary as „fixed
periodical payment to a person doing other than manual or mechanical work .
The payment towards manual or mechanical work is referred to as wages. The word
pay refers to the payment for services done which would include salary as well as
wages.
Wages are commonly understood as price of labour. In ordinary parlance, any
remuneration paid for services is etymological wage. Benham defines wage as
“„a sum of money paid under contract by an employer to a worker for services
rendered.” Labour was always looked upon as a commodity governed by
the law of supply and demand. Certain theories were propounded for
determination of wages but these could not stand the test of time. A few
theories are discussed below:
THE BARGAINING THEORY OF WAGES:

John Davidson propounded this theory. According to him, wages are

determined by the relative bargaining power of workers or trade unions and of
employers. When a trade union is involved, basic wages, fringe benefits, job
differentials and individual differences tend to be determined by the relative
strength of the organization and the trade union. The Tribunals and Wage
Boards have generally followed the-principles laid down in the Fair Wages
Committee's Report on fixing wages.

The Committee, in its report, has focused on wage differentials and has
identified the following factors for consideration for fixation of wages:
1. The degree of skill.
2. The strain of work.
3. The experience involved.
4. The training involved.
5. The responsibility undertaken.
6. The mental and physical requirements.
7. The disagreeableness of the task.
8. The hazard attendant on the work, and
9. The fatigue involved.

Generally, ascertaining wages and deciding who to pay what is a activity

undertaken in the beginning when a organization is set up. Thereon it
is annual reviews to make corrections per the country s economic and
market/industry trends. The management considers the state of the labour
market and takes into account of what he can afford to pay and the value of
the worker to him. The workers willingness for employment at the rate
offered implies that they agree to work at that rate, though they have had no
part in fixing it.

1. Collective Bargaining: Collective bargaining is still in the initial stage in

India. Although it is a desirable development in the relations between
management and labour, it cannot be imposed upon either side by
compulsion and should evolve naturally from within.

2. Voluntary Arbitration: In voluntary arbitration, both parties agree to refer

their dispute to mutually agreed arbitrator and his award becomes binding on
the parties.
3. Wage Legislation: Wages are fixed according to law in some industries. The
Central Government and State Governments may fix minimum wages
under the Minimum Wages Act of 1948 for industries in which workers
are exploited or too unorganized to protect their own interests. In order to
advise them in the matter of fixing minimum wages, the Governments
appoint Minimum Wages Committees and the Advisory Boards. The
Committees and the Advisory Boards consist of equal number of workers
and employers representatives and also independent members whose
number should not exceed one- third of the total number of members.

4. Conciliation: The Industrial Disputes Act, 1947, provides for consideration

in case of disputes between employers and workers. If an agreement is
reached in the course of conciliation proceedings, it becomes binding on
the parties and takes effect from the date agreed upon or from the date on
which it is signed by the two parties. In case no agreement is reached, the
Conciliation Officer sends a full report of the proceedings. On receipt of this
report, the government may decide to refer the case to Industrial Tribunal for
award.

5. Adjudication: Labour courts and Industrial Tribunals are set up under the
Industrial Disputes Act, 1947. On studying the awards one gets the impression
that the adjudicators are attempting to justify their decision in social and
ethical terms. At the same time, there is a desire to satisfy both parties to
the dispute, and therefore, economic factors such as capacity to pay,
unemployment, profits, condition of the economy or welfare of the
industry concerned, are given due prominence.

6. Wage Boards: The boards are appointed by the Government and

usually consist of seven members – two representatives of management,
two of labour, two independent members and a chairman. The board is
expected to take into account the needs of the specific industry in a
developing economy, the special features of the industry, the requirements of
social justice, and the necessity for adjusting wage differential in such a
manner as to provide incentives to workers for advancing their skill. Its
recommendations may be accepted by the Government either completely or
partly, and may be statutorily imposed on the industry in question, or may be
rejected. In a nutshell, wages are influenced both by social and economic
factors. In one case, economic factors may play a major role, whereas in
another, social factors may be predominant. Thus, wages are product of both
social and economic factors.
Q.6 Write short notes on:

 Charismatic Leadership: Charismatic Leader is the degree to which the

leader behaves in admirable ways that cause followers to identify with
the leader. Charismatic leaders display convictions, take stands and
 appeal to followers on an emotional level. This is about the leader
having a clear set of values and demonstrating them in every action,
providing a role model for their followers.

 Participative Leadership : Lewin s study found that participative

(democratic) leadership is generally the most effective leadership
style. Democratic leaders offer guidance to group members, but they
also participate in the group and allow input from other group members.
While it is possible that this style productivity is lower than the in the
authoritarian group, but the contributions were of a much higher
quality. This could also be more time taking. Participative leaders
encourage group members to participate, but retain the final say
over the decision-making process. Group members feel engaged in the
process and are more motivated and creative.

 Delegative Leadership: Delegative leaders offer little or no guidance to

group members and leave decision-making entirely to group members.
While this style can be effective in situations where group members
are highly qualified in an area of expertise, it often leads to poorly
defined roles and a lack of motivation.

 Transformational Leadership: Transformational leaders offer a purpose

that transcends short-term goals and focuses on higher order
intrinsic needs (as discussed above). This results in followers
identifying with the needs of the leader.