Management of Industrial

Relations

A Project Report
On

Industrial Relations in BHEL, Bhopal

Submitted By: Ashish Nirmal F-241

Ishant Gupta F-231
Shakti Mehta F- 59
Anurag Choudhary F-239

BHEL is the largest engineering and manufacturing enterprise in India in the energyrelated/infrastructure sector, today. BHEL was established more than 50 years ago, ushering
in the indigenous Heavy Electrical Equipment industry in India - a dream that has been more
than realized with a well-recognized track record of performance. The company has been
earning profits continuously since 1971-72 and paying dividends since 1976-77.
BHEL manufactures over 180 products under 30 major product groups and caters to
core sectors of the Indian Economy viz., Power Generation & Transmission, Industry,
Transportation, Telecommunication, Renewable Energy, etc. The wide network of BHEL's 14
manufacturing divisions, four Power Sector regional centers, over 100 project sites, eight
service centers and 18 regional offices, enables the Company to promptly serve its customers
and provide them with suitable products, systems and services efficiently and at competitive
prices. The high level of quality & reliability of its products is due to the emphasis on design,
engineering and manufacturing to international standards by acquiring and adapting some of
the best technologies from leading companies in the world, together with technologies
developed in its own R&D centers.
BHEL has acquired certifications to Quality Management Systems (ISO 9001),
Environmental Management Systems (ISO 14001) and Occupational Health & Safety
Management Systems (OHSAS 18001) and is also well on its journey towards Total Quality
Management.
BHEL's operations are organized around three business sectors, namely Power,
Industry - including Transmission, Transportation, Telecommunication & Renewable Energy
- and Overseas Business. This enables BHEL to have a strong customer orientation, to be
sensitive to his needs and respond quickly to the changes in the market.
BHEL's vision is to become a world-class engineering enterprise, committed to
enhancing stakeholder value. The company is striving to give shape to its aspirations and
fulfill the expectations of the country to become a global player.
NEED FOR THE STUDY
The aim of good industrial relations is to achieve a motivated, capable workforce that
sees its work as creative and fulfilling. A breakdown in industrial relations can lead to an
industrial dispute where one party takes industrial action.
Industrial Relations is studied to understand the Labour Relations i.e., the relations
between union and management, Employer-employees relations i.e., relations between
management and employees, Group relations i.e., relations between various groups of
workmen, Community or Public relations i.e., relations between industry and society and to
promote and develop healthy workmen-management relations, to maintenance of industrial
peace and avoidance of industrial strife and to develop true industrial Democracy.

Industrial Relations is also needed to achieve an uninterrupted production, to reduce

wastage, to reduce the industrial disputes, to achieve high morale among the employees.
Good Industrial Relations are the basis of higher production with minimum cost and
higher profits. It also results in increased efficiency of workers. New projects may be
introduced for the welfare of the workers and to promote the morale of the people at work.
An economy organized for planned production and distribution, aiming at the
realization of social justice and welfare of the massage can function effectively only in an
atmosphere of industrial peace. If the twin objectives of rapid national development and
increased social justice are to be achieved, there must be harmonious industrial relationship
between management and workmen.
METHODOLOGY

HYPOTHESIS:
The hypothesis states INDUSTRIAL RELATIONS ARE GOOD IN BHEL.
This hypothesis is developed after a proper observation of the working environment in
BHEL.

SOURCES OF DATA:
Two sources of data are used of which the first one is Primary source and the
second is Secondary source. The primary source consists of questionnaires and
observations. The secondary source consists of internet and magazines.
The design of questionnaire is as follows:
Types of questions: Objective and Subjective questions are framed. These questions include
Open format questions, Closed format questions, Likert questions, Dichotomous questions,
Rating scale questions etc.
Phrasing of the questions: The following points were taken into consideration while
phrasing of the questions:
1.
2.
3.
4.

Difficult and vague words are avoided.

Lengthy and unspecific questions are avoided.
Positive/ negative connotation questions are avoided.
Embarrassing questions that ask respondents details about personal and
private matters are avoided.
5. Hypothetical questions that are based on speculation and fantasy are avoided.

Order of the questions: Both the objective and subjective questions are arranged according
to the convenience of the employees.
There are two sets of questionnaires; one for the workmen and the other for the
supervisors and executives. The first 10 questions in both the questionnaires are specific for
the workmen and supervisors-executives respectively and the rest of the questions are
common in both the questionnaires for all the employees. All the questions deal with
INDUSTRIAL RELATIONS, out of which the first set of questions focuses on the
satisfaction levels of the employees.
SAMPLING DESIGNS AND SAMPLE SIZE:
Random sampling method is used. Representing the employees in BHEL, Bhopal unit,
comprising of employees of all the levels, the sample size is taken as 60.
TARGET POPULATION:
The selected population consists of the employees of Bharat Heavy Electricals
Limited, Bhopal. The employees here are categorised as Workmen, Supervisors and
Executives. Out of the sample size 60, 40 employees have been surveyed which includes
20 Workmen, 10 Supervisors and 10 Executives.
DESCRIPTIONS OF STUDY:
The survey is conducted in the Bhopal unit of Bharat Heavy Electricals Limited. The
Industrial Relations Survey is a survey mapping the relationship between employees and
management which stem directly or indirectly from union-employer relationships in the
workplaces of BHEL, Bhopal.
Data are collected from the questionnaire floated among workplace executives who
have day-to-day responsibility for the work, interviews with supervisors and workmen via a
self-completion questionnaire.
The main topics covered under Industrial Relations in the survey are: satisfaction,
employment and workplace characteristics, management of the personnel function, pay
determination, collective procedures and industrial disputes, grievance and disciplinary
procedures, fair treatment at work, workplace flexibility and workplace performance.

FINDINGS:
From the findings, we came to know that there are three categories of employees working in
BHEL. They are

a.
b.
c.
d.
e.

Executives
Supervisors
Workmen

The study of the Industrial Relations of BHEL led to the following findings:
Job satisfaction is found to be 100% in all the categories of employees.
Workmen have their trade union while the executives and supervisors have their
associations.
There are about 5 trade unions in BHEL namely
INTUC (Indian National Trade Union Congress)
CITU
AITUC (All India Trade Union Congress)
BMS (Bharat Mazdoor Sangh)
TNTUC
Presently, INTUC is the ruling union in BHEL.
BHEL rarely resorts to strikes.
Workers went on a strike for about 6 years back where they demanded for the hike in
their wages and which proved successful.
All the units of BHEL are not provided with modern production techniques but only the units
where it is found very essential to increase the efficiency are provided with the modernized
equipment and machinery.
EMPLOYMENT TECHNIQUE:
BHEL follows the following employment techniques

Manpower Recruitment
Identifying Source of recruitment
Internal
External
1. Consultant
2. Advertisement

PROMOTION:
Among the executives:

The executives are being promoted in every 4 years purely on the basis of their performance.
Among the Supervisors:
Different time periods are there for different cadres of the supervisors for promotion based on
their performance.
Cadres

Promotion

For S1 to S3

100%

For S4

80%

For S5

65%

For S6

70%

For S7

75%

Among the workmen:

The workmen are promoted in every 4 to 7 years depending upon their cadre.

BENEFITS:
BHEL provides a very good number of benefits to its employees keeping in view to retain
them by satisfying their other needs as well. They can be listed as:

Group Insurance Scheme

Group Savings Linked Insurance Scheme
Insurance Scheme In Lieu Of EDLI Scheme
BHEL Employees Housing Loan Group Insurance Scheme
Accident/Medical Insurance Scheme
Compensation to employees not covered under Workmens Compensation ACT.
Compensation in cases of those killed in terrorist attacks
BHEL Gratuity Fund
Death Relief Fund
Reimbursement of cost of newspapers

FACILITIES:
1. LEAVE POLICY:
The BHEL Leave rules apply to all the regular employees of the company as well as the
trainees and the apprentices.
It includes:

EL (Earned Leave) - It ranges from 22 days to 26 days depending on the category of

the employee.
CL (Casual leave) - It ranges from 10 to 12 days in a year depending upon the years
of service in the company.
HPL (Half Pay Leave) - This is leave on half pay earned by the employee in respect
of service with the company.

Commuted Leave - It means leave granted on medical certificate on full pay. For every
commuted leave two HPL will be debited from employees leave account. An employee can
either take 11 days HPL and 11 days commuted leave or, 22 days HPL only.

EOL (Extra Ordinary Leave) - It is the leave sanctioned under special

circumstances without any pay and allowances.
Maternity Leave - All female employees are entitled to the grant of maternity leave
on full pay for a period of 90 days
Special Casual Leave - Special casual leave not exceeding 30 days in a calendar year
may be granted in the following cases:
a) Employees selected to represent the company in tournaments recognized by the
state association or of national or international importance for the game(s)
concerned .entry for such tournaments will normally be sponsored by the
organization.
b) Such special casual leave are allowed for many other purposes like for donating
blood, quarantine leave, disability leave for employees governed under
workmens compensation act meeting accident arising out of or in the course of
employment .no leave salary will be paid for such leave but payments will be
made as due under the act.
c) Employees also get study leave under certain terms and conditions.

National and festival holidays-subject to the exigencies of work, all employees may
be granted holidays with wages on three national holidays viz. republic day,
Independence Day and Gandhi Jayanthi and other festivals of general and local
importance.
Leave travel concession

2. LOANS AND ADVANCES:

The regular employees of the company are entitled to the festival advance also but
for a limited number covering around 16 festivals.
An advance for purchase of cycle is admissible once every 5 years to all the
employees other than temporary and casual employees who have completed at least
one year of service in the company.
An advance for the purchase of motor car, motor cycle/scooter is admissible only to
employees who are members of the Bharat Heavy Electricals Limited provident
fund and who have been subscribing to it for at least one year and have put in at
least one year of service in the company.
House building advance is also granted to company employees on regular
establishment with not less than 5 years of continuous service.
2. ALLOWANCES:
Dearness allowance
House rent allowance
Transport allowance
City compensatory allowance
Medical allowance
Children education allowance
Washing allowance
Entertainment allowance
Milk allowance for painters

3. QUARTERS- All the employees are provided with the quarters according to their
cadres. The executives are provided with bungalows and the supervisors and workmen
are provided accordingly.
4. CANTEEN- BHEL provides three canteen facilities with different costs, one canteen
costs Rs.1 per meal, one costs Rs. 5 per meal and the third one costs Rs. 15 per meal
equivalent to Rs.20, Rs.35 and Rs.50 respectively, the approximate rates of the meals in
the market.
6. FIRST AID- Whenever any employee gets injured during the working hours, he or she
is immediately provided with first aid and then is moved to the hospital which is present
in the premises of BHEL.
TRAINING PROGRAMME OF BHEL:
BHEL conducts training programmes on a regular or occasional basis depending on the
category of employees and the need of the situation which generally proves to be very useful
for the employees for their work.

OCCUPATIONAL HEALTH AND SAFETY POLICY:

Compliance with applicable legislation and regulations

Setting objectives and targets to eliminate/control/minimize risks due to occupational

and safety hazards.
Appropriate structured training of employees on occupational health and safety
(OH&S) aspects.
Formulation and maintenance of OH&S management programs for continual
improvement.
Periodic review of OH&S management system to ensure its continuing suitability,
adequacy and effectiveness.
Communication of OH&S policy to all employees and interested parties.
The major units of BHEL have already earned international recognition by
implementation of ISO 14001 Environmental Management System and OHSAS
18001 occupational health and safety management system.
In pursuit of these policy requirements, BHEL will continuously strive to improve
work practices in the light of advances made in technology and new understanding in
occupational health, safety and environmental science.

ANALYSIS
In order to know whether Industrial Relations is good in BHEL or not, first, the set of
questions in the questionnaire which represents the Satisfaction levels among all the
three categories of employees of BHEL are analysed to know the satisfaction levels
among the employees. Each question represents one dimension of satisfaction.
The questions of the workmen dealt with the problems they have with their work
conditions, timings etc., and the way they prefer to solve their problems, their wages,
safety levels and availability of the modernised equipment.
The questions of the supervisors and executives dealt with their kind of problems, the
way they resolve the problems, their salary related issues, promotional schemes, work
timings and requirement of flexi timings. Though the questions for the supervisors and
executives are same, their answers had wide variations. This is because of the difference
in their mode of jobs and their schedules
After analysing this set of questions, an overall analysis to judge the hypothesis is
done using CHI-SQUARE as the statistical tool. A graph is plotted taking the
category of employees on x-axis and number of employees on y axis to determine the
number of employees in each category agree that Industrial Relations is good in BHEL
and the number of employees who disagree that Industrial Relations is good in BHEL.
Then, Chi-Square table is prepared and is analysed

The analysis of the questions is as follows:

WORKMEN
1. What are the usual problems faced by you?
a. Working conditions
b. No guidance
c. Benefits
d. No such problems faced
It is seen from our analysis that more than half of the workmen i.e. 55% face no problems
while working in BHEL. They are very much satisfied with their working conditions, the
guidance which they get from their supervisors, their work timings, the benefits which they
are getting etc. But, 25% of the workmen have grievances related to working conditions and
20% of them are not happy with their work timings. The workmen not happy with their
working conditions face problems with the noise levels in the shop floor where they work as
well as with the temperature which is usually high and they are not provided with any
alternative to overcome this problem. Some of the workmen who work in the factory area are
not happy with their work timings as they need to attend irregular shifts and at times they
need to work beyond the regular
Timings
2. How do you try to resolve it?
a. On your own
b. By consulting your immediate superior
c. With the help of the Union
d. All
From our analysis we found out that whenever the workmen come across any problem during
their work, most of them try to consult their immediate superior only to solve their problems
but there seems to be a few constituting about 10% which directly consults their union leader
in order to solve their problems. This is so because they find it more easier and reliable way
to meet their grievances.
3. Are you satisfied with the wages you are paid?
a. Yes
b. No
As we can see from the chart, 80% of the workmen say that they are satisfied with their
wages but 20% of the workmen are still not satisfied with their wages and these include those
who have a big family and they are not able to meet their needs properly. Moreover with the
present situation of rising prices, they expect a hike in their wages to meet their needs.
4. Does it really return the worth you are provided to the organization?
a. Yes
b. No

Here, we can see the satisfaction levels among the workmen, as 90% of them assert that they
are being paid according to their work and not being underpaid. This means that they are
being paid in proportion to the service they are providing to the organisation and not being
made to work more and pay less. But 10% of the workmen still feel that are not being paid
according to their work and they should be paid more than what they are being paid now.
This is because they feel that they are putting more physical labour as compared to the
workmen who are getting same wage with a comparative less physical effort.
5. Is your working environment safe?
a. Yes
b. No
When asked about the safety of the working environment, a noticeable difference was found
in the response given by the workers. Around 60% of the workmen say that the working
environment of BHEL is very safe. The remaining 40% of the workmen say that the working
environment is unsafe. The 40% of the workmen mostly belong to the factory areas, security
department, building department etc. They feel it to be unsafe as they get exposed to different
kinds of toxic gases, metal dusts and smoke and even had to work with heavy machinery,
volatile agents, hazardous materials, hand and portable power tools, welding, cutting and
brazing tools and electrical tolls.
6. Are you being provided with modern production techniques?
a. Yes
b. No
When asked the workmen whether they are provided with modern production techniques, a
demarcating response was seen to be found. Around 45% of the workmen say that they are
being provided with modernised equipments and machines but surprisingly more than half of
the workmen, constituting around 55% say that they are not being provided with modern
production techniques. This is due to the fact that some of the units were having the modern
production techniques but some units were not. The units like Heat Exchangers and
Fabrications, Pulverisers etc. do not require modernised machinery whereas the units like Gas
turbines, Steam turbines, Grinding etc. essentially require the latest equipment and
machinery.

SUPERVISORS
1. What are the usual problems faced by you?
a. Work Schedule
b. Benefits
c. Union interference in decision making
d. Working conditions
e. Disciplinary action
f. All
From our analysis we found that, varied answers were collected when the supervisors were
asked about the usual problems they face while working. 10% of them are not satisfied with

their work schedule as sometimes they need to stay beyond the working hours. At times they
also need to work in different shifts. 40% of them are not satisfied with the benefits they are
getting. 20% of the supervisors face problem with the union interference in the decisionmaking.
Under the pressure of the union, they are unable to implement in time the decisions made by
their executives and immediate superiors. After negotiations with the union, after remaking
the decisions by the management, they are implemented. 40% of the supervisors are not
happy with their working conditions as they have to work in a noisy area with high
temperature too. Some of them have to work in very small work areas too. These grievances
are of the supervisors who work in the shop floor. 30% of them are not satisfied with the
discipline. This is because they sometimes come across a situation when the workmen
working under them do not follow what they have been asked by the supervisors and they do
not take up the responsibility of the equipment they are given to work with.
2. How do you try to resolve it?
a. On your own
b. By consulting your immediate superior
c. With the help of the Union
d. All
When the supervisors are asked about their approach in resolving the problems, 30% of them
say that they try to do it on their own and 70% prefer consulting their superior rather than
resolving the problems on their own. Both the set of the employees approach the association
as the final alternate to solve the problems.
3. Are you satisfied with your salary?
a. Yes
b. No
As far as salary is concerned, from the survey, it is found that there is an equal division of the
satisfaction level among the supervisors. 50% of the supervisors are satisfied with their salary
and the rest 50% are not satisfied with it. This is due to their mode of jobs, working
conditions, hectic work schedules and pressurized works.
4. Does your salary complement your work content?
a. Yes
b. No
From our analysis we found that, 60% of the supervisors feel that they are being paid
according to their work content but 40% of the supervisors feel that they are not being paid
according to their work content and that they should be paid more. This shows that
satisfaction level among these 40% supervisors regarding their salary is quite low. The
supervisors of this set mostly belong to the shop floors where production works take place.
Their satisfaction levels are purely based on their work environment, conditions, their mode
of job etc.
5. Are you satisfied with your promotional scheme?
a. Yes

b. To some extent
c. No
When the supervisors were enquired about the promotional scheme, 30% were satisfied to
some extent but there constituted 70% of them who are not satisfied at all with the present
promotional scheme. They had a grievance that they are not provided enough opportunities to
get promoted. Comparing the three categories of employees-workmen, supervisors and
executives, the promotions for the supervisors lack the pace.
6. Are you happy with the work timings?
a. Yes
b. No
Work timings seem to be very much suitable for all the supervisors as 100% of them are
satisfied. Shift system is followed in BHEL. Morning shift begins from 6.30a.m. and ends at
3.30p.m. Evening shift begins from 3.30p.m. and continues till 11.30p.m. Each of the
supervisors has to work in one shift continuously for a week and then in the other shift for the
second week and this continues. Hence the supervisors find it quite convenient to work with.
7. Do you think flexi timings are required?
a. Yes
b. No
As far as flexi timings are concerned there is a mixed view of the supervisors where 50% of
them want flexible work timings and the rest 50% do not think it is required. They are liable
to work for 48 hours a week and so at times of emergency for personal affairs the
implementation of flexible timings would allow the needy supervisors to take leave from
work with pay and can compensate that work by working extra some other day within the 48
hours of that week. 50% of the supervisors did not appreciate this concept and felt it to be of
no use as they are provided with a good leave policy which can be utilized when needed.
EXECUTIVES
1. What are the usual problems faced by you?
a) Work schedule
b) Benefits
c) Union interference in decision making
d) Working conditions
e) Disciplinary action
f) All
From our analysis we found out that the usual problems which the executives face while
working gives varied answers. 20% of them are not satisfied with their benefits.30% faces
problem with union interference.50% are not happy with their working condition.50% are not
finding proper discipline as they say that people working under them are not always
following the rules.10% executives are there who are not satisfied and have grievances
regarding work schedule, benefits they are receiving, union interference in decision making,
working condition and discipline.

2. How do you try to resolve them?

a. On your own
b. By consulting your immediate superior
c. With the help of the Union
d. All
When enquired about how these executives try to resolve their work problems, a result came
where it was found that 30% of them try to do it on their own and 90% prefer going to their
superior for solving their problems and it includes the ones who tries to do it on their own as
well.
3. Are you satisfied with your salary?
a. Yes
b. No
As far as satisfaction with salary is concerned, 80% of the executives are satisfied with the
salary they get but the rest 20% are still not satisfied with their salary. This 20% of the
executives include those who work in the shop floor. They do expect a hike in their salary
because of their mode of jobs, working conditions, hectic work schedules and pressurized
works.
4. Does your salary complement your work content?
a. Yes
b. No
Surprisingly, it was found that the executives accept that they are being paid according to
their work and are not being made to do work more than they are actually paid in spite of the
fact that there are a few who still expect a hike in salary.
5. Are you satisfied with your promotional scheme?
a. Yes
b. To some extent
c. No
As far as promotional scheme is concerned, executives show a 100% satisfaction level as
they say that they are being promoted according to their work performance majorly which is
very much fair and satisfactory for them. A four-year promotion scheme is followed in
BHEL, where for every four years, the executives are promoted from their present cadre to
immediate higher cadre.
6. Are you happy with the work timings?
a) Yes
b) No
Work timings also have shown a 100% satisfaction among the executives. They are very
much satisfied as the timings are convenient for them. Shift system is followed in BHEL,
where the morning shift begins from 6.45 a.m. and ends at 3.30 p.m. and the noon shift starts
from 3.30p.m. till 11:30 p.m.
7. Do you think flexi timings are required in BHEL?

a) Yes
b) No
When the executives were asked about the need to implement flexible work timings 80% of
them did not feel the need for it but 20% of them wanted it to be implemented. They are
liable to work for 48 hours a week and so at times of emergency for personalaffairs the
implementation of flexible timings would allow the needy executives to take leave from work
with pay and can compensate that work by working extra some other day within the 48 hours
of that week. But 80% of the executives did not appreciate this concept and felt it to be of no
use as they are provided with a good leave policy which can be utilized when needed.
ANALYSIS OF INDUSTRIAL RELATIONS
All the Workmen, Supervisors and Executives of BHEL are divided into two categories
according to their responses in the questionnaires. Out of 38 questions in the questionnaire,
28 questions are considered for the analysis of Industrial Relations in BHEL. The workmen
who gave more than 6 negative answers are categorised as the employees who disagree that
Industrial Relations is good in BHEL and the others are categorised as the employees who
agree that Industrial Relations is good in BHEL.
Similarly, the Supervisors who gave more than 9 negative answers are categorised as the
employees who disagree that Industrial Relations is good in BHEL and the others are
categorized as the employees who agree that Industrial Relations is good in BHEL. And the
Executives who gave more than 12 negative answers are categorised as the employees who
disagree that Industrial Relations is good in BHEL and the others are categorised as the
employees who agree that Industrial Relations is good in BHEL.
QUESTIONNAIRES (W)
1. What are the usual problems faced by you?
a. Working conditions
b. No guidance
c. Benefits
d. Working conditions
e. All
2. How do you try to resolve it?
a. On your own
b. By consulting your immediate superior
c. With the help of the Union
d. All
3. What are your grievances that results from management policies?
a. Wage rates
b. Leave policy
c. Over time
d. Lack of career planning
e. Role conflicts
f. Lack of regard for collective agreement

g. Disparity between skill of workers and job responsibility

4. What are your grievances resulting from working conditions?
a. Poor safety and bad physical conditions
b. Unavailability of tools and proper machinery
c. Negative approach to discipline
d. Unrealistic targets
5. What are your grievances resulting from interpersonal factors?
a. Poor relations with team members
b. Autocratic leadership style of superiors
c. Poor relations with seniors
d. Conflicts with peers and colleagues
6. How many days does it take to solve the issue?
a. Depends on the issue
b. One week
c. Several weeks
7. Is it resolved easily or it leads to unavoidable conflict?
a. Yes, it is resolved easily b. No, it is not and leads to conflict
8. Do you feel the need to resort to strikes?
a. Sometimes b. Rarely c. Never
9. Are you satisfied with the wages you are paid?
a. Yes b. No
10. Does it really return the worth you are providing to the organization?
a. Yes b. No
11. Is your working environment safe?
a. Yes b. No
12. Are you being provided with modern production techniques?
a. Yes b. No
13. Are you being trained on handling the production techniques?
a. Yes b. No
14. How many unions are there in BHEL?
15. Why did you feel the need of joining trade union?
16. Are you satisfied with your job?
a. Yes b. No
17. How is the working environment in BHEL?
a. Satisfactory b. Good c. Not satisfactory
18. Are you satisfied with the employment technique of BHEL?
a. Yes b. No c. To some extent

19. Is there a proper interaction process between employers and employees?

a. Yes b. No
20. What are the benefits that have been provided to you?
a. Banquet hall
b. Own building scheme
c. Clubs
d. Sports ground
e. Children education allowance
f. Crches
g. Pension
h. Reimbursement of medical expenses
i. Other benefits, if any______________
21. What are the facilities that you can avail in BHEL?
a. Insurance (medical, health, accidental, others)
b. Allowances
c. Quarters
d. Canteen
e. Washing
f. Rest rooms
g. First aid
h. Others______
22. How do you find the training programme of BHEL?
a. Mostly helpful
b. At times helpful
c. Not up to the mark

QUESTIONNAIRE (E, S)
1. What are the usual problems faced by you?
a. Work schedule
b. Benefits
c. Union interference in decision making
d. Working conditions
e. Disciplinary action
f. All
2. Are you satisfied with your salary?
a. Yes b. No
3. Does your salary complement your work content?
a. Yes b. No
4. Are you satisfied with your promotional scheme?
a. Yes
b. To some extent

c. No
5. Are you happy with the work timings?
a. Yes b. No
6. Do you think flexible timings are required in BHEL?
a. Yes b. No
7. Why do you think most of the executives are quitting BHEL?
8. Why did you feel the need of joining trade union?
9. How many days does it take to solve the issue?
a. Depends on the issue
b. One week
c. Several weeks
10. Is it resolved easily or it leads to unavoidable conflict?
a. Yes, it is resolved easily b. No, it is not and leads to conflict
Do you feel the need to resort to strikes?
a. Sometimes
b. Rarely
c. never
12. Are you satisfied with your job?
a. Yes b. No
13. How is the working environment in BHEL?
a. Satisfactory b. Good c. Not satisfactory
14. Are you satisfied with the employment technique of BHEL?
a. Yes b. No c. To some extent
15. What are the benefits that have been provided to you?
a. Banquet hall
b. Own building scheme
c. Clubs
d. Sports ground
e. Children education allowance
f. Crches
g. Pension
h. Reimbursement of medical expenses
i. Other benefits, if any
16. How do you find the training programme of BHEL?
a. Mostly helpful b. At times helpful c. Not up to the mark
17. What are the facilities that you can avail in BHEL?
a. Insurance (medical, health, accidental, others)
b. Allowances

c. Quarters
d. Canteen
e. Washing
f. Rest rooms
g. First aid
h. Others_______
18. What are your grievances that results from management policies?
a. Wage rates
b. Leave policy
c. Over time
d. Lack of career planning
e. Role conflicts
f. Lack of regard for collective agreement
g. Disparity between skill of workers and job responsibility
19. What are your grievances resulting from working conditions?
a. Poor safety and bad physical conditions
b. Unavailability of tools and proper machinery
c. Negative approach to discipline
d. Unrealistic targets
20. What are your grievances resulting from interpersonal factors?
a. Poor relations with team members
b. Autocratic leadership style of superiors
c. Poor relations with seniors
d. Conflicts with peers and colleagues

Literature Review Human Resources Accounting

1. HUMAN
RESOURCES
ACCOUNTING
MANUFACTURING SECTOR-A STUDY

SYSTEM

IN

IT

AND

Author: Munivenkatappa; Jagadeesh, S R; Bharathi, K V

Human Resources accounting is used to evaluate the profitability and expenses done on
human resource. Human assets accounting or human resource accounting (HRA), which
stands for measurement and reporting of the cost and value of people as organizational
resources, is still to become an accepted trend in the Indian IT industry. The problem in fact
starts when it comes to assessing the real value of human assets. While most organizations
can readily give detailed information about their tangible assets like plant and machinery,
land and buildings, transport and office equipment, there is no formal record of investment in
employees. This is the one of the challenges facing in today's IT &Manufacturing sector the
performance &profitability can be considered as the expenses spend on the human resource
& this can be considered as Human Resources Accounting to evaluate the profitability and
expenses done on human resource.
Human Resource Accounting (HRA) is basically an information system that tells
management what changes are occurring over time to the human resources of the business.
HRA also involves accounting for investment in people and their replacement costs, and also
the economic value of people in an organization. The IT industry is a service industry
whereas manufacturing industry is the goods producing industry. The performance and
profitability of the organization will depend on the quality of service offered to individuals. In
a high performance driven industry like IT and manufacturing sector becomes all the more
important. Some of the challenges that the industry facing are investment in people,
replacement costs, economic value of people, contribution &earned on them &methods
implement to calculate all above this.
This study is positioned as an exploratory study to understand human resources accounting in
IT and manufacturing sector

To identify importance given to HRA system on companies.

To do the Comparative study in both I T and manufacturing sector relating to Human
Resource Accounting.
To give suitable suggestion and recommendation.

Considering the great significance of HRA proper initiation should be taken by the
government along with that other professional &accounting bodies both at the national
&international levels for the measurement &reporting of such valuable assets.
2. A Critical Evaluation of Measuring the Immeasurable: Human Resource
Accounting (HRA)
Author: Sharma, C S; Lama, Sameer
This paper highlights the astounding growth and development made in the domain of human
resource accounting. The paper also exemplifies the constraints on the measurement aspect of

human resource accounting and examines the validity of the deceptive financial statements.
The paper also discusses the development of human resource accounting made in the
international arena and accentuates the importance of measuring the value of human resource
highlighting the examples of some Indian companies that made unprecedented effort to value
and account human resource in the financial statements. This study has been done mainly to
reinforce the importance of human resource accounting in the current business framework
highlighting the prospects and problems of human resource accounting and to bring forward
the core measurement aspect of human resource facilitating the existence of human resource
in the financial statements. Srimannarayana (2009) reveals that attempts made in Indian
industry to measure the HR activities vary from a limited extent to a significant extent among
various organizations. The author further concludes that employee compensation related
activities are given more importance when compared to other domains of HR in
measurement. The author also exemplifies that the positive results of traditional HR measures
reinforce HR managers for their contribution, but may not stimulate change for business
impact and thereby suggests that having achieved significant progress with respect to
measuring HR using traditional measures, the HR profession also now may focus on
measures that shows concrete business improvements.
3. A STUDY ON HUMAN RESOURCE ACCOUNTING IN CORPORATE
SECTORS
Author: Madhumalathi R.1 Lina George2 Madhumathi T. K.
MEASURMENTS IN HRA

The biggest challenge in HRA is that monetary values to different dimension of HR costs,
investments and the worth of employees. The two main approaches usually employed for this
are:
The Cost approach,
The Economic Value approach, which includes methods, based on the economic value
of the human resources as assets and tries to identify the stream of benefits flowing
from the asset.
Cost approach:
It involves methods, based on the costs incurred by the company, with regard to an employee.
Two types of costs are of special importance in HRA. These are cost,
1. Original or historical: The historical cost of human resources is the sacrifice that
was made to acquire and develop the resource. These include the costs of recruiting,
selection, hiring, placement, orientation, and on the job training
2. Replacement cost:The replacements cost of human resources is the cost that would
have to be incurred if present employees are to be replaced. For instance, if an
employee were to leave today, several costs of recruiting, selection, hiring,
placements, and orientation and on the job training would have to be incurred in order
to replace him.

Economic Value Approach:

The value of an object, in economic terms, is the present value of the services that is expected
to render in future. Similarly, the economic value of human resources is the present worth of
the services that they are likely to render in future.
Monetary Measures for assessing Individual Value:

FLAMHOLTZS Model:According to Flamholtz, the value of an individual is the

present worth the services that he likely to render to the organization in future
FLAMHALTZS Stochastic Rewards Valuation Model:The movement or progress
of people through organizational states or roles is called a stochastic process. The
Stochastic Rewards Model is a direct way of measuring a persons expected realizable
value.
LEV and SCHWARTZ Model:Under this method the future earnings of the human
resource of the organization until their retirement is aggregated and discounted at the
cost of capital to arrive at the present value.

4. Accounting for the development of human capital in manufacturing

organizations
Author: NaveedIqbalChaudhry; Muhammad AzamRoomi
A considerable number of research studies have been conducted in different countries
exploring theeffectiveness of human capital, training and development of human capital,
evaluation of training and development programs, human resource accounting, measurement
of human resources, appraisal of investment made on development of human resources in
organizational. These studies provide a base for the development of the theoretical model for
the current research exercise.
Human capital
To develop human capital as a part of the organization's overall human resource strategy
means the skillful provision and organization of learning experiences in the workplace.
Owing to enhancing the skills, knowledge, learning ability and enthusiasm of human
resources at every level, continuous organizational as well as individual growth occurs.
According to the existing literature, human capital has been defined by three different
approaches including:
The transaction cost economics theory,
The resource-based view of the firm,
Human capital theory.
Development of human capital:
Development of human capital can be a base for providing the competitive edge because it
offers long-lastingbenefits. It explains why training and development activities become an
essential feature for the survival of the organization in this era

Human resource accounting

According to Flamholtz (1971), human resource accounting means the process of
measurement andreporting of the cost and value of people as organizational resources. The
American Accounting Association's Committee on Human Resource Accounting (1973)
referred to the process of identifying and measuring data about human resources and
communicating this information to interested parties as human resource accounting.
5. Importance of human resource accounting (HRA) in making business decisions
Published by HT Syndication with permission from The Financial Express. Publication title: The Financial Express
Publication year: 2010 Publication date: Aug 4, 2010 Dateline: Bangladesh

It is well accepted by the accounting experts that financial accounting does not consider those
transactions of non-monetary in nature. For example, extent of competition faced by the
business, technical innovations possessed by the business, loyalty and efficiency of the
employees; changes in
the value of money etc. are the important matters in which management of the business is
highly interested, but accounting is not tailored to take note of such matters. Thus any user of
financial information is, naturally, deprived of vital information that is of non-monetary
character. Besides, financial accounting does not provide timely information and does not
provide detailed analysis. Financial accounting also does not disclose the present value of the
business. To overcome this situation of financial accounting, Human Resource Accounting
(HRA) has been designed to assist senior management in understanding the long term cost
and benefit implications of their HR decisions so that better business decisions can be taken.
If such accounting is not done, then the management runs the risks of taking decisions that
may improve profits in the short run but may also have severe repercussions in future. For
example, very often organisations hire young people from outside
on very high salaries because of an immediate business requirement. Later on, however, they
find that the demotivating impact of this move on the existing experienced staff has caused
immense long term harm by reducing their productivity and by creating salary distortions
across the organizational structure. For internal use of any organization, HRA can be
considered a management tool, and for external use, a tool for profiling the
enterprise/organization. The following reasons for developing HRA are often cited:
Reasons for developing HRA internally||Reasons for developing HRA both internally and
externally || Reasons for developing HRA externally

To improve human resource management

To overcome problems arising from the valuation of intangible assets
To overcome the difficulties in providing sufficient information to investors in traditional
balance sheets
To focus on employees as assets
To redistribute social responsibilities between the public and the private sector
To profile the enterprise and improve its image
To retain qualified labor force
To attract future employees

6. ACCOUNTING FOR HUMAN RESOURCES: IMPLICATIONS

FOR THEORY AND PRACTICE

Author: - Olin Scott Stovall, B.B.A, M.S.
Friedman and Lev (1974, 235) suggest that HRA includes identifying, measuring, and
communicating aspects about a companys human resources.. Sackman et al. (1989, 238)
categorize HRA research as (1) .development of human resource cost and value measurement
models, (2) organizational applications of human resource cost and value measures, and (3)
empirical research regarding the impact of HRA in decision making. They place HRA models
into two broad classifications: (1) cost models and (2) value models. The cost models fall into
three subcategories: (1) original cost, (2) replacement cost, and (3) opportunity cost models.
Historic cost-based HRA models rely on the traditional transactional (actual) cost model.
Historic cost-based models generally record the costs of acquiring and maintaining the firm.s
human resource skill set (Sackman et al. 1989). Such models record recruiting, training, and
other costs as assets. Brummet et al. (1968), Caplan and Landekich (1974), and Flamholtz
(1974) provide examples of this approach. The replacement cost model represents a step
toward breaking the linkage between
HRA and actual costs incurred. These models capitalize the costs of recruiting, hiring, and
training new workers if the firm had to replace its set of human resources. Hekimian and
Jones (1967) and Flamholtz (1973) provide examples of replacement cost HRA models.
A few early studies in HRA attempted to test the effect of HRA information on decision
makers. Flamholtz (1976) examined the effect of monetary and nonmonetary HRA
information on a human resource management decision. He designed the experiment around
a staffing task. Reported results indicated that nonmonetary human resource information
affected participants decisions. Two other studies examined whether the presence of human
resource information made a difference in investment decisions. Elias (1972) used survey
methodology to investigate differences among investment decisions of various accounting
users based on the presence or absence of HRA information. The results of his study
indicated that human resource data would make a difference in the investment decision.
Hendricks (1967) performed an experiment in which he used MBA students as subjects in a
repeated measures design to analyze financial statements given the presence or absence of
human resource data. He analyzed investment decision outcomes to determine whether
human resource data influenced participants investment choices. His results suggested that
HRA data had an effect on decision outcomes in the experiment.
7. Human Resource Accounting Practices Adopted in Indian Industries
Author: Seth, Neha
The concept of human resource accounting helps to channelize the available skill, talents,
knowledge and experience of their employees more efficiently. By adopting and
implementing human resource accounting in an organisation the following important
information can be obtained:
1. Cost per employee
2. Human capital investment ratio
3. Amount of wealth created by each employee
4. Profit created by each employee
5. Ratio of salary paid to the total revenue generated
6. Average salary of each employee
7. Employee absenteeism rate

8. Employee turnover rate and retention rate

Moreover, human resource accounting also helps an organisation in expansion and
diversification plans, for instance while tapping different markets for funds, a corporate
requires credit rating and human resource accounting in place will enable a corporate to
secure a better grade from credit rating agencies. In a technology intensive business, it brings
to light the value of research and development workers value that will make all the different
tomorrow.
Models of Human Capital Valuation
A number of methods have been suggested for the valuation of human assets. Many of these
methods are based on the valuation of physical and financial assets while others take into
account human consideration. On scanning through literature, the approaches to human
resource accounting can be broadly classified as monetary approaches and nonmonetary
value-based approaches. The monetary approaches are further classified as (a) Cost Based
Approaches, which incorporate historical cost approaches, replacement cost approach,
opportunity cost model, standard cost method, current purchasing power method, and (b)
Value- Based Models that embrace Hermanson's adjusted discounted future earnings model,
Lev and Schwartz present value of future earnings model, rewards valuation model, Jaggi and
Lau model, net benefit model, Eric Flamholtz model and Morse model. Many models have
been created to value human capital. Some are based on historic costs while some are based
on future earnings. But each has its own limitations and one model has proved to be more
valid than other. Among all these, the Lev and Schwartz model has been the most widely used
for its ease of use and convenience.