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MODULE

HR GENERALIST GOALS


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PROLOGUE

In recent years, the rapidly changing environment has put pressure on the Human
Resource Generalist to justify its existence. As such the Human Resource function must
demonstrate that it can add value and deliver results to the organization and its
stakeholders. It means that the human resource management practices should and retain
excellent employees who, in turn, will enable a firm to provide high- quality products and
services.
However, the contribution of HR generalist to the firm's performance is being debated and
number of scholars has stressed the need to view human resource management from
strategic perspective. The emphasis has been on linking Human Resource Generalist
practices on strategy in order to increase the organizational competitiveness and
effectiveness.
The purpose of this book is to introduce and reflect on the ideas, models and approaches
in Strategic Management. Hopefully the book will bring together ideas and models from
other areas of business and management study to support the planning of strategy.

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TABLE OF CONTENT

CHAPTER 1 ........................................................................................................................................ 6
MAINTENANCE ................................................................................................................................. 6
1.1 FRINGE AND RETIREMENT TERMINAL BENEFIT .......................................................... 6
1.1.1 FRINGE BENEFIT ...................................................................................................... 6
1.1.2 GOALS OF FRINGE BENEFIT ................................................................................... 6
1.1.3 NEEDS FOR EXTENDING BENEFITS TO EMPLOYEES ......................................... 7
1.1.4 FRINGE BENEFITS TYPES ....................................................................................... 7
1.1.5 RETIREMENT TERMINAL BENEFIT ......................................................................... 7
1.1.6 SOME OF THE RETIREMENT BENEFITS ARE: ....................................................... 8
1.2 ADMINISTRATION OF WELFARE AMENTITIES .............................................................. 9
1.2.1 FEATURES OF EMPLOYEE WELFARE ................................................................... 9
1.2.2 THE TYPES OF WELFARE SERVICES ARE AS FOLLOWS ................................. 10
1.2.3 OBJECTIVES OF EMPLOYEMENT WELFARE ...................................................... 10
1.2.4 AGENCIES OF EMPLOYEE WELFARE .................................................................. 10
1.2.5 PROVISIONS PROVIDED BY FACTORIES ACT 1948 ........................................... 11
1.3 MEANING AND IMPORTANCE OF EMPLOYEE SAFETY ............................................. 11
1.3.1 MANAGEMENT ROLE IN EMPLOYEE SAFETY ..................................................... 11
1.3.2 SUPERVISOR ROLE IN EMPLOYEE SAFETY ....................................................... 11
1.3.3 IMORTANCE OF EMPLOYEE SAFETY................................................................... 12
1.4 ACCIDENTS -CAUSES AND THEIR PREVENTIONS ..................................................... 13
1.5 SAFETY PREVISIONS UNDER THE FACTORIES ACT 1948 ........................................ 13
1.6 WELFARE OF EMPLOYEES AND ITS IMPORTANCE SOCIAL SECURITY ................. 19
1.6.1 IMPORTANCE OF EMPLOYEE WELFARE ............................................................. 20
1.6.2 FEATURES OF EMPLOYEE WELFARE ................................................................. 20
1.7 FAMILY PENSION SCHEME ........................................................................................... 21
1.8 EMPLOYEES STATE INSURANCE ACT 1948 ................................................................ 22
1.9 WORKMENS GRATUITY ACT 1972 ............................................................................... 27
1.10 FUTURE CHALLENGES FOR HUMAN RESOURCE MANAGEMENT ........................... 29
SUMMARY .................................................................................................................................... 29
EXERCISE- I ................................................................................................................................. 29
EXERCISE- II ................................................................................................................................ 29

CHAPTER 2 ...................................................................................................................................... 32
MEETING OTHER HUMAN RESOURCES GOALS ........................................................................ 32
2.1 COLLECTIVE BARGAINING AND LABOUR RELATIONS .............................................. 32
2.1.1 COLLECTIVE BARGAINING .................................................................................... 32
2.1.2 ISSUES IN COLLECTIVE BARGAINING ................................................................. 34
2.2 MANAGING HUMAN RESOURCES GLOBALLY ............................................................ 34
2.2.1 BECAUSE OF SOME FACTORS GLOBAL HUMAN RESOURCE MANAGEMENT
IS DIFFERENT FROM DOMESTIC MANAGEMENT ............................................................... 34
2.2.2 STRATEGIC ROLE OF GLOBAL HUMAN RESOURCE MANAGEMENT .............. 34
2.2.3 GLOBLIZATION IMPACT ON HUMAN RESOURCE MANAGEMENT .................... 35
2.2.4 GLOBALIZING THE HR FUNCTION: HR STAFF DEVELOPMENT ........................ 35
2.3 HIGH PERFORMANCE ORGANIZATION ....................................................................... 35
SUMMARY .................................................................................................................................... 76
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EXERCISE I ................................................................................................................................ 76
EXERCISE II ............................................................................................................................... 76

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CHAPTER 1
MAINTENANCE

1.1 FRINGE AND RETIREMENT TERMINAL BENEFIT

1.1.1 FRINGE BENEFIT

So what is the meaning of fringe benefit? It is defined as the compensation i.e. direct
wages or salaries which include home allowance, medical insurance, company car, paid
holiday, pension schemes. Sometimes, the taxable income can also be considered as a
part of fringe benefit.

In general, Any benefit which can be non wage payment or other granted to
employees/person/individual working in organization by employers is known as fringe
benefit.

1.1.2 GOALS OF FRINGE BENEFIT

According to the employers fringe benefits are an integral part of employee incentives so
is to attain their loyalty and retain them. Some of the goals of the fringe benefits are given
below:

For boosting up the employee morale


Creating and improving industrial relations.
For motivating the employees by identification and satisfaction of their unsatisfied
requirements.
For providing a healthy work environment and work place.
For providing security to the employees so as to prevent them from the risks which
they can face socially, security likes old age benefits and benefits for maternity.
For providing safety to the employees against accidents and for protecting their
health.
It can also be used to promote the employees welfare by giving them some
measures like recreation facilities.
Sometimes fringe benefits are regarded as golden hand-cuffs because they
generate a sense of belongingness in employees which is helpful in retaining
them.
In relation to the fringe benefits there are some requirements of legislations which
have to be met.
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1.1.3 NEEDS FOR EXTENDING BENEFITS TO EMPLOYEES

Increasing prices and better life style has led to continuous demand for providing
extra benefits for employees.
The fringe benefits have the extra perk of negotiation which the employees can
use when the employees large wages and extra salaries are not profitable.
The fringe benefits are very much expanded by the organizations for the persons
working in the organization, which results in greater pressure on the organization
as they have to attract the new employees and to keep the existing employees
within the organization only.
Acknowledgment that the fringe benefits are non-taxable rewards has been a
major provocation to the companys expansion.
If the company or organization is growing and expanding then the benefits and
services of the organization are also influenced by the growth if the organization.
Increasing labour legislations, legislation for social security to be more specific,
have made it essential for employers to equally share with the organization
employees survivor and disable benefits, the cost of old age.
Management of a organization protects itself from the insecurity arising from
unemployment, old age, diseases, and injury by providing the benefits of
increasing productivity, which can be due to increasing industrialization, at least
partly to employees who are responsible for that. Benefits and service programs of
the company are some of the ways by which managers supply the security that we
were talking about.

1.1.4 FRINGE BENEFITS TYPES

Various fringe benefits types that a organization may provide are enlisted below:
Employment Security
Personnel Identification, Participation and Stimulation
Old age and Retirement
Protection against Health.
Payment for time not worked
Extra pay for time worked
Lay off compensation
Retrenchment Compensation

1.1.5 RETIREMENT TERMINAL BENEFIT

Human Resource Management Department provides plenty of retirement benefits that can
help retiring employees for their future and provide them additional income upon their
retirement. Each employee must know about the various retirement benefits he would get
on normal retirement as well as its tax implications. HE also should know the additional
benefits that he may get if his service was good. But there will no exemptions in case of
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taxes. Under the head salary, various retirement benefits which are received by an
employee are taxable. Therefore, the employer should take these benefits into
consideration; at the time of retirement he/she should compute the Tax Deducted at
Source (TDS). Some retirement benefits are fully or partially exempt from tax.

1.1.6 SOME OF THE RETIREMENT BENEFITS ARE:

Pension

The income received by an employee after his retirement is known as pension.


On account of the past service it is a periodical allowance given by an organization
after the retirement of an employee.
Un-commuted pension is similar to the periodical pension.
A commuted pension is a lump-sum payment is made in lieu of a
periodical pension. Under the head salary pension of an employee is taxable
always.
But the taxability of pension depends on whether it is periodic or lump-sum.
Periodic payment is fully taxable in case of both government and non-government
employees.
Lump-sum Payment is tax-free in case of government employees.
In case of other employees, if that employee is also receiving gratuity, then 1/3rd
of the commuted pension would be exempt from tax.
If gratuity is not received by an employee, half of the commuted pension will be
exempt from tax.

Gratuity

Gratuity is a lump-sum payment made by an employer as a mark of gratitude for


the services rendered by his employee.
It is an important form of social security benefit.
Gratuity is payable at the end of the employment. Every employer who has more
than 10 salaried workers is allowed to grant gratuity to workers.
The law which governs gratuity in India is the Payment of Gratuity Act, 1972.
To receive gratuity, the employee should at least have completed 5 years of
service.
The payment of gratuity is made to the employee based on the duration of his total
service to that employer.
The benefit is payable by taking the last drawn salary as the basis for calculation.
For the purpose of Income Tax, gratuity received by an employee of the central
government, state government or any local authority is completely exempt from
tax.
For other employees, the least of the following is exempt from tax
1. Rs. 10,00,000 (as per amendment from march 2010)

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2. Gratuity actually received, or
3. Half month's average salary (average of last 10 months salary) for each
completed year of service.

Leave Encashment
Sometimes there are some unused leave of an employee. The employee surrenders the
leave at the time of retirement and is paid for the same which is known as the leave
enhancement. Taxability of leave encashment received at the time of retirement is as
follows:

In case of government employees, it is fully exempt from tax.


In case of non-government employees, the least of the following is exempt
1. Rs. 3,00,000/-
2. 10 months average salary
3. Leave encashment actually received
4. Cash equivalent to the leaves surrendered

Voluntary Retirement Compensation

Many organizations provide its employee with the option of taking voluntary
retirement under the Voluntary Retirement Scheme (VRS).
This scheme is drawn to right-size the existing strength of employees within a
organization.
The benefits derived by an employee by taking VRS can also be considered as
retirement benefit.
VRS also have some age boundaries. It is applicable to only those employees who
have completed 10 years of service or are of the age of 40 years.
Under VRS, the employees are offered a onetime lump-sum amount.
For income tax purposes, this compensation amount received is exempt up to Rs.
5,00,000/- if all the conditions under the scheme are fulfilled.

1.2 ADMINISTRATION OF WELFARE AMENTITIES

Welfare Amenities are the efforts to make the life worth living for workmen.

According to Todd, employee welfare means anything done for the comfort and
improvement, intellectual or social, of the employees over and above the wages paid
which is not a necessity of the industry.

1.2.1 FEATURES OF EMPLOYEE WELFARE

Employee welfare is a comprehensive term including various services, facilities and


amenities provided to employees for their betterment.
Employee welfare measures are also known as fringe benefits and services.
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The basic purpose in to improve the lot of the working class.
Welfare measures may be both voluntary and statutory.
Employee welfare is a dynamic concept.

1.2.2 THE TYPES OF WELFARE SERVICES ARE AS FOLLOWS

Intramural: - These are provided within the organization like:


1. Canteen,
2. Rest rooms,
3. Uniform etc.

Extramural: - These are provided outside the organization, like:


1. Housing,
2. Education,
3. Vocational guidance etc.
4. Child welfare,
5. Leave travel facilities,
6. Interest free loans,
7. Workers cooperative stores,

1.2.3 OBJECTIVES OF EMPLOYEMENT WELFARE

Employee welfare is in the interest of the employee, the employer and the society as a
whole. The objectives of employee welfare are:

It helps to improve.
It helps to improve employee productivity.
It improves the loyalty and morale of the employees.
Welfare measures help to improve the goodwill and public image of the
enterprise.
It reduces labor turnover and absenteeism.
It helps to improve industrial relations and industrial peace.

1.2.4 AGENCIES OF EMPLOYEE WELFARE

Central government: - The central government has made elaborate provisions for the
health, safety and welfare under Factories Act 1948, and Mines Act 1952. These acts
provide for canteens, ches, rest rooms, shelters etc.

Employers: - Employers in India in general looked upon welfare work as fruitless and
barren though some of them indeed had done pioneering work.

State government: - Government in different states and Union Territories provide welfare
facilities to workers. State government prescribes rules for the welfare of the workers and
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ensures compliance with the provisions under various labor laws.

Trade unions: - In India, trade unions have done little for the welfare of workers. But few
sound and strong unions have been the pioneering in this respect.

Other agencies: - Some philanthropic, charitable d social service organizations.

1.2.5 Provisions provided by Factories Act 1948

Adequate, suitable and clean washing facilities separately for men and women
workers.
First aid boxes are provided.
Canteens, if more than 250 workers are employed.
Facilities for storing and drying clothes.
Welfare officer, wherever more than 500 workers are employed.

1.3 MEANING AND IMPORTANCE OF EMPLOYEE SAFETY

All employees working in an organization must know their rights and responsibilities which
includes the safety and health at work. A safe and healthy workplace should be provided
to employees of an organization and it is the responsibility of the employers. Employee
safety is the safety provided by the employer to the organization. All employees have
entitled to rest breaks and paid vacations. Employers must work safely to protect
themselves and others from injury. Employers properly orientate, train and supervise the
staff to ensure safe work.

1.3.1 MANAGEMENT ROLE IN EMPLOYEE SAFETY

Organization includes a plenty of strategies which ensures a healthy and safe workplace
and guarantees a compliance with a legal requirement. They are:

Design: A safe and healthy system of works


Exhibit: Strong management commitment
Inspect: Workplace for health and safety problems
Establish: Procedures and controls for dealing with the health and safety issues.
Develop: Some training programs for employees.
Set up: Set up different health and safety committees.
Monitor: Monitors the safety policies.
Draw up: Draw the various action plan and checklist

1.3.2 SUPERVISOR ROLE IN EMPLOYEE SAFETY

Supervisors must frequently monitors the work places or organization to identify


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the unsafe conditions in the organization
They should immediately take some strict actions against the critical conditions.
Employer should encourage the organization employee for reporting to the unsafe
or unhealthy conditions.
Supervisor should investigate workplace accidents such as to investigate
workplace mishaps
Take some actions to prevent recurrence of accidents.

1.3.3 IMORTANCE OF EMPLOYEE SAFETY

Economic reasons for ensuring safe workplace:

Employee safety reduces accidents,


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It gives the insurance to the employees,
It improves employee relations
It facilitates employee commitment to quality goals.

1.4 ACCIDENTS - CAUSES AND THEIR PREVENTIONS

Unsafe conditions are the major cause of the accident in an organization. It can cause
mechanical and physical accidents in the organization. They include the enlisted below:

Employee carelessness: These types of accidents can occur if the employees


that do not follow instructions, use required safety equipment, or act
inappropriately. Employer or managers must know and do their job to prevent
these instances from occurring to prevent workplace accidents.

Repetitive motion: A repetitive motion is also one of the main factors of risk, or
doing the same action repetitively can cause the problem within the workings of
the body. This includes the use of limbs, sitting or standing. There are steps
employers can do to reduce this such as using floor mats with support or by using
ergonomically designed equipment.

Rotating swing shits: Poor sleep habits, due to swing shifts can be the reason of
the accident in workplace. The shifts can be problematic if they are back to back.
The supervisor develop shifts which support worker health and offer breaks for
those who must work nights or extra shifts, so employees can return to work
refreshed.

Defective equipment: The equipment should be used properly by the employees.


Its management duty to ensure equipment is working properly and is maintained
as well. A common cause of problems which is preventable is not noticing the
warning signs of wear and tear that need addressing. This can lead to potential
threats to employees.

Hazardous procedure in around machines or equipments: Improper storage


and use of hazardous chemicals is a big problem. Following OSHA standards and
the EPA requirements, though, can reduce many of these risks significantly.
Employees must know how to take proper precautions. Supervisors need to follow
up to ensure this is being done and that other safety measure, such as storing
chemicals properly, happens.

1.5 SAFETY PREVISIONS UNDER THE FACTORIES ACT 1948

Short title, extent and commencement:


This Act may be called the Factories Act, 1948.
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It extends to the whole of India
It shall come into force on the 1st day of April, 1949.

Interpretation:
In this Act, unless there is anything repugnant in the subject or context,-

"Adult" means a person who has completed his eighteenth year of age;

"Adolescent" means a person, who has completed his fifteenth year of age but has not
completed his eighteenth year;

"Calendar year" means the period of twelve months beginning with the first day of January
in any year;

"Child" means a person who has not completed his fifteenth year of age;

"Competent person", in relation to any provision of this Act, means a person or an


institution recognized as such by the Chief Inspector for the purposes of carrying out tests,
examinations and inspections required to be done in a factory under the provisions of this
act having regard to:
I. The qualifications and experience of the person and facilities available at his
disposal, or
II. The qualifications and experience of the persons employed in such institution and
facilities available therein, with regard to the conduct of such tests, examinations
and inspections, and more than one person or institution can be recognized as a
competent person in relation to a factory;

"Hazardous process" means any process or activity in relation to an industry specified in


the 'First Schedule where, unless special care is taken, raw materials used therein or the
intermediate or finished products, bye-products, wastes or effluents thereof would:
III. Cause material impairment to the health of the persons engaged in or connected
therewith, or
IV. Result in the pollution of the general environment:

Provided that the State Government may, by notification in the Official Gazette, amend the
First Schedule by way of addition, omission or variation of any industry specified in the
said Schedule;

"Young person" means a person, who is either a child or an adolescent;

"Day" means a period of twenty-four hours beginning at midnight;

"Week" means a period of seven days beginning at midnight on Saturday night or such

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other night as may be approved in writing for a particular area by the Chief Inspector of
Factories;

"Power" means electrical energy, or any other form of energy, which is mechanically
transmitted and is not generated, by human or animal agency;

"Prime-mover" means any engine, motor or other appliance, which generates or otherwise
provides power;

"Transmission machinery" means any shift, wheel, drum, pulley, system of pulleys,
coupling, clutch, driving belt or other appliance or device by which the motion of a prime-
mover is transmitted to or received by any machinery or appliance;

"Machinery" includes prime-movers, transmission machinery and all other appliances,


whereby power is generated, transformed, transmitted or applied;

"Manufacturing process" means any process for:


I. Making, altering, repairing, ornamenting, finishing, packing, oiling, washing,
cleaning, breaking up, demolishing or otherwise treating or adopting any article or
substance with a view to its use, sale, transport, delivery or disposal; or
II. Pumping oil, water, sewage, or any other substance; or
III. Generating, transforming or transmitting power; or
IV. Composing types for printing, printing by letter press, lithography, photogravure or
other similar process or book-binding; or
V. Constructing, reconstructing,, repairing, refitting, finishing or breaking up ships or
vessels; or
VI. Preserving or storing any article in cold storage ;

"Worker" means a person employed directly or by or through any agency (including a


contractor) with or without the knowledge of the principal employer whether for
remuneration or not in any manufacturing process, or in cleaning any part of the
machinery or premises used for a manufacturing process, or in any other kind of work
incidental to, or connected with the manufacturing process, or the subject of the
manufacturing process but does not include any member of the armed forces of the
Union;

"Factory" means any premises including the precincts thereof-


I. Whereon ten or more workers are working, or were working on any day of the
preceding twelve months, and in any part of which a manufacturing process is
being carried on with the aid of power, or is ordinarily so carried on, or
II. Whereon twenty or more workers are working, or were working on any day of the
preceding twelve months, and in any part of which a manufacturing process is
being carried on without the aid of power, or is ordinarily so carried on,- but does
not include a mine subject to the operation of the Mines Act, 1952 (XXXV of 1952)
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or a mobile unit belonging to the armed forces of the Union, a railway running shed
or a hotel, restaurant or eating place;

Explanation I: For computing the number of workers for the purposes of this clause all
the workers in different groups and relays in a day shall be taken into account.

Explanation II: For the purposes of this clause, the mere fact that an Electronic Data
Processing Unit or a Computer Unit is installed in any premises or part thereof, shall not
be construed to make it a factory if no manufacturing process is being carried on in such
premises or part thereof.

"Occupier" of a factory means the person, who has ultimate control over the affairs of the
factory, provided that:
I. In the case of a firm or other association of individuals, any one of the individual
partners or members thereof shall be deemed to be the occupier;
II. In the case of a company, any one of the directors shall be deemed to be the
occupier:
III. In the case of a factory owned or controlled by the Central Government or any
State Government, or any local authority, the person or persons appointed to
manage the affairs of the factory by the Central Government, the State
Government or the local authority, as the case may be, shall be deemed to be the
occupier:

Provided further that in the case of a ship which is being repaired, or on which
maintenance work is being carried out, in a dry dock which is available for hire:-
The owner of the dock shall be deemed to be the occupier for the purposes of any matter
provided for by or under:
I. Section 6, section 7, section 7A, section 7B, section 11 or section 12;
II. Section 17, in so far as it relates to the providing and maintenance of sufficient and
suitable lighting in or around the dock;
III. Section 18, section 19, section 42, section 46, section 47 or section 49, in relation
to the workers employed on such repair or maintenance;

The owner of the ship or his agent or master or other officer-in-charge of the ship or any
person who contracts with such owner, agent or master or other officer-in-charge to carry
out the repair or maintenance work shall be deemed to be the occupier for the purposes of
any matter provided for by or under section 13, section 14, section 16 or section 17 (save
as otherwise provided in this proviso) or Chapter IV (except section 27) or section 43,
section 44 or section 45, Chapter VI, Chapter VII, Chapter VIII or Chapter IX or section
108, section 109 or section 110, in relation to:
I. The workers employed directly by him or by or through any agency; and
II. The machinery, plant or premises in use for the purpose of carrying out such repair
or maintenance work by such owner, agent, master or other officer-in-charge or
person;
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"Prescribed" means prescribed by rules made by the State Government under this Act;

Where work of the same kind is carried out by two or more sets of workers working during
different periods of the day, each of such sets is called a "group" or "relay" and each of
such periods is called a "shift".

Reference to time of day


In this Act references to time of day are references to Indian Standard Time being five and
a half hours, ahead of Greenwich Mean Time. Provided that for any area in which Indian
Standard Time is not ordinarily observed the State Government may make rules:

I. Specifying the area,


II. Defining the local mean time ordinarily observed therein, and
III. Permitting such time to be observed in all or any of the factories situated in the
area.

Power to declare different departments to be separate factories or two or more


factories to be a single factory.
The State Government may, on its own or on an application made in this behalf by an
occupier, direct by an order in writing and subject to such conditions as it may deem fit,
that for all or any of the purposes of this Act different departments or branches of a factory
of the occupier specified in the application shall be treated as separate factories or that
two or more factories of the occupier specified in the application shall be treated as a
single factory.

Provided that no order under this section shall be made by the State Government on its
own motion unless an opportunity of being heard is given to the occupier.

Power to exempt during public emergency.


In any case of a public emergency the State Government may, by notification in the
Official Gazette, exempt any factory or class or description of factories from all or any of
the provisions of this Act except section 67 for such period and subject to such conditions
as it may think fit:

Provided that no such notification shall be made for a period exceeding three months at a
time.

Explanation: For the purposes of this section 'public emergency' means a grave
emergency whereby the security of India or of any part of the territory thereof is
threatened, whether by war or external aggression or internal disturbance.
Approval, licensing and registration of factories:

1. The State Government may make rules:

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a) Requiring for the purposes of this Act, the submission of plans of any class or
description of factories to the Chief Inspector or the State Government.
b) Requiring the previous permission in writing of the State Government or the
Chief Inspector to be obtained for the site on which the factory is to be situated
and for the construction or extension of any factory or class or description of
factories.
c) Requiring for the purpose of considering applications for such permission the
submission of plans and specifications;
d) Prescribing the nature of such plans and specifications and by whom they shall
be certified.
e) Requiring the registration and licensing of factories, or any class or description of
factories, and prescribing the fees payable for such registration and licensing
and for the renewal of licenses.
f) Requiring that no license shall be granted or renewed unless the notice specified
in section 7 has been given.

2. If on an application for permission referred to in clause (b) of sub-section (1)


accompanied by the plans and specifications required by the rules made under clause
(b) of that sub-section, sent to the State Government or Chief Inspector by registered
post, no order is communicated to the applicant within three months from the date on
which it is so sent, the permission applied for in the said application shall be deemed
to have been granted.

3. Where a State Government or a Chief Inspector refuses to grant permission to the


site, construction or extension of a factory or to the registration and licensing of a
factory, the applicant may within thirty days from the date of such refusal, appeal to
the Central Government if the decision appealed for was of the State Government,
and to the State Government in any other case.

Explanation: A factory shall not be deemed to be extended within the meaning of this
section by reason only of the replacement of any plant or machinery, or within such limits
as may be prescribed, of the addition of any plant or machinery. If such replacement or
addition does not reduce the minimum clear space required for safe working around the
plant or machinery or adversely affects the environment conditions from the evolution or
emission of steam, heat or dust or Iumes which are injurious to health.

Notice by occupier:
1. The occupier shall, at least fifteen days before he begins to occupy or, use any
premises as a factory, send to the Chief Inspector a written notice containing:
a) The name and situation of the factory;

b) The name and address of the occupier;


c) The name and address of the owner of the premises or building (including the
precincts thereof) referred to in section 93;
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d) The address of which communication relating to the factory may be sent;
e) The nature of the manufacturing process-
f) Carried on in the factory during the last twelve months in the case of factories in
existence on the date of the commencement of this Act, and
g) To be carried on in the factory during the next twelve months in the case of all
factories;
h) The total rated horse power installed or to be installed in the factory, which shall
not include the rated horsc power of any separate standby plant;
i) The name of the manager of the factory for the purposes of this Act;
j) The number of workers likely to be employed in the factory:
k) The average number of workers per day employed during the last twelve months
in the case of a factory in existence on the date of the commencement of this
Act;
l) Such other particulars as may be prescribed.

2. In respect of all establishments, which come within the scope of the Act for the first
time the occupier shall send a written notice to the Chief Inspector containing the
particulars specified in sub-section (1) within thirty days from the date of the
commencement of this Act.

3. Before a factory engaged in a manufacturing process which is ordinarily carried out for
less than one hundred and eighty working days in the year, resumes working, the
occupier shall send a written notice to the Chief Inspector containing the particulars
specified in sub-section (1) that least thirty days before the date of the commencement
of work.

4. Whenever a new manager is appointed, the occupies shall send to the Inspector a
written notice and to the Chief Inspector a copy thereof within seven days from the
date on which such person takes over charge.

5. During a period for which no person has been designated as manager of a factory or
during which the person designated does not manage the factory, any person found
acting as manager, or if no such person is found, the occupier himself, shall be
deemed to be the manager of the factory for the purposes of this Act.

1.6 WELFARE OF EMPLOYEES AND ITS IMPORTANCE SOCIAL


SECURITY

Employee welfare includes various services, benefits and facilities offered to organizations
workers by the organization. The welfare measures can be of any kind/forms. Allowances,
housing, transportation, medical insurance and food all are included in it. It also includes
monitoring of working conditions, creation of industrial harmony through infrastructure for
health, industrial relations and insurance against disease, accident and unemployment for

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the workers and their families. Through such generous benefits the employer makes life
worth living for employees.

1.6.1 IMPORTANCE OF EMPLOYEE WELFARE

Compliance
As an owner, you are required by law to provide certain benefits for the welfare of your
employees. You may have to match the Social Security taxes your employees pay and
obtain a worker's compensation insurance policy. If you terminate an employee, you may
have to funds to extend his health insurance.

Employees Motivation
By providing a plan that's good for employees' welfare, you show them that you value
them. This can help make them feel welcome and happy in your company, motivating
them to work harder. If your health plan has wellness coverage and preventative care,
employees are more likely to stay healthy, cutting down on absenteeism and sick days.

Employees' Well-Being
For companies that have a large base of employees working under stressful conditions or
living away from family, it is important to look at fostering personal happiness and
professional growth. Investing in employees pays dividends in terms of higher productivity
and greater loyalty.

Company Image
Providing a good employee welfare plan reflects well on your business, building a good
company image. It may even earn you some press coverage, giving you free publicity to
improve awareness among potential customers. This may boost your sales and increase
your profits.

Hiring and Retention


The benefits an employee receives from his employer for his welfare are often a
significant reason why he decides to accept a job offer. As such, providing employee
benefits allow you to compete with other businesses to recruit and retain qualify
employees. If other employers offer better benefits, good employees may choose to go
there.

1.6.2 FEATURES OF EMPLOYEE WELFARE

Employee welfare is a comprehensive term including various services, facilities


and amenities provided to employees for their betterment.
The basic purpose of employee welfare is to improve the lot of the working class
and thereby make a worker a good employee and a happy citizen.
Welfare measures may be both voluntary and statutory.

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Employee welfare is an essential part of social welfare. It involves adjustment of
an employee's work life and family life to the community or social life.
Welfare measures are in addition to regular wages and other economic benefits
available to employees under legal provisions and collective bargaining.

1.7 FAMILY PENSION SCHEME

Employees Pension Scheme is Pension Scheme for survivors, old aged and disabled
persons. The earlier Family Pension Scheme, 1971 offered only one type of benefit,
namely, survivors benefit, i.e. (payment of pension to widow/widower on death of the
member in service. On the other hand, the new scheme caters for three types of
contingencies:

Survivor Pension: If death occurs during service period.


Old Age Pension: Pension or Superannuation.
Permanent Disability: In the event of member suffering. Pension permanent
disability while in service.

Characteristics

In the scheme three scales of pensioners benefits have been offered according to the
length of service.

2.1 For service below 10 years Return of contribution on exit from employment -
Table - D. Example : Suppose a member exits from employment after four
years of service his wage on exit is Rs. 4,000, (Return of contribution will be
calculated as Rs. 4,000 x 4.18 of wages on exit) i.e., Rs. 16,720/-

2.2 Service above 10 years but below 20 years. In the first instance pension will
be calculated by applying the formula, i.e.
Pensionable Salary X Pensionable service/70
Say, a member has done 18 years of pensionable service, Pensionable Salary
determined as Rs. 4,000/- pension payable to him will be Rs. 1,029/-
2.3 Service over 20 years full pension according to the formula stated above. It is
to be noted here that for rendering 20 years of pensionable service or more,
members pensionable service shall in all cases be increased by adding 2
years. In other words, 20 years actual pensionable service will be treated as
22 years of pensionable service for calculation of pension.

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2.4 Special provisions for existing members special provisions have been made
for calculation of pension in case of member who was a member of the ceased
Family Pension Scheme 1971 and who has attained the age of 48 years on
the 16th November, 1995 or a member who has attained the age of 48 years
but is less than 53 years on 16th November, 1995, member who has attained
the age of 53 years or more on the 16th November, 1995. In the aforesaid
cases the formula for calculating pension will be as follows -

1.8 EMPLOYEES STATE INSURANCE ACT 1948

Short title, extent, commencement and application

This Act may be called the Employees' State Insurance Act, 1948.
It extends to the whole of India 1.
It shall come into force on such 2 date or dates as the Central Government may,
by notification in the Official Gazette, appoint, and different dates may be
appointed for different provisions of this Act and 3 for different States or for
different parts thereof.
It shall apply, in the first instance, to all factories (including factories belonging to
the government) other than seasonal factories:
4[PROVIDED that nothing contained in this sub-section shall apply to a factory or
establishment belonging to or under the control of the government whose
employees are otherwise in receipt of benefits substantially similar or superior to
the benefits provided under this Act.
The appropriate government may, in consultation with the Corporation and
5[where the appropriate government is a State Government, with the approval of
the Central Government], after giving six months notice of its intention of so doing
by notification in the Official Gazette, extend the provisions of this Act or any of
them, to any other establishment or class of establishments, industrial,
commercial, agricultural or otherwise:
PROVIDED that where the provisions of this Act have been brought into force in
any part of a State, the said provisions shall stand extended to any such
establishment or class of establishments within that part if the provisions have
already been extended to similar establishment or class of establishments in
another part of that State.
A factory or an establishment to which this Act applies shall continue to be
governed by this Act not withstanding that the number of persons employed
therein at any time falls below the limit specified by or under this Act or the
manufacturing process therein ceases to be carried on with the aid of power.

Definitions

In this Act, unless there is anything repugnant in the subject or context,-


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Appropriate government" means, in respect of establishments under the control of the
Central Government or 7

A railway administration or a major port or a mine or oilfield, the Central Government, and
in all other cases, the 8 State Government;

"Confinement" means labour resulting in the issue of a living child or labour after twenty-
six weeks of pregnancy resulting in the issue of a child whether alive or dead;

"Contribution" means the sum of money payable to the Corporation by the principal
employer in respect of an employee and includes any amount payable by or on behalf of
the employee in accordance with the provisions of this Act;

"Corporation" means the Employees' State Insurance Corporation set up under this Act;
11
"Dependant" means any of the following relatives of a deceased insured person, namely:
I. A widow, a minor legitimate or adopted son, an unmarried legitimate or adopted
daughter, a widowed mother;
II. If wholly dependent on the earnings of the insured person at the time of his death, a
legitimate or adopted son or daughter who has attained the age of eighteen years
and is infirm;
III. If wholly or in part dependent on the earnings of the insured person at the time of
his death:
A parent other than a widowed mother,
A minor illegitimate son, an unmarried illegitimate daughter or a daughter
legitimate or adopted or illegitimate if married and a minor or if widowed and a
minor,
A minor brother or an unmarried sister or a widowed sister if a minor,
A widowed daughter-in-law,
A minor child of a pre-deceased son,
A minor child of a pre-deceased daughter where no parent of the child is alive, or
A paternal grand-parent if no parent of the insured person is alive,

"Duly appointed" means appointed in accordance with the provisions of this Act or with the
rules or regulations made there under;

"Employment injury" means a personal injury to an employee caused by accident or an


occupational disease arising out of and in the course of his employment, being an
insurable employment, whether the accident occurs or the occupational disease is
contracted within or outside the territorial limits of India;

"Employee" means any person employed for wages in or in connection with the work of a
factory or establishment to which this Act applies and:
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I. Who is directly employed by the principal employer on any work of, or incidental or
preliminary to or connected with the work of, the factory or establishment whether
such work is done by the employee in the factory or establishment or elsewhere; or
II. Who is employed by or through an immediate employer on the premises of the
factory or establishment or under the supervision of the principal employer or his
agent on work which is ordinarily part of the work of the factory or establishment or
which is preliminary to the work carried on in or incidental to the purpose of the
factory or establishment; or
III. Whose services are temporarily lent or let on hire to the principal employer by the
person with whom the person whose services are so lent or let on hire has entered
into a contract of service;
Any member of the Indian naval, military or air forces; or
Any person so employed whose wages (excluding remuneration for overtime
work) exceed
Such wages as may be prescribed136 by the Central Government.

PROVIDED that an employee whose wages (excluding remuneration for overtime work)
exceed 18 such wages as may be prescribed by the Central Government at any time after
(and not before) the beginning of the contribution period, shall continue to be an employee
until the end of that period.

"Exempted employee" means an employee who is not liable under this Act to pay the
employee's contribution;

"Family" means all or any of the following relatives of an insured person, namely:
I. A spouse;
II. A minor legitimate or adopted child dependent upon the insured person;
III. A child who is wholly dependent on the earnings of the insured person and who is:
Receiving education, till he or she attains the age of twenty-one years,
An unmarried daughter;

IV. A child who is infirm by reason of any physical or mental abnormality or injury and is
wholly dependent on the earnings of the insured person, so long as the infirmity
continues;
V. Dependent parents;

"Factory" means any premises including the precincts thereof:

I. whereon ten or more persons are employed or were employed for wages on any
day of the preceding twelve months, and in any part of which a manufacturing
process is being carried on with the aid of power or is ordinarily so carried on, or
II.

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III. whereon twenty or more persons are employed or were employed for wages on any
day of the preceding twelve months, and in any part of which a manufacturing
process is being carried on without the aid of power or is ordinarily so carried on.
but does not include a mine subject to the operation of the Mines Act, 1952 or a
railway running shed;

"Immediate employer", in relation to employees employed by or through him, means a


person who has undertaken the execution, on the premises of a factory, or an
establishment to which this Act applies or under the supervision of the principal employer
or his agent, of the whole or any part of any work which is ordinarily part of the work of the
factory or establishment of the principal employer or is preliminary to the work carried on
in, or incidental to the purpose of, any such factory or establishment, and includes a
person by whom the services of an employee who has entered into a contract of service
with him are temporarily lent or let on hire to the principal employer 4[and includes a
contractor;

"Insurable employment" means an employment in a factory or establishment to which this


Act applies;

"Insured person" means a person who is or was an employee in respect of whom


contributions are or were payable under this Act and who is, by reason thereof, entitled to
any of the benefits provided by this Act;

"Managing agent" means any person appointed or acting as the representative of another
person for the purpose of carrying on such other person's trade or business, but does not
include an individual manager subordinate to an employer;]

"Manufacturing process" shall have the meaning assigned to it in the Factories Act, 1948;]

"Mis-carriage" means expulsion of the contents of a pregnant uterus at any period prior to
or during the twenty-sixth week of pregnancy but does not include any mis-carriage, the
causing of which is punishable under the Indian Penal Code;]

"Occupier" of the factory shall have the meaning assigned to it in the Factories Act, 1948;

"Permanent partial disablement" means such disablement of a permanent nature, as


reduces the earning capacity of an employee in every employment which he was capable
of undertaking at the time of the accident resulting in the disablement:
PROVIDED that every injury specified in Part II of the Second Schedule shall be deemed
to result in permanent partial disablement;

"Permanent total disablement" means such disablement of a permanent nature as


incapacitates an employee for all work which he was capable of performing at the time of
the accident resulting in such disablement:
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PROVIDED that permanent total disablement shall be deemed to result from every injury
specified in Part I of the Second Schedule or from any combination of injuries specified in
Part II thereof where the aggregate percentage of the loss of earning capacity, as
specified in the said Part II against those injuries, amounts to one hundred per cent or
more;

"Power" shall have the meaning assigned to it in the Factories Act, 1948;

"Prescribed" means prescribed by rules under this Act;

"Principal employer" means:


I. In a factory, the owner or occupier of the factory, and includes the managing agent
of such owner or occupier, the legal representative of a deceased owner or
occupier, and where a person has been named as the manager of the factory
under 20[the Factories Act, 1948]; the person so named;
II. In any establishment under the control of any department of any government in
India, the authority appointed by such government in this behalf or where no
authority is so appointed, the head of the department;
III. In any other establishment, any person responsible for the supervision and control
of the establishment;

"Regulation" means a regulation by the Corporation;

"Schedule" means a Schedule to this Act;

"Seasonal factory" means a factory which is exclusively engaged in one or more of the
following manufacturing processes, namely, cotton ginning, cotton or jute pressing,
decortications of groundnuts, the manufacture of coffee, indigo, lac, rubber, sugar
(including gur) or tea or any manufacturing process which is incidental to or connected
with any of the aforesaid processes and includes a factory which is engaged for a period
not exceeding seven months in a year:
I. In any process of blending, packing or repacking of tea or coffee; or
II. In such other manufacturing process as the Central Government may, by
notification in the Official Gazette, specify;

"Sickness" means a condition which requires medical treatment and attendance and
necessitates abstention from work on medical grounds;

"Temporary disablement" means a condition resulting from an employment injury which


requires medical treatment and renders an employee, as a result of such injury,
temporarily incapable of 21doing the work which he was doing prior to or at the time of the
injury;

"Wages" means all remuneration paid or payable, in cash to an employee, if the terms of
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the contract of employment, express or implied, were fulfilled and includes any payment to
an employee in respect of any period of authorized leave, lock-out, strike which is not
illegal or lay -off and other additional remuneration, if any, 22 paid at intervals not
exceeding two months, but does not include:
I. Any contribution paid by the employer to any pension fund or provident fund, or
under this Act;
II. Any travelling allowance or the value of any travelling concession;
III. Any sum paid to the person employed to defray special expenses entailed on him
by the nature of his employment; or
IV. Any gratuity payable on discharge.

"Wage period" in relation to an employee means the period in respect of which wages are
ordinarily payable to him whether in terms of the contract of employment, express or
implied or otherwise.

All other words and expressions used but not defined in this Act and defined in the
Industrial Disputes Act, 1947, shall have the meanings respectively assigned to them in
that Act.

Registration of factories and establishments every factory or establishment to which this


Act applies shall be registered within such time and in such manner as may be specified
in the regulations made in this behalf.

1.9 WORKMENS GRATUITY ACT 1972

The Payment of Gratuity Act, 1972 applies to factories and other establishments
employing ten or more persons. On completion of five years service, the employees are
entitled to payment of gratuity @15 days wages for every completed year of service or
part thereof in excess of six months subject to a maximum of Rs.3.50 lakhs. The current
maximum limit is applicable from 24.9.1997. The wage ceiling for coverage under the Act
has since been removed w.e.f. 24.05.1994.

Objectives
The Payment of Gratuity Act, 1972 envisages to provide a retirement benefit to the
workmen who have rendered long and meritorious services to the employer.

Applicability

The Act applies to:


every factory, mine, oilfield, plantation, port, railway company;
every shop or establishment governed by the Shops and Establishments Act of
that State in which 10 or more persons are employed, or were employed on any
day of the preceding 12 months; and
every other establishment wherein 10 or more persons are employed, or were
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employed on any day of preceding 12 months and which is so notified by the
Central Government.
The Central Government has made the Act applicable to all the educational
institutions in the country having 10 or more employees, and to all registered trusts
and societies employing 10 or more persons.
The Act has been made applicable also to motor transport undertakings, clubs,
Chambers of Commerce & Industry, local bodies and solicitors offices employing
10 or more persons.
The shop or establishment to which this Act has become applicable shall continue
to be governed by this Act, irrespective of the fact that the number of employees
working therein has subsequently fallen below 10.
This Act is not applicable to apprentices and persons holding a post under the
Central or State Government who are governed by any other Act or by any other
rule providing for payment of gratuity.

Eligibility
Any person employed on wages/salary.
In case of death or disablement, the gratuity is payable, even if he has not
completed 5 years of service.
At the time of retirement or resignation or on superannuation, an employee should
have rendered continuous service of not less than five years,

Benefits
The quantum of gratuity is to be computed at the rate of 15 days wages (7 days
wages in case of seasonal establishments) based on rate of wages last drawn by
the employee concerned for every completed year of service or a part thereof
exceeding 6 months.
In case where higher benefit of gratuity is available under any gratuity scheme of
the Co., the employee will be entitled to higher benefit.
The total amount of gratuity payable shall not exceed the prescribed limit.

Calculation of gratuity
Gratuity = Monthly Salary x 15 days x No. of yrs. of service 26
Max. Gratuity payable under the Act is Rs. 3,50,000/- (w.e.f. 24-9-1997)

Penal Provisions
Nonpayment of gratuity payable under the Act is punishable with imprisonment up
to 2 years (minimum 6 months) and/or fine up to RS 20,000/-. Other
contravention/offenses attract imprisonment up to 1 year and/or fine up to RS
10,000.

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1.10 FUTURE CHALLENGES FOR HUMAN RESOURCE MANAGEMENT

Some of the future trends and challenges in HR management include the use of new
technology. This includes training employees the some different methods such as
through the use of podcasts and webinars. The new technology is coming year and it will
impact the Human Resource Department as it gives the organization some new to hire,
planning the recruitment, hoe to recruit new employees,. Technology is also a way in
which companies can recruit new employees. Of course, the economy is a challenge that
the HR department and management have to consider.

SUMMARY

This chapter Maintenance gives you the detailed information about the benefits which
employee gets from the organization during the working period of an employee or after the
retirement of an employee. In this chapter we have studied about the benefits such as
fringe benefits, retirement terminal benefits, goals of fringe benefits, needs of fringe
benefits, needs of fringe benefits and various fringe benefit types, we have also discussed
the different retirement terminal benefits an organization offers to the employees. This
chapter also included the various features of employee welfare and objective of employee
welfare, employee safety, how company provides the safety, various safety measures
company should take care at the workplace for an employee If an accident occurs, what
are the prevention they should takes, different causes for the occurrence of an accident. It
gives the detailed description about the acts such as Safety Provision Act 1948 i.e.
Factory Act, different pension schemes, Employee Insurance Act 1948, Workmens
Gratuity Act 1972 and the different future challenges for the Human Resource
Department.

EXERCISE- I

1. What are the goals of fringe benefits?


2. What is the scope of Workmens Gratuity Act 1972?
3. Explain the pension scheme for widows.
4. Write down the various causes for the accidents.
5. What are the various retirement benefits?
6. How employer should take care of the employees safety at the workplace?
7. Define Factory Act 1948.
8. What is the importance of employee welfare in an organization?
9. What are the provisions provided by Factories Act 1948
10. Explain the need of fringe benefit.

EXERCISE- II

1. _______ is defined as the compensation which includes home allowances,


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company car, etc.
a. Fringe benefit
b. Retirement Terminal benefit
c. Terminal benefit
d. Retirement benefit

2. Which are the goals of the fringe benefit?


a. For boosting up the employees
b. Creating and improving the industrial relations
c. For motivating the employees
d. For providing a healthy work environment
e. All of the above

3. Which is not a fringe benefit type?


a. Lay off compensation
b. Retrenchment compensation
c. Protection against health
d. None of the above

4. What is the abbreviation of TDS?


a. Tax Deducted at Source
b. Tax Deduction at Scope
c. Total Dissolved Solid
d. Total Deducted at source

5. Which are the retirement benefits from the following given below?
a. Pension
b. Gratuity
c. Leave Encashment
d. All of the above

6. What is the full form of VRS?


a. Voluntary Retirement Scheme
b. Voluntary Return Scheme
c. Value Retirement Scheme
d. Value Return Scheme

7. The central government has made elaborate provision for health, safety and
welfare under the Acts. Name those acts.
a. Employment Exchange Act 1959
b. Factories Act 1948 and Mines Act 1952
c. Mines Act 1952 and Contract Labour Act 1970
d. Factories Act 1948 and Contract Labour Act 1970

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8. Workplace should be safe and the organization should provide the security
measures for the safety.
a. True
b. False

9. The earlier Family Pension Scheme 1971 offered a type of benefit. How many are
they?
a. Two
b. One
c. Three
d. Four

10. The payment of Gratuity Act 1972 applies to the


a. Individual
b. Factories
c. Both
d. None of the above

Answer: 1 (a), 2 (e), 3 (d), 4 (a), 5(d), 6 (a), 7 (b), 8 (a), 9 (b), 10 (b)

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CHAPTER 2
MEETING OTHER HUMAN RESOURCES GOALS

2.1 COLLECTIVE BARGAINING AND LABOUR RELATIONS

2.1.1 COLLECTIVE BARGAINING

It is the process of negotiation between the employer and employee in an organization.


The term "collective bargaining" was first used in the middle of 1891 by economic
theorist Beatrice Webb. Here, the collective term meaning is that the together
representatives effort of negotiate an agreement. Whereas the bargaining is the process
of discussing, debating, even threaten in order to bring about the favorable agreement of
those represented. The negotiation can be done of the following such as:

Hours
Rules
Working conditions
Wages
Vacation Time
Retirement Benefits
Sick leave
Health care benefits
Overtime pay
Shift length
Work holidays
Base pay

It is an agreement on which both employee and employer agrees and this document
regulated the working conditions for employees. It refers to a good-faith business
mechanism people use to reach an agreement. It helps to find a solution for work related
problems. The main objective of the bargaining system is to improve the conditions in a
way to make things more efficient, economical, safe or enjoyable in the workplace or
organization. The collective bargaining result into the collective agreement. Employees
are generally represented in bargaining by a union or other labor organization.

There are two types of collective bargaining:


Periodic
Continuous.
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The Periodic according to the name happens at interval of time i.e. periods. Periodic
happens at irregular intervals as problems or needs come up. It does not include a
predefined schedule, and the business leaders and general workers pick representatives
that best fit the immediate need.

Continuous style includes a predefined schedule. With the continuous or rolling style, both
sides are always working to fix or head off issues, and there usually are permanent
committees that represent both sides over many different areas.

Collective bargaining occurs when representatives of a labour union meet with the
management representatives to determine employees wages and benefits, to create or
revise rules, and to resolve dispute or violations of the labour contract.

For Human Resource Management Specialists and senior managers in an organization,


the knowledge of labour relations and collective bargaining is important. Human Resource
planning is closely related to the labour relations as the labour contract generally decide
on conditions of policies and various procedures which are related to promotions, job
security, transfers and layoffs. The collective bargaining is the most critical in case of
compensation and benefits as all the different aspects of wages and benefits are related
to negotiation.

There is one more formal agreement between the union and the management known as
Labour Contract. It specifies the conditions for employment and union-management
relationship based upon a mutually agreed period of time. This agreement gives the
information about the terms on which the two parties agreed which includes the issues
such as wage, benefit, working conditions. The process is a difficult one and complex.

A good faith bargaining is demonstrated by the below events:

Various meetings at reasonable time and places for purposes of negotiating the
contract and schedule and conducted with the union.
Realistic proposals are submitted
Reasonable counter proposals are offered.
Once all has been done each party sign the agreement.

Lack of good faith bargaining is demonstrated by the below event:

Person is unwilling to make counter proposal


Changes positions constantly
Make use of some delaying tactics
After the concessions are made, withdraw them.
Refuses to provide the needed for negotiations

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2.1.2 ISSUES IN COLLECTIVE BARGAINING

Administrative issues
Such type of issues include seniority, employee discipline and employee health and
safety, work rules, job security , training, employee discharge procedure, technological
changes, etc.

Institutional issues
These type of issues include the rights, responsibilities and duties of the employers,
employees, union which also includes the union security, check-off procedures, employee
stock ownership plans, and the quality of work-life programs.

Wage-related issues
These includes how you can determine the wage issues, cost of living adjustments, wage
differentials, wage adjustments, over-time rates and wage systems are applied.

Supplementary Economic benefits


These types of benefits are pension plans, paid vacations, health insurance plans,
reporting pay, supplementary employment benefits, and dismissal pay.

Labour unions
Labour union is an officially recognized body representing a group of individuals who have
joined together to present a united front and collective voice in working with management.
Labour relations strategy is an organization's overall plan for dealing with unions. Labour
Relations Board is composed of reps from union, management, and a neutral chair or vice
chair. Used to interpret, administer, and enforce the Act and investigate alleged violations

2.2 MANAGING HUMAN RESOURCES GLOBALLY

2.2.1 BECAUSE OF SOME FACTORS GLOBAL HUMAN RESOURCE


MANAGEMENT IS DIFFERENT FROM DOMESTIC MANAGEMENT

They both have different labour market


There occur some mobility problems such as legal, economic and cultural barriers.
Difference in management style
Varied compensation practices.
Labour laws

2.2.2 STRATEGIC ROLE OF GLOBAL HUMAN RESOURCE MANAGEMENT

The organizational architecture is used to implement the strategy


Put right people at right jobs or postings.

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To acquire effective right skills set effective training is used to help performing the
job effectively.
The behavior depends upon the desired organizational culture.
Action in line with the strategy must led to the compensation must create
incentives.
Performance appraisal should be given to measure the behavior, firm wants to
encourage.

2.2.3 GLOBLIZATION IMPACT ON HUMAN RESOURCE MANAGEMENT

Globalization means to define the political force, economic drive in the business world and
as the management has significantly changing and expanding across the territories and
cultures. Now the major duty of Human Resource Department is to include the global
strategies, multi-national accountabilities. The HR professionals working in the
international market have to look beyond the local borders and also they should possess
the capability which is needed to develop a global Human Resource policies and
processes. The global Human Resource Management program is valued because of
comprehensive knowledge gained from the different experienced gained from the
international as well as forward-thinking Human Resource best practices, policies and
procedures which all are introduced to the executive level Hr-professionals to effectively
form their jobs responsibilities and duties.

2.2.4 GLOBALIZING THE HR FUNCTION: HR STAFF DEVELOPMENT

If the company globalize, then according to that the HR departments need to understand
the challenges of working in and serving a global organization. ITAP can provide:

To support them, consult behind the scenes for HR professionals as they serve the
needs of their global organizations.
Web content HR professionals can use to sell to, train or explain about and be a
better global business partner
It also act as temporary staff to supplement the capabilities of the existing
professionals
Certification for HR professionals in the administration and use of ITAP tools and
services

2.3 HIGH PERFORMANCE ORGANIZATION

The perfect combination of people, technology, and organizational structure which makes
full use of the organizations resources and opportunities in achieving the organizations
goals. Any organization if wants to function as a high-performance organization then each
of these elements must fit well with the others in a smoothly functioning whole.

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Elements of high-performance work system:

Organizational structure: The way the organization groups its people into useful
divisions, departments, and reporting relationships.

Task design: It determines how the details of the organizations necessary activities will
be grouped, whether into jobs or team responsibilities.

People: The organization individual well suited and well prepared for their jobs.

Reward systems: contribute to high performance by encouraging people to strive


for objectives that support the organizations overall goals.
Information systems: modern information systems have enabled organizations to
share information widely.

In a high-performance work system, all the elements people, technology, and


organizational structure work together for success.

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Outcomes of a high-performance work system

Outcomes of a high-performance work system include higher productivity and


efficiency.
These outcomes contribute to higher profits.
Other outcomes include:
High product quality
Great customer satisfaction
Low employee turnover
The outcomes of each employee and work group contribute to the systems overall
high performance.
The organizations individuals and groups work efficiently, provide high-quality
goods and services, etc., and in this way they contribute to meeting the
organizations goals.
When the organization adds or changes goals, people are flexible and make
changes to as needed to meet the new goals.
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Future scope of openERP

OpenERP is an open source business application aimed at leveraging the power of open
source community to develop a powerful ERP system. OpenERP has simplified ERP
implementations across industries by making available basic functionalities.

Business Analyst has to study the business requirement and map it one-to-one to the
existing features of OpenERP. If functionality is not available, python programming
language can be used for developing the required feature. Thus this way, vendor doesnt
develop ERP system from scratch but tweaks the existing functionalities or make use of
them for speedy implementation. It not only saves time, effort, cost but also and speeds
up the ERP implementation.

Currently, OpenERP has over 700 modules that cater to various need of an organization.
Open ERP is being used everywhere, from small and medium sized companies to large
business houses.

The expert of ERP software claims that companies providing ERP will continue to merge
in future. The major player of ERPs will look at consolidation and merger of portfolio to
develop horizontal (Services in all possible domains) and vertical solutions (Industry
depth). Now ERP software have the capability to provide e-commerce and CRM services.

ERP provides competitive edge to get ahead of your competitors. Future ERP software
will be integrated with latest marketing strategies and business plan.

Software as a service (SaaS), Application on Demand and Open Source Application will
rule ERP future.

2.4 MANUAL

2.4.1 INSTALLATION

OpenERP all-in-one installation

Each time a new release of OpenERP is made, OpenERP supplies a complete Windows
auto-installer for it. This contains all of the components you need the Postgre SQL
database server, the OpenERP application server, the GTK application client and the Web
client.

This auto-installer enables you to install the whole system in just a few mouse clicks. The
initial configuration is set up during installation, making it possible to start using it very
quickly, as long as you do not want to change the underlying code. It is aimed at the
installation of everything on a single PC, but you can later connect GTK clients from other
PCs, Macs and Linux boxes to it as well.
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Downloading openERP all-in-one

The first step is to download the OpenERP All-In-One installer. At this stage, you must
choose which version to install the stable version or the development version. If you are
planning to put it straight into production we strongly advise you to choose the stable
version.

Note

Stable Versions and Development Versions.

OpenERP development proceeds in two parallel tracks: stable versions and development
versions. New functionality is integrated into the development branch. This branch is more
advanced than the stable branch, but it can contain undiscovered and unfixed faults. A
new development release is made every month or so, and OpenERP has made the code
repository available so you can download the very latest revisions if you want.

The stable branch is designed for production environments. Here, releases of new
functionality are made only about once a year after a long period of testing and validation.
Only bug fixes are released through the year on the stable branch.
To download OpenERP for Windows, follow these steps:

Navigate to the site http://www.openerp.com.


Click the Downloads button at the right, then, under Windows Auto-Installer,
select All-In-One.
Before you can proceed with the download, you will be asked to fill an online form
with your contact and company details and information regarding your interest in
OpenERP.
Once you submit the online form, the All-In-One Windows installer is automatically
downloaded.
Save the file on your PC - it is quite a substantial size because it downloads
everything including the Postgre SQL database system (version 8.3, at the time of
writing), so it will take some time.

Installing the openERP all-in-one

To install OpenERP and its database, you must be signed in as an Administrator on your
PC. If you have previously tried to install the All-In-One version of OpenERP, you will have
to uninstall that first, because various elements of a previous installation could interfere
with your new installation. Make sure that all Tiny ERP, OpenERP and PostgreSQL
applications are removed: you are likely to have to restart your PC to finish removing all
traces of them.

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Double-click the installer file to install OpenERP and accept the default parameters on
each dialog box as you go. The All-In-One installer is the simplest mode of installation and
has the following steps:
Select installation language
The default is English . The other option is French .
Welcome message
Carefully follow the recommendations given in this step.

Figure: Welcome to OpenERP

Licence Agreement
It is important that you accept the GNU General Public License to proceed with
installation.
Select components to install
You can proceed with the default install type All In One , which will install the
OpenERP Server, GTK Desktop Client, Web Client and PostgreSQL Database
(version 8.3, at the time of writing). Or, you may customize your installation by
selecting only the components you require.

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Figure: Customize component installation

Configure PostgreSQL connection


The installer will suggest default parameters to complete your PostgreSQL
connection configuration. You may accept the defaults, or change it according to
your requirement.

Figure: PostgreSQL configuration


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Select folder for installation
By default, OpenERP is installed in C:\Program Files\OpenERP 6.0 . To install
in a different folder, browse for a different location (folder) in this step.
Install
The automatic installation of OpenERP begins and you can view its progress.
Finish
On successful installation of OpenERP, you will get an appropriate confirmation.
You can click Finish to close the setup wizard.

Figure: End of setup wizard

Connecting to openERP

You do not need to manually start the OpenERP Server, because it is installed as a
Windows service and automatically started. You may however access it from the shortcuts
created in the Start menu for OpenERP, or simply by connecting with your preferred
browser to web interface, by default available on http://localhost:8069

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Use the database list at the top-right corner to choose a database to connect to. As this
would be the first time you are using OpenERP since its installation, your database list will
be empty. You can create a new database through the Manage databases link on the
login page.

DATABASE CREATION

Use the technique outlined in this section to create a new database, openerp_ch01. This
database will contain the demonstration data provided with OpenERP and a large
proportion of the core OpenERP functionality. You will need to know your super
administrator password for this or you will have to find somebody who does have it to
create this database.

Note
The Super-administrator Password

Anyone who knows the super-administrator password has complete access to the data on
the server able to read, change and delete any of the data in any of the databases
there.

After first installation, the password is admin. This is the hard-coded default, and is used if
there is no accessible server configuration file. If your system has been set up so that the
server configuration file can be written to by the server, then you can change the
password through the client. Or you could deliberately make the configuration file read-
only so that there is no prospect of changing it from the client. Either way, a server
systems administrator can change it if you forget it.

So if your system is set to allow it, you can change the super admin password through the
GTK client from the menu File Databases Administrator Password or through the web
client by logging out (click the Logout link), clicking Databases on the login screen, and
then clicking the Password button on the Management screen.

The location of the server configuration file is typically defined by starting the server with
the--config command line option.

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43 | Appin Technology Lab


Figure: Changing the super-administrator password through the web client

Creating the Database


If you are using the GTK client, choose File Databases New database in the menu at
the top left. Enter the super-administrator password, then the name of the new database
you are creating.

Figure: Creating a new database through the GTK client


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If you are using the web client, click Databases on the login screen, then Create on the
database management page. Enter the super-administrator password, and the name of
the new database you are creating.

In both cases, you will see a checkbox that determines whether you load demonstration
data or not. The consequences of checking this box or not affect the whole use of this
database.

In both cases, you will also see that you can choose the Administrator password. This
makes your database quite secure because you can ensure that it is unique from the
outset. (In fact many people find it hard to resist admin as their password!)
Database openerp_ch01
Wait for the message showing that the database has been successfully created, along
with the user accounts and passwords (admin/XXXX and demo/demo). Now that you have
created this database, you can extend it without having to know the super-administrator
password.

Tip
User Access
The combination of username/password is specific to a single database. If you have
administrative rights to a database you can modify all users. Alternatively, you can install
the users_ldap module, which manages the authentication of users in LDAP (the
Lightweight Directory Access Protocol, a standard system), and connect it to several
OpenERP databases. Using this, many databases can share the same user account
details.

Note
Failure to Create a Database
How do you know if you have successfully created your new database? You are told if the
database creation has been unsuccessful. If you have entered a database name using
prohibited characters (or no name, or too short a name), you will be alerted by the dialog
box Bad database name! Explaining how to correct the error. If you have entered the
wrong super-administrator password or a name already in use (some names can be
reserved without your knowledge), you will be alerted by the dialog box Error during
database creation!

Since this is the first time you have connected to this database, you will be asked a series
of questions to define the database parameters. You may choose to Skip Configuration
Wizards or Start Configuration. If you choose to configure your application, you may
proceed with the following steps:
Configure Your Interface: select Simplified and click Next.
Configure Your Company Information: replace the proposed default
of OpenERPS.A. By your own company name, complete as much of your address

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as you like. You can set the currency that your company uses or leave the default
setting. You may also add your company logo which will be visible on reports and
other documents. Click Next.
Install Applications: check the applications you need and then click Install. For
now, do not install any application.

Once configuration is complete, you are connected to your OpenERP system. Its
functionality is very limited because you have selected a Simplified interface with no
application installed, but this is sufficient to demonstrate that your installation is working.

Figure: Defining your company during initial database configuration

Managing Databases
As a super-administrator, you do not only have rights to create new databases, but also
to:
Backup databases
Delete databases
Restore databases
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All of these operations can be carried out from the menu File Databases... in the GTK
client or from the Databases button in the web client's Login screen.

Tip
Backup (copy) a Database
To make a copy of a database, go to the web Login screen and click
the Databases button. Then click the Backup button, select the database you want to copy
and enter the super-administrator password. Click the Backup button to confirm that you
want to copy the database.

Tip
Drop (delete) a Database
To delete a database, go to the web Login screen and click the Databases button. Then
click the Drop button, select the database you want to delete and enter the super-
administrator password. Click the Drop button to confirm that you want to delete the
database.

Tip
Restore a Database
To restore a database, go to the web Login screen and click the Databases button. Then
click the Restore button, click the Choose File button to select the database you want to
restore. Give the database a name and enter the super-administrator password. Click
the Restore button to confirm that you want to install a new copy of the selected database.
To restore a database, you need to have an existing copy, of course.

Tip
Duplicating a Database
To duplicate a database, you can:

Make a backup file on your PC from this database.


Restore this database from the backup file on your PC, and give it a new name.

This can be a useful way of making a test database from a production database. You can
try out the operation of a new configuration, new modules, or just the import of new data.

A system administrator can configure OpenERP to restrict access to some of these


database functions so that your security is enhanced in normal production use. You are
now ready to use databases from your installation to familiarize yourself with the
administration and use of OpenERP.

New OpenERP Functionality


The database you have created and managed so far is based on the core OpenERP
functionality that you installed. The core system is installed in the file system of your

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OpenERP application server.

What if you want to update what is there, or extend what is there with additional modules?

To update what you have, you would install a new instance of OpenERP using the
same techniques as described earlier.
To extend what you have, you would install new modules in the add-ons directory
of your current OpenERP installation. There are several ways of doing that.

In both cases you will need to be a root user or Administrator of your OpenERP
application server.

Extending OpenERP
To extend OpenERP you will need to copy modules into the addons directory. That is in
your server's openerp-server directory (which differs between Windows, Mac and some of
the various Linux distributions and not available at all in the Windows all-in-one installer).
If you look there you will see existing modules such as product and purchase. A module
can be provided in the form of files within a directory or a a zip-format file containing that
same directory structure.

You can add modules in two main ways through the server, or through the client.
To add new modules through the server is a conventional system administration task.
As rootuser or another suitable user, you would put the module in the addons directory
and change its permissions to match those of the other modules.

To add new modules through the client you must first change the permissions of
the addonsdirectory of the server, so that it is writeable by the server. That will enable you
to install OpenERP modules using the OpenERP client (a task ultimately carried out on
the application server by the server software).

Tip
Changing Permissions
A very simple way of changing permissions on the Linux system you are using to develop
an OpenERP application is to execute the command sudo chmod 777 <path_to_addons>
(where <path_to_addons> is the full path to the addons directory, a location like
/usr/lib/python2.5/site-packages/openerp- server/addons).
Managing Human Resources

To establish a system that is integrated into the company's management, you need to
start with a current list of collaborators.

Note
Do not confuse employees and users

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For OpenERP, employee represents all of the physical people who have a work contract
with the company. This includes all types of contracts: contracts with both fixed and
indeterminate time periods, and also independent and freelance service contracts.

A user is a physical person who is given access to the company's systems. Most
employees are users but some users are not employees: external partners can have
access to parts of the system. Here are some examples of functions which depend on the
accuracy of the employee list:
The cost of a service, which depends on the employee's working contract,
Project planning, which depends on the work pattern of the project contributors,
The client billing rate, which probably depends on the employee's job function,
The chain of command, or responsibilities, which are related to the hierarchical
structure of the company.

Link employees and OpenERP users to facilitate the management of rights


To define a new employee in OpenERP, use the menu Human Resources Employees.

Figure: Form describing an employee

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Start by entering the employee's name in Name and the employee category i.e. Tags. You
can then create a new user of the OpenERP system linked to this employee by filling in a
new Userform through the Related User field. And the company that this employee works
for in Company.

Even if the employee is not a user, it is best if you create a system access for most of your
staff just so that you can control their access rights from the outset (and you can do that
through this field if you need to).

Tip
Employee and User link.
If the employee has a user account on the system, you always link his or her user account
to the employee form.

Creating this link enables automatic completion to be done on the Employee field in the
relevant forms, such as services and expense records.
Then enter the employee's address.

This appears in the partner contact form in OpenERP. Since employees are people that
have contracts with your company, it is logical that they have entries like any other partner
in your database. So enter the name of the employee as a new partner Name and the
address. Then all of the functions that apply to a partner can also be applied to an
employee. This is particularly useful for tracking debits and credits in the accounts so
you can track salary payments, for example.

To help employees encode and validate timesheets and attendances, you can
installhr_timesheet_sheet by going to the menu Settings Modules Apps.. You can then
set both an analytic journal and linked a product to an employee in the HR Settings tab of
employee form. If you do it that way, then this information can be used to track services.
For now, just complete the form with the following information:

Analytic Journal : usually a Timesheet Journal,


Product: a service product that describes how this employee would be charged
out, for example as Service on Timesheet.

At the top right of the form you can find button which will lead you to the Timesheets
associated with that employee.

Define employees' billing prices and costs


To be able to use the timesheets at all, you must first define those employees who are
system users. The employee definition forms contain the information necessary to use
that sheet, such as the job title, and hourly costs. Two fields will be of particular interest to
you for managing timesheets: the Analytic Journal and the Product.

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All the analytic entries about the costs of service times will be stored in the analytic
journal. These enable you to isolate the cost of service from other company costs, such as
the purchase of raw materials, expenses receipts and subcontracting. You can use
different journals for each employee to separate costs by department or by function.

The employee is also associated with a product in your database in OpenERP. An


employee is linked with a product, so they can be 'bought' (subcontracting) or 'invoiced'
(project management). You have to create a product for each job type in your company.
The following information is important in the product form:
Name : Secretary , Salesperson or Project Manager
Product Type : Service
Unit of Measure : Hour or Day
Cost Price
Sale Price
Costing Method : either Standard Price or Average Price

Tip
Price Indexation
When the Costing Method is Average Price in the Product form, you can have a
button Update, beside the Cost Price field, that opens up a wizard for changing the cost
price.
In summary, each company employee corresponds, in most cases, to:

A Partner
An Employee form,
A System User.

And each company job position corresponds to a Product.

Note
Time Charge Rates
By default, the hourly cost of an employee is given by the standard cost of the product
linked to that employee. But if you install the hr_contract module, it is possible to manage
contracts differently. The hourly cost of the employee is then automatically calculated from
their employment contract when they enter their timesheet data.

To do this, the software uses a factor defined in the contract (for example, contract type,
wages, working schedule, etc). Ideally, this factor should take into account the salary
costs, taxes, insurances and other overheads associated with pay.

Define employee categories to assign different Holidays rights to different employee


groups

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You must create and assign employee categories for employees in order to be able to
assign and manage leave and allocation requests by category. You can define employee
categories from Human Resources Configuration Employee Tags. For a new category,
define its name in Category. A category may also be assigned a Parent Category.

Figure: Example of categories defined for employees

To link an employee to a category, open the employee form through Human Resources
Human Resources Employees. In the Tags, you can assign more than one category to
an employee.

Figure: Assign categories to an employee in the Employee form

Now, when you create a new leave or allocation request from the menuitems
under Human Resources Leaves, if your Allocation Mode is By Employee Category,
then you must choose a pre-defined Category. The request will then be applicable to all
those employees who belong to the category selected. For example, you can create an
allocation request for employees belonging to the Trainee category, entitling them to fewer
leaves than the rest of the employees.

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Define contract types with start and end dates for contracts as well as trial periods
If you install the hr_contract module you can link contract details to the employee record.
Go to the menu Settings Configuration Human Resources. And then tick the Record
contracts per employee.

Figure: Install hr_contract

Define new contract types at Human Resources Configuration Contract Contract


Types.

Figure: Contract Types list

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Using Human Resources Human Resources Contracts you can create and edit
contracts.

Figure: Definition of a working contract for a given employee

You can enter information about the employment contract for the employee, such as:

Employee: Employee for whom you want to define a contract.


Job Title: Select job position.
Contract Type: Select one from pre-defined contract types.
Working Schedule: For example 45 Hours/Week.
Duration: Start date and end date, since the employee started working where Start
date is mandatory.
Wage: Basic salary of the employee.
Trial Period Duration: Start date & End date for the contract trial period, if any.
Work Permit tab: Information regarding the Visa No, Visa Expire date and Work
Permit No.

TO CONNECT TO OPENERP

Since this is the first time you have connected to OpenERP, you will be given the
opportunity to configure the system. You may choose to either Skip Configuration
Wizards or Start Configuration. We shall proceed with system configuration by
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clicking Start Configuration.
Configuration consists of a set of wizards that help you through options for the installed
modules. Hardly anything is installed, so this is a very simple process at the moment.

Configure Your Interface: select Simplified and click Next.


At the Company Configuration step, you should select your own Company
Name and Currency. You may add your company address, contact and other
details and a logo, if you have one that appears on reports. Then, click Next.
The Install Applications section would enable you to add applications to your
system. For now, click Skip to proceed without installing any applications. You are
now connected to OpenERP and can start using the system as an Administrator.

Once you are displaying the main menu, you are able to see the following screen items,
as shown in screenshot The Main Menu of the openerp_ch02 database:

the name of the database you are logged into and, just below it, the current user
name,
the ONLINE SUPPORT button, which gives you an overview of the support
services provided by OpenERP which is available for subscription,
the Preferences toolbar to the top right, showing the links to the HOME page, EDIT
PREFERENCES page, ABOUT, HELP and LOGOUT button,
just below, you will find shortcuts (which the user can customize) and links to the
menu items of installed applications,
a collection of interesting and useful widgets are available on the right of the home
page beside the main menu.

Figure: The Main Menu of the openerp_ch02 database

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Two menus are available at the moment:

Sales
Administration

PREFERENCES TOOLBAR

When you are connected to OpenERP, the topmost toolbar indicates which user you are
connected as. So it should currently be showing Administrator (unless you logged in as
another user and it is reflecting the name of that user instead).

You will find the Preferences toolbar to its right containing a set of useful links. First, you
will find a link to the HOME page. This takes you to either the Home page containing links
to the available menus or to another window or dashboard, depending on the user
configuration. In the case of the openerp_ch02 database, so far the Home page is the
Main Menu. But in general each user of the system is presented with a dashboard that is
designed to show performance indicators and urgent documents that are most useful to
someone of the user's position in the company. You will see how to assign dashboards to
different users in a later chapter, Configuration & Administration.

Tip
Multi-nationals and Time Zones
If you have users in different countries, they can configure their own time zone.
Timestamp displays are then adjusted by reference to the user's own localization setting.

So if you have a team in India and a team in England, the times will automatically be
converted. If an Indian employee sets her working hours from 9 to 6 that will be converted
and saved in the server's time zone. When the English users want to set up a meeting
with an Indian user, the Indian user's available time will be converted to English time.

The next element in the toolbar is a link to EDIT PREFERENCES. By clicking that link,
you get a dialog box where the current user can set his interface in the Current
Activity tab; and in the Preferences tab, set his password, a time zone, a working
language, e-mail and a signature:

The Interface field in the Current Activity tab allows the user to switch between the
Simplified and Extended interfaces.
The Language field enables the user's working language to be changed. But first,
the system must be loaded with other languages for the user to be able to choose
an alternative, which is described in the next subsection of this chapter. This is a
mandatory field.

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The Time zone setting indicates the user's location to OpenERP. This can be
different from that of the server. All of the dates in the system are converted to the
user's time zone automatically.
The Menu Tips checkbox gives the user the choice to have tips displayed on each
menu action.
The Change Password button gives users the opportunity to change their own
password. It opens a new dialog box where users may change the password and
must logout and login again after the change. You should take steps (perhaps
written policies) to prevent users making these too trivial.
The Email field is for storing the current user's default e-mail address.
The Signature field gives the user a place for the signature attached to messages
sent from within OpenERP.

The ABOUT link gives information about the development of the OpenERP software and
various links to other information.

The HELP link directs the user to the online documentation of OpenERP, where extensive
help is available on a host of topics.

The LOGOUT link enables you to logout and return to the original login page. You can
then login to another database, or to the same database as another user. This page also
gives you access to the super-administrator functions for managing databases on this
server.

INSTALLING A NEW LANGUAGE

Each user of the system can work in his or her own language. More than twenty
languages are currently available besides English. Users select their working language
using the Preferences link. You can also assign a language to a partner (customer or
supplier), in which case all the documents sent to that partner will be automatically
translated into that language.

Attention
More about Languages
The base version of OpenERP is translated into the following languages: English,
German, Chinese, Spanish, Italian, Hungarian, Dutch, Portuguese, Romanian, Swedish
and Czech.
But other languages are also available: Arabic, Afghan, Austrian, Bulgarian, Indonesian,
Finnish, Thai, Turkish and Vietnamese..

As administrator, you can install a new main working language into the system.

Select Administration in the Menu Toolbar and click Translations Load an Official

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Translation in the main menu window,
Select the language to install, French for example, and click Load,
The system will intimate you when the selected language has been successfully
installed. Click Close to return to the menu.

To see the effects of this installation, change the preferences of your user to change the
working language (you may first need to ensure that you have explicitly selected English
as your language, rather than keep the default, before you are given the French option).
You may have to reload the page to see the effects. The main menu is immediately
translated in the selected language. If you are using the GTK client, you will first have to
close the menu then open a new main menu to start seeing things in the new language.

Note
Navigating the Menu
From this point in the book navigation from the main menu is written as a series of menu
entries connected by the character. Instead of seeing Select Administration in the Menu
toolbar then click Translations > Load an Official Translation you will just get use menu
Administration Translations Load an Official Translation.

REQUESTS
Requests have been removed in OpenERP 6.1 - a new internal communication system
will be added in 7.0.

CONFIGURING USERS
The database you created contains minimal functionality but can be extended to include
all of the potential functionality available to OpenERP. About the only functions actually
available in this minimal database are Customers and Currencies and these only
because the definition of your main company required this. And because you chose to
include demonstration data, both Customers and Currencies were installed with some
samples.

Because you logged in as Administrator, you have all the access you need to configure
users. Click Administration Users Users to display the list of users defined in the
system. A second user, Demo User , is also present in the system as part of the
demonstration data. Click the Demo User name to open a non-editable form on that
user.

Click the Groups tab to see that the demo user is a member of only
the Employee group, and is subject to no specialized rules. The user Administrator is
different, as you can see if you follow the same sequence to review its definition. It is a
58 | Appin Technology Lab
member of the Administration /Configuration and
the Administration / Access Rights groups, which gives it more advanced rights to
configure new users.

Tip
Groups and Users
Users and groups provide the structure for specifying access rights to different
documents. Their setup answers the question Who has access to what?
Click Administration Users Groups to open the list of groups defined in the system. If
you open the form view of the Administration / Configuration group by clicking its
name in the list, the first tab Users gives you the list of all the users who belong to this
group.

You can also see in the Menus tab, the list of menus reserved for this group. By
convention, the Administration / Configuration in OpenERP have rights of access to
the Configuration menu in each section. So Sales / Configuration is found in the list
of access rights but Sales is not found there because it is accessible to all users. Click
the Access Rights tab and it gives you details of the access rights for that group. These
are detailed later in Configuration & Administration.
You can create some new users to integrate them into the system. Assign them to
predefined groups to grant them certain access rights. Then try their access rights when
you login as these users. Management defines these access rights as described
in Configuration & Administration.

Note
Changes to Default Access Rights
New versions of OpenERP differ from earlier versions of OpenERP and Tiny ERP in this
area: many groups have been predefined and access to many of the menus and objects
are keyed to these groups by default. This is quite a contrast to the rather liberal approach
in 4.2.2 and before, where access rights could be defined but were not activated by
default.

MANAGING PARTNERS
In OpenERP, a partner represents an entity that you do business with. That can be a
prospect, a customer, a supplier, or even an employee of your company.

LIST OF PARTNERS
Click Sales Address Book Customers in the main menu to open the list of partners
who are customers. Then click the name of the first partner to get hold of the details a
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form appears with information about the company, such as its corporate name, its primary
language, its reference and whether it is a Customer and/or a Supplier . You will also
find several other tabs on it:

The General tab contains information about different contacts at that partner,
postal information, communication information and the categories it belongs to.
The Sales & Purchases tab contains information that is slightly less immediate.
The History tab (visible if you install other modules like crm ) contains the history
of all the events that the partner has been involved in. These events are created
automatically by different system documents: invoices, orders, support requests
and so on, from a list that can be configured in the system. These give you a rapid
view of the partner's history on a single screen.
The Notes tab is an area for free text notes.

To the right of the form is a list of Reports, Actions, Links and Attachments related to a
partner. Click some of them to get a feel for their use.

MAKE A BACKUP OF THE DATABASE

If you know the super-administrator password, make a backup of your database using the
procedure described in Managing Databases. Then restore it to a new database: testing.

This operation enables you to test the new configuration on testing so that you can be
sure everything works as designed. Then if the tests are successful, you can make a new
database from openerp_ch03, perhaps called live or production, for your real work.

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From here on, connect to this new testing database logged in as admin if you can. If you
have to make corrections, do that on openerp_ch03 and copy it to a new testing database
to continue checking it.

Or you can just continue working with the openerp_ch03 database to get through this
chapter. You can recreate openerp_ch03 quite quickly if something goes wrong and you
cannot recover from it but, again, you would need to know your super-administrator
password for that.

USER LOGIN

Tip
Managing Passwords
If you let users change their passwords for themselves, you will have no direct control
over the password they choose. You should have a written policy about password
strength to try to maintain a level of security in your system.

Tip
Managing Users through LDAP
With the users_ldap module, user accounts can be managed through an LDAP directory
that can be made common to various different company resources.
Connection parameters for the LDAP directory are then registered with the company
definition. You can provide a user profile template there from which new users are
automatically created during their first connection to OpenERP.

Note
LDAP
The LDAP protocol (Lightweight Directory Access Protocol) enables you to manage
common directories for various different resources through your standard TCP/IP network.
This enables users in the company to have the same username and password to access
all their applications (such as email and intranet).

MANAGING ACCESS RIGHTS


One of the most important areas in configuring OpenERP is how to manage access rights
to the information in it.

You are planning to put everything significant to your business into the system, but most
of your staff need see only part of it, and may need to change even less of it. Who should
have rights to what, and how do you manage that?
OpenERP's approach to rights management is highly flexible. Each user can belong to
one or more groups, and the group(s) you belong to determine(s):
The visibility of each menu item and
The accessibility of each table in the database.
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For example, the group Warehouse / User may only be given access to some of the
menus in Warehouse, and may have no access to any of the accounting information.
Each system user who works in stores is given membership of
the Warehouse / User group. If some users also work elsewhere, they would also be
given membership of other groups.

GROUPS AND USERS


To configure access rights, you would start by defining the groups. It is important for the
groups to be representative of your company's job functions rather than of its individual
employees.

So if your finance director is also your sales director, you should create both a Finance
Director group and a Sales Director group, even though they are both the same person,
and would both be assigned to this user in practice. This gives you flexibility for the future.

You should also create groups within departmental areas that have different levels of
access rights. For example, if you create a Sales Director group and a Sales group
avoid assigning exactly the same rights to each group. The first could see all the of
reports, while the second could be restricted to seeing quotations. You could either make
the Sales Director a member of both groups, and give the Sales Director group a
limited set of extra rights, or give the Sales Director group all the rights it needs for a
Sales Director to belong only to this one group. You should choose the scheme that gives
you most flexibility and then stick with it to maintain consistency.

Tip
Flexibility in Managing Access
To give yourself flexibility, you can ensure that a trusted staff member (perhaps a director
or someone in accounts, or even the system administrator) is given wide rights to use the
system, and is authorized by the management to carry out specific tasks for people.

ACCESS RIGHTS FOR MENUS


To get a feel for rights management in OpenERP, you will create a new Stock1 group,
with access to the Warehouse menu items. You will then create a stores person user who
is a member of the Stock1 group.
To create a new group, use the menu Administration Users Groups. Enter the group
name Stock1 .
Then to create a new user linked to this, use Administration Users Users to enter the
following:
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User Name : Stores Person ,
Login : stores ,
Password : stores ,
Menu Action : Menu .
In the Groups section of the user form, add the Stock1 group that you just created.

Figure: Groups that have access to the Warehouse menu

Save the user, then go into the menu Administration Customization User Interface
Menu Items to get a list of menus. Filter this list using the search field Menu to get
the Warehouse menu item. In the form describing the menu, add Stock1 into
the Groups field. From now on, only members of

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the Warehouse / Manager , Warehouse / User and Stock1 group will be able
to see this menu item in their main menu list.

Tip
Menu Hierarchy
Since menus are hierarchical, there is no need to hide access to lower menus: once you
have configured Warehouse this way, all lower-level menus become invisible to members
of other groups.

Tip
Security
This method of managing access to menus does not guarantee that users are prevented
from reaching hidden business objects in the system in other ways. For example, hiding
the Invoicesmenu will not prevent people reaching invoices through purchase and sales
orders, or by guessing the URL.

For effective security management, you must use the methods for managing access rights
to objects presented in the following section.

Note
Initial Access Configuration
In the initial configuration, OpenERP's admin user, a member of
the Administration /Configuration group, is given access to the Configuration menu in
each section of the main menu. This is a general convention. For example, Sales
Configuration is visible in the administrator's menu amongst the other Sales menu items.
But only the menu items other than Sales Configuration are visible to other users.
Similarly, the main menu item Administration is, by convention, visible only to users who
are members of the Administration /Configuration group.

ACCESS RIGHTS TO OBJECTS


The menu access rights determine who can access which menu, but does not define what
you can do once you are in the menu.

Access controls on the objects give you the possibility of defining what your users have
the right to do with your data when they get access to it. Access control of objects is
structured the same way as access to menus.

Note
Object

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An object represents a document in the system. Objects are linked to database tables,
and also have additional concepts, such as the functions of fields, inheritance from other
objects, and class methods that give them behavior.

If no group is assigned to an object, all users can access it without any restriction of any
sort. Conversely, when an access control is defined for an object, a user must be a
member of a group owning appropriate access rights to have any sort of access to that
object.
You must always ensure that you do not lock
the Administration / Access Rights group out of any object that controls
administration and configuration options, such as the ir.model.access model.
You can manage four access modes on objects independently:

Read access : members of the group can read the data in the object,
Create access : members of the group can create a new record in the object,
Write access : members of the group can modify the contents of records in the
object,
Delete access: members of the group can delete records from the object.

Figure: Access control to invoices for the Accounting / Invoice group

To configure access rights on an OpenERP object, use the menu Administration


Security Access Controls List and click New or choose an existing one and click Edit.
You give a Name to the access control, select a Group, and the Object, then check the
checkbox corresponding to each of the four Access modes.

If you do not specify any group in the access rules, the rule is applied to all groups. So to
remove access to an object for all users you could create a rule:

which is defined for a specific object,


which is linked to no group,
for which none of the four access options is checked.
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You can then create additional rules on the same object to give specific rights to certain
groups.

RECORD RULES FOR OBJECTS


Record rules determine who can access the objects, depending on the rules set for the
particular object. A record rule has some tests to be performed on objects.
You can manage four access modes on objects independently, depending on the test:

Read access : can read the data in the object,


Create access : can create a new record in the object,
Write access : can modify the contents of records in the object,
Delete access: can delete records from the object.

To configure a rule on an object, use the menu Administration Security Record Rules.
The fields in the ir.rule object describe:
Object : Object on which to have the rule
Name : Name of the rule
Global : If global is checked, then that rule would be applied for all the groups; and
if it is unchecked, then that rule would be applied only for the groups selected for it
Domain: A list of all the tests for the object. It is specified through a Python
expression as a list of tuples.
1. If there are multiple tests on same object, then all of them are joined
using AND operator, and depending on the result the rule would be satisfied
2. If there are multiple rules on same object, then all of them are joined
using OR operator
Access Modes : Read, Write, Create, Delete as described earlier
1. If only one access mode is checked, then only that mode would be applied
2. If all of them are checked, then all the access modes would be applied

But at least one access mode has to be checked, all of them cannot be unchecked. If all
of them are unchecked, it would raise an exception.
For example: We can have a rule defined on res.partner object, which tests if the user is
the dedicated salesman of the partner [('user_id', '=', user.id)] . We check only the
create and write access modes and keep other access modes unchecked.

This would mean that a user in the group for which the rule is applied can only
create/write records where he himself serves as the dedicated salesman, and cannot
create/write records where he is not the dedicated salesman. As other access modes are
unchecked, the user can read/delete the records of partners where he is not the dedicated
salesman.
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MODIFICATION HISTORY

Figure: Partner Record History

Each record in an OpenERP database carries a note of its history. You can find out who it
was created by and when that occurred, and who last modified it and when that occurred.
Click the View Log link at the right of any form in the web client to display a dialog box
showing this information, as shown in the figure Partner Record History. It can help you
identify who to contact if there are any problems with the data in the records.

Tip
Audit Trail
OpenERP has an Audit Trail module audit trail , which can be used to track any or all of
the changes to one or more objects. It should be used with care, because it can generate
huge amounts of data in the live database, but can be an invaluable tool.

MANAGING YOUR LEADS

To define leads, imagine a bucket full of potential sales contacts expressing an interest in
your company's products.

A lead represents a potential customer with whom you have not established a relationship
yet. Usually a lead contains valuable information to realize future sales opportunities.
However, the most common mistake is that such key information too often gets lost,
because it is registered nowhere. And even when registered, it might still be difficult to
track any activity for that lead, because the information is not at hand when you need it.

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Storing leads information in a central place such as OpenERP will release you of these
worries. So when would you create a lead in OpenERP, either manually or automatically?
The following events could be a trigger:

An inquiry email sent to one of your company's generic email addresses, such
assales@mycompany.com, from the mail gateway,
A business card from a prospective customer met briefly at an exhibition: you have
to contact him again to qualify the lead and to know if there is any possibility of a
sales opportunity; registered manually,
A database of potential customers in a given sector and region imported through a
CSV file. The potential customers have to be contacted again individually or
through a mass mailing to determine which contacts require further follow-up,
An interesting contact that you met during a business networking event. You have
to qualify it before assigning a salesperson to the contact,
A form completed on your website directly integrated into OpenERP using our web
service. Before converting the form into a sales proposition or opportunity, you
should read and handle the person's request.

Employees in the marketing or presales department will usually work on leads. Once
these leads will be converted into customers and/or sales opportunities, the sales
department pays individual attention to each opportunity. Of course, before converting a
lead into an opportunity, some qualification work has to be done.

OpenERP allows you to easily configure the way your company qualifies leads. You can
create your own stages through Sales Configuration Leads & Opportunities Stages.
Use the sequence number to determine the order of the stages, i.e. 10 for First Call, 20 for
Renewing Contact and so on. Of course, you can also drag & drop a stage to another
place to automatically change the order of all the stages. A salesman can change the
status of the lead according to the response from the prospect and enter the result of this
contact in the lead form (e.g. in the Notes field).

From the Sales Sales Leads menu, you can qualify each individual lead through
the Stage field that is found up to the right of the lead definition. To move your lead
automatically to the next step from the list of leads, you can use the button that looks like
a green, right arrow.
Leads can be assigned to a Sales Team for easy follow-up (see Adapting OpenERP to
your Sales Organization). Each user can be added to a default sales team which can be
specified in the User Preferences. When you define a tree structure for your sales teams,
you can also escalate a lead to another sales team for further actions.

Note
Leads or Opportunities

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Companies may decide to not use leads, but instead to keep all information directly in an
opportunity. For some companies, leads are merely an extra step in the sales process.
You could call this extended (start from lead) versus simplified (start from opportunity)
customer relationship management. OpenERP perfectly allows for either one of these
approaches to be chosen. If your company handles its sales from opportunities directly,
feel free to move on to chapter Optimizing your Sales Cycle through Opportunities,
although most of the features explained below also apply to opportunities.

In the next sections we will explain in more detail some examples of what Leads in
OpenERP can be used for.

Tip
Leads Menu is not displayed
In Simplified view, Leads will not be displayed. To see not also opportunities, but also
leads, you should switch to the extended view. You can easily switch
from Simplified to Extended view by changing your User Preferences through the Edit
Preferences button.
Storing your Business Cards effectively
Potential customers are usually entered as a lead in the system. This means that you do
not create a partner or a sales opportunity until you have qualified whether the lead is
interesting or not.

Tip
Qualification
When a qualified lead requires further actions, you can turn the lead into a partner and,
eventually, a sales opportunity.

To make a new lead, go to the Sales Sales Leads menu and click the New button. In
the Lead form that opens, you can enter the contact data of this new potential customer
and add notes.

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Figure: Creating a New Lead

You can also set the status of a lead according to the qualification work that has been
carried out:

Draft : the lead data have been entered, no work has been done yet and a
salesperson has not yet been assigned to the request,
Open: the lead is being handled,
Closed: the lead has been converted into a partner and/or a sales opportunity,
Pending: the lead is waiting for a response from the potential customer,
Escalate: the lead is escalated to the upper sales team in the tree structure for
further actions,
Cancelled: the lead has been cancelled because the salesperson has decided that
it is not worth following up.

A lead status can easily be changed, even from list view (the standard view when you
start the Leads program). Simply click the green arrows to change the status of a lead.
On the Extra tab in the Leads form, you find statistics about days to open and close and
more information about the campaign, the channel, and so on.
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Figure: Extra Tab

On the Communication & History tab in the Leads form, you can see a complete history of
all actions regarding this lead. You can also add internal notes and change the status of a
lead while adding such a note. Send an email directly from the lead simply by clicking
the Send New Email button (to configure your email settings, please refer to chapter ch-
crm-fetchmail-install. You can add attachments to internal notes and emails you send to
the prospect. You can customize your message and have the status changed after an
email has been sent; you could automatically have the lead set to Pending, because you
require a response from the customer before further actions can be taken.

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Figure: Communication & History Tab

Importing a Leads Database


You can also import a huge list of leads. That may be useful if you have bought a
database of potential prospects that you want to load into OpenERP to handle them all at
the same time.
Start with a list of leads in CSV format, for instance. If your prospects database is
provided in another format, you can easily convert it to the CSV format using Microsoft
Excel or Open Office Calc.

Tip
Import
The best thing to do to make sure your import will go smoothly, first export all the required
Lead fields using the Export function, and then edit the resulting csv file for import.

Open the Leads form using the menu Sales Sales Leads. In Other Options, click
the Import link. (You can also import from List view, just open the action window on the
right (by clicking the arrow) and in Other Options, click the Import link.)

Select your file containing the leads information and click Import File. OpenERP will
automatically map the column headers from your CSV file to the corresponding fields in
OpenERP. If necessary, you can click CSV Options to change the settings so that they
match your local settings.

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Figure: Importing Leads into the System

Check the online chapter about system administration for more information on import and
export on http://doc.openerp.com/v6.0/book/.

Tip
Various Imports
Importing and Exporting data in OpenERP is a generic function available to all resources.
So you can import and export such lists as partners, opportunities, accounting entries,
products and price lists.

Clearly there are other methods of generating leads automatically or semi-automatically:

Through a Contact Form on your Website;


Using the Outlook or Thunderbird plugin to insert new leads directly from the
salesman's mailbox when he sees promising emails,
Using the email gateway for each incoming email from a certain address (such
assales@mycompany.com) which may create a lead automatically from the
contents of the email.

These different methods are described later in this book (see chapter automating your
Lead Acquisition).

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Organizing Leads
To help the users organize and handle leads efficiently, OpenERP provides several
features in the CRM to be used according to the needs of each:
Use the Sales Sales Leads view to organize your leads:

Display a list of all the leads (qualified, open, not open, ...) according to the sales
team you are linked to,
Create a new lead by clicking New,
Display Unassigned Leads, click the button next to the Salesman field,
Display a list of all your leads you still need to handle (your open and draft leads),
Display a list of all your leads that are waiting for a customer response (usually
in Pending status). This enables you to check periodically on your work to do,
Display a list of all the leads assigned to different salespeople,
Use Extended Filters to display all the leads created today or during the last week,
in a specific time period, and so on,
Quickly find leads not yet assigned to a Campaign, by clicking the Group by button
and then Campaign.

The sales manager can use this Leads view to easily keep track of what each salesperson
is working on.

Figure: List of Leads to be Handled

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Leads can also be prioritized. Salespeople can assign a priority to their lead, and then
start working on their leads from the top of the list, which is sorted by priority.
Analysing Leads

OpenERP also offers statistical reports to keep track of your Lead Management.
The Sales Reporting Leads Analysis report allows you to check various leads-related
elements. You can look at processing delays, number of responses given and emails sent
(if you use the email gateway feature). Sort your leads analysis by different groups to get
accurate, grained analysis.
These are some analysis possibilities of the Leads Analysis report.

Leads by State and per Month


To analyze the leads by status, group the leads by qualification level (Stage) and
status (State), this can also be done for individual months (first group by Month).
Leads by Origin
Analyze leads according to their state (open, lost, won) and their stage (e.g. cold /
hot or new / qualification / ... ) and find out how many leads belong to each state /
stage.
How effective are your Campaigns?
Group by Campaign to easily find the number of leads by campaign and the total
number of leads. You can also select a specific campaign in your filter.
Leads by Priority.

Group by Priority to see which leads are hot, warm or cold.

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SUMMARY

This chapter is not as long as the other chapters are, this is a short chapter but still it
contains the important information. This chapter included the information about the
collective bargaining and labour relations. It is the process of negotiation between the
employer and employee in an organization. For Human Resource Management
Specialists and senior managers in an organization, the knowledge of labour relations and
collective bargaining is important. We also discussed about the agreements between the
labour and the organization one of these is labour agreement. This chapter has given the
information about the global human resource management. We got to know about the
globalization impact on human resource management system. In the end we also
discussed briefly about the high performance management work system or organizations.

EXERCISE I

1. What do you understand by the term collective bargaining?


2. Explain the strategic roles of global human resource management.
3. What are the various outcomes of high performance management systems?
4. Explain how to globalize the human Resource functions?
5. Describe the issues in collective bargaining?
6. Explain the impact of globalization on human resource management?
7. Name the two types of collective bargaining.
8. Explain the events which are used to demonstrate a good faith bargaining.
9. Explain the elements of high-performance work system.
10. Define labour relation strategy.

EXERCISE II

1. _________ is the negotiation between the employer and employee in an


organization.
a. Fringe benefit
b. Retirement benefit
c. Collective bargaining
d. Economic benefits

2. Which are the two types of the collective bargaining?


a. Internal and External
b. Periodic and Continuous
c. Fringe and Retirement
d. None of the above

3. What are the issues in collective bargaining?


a. Administrative issues
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b. Institutional issues
c. Wage-related issues
d. All of the above

4. ___________ is an organizations overall plan for dealing with union.


a. Labour Unions
b. Labour Relation Strategy
c. Labour Relation Board
d. Economic Relations

5. __________ Types of issues include seniority, employee discipline, employee


health and safety, work rules, job security.
a. Administrative issues
b. Institutional issues
c. Wage-related issues
d. Supplementary Economic benefits

6. Which type of issues includes the right, responsibilities and duties of the
employee, employers and union?
a. Administrative issues
b. Institutional issues
c. Wage-related issues
d. None of the above

7. The major duty of Human Resource Department is to include


a. Global strategies
b. Multi-national accountability
c. All of the above
d. None of the above

8. ___________ means to define the political force, economic drive in the business
world.
a. Economic benefits
b. Human Resource
c. Globalization
d. ITAP

9. Which is not an element of high-performance work system?


a. Task design
b. Organizational structure
c. Low turnover
d. Information systems

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10. High performance work system results to _______________.
a. Higher productivity
b. Efficiency
c. Customer Satisfaction
d. All of the above

Answer: 1 (c), 2 (b), 3 (d), 4 (b), 5 (a), 6 (b), 7 (c), 8 (c), 9 (c), 10 (b)

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83 | Appin Technology Lab


NOTES
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84 | Appin Technology Lab


NOTES
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85 | Appin Technology Lab


NOTES
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86 | Appin Technology Lab


NOTES
Session #
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87 | Appin Technology Lab


NOTES
Session #
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88 | Appin Technology Lab


NOTES
Session #
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89 | Appin Technology Lab


NOTES
Session #
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90 | Appin Technology Lab