HUMAN RESOURCE MANAGEMENT

UNIT-3

Q-1: “Every organization must design its compensation system such that it is
capable of attracting, retaining and motivating the employees”.
In light of the above statement, discuss the factors responsible for a sound
compensation plan and significance of compensation management to the
organization and organizational workforce.
Ans: Compensation refers to a wide range of Financial and non-financial rewards to
employees for their services rendered to the organisation.
FACTORS AFFECTING COMPENSATION PLAN :
I. DEMAND AND SUPPLY OF LABOUR : The primary result of the operation of
law of supply and demand is the creation of the going wage rate.
II. ABILITY TO PAY : Employees ability to pay is an important factor affecting
wages not only for the individual firm but also for the entire industry.
III. COST OF LIVING : Another important factor this tends to vary money wage
depending upon the variation in the cost of living in following rise and fall in the
general price level.
IV. PRODUCTIVITY OF WORKERS : To achieve the best results from the workers
and to motivate him to increase his efficiency wages have to be productivity
based.
V. GOVERNMENT : To protect the working class from the exploitation of powerful
employees, the government has introduced several laws.
VI. PREVAILING WAGE RATE : Wages in a firm are influenced by the general
wage level for similar occupation in the industry region and economy as a whole.
SIGNIFICANCE OF COMPENSATION MANAGEMENT TO ORGANISATION
I. To approve the system of job description and job education
II. To review wage and salary schemes department wise
III. To recommend the change in wage policies and in the salary level
IV. To recommend top management specific rise for executive
V. To check all activities of the salary administration group against the company
policy
Q-2: How will you define fringe benefits? Highlight the rationale behind offering
incentives to the employees.
Ans: FRINGE BENEFITS: Fringe benefits are additions to compensation that
companies give their employees. Some fringe benefits are given universally to all
employees of a company while others may be offered only to those at executive levels.
Some benefits are awarded to compensate employees for costs related to their work
while others are geared to general job satisfaction.
TYPES OF FRINGE BENFITS
1.For Employment Security : Benefits under this head include unemployment,
insurance, technological adjustment pay, leave travel pay, overtime pay, level for
negotiation, leave for maternity, leave for grievances, holidays, cost of living bonus,
call-back pay, lay-off, retiring rooms, jobs to the sons/daughters of the employees and
the like.
2.For Health Protection: Benefits under this head include accident insurance, disability
insurance, health insurance, hospitalization, life insurance, medical care, sick benefits,
sick leave, etc.
3.For Old Age and Retirement: Benefits under this category include: deferred income
plans, pension, gratuity, provident fund, old age assistance, old age counselling, medical
benefits for retired employees, traveling concession to retired employees, jobs to
sons/daughters of the deceased employee and the like.
APPROCHES TO FRINGE BENEFITS
I. INNOVATION : Golden handshake, special training, overseas, traveling, free
holiday travel
II. CAFETERIA/FLEXIBILITY APPROCH : Refers to the choice of benefits from
a full menu of benefits at different level.
III. HARMONISATION : Process of aligning conditions of service for blue collar
and white-collar workers. For e.g.- working hours, catering, uniform medical
care.

Q- 3: Differentiate between base and complementary compensation. (use Tabular

Format)
Ans:
Base compensation Complementary compensation
It denotes payment to workers in the It denotes fringe benefits to workers
form of wages and salaries. over and above their regular wages
and salaries.
wages and salaries are paid in cash Fringe benefits are offered in the form
of employee’s services and benefits
such as housing, medical aid etc.
Wages and salaries are paid to Fringe are made to increase the
compensate employees for their efficiency of employees and to retain
services. them in the organisation on a long-
term basis.
Wages and salaries are determined by It is determined by the history of the
job evaluation, demand and supply of organisation philosophy of
labour organisations capacity of pay, management, need to retain talented
trade union bargaining power, employees, desire to enhance public
productivity, etc image.

Q-4: Write notes on following:

a. two non-quantitative methods of job evaluation
b. two quantitative methods of job evaluation
Ans: 1. TWO NON QUANTITAVE METHODS

I. RANKING METHOD :
The job ranking method is the simplest of all the methods. No specific factors are used
for consideration. The purpose of ranking is to determine whether a job involves the
same level of duties, responsibility and requirements.
Three techniques are generally used: -
o Utilising job descriptions
o Making group comparisons
o Ranking along a number line

II. JOB GRADING:

This method is considered to be an improvement over ranking method in that a
predetermined scale of values is provided.
The job evaluation committee goes through each job description and carefully weighs it
in the light of certain factors like skill, experience, etc.
The main advantage of job grading is that broad generalisation must be used in defining
grades.

1. TWO QUALITATIVE METHOD

i. PAINT METHOD :
This is the most widely used method of job evaluation. It measures job as whole job.
The point system is a more analytical approach and deals with job factors. the
process is :-
o Listing of jobs
o No. of factors
o Definition of factors
o Determination of degree
o Allocation of points of degree
o Evaluation of jobs
o Design the wage structure

ii. FACTOR COMPARISON METHOD :

THOMAN E. HITTEN was first to originate the factor comparison method. This
method determines the relative rank of the jobs to be evaluated in relation to
monetary scale. Final ratings are expressed in terms of numbers.
The evaluation is done as: -
o Select the factors and defines them
o Select the key job which would serve as standard
o Allocate wage for each day
o Develop a job comparison scale
o Design, adjust and operate wage structure.

UNIT 4 HRM

Q1: (a) Discuss the causes of industrial disputes in India.

Ans: Industrial dispute means any dispute or difference between employers and
employers or between employers and workmen or between workmen and workmen,
which is connected with the employment or non-employment or the terms of
employment or with the conditions of labour of any person.
Causes of Industrial Disputes:
We can classify the causes of industrial disputes into two broad groups: Economic
causes and Non-economic causes.

Economic causes: Includes

 Wages: Low wages of industrial workers constitute a major cause of industrial
disputes in the country. Wages have not been rising in proportion to the rise in prices.
This has forced the labourers to demand higher wages, consequently leading to disputes.

  Bonus: The demand for bonus or increase in bonus has been the second major
cause of industrial disputes. The workers feel that they should have a greater share in
the profits of the industrial concern. Non-acceptance of this fact by the employers has
been a source of friction among the employers and the workers.
 Working Conditions: The demand for improvement in working conditions such
as lesser working hours, security of job, , leave, canteen, gratuity facilities, etc., are also
responsible for many industrial disputes.

Non-Economic causes: Includes

 Workers’ resistance to rationalization, introduction of new machinery and change
of place of factory.
 Non-recognition of trade union.
 Rumours spread out by undesirable elements.
 Working conditions and working methods.
 Lack of proper communication.
 Behavior of supervisors.
 Trade union rivalry etc.
 (b) Explain the machinery for prevention and settlement of industrial
disputes in India.

Ans: The following is the machinery for prevention and settlement of industrial
disputes:
1. Works committees: This committee represents workers and employers. Under
the Industrial Disputes Act 1947, works committees exist in industrial
establishments in which one hundred or more workmen are employed during
the previous year.
2. Conciliation officers: Conciliation Officers are appointed by the government
under the Industrial Disputes Act, 1947
The duties of conciliation officer are given below:
 He has to evolve a fair and amicable settlement of the dispute. In case of public
utility service, he must hold conciliation proceedings in the prescribed manner.
 He shall send a report to the government if a dispute is settled in the course of
conciliation proceedings along with the charter of the settlement signed by the parties.
 Where no settlement is reached, conciliation officer sends a report to the
government indicating the steps taken by him for ascertaining the facts, circumstances
relating to dispute and the reasons on account of which settlement within 14 days of the
commencement of the conciliation proceedings.

3. Boards of conciliation: The government can also appoint a Board of Conciliation

for promoting settlement of Industrial Disputes. The chairman of the board is an
independent person and other members (may be two or four) are to be equally
represented by the parties to the disputes.

The duties of the board include:

 To investigate the dispute and all matters affecting the merits and do everything
fit for the purpose of inducing the parties to reach a fair and amicable settlement.
 A report has to be sent to the government by the board if a dispute has been
settled or not within two months of the date on which the disputes were referred to it.

4. Court of enquiry: The government may appoint a Court of enquiry for enquiring into
any industrial dispute. A court may consist of one person or more than one person and
in that case one of the persons will be the chairman. The Court shall be required to
enquire into the matter and submit its report to the government within a period of six
months.

5. Labour courts: As per the second schedule of the Industrial Dispute Act 1947.

The government sets up Labour Courts to deal with matters such as:

 The propriety or legality of an order passed by an employer under the standing

orders.
 The application and interpretation of standing orders passed.
 Discharge or dismissal of workmen including reinstatement, grant of relief to
workers who are wrongfully dismissed.
 Withdrawal of any customary concession of privilege
 Illegality or otherwise of a strike or lockout, and all other matters not specified in
the third schedule.

6. Industrial Tribunals: A Tribunal is appointed by the government for the

adjudication of Industrial disputes.

7. National Tribunal: A National tribunals is constituted by the Central government

for Industrial Disputes involving question of national importance.

8. Arbitration: The employer and employees may agree to settle the dispute by
appointing an independent and impartial person called Arbitrator. Arbitration provides
justice at minimum cost.

Q2: Discuss the weapons of labour and management used in industrial disputes.

Ans: Whenever an industrial dispute occurs, both management and workers try to
pressurize each other. The management may resort to lock-out and the workers may
resort to strike, gherao, picketing, etc.
(a) WEAPONS OF LABOUR IN CASE OF INDUSTRIAL DISPUTE
1. Strike: Strike is a very powerful weapon used by labourers to get their demands
accepted. It means quitting work by a group of workers for the purpose of bringing
pressure on their employer to accept their demands.

Types of Strikes:
 Economic Strike
 Sympathetic Strike
 General Strike
 Sit Down Strike
 Slow Down Strike

2. Gherao: It is a Hindi word which means to surround. The term ‘Gherao’ denotes a
collective action initiated by a group of workers under which members of the
management of an industrial establishment are prohibited from leaving the business or
residential premises by the workers who block their exit through human barricade.
A human barricade is created in the form of a ring or a circle at the centre of which the
persons concerned virtually remain prisoners of the persons who resort to gherao. 

3. Picketing: When workers are dissuaded from reporting for work by stationing
certain men at the factory gates, such a step is known as picketing. If picketing does not
involve any violence, it is perfectly legal. It is basically a method of drawing the
attention of public towards the fact there is a dispute between the management and the
workers.

4. Boycott

(b) WEAPONS OF MANAGEMENT IN CASE OF INDUSTRIAL DISPUTE

1. Lock-out: Lock-out is declared by the employers to put pressure on their workers.
It is an act on the part of the employers to close down the place of work until the
workers agree to resume the work on the terms and conditions specified by the
employers.
2. Termination of services: Termination of Service means a termination of
employment or service relationship with the Company or a Related Company for any
reason, whether voluntary or involuntary, including by reason of death, Disability or
Retirement.

3. Employers’ associations: Employers' associations are representative voluntary

organizations—i.e., they are led by elected leaders and managed by professional
managers—with a permanent staff for the administration of associational activities and
the delivery of associational services, a budgetary process for the acquisition of funds
and the accountability of their use, and a set of specific criteria defining the rights and
duties of members.

Q3: “An effective grievance procedure must contain some essential

characteristics”.
What are the essentials of a good grievance procedure?
Ans: The most important channel through which discontent and dissatisfaction of
employees can be handled is through evolving a grievance procedure. A grievance
procedure may be defined as the method or procedure by which a grievance is filed and
carried through different steps or stages leading to an ultimate decision.
A good grievance procedure is one which meets its objective of grievance redressal
within the least possible time and least possible cost, both financial and psychological.
From this point of view, a grievance procedure should be built on the following
principles:
1. Conformity to Legal Provisions:
Grievance procedure is developed either by the management on its own or with
consultation of employees. There are various legal provisions to take care of employer-
employee relationship. Therefore, a grievance procedure should not infringe any legal
provision as in the case of a conflict, legal provision prevails over voluntarily agreed
grievance procedure.
2. Acceptability:
Grievance procedure, to be effective, must be acceptable to both management and
employees and their union. In order to be acceptable, the procedure should ensure (i) a
sense of fair play and justice to employees, (ii) reasonable exercise of authority by
management, and (iii) adequate participation of employees/union.
3. Simplicity:
The procedure should be a simple one which is easily understandable by employees. As
far as possible, the number of steps should be kept limited as cumbersome processes
take more time and energy which becomes quite frustrating to the employees. The
employees must know very clearly whom to approach for the redressal of a specific type
of grievance.
4. Promptness:
This is the most essential feature of an effective grievance procedure. A proverb says
that ‘justice delayed is justice denied’. This is true for grievance procedure too.

The promptness in a grievance procedure may be brought by the following features:

As far as possible, the grievances should be settled at the first level. This can be done by
specifying the grievances which can be taken for consideration at different levels.
No matter should ordinarily be taken up at more than two levels, that is, normally, there
should be only one appeal.
Time limit should be placed at each step and it should be followed rigidly at each level.
In order to make prompt decisions on grievances, all personnel involved including
union representatives should be provided training in this respect.

Q5: Write notes on following:

Step Ladder Grievance procedure
Under the step-ladder procedure, the employee with a grievance has to proceed step by
step unless he is able to redress his grievance. According to the Model Grievance
Procedure, an aggrieved employee shall first present his grievance verbally in person to
the officer designated by the management for this purpose. An answer shall be given
within 48 hours. If he is dissatisfied with the answer, the worker will present his
grievance to the head of the department, who will give his answer within 3 days. If the
worker is dissatisfied with the answer, he may ask that his grievance should be referred
to the Grievance Committee, which shall make its recommendations within 7 days to
the manger. The management must implement unanimous recommendations of this
committee. A dissatisfied worker can apply to the management for a revision of its
decision within on weeks’ time.
OPEN DOOR POLICY
Under this policy, any employee can take his grievance to the chief boss and talk over
the problem. As the name suggests, the management keeps its doors open for the
employees to share their problems. It is said that this policy can remove the cause of
grievance quickly. Though this policy appears to the attractive, it has some
prerequisites. The open door policy is workable only in small organizations. In big
organizations, the top management does not have the time to attend to innumerable
routine grievances daily that is the work of lower-level managers. Under this policy, the
front-line supervisor who should be the first man to know about the grievances of his
subordinates is by passed. This provokes him in two ways. First, he thinks the man who
skipped him is disrespectful. Secondly, he fears that he will incur his superior’s
displeasure because of his failure to handle his subordinates will interpret this.

NAME – SHUBHAM TALWAR

ENROLLMENT NUMBER – 13024401718
BBA E3