Assignment

ASSIGNMENT
Course Code : MS-02
Course Title : Management of Human Resources
Assignment Code : MS- 02/TMA/SEM-I/2018
Coverage : All Blocks
Note: Attempt all the questions and submit this assignment on or before 30st April, 2018 to
the coordinator of your study centre.
1. Explain the process of human resource planning. Describe how HR forecast is carried out
in the organisation you are working with or an organisation you are familiar with.
2. Discuss the concept of ‘performance appraisal’. Explain any two methods of performance
appraisal that you are familiar with citing suitable organisational examples.
3. Define mentoring and distinguish it from performance coaching. Assume you are
responsible for mentoring of employees in a large organisation. Discuss how you will make
mentoring a strategic function. Illustrate.
4. Discuss the laws covering wages. Analyse the recent amendments and trends in laws
covering wages in India.
5. Critically evaluate the state of workers’ participation in Management in the present day
business scenario. Explain with examples your answer giving due details of the organizations
and the sources you are referring to.

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Answer
1. Explain the process of human resource planning. Describe how HR forecast is carried
out in the organisation you are working with or an organisation you are familiar with.
Ans.: Human resource planning is a process through which the company anticipates future
business and environmental forces. Human resources planning assess the manpower
requirement for future period of time. It attempts to provide sufficient manpower required to
perform organizational activities. HR planning is a continuous process which starts with
identification of HR objectives, move through analysis of manpower resources and ends at
appraisal of HR planning. Following are the major steps involved in human resource
planning:
1. Assessing Human Resources: The assessment of HR begins with environmental
analysis, under which the external (PEST) and internal (objectives, resources and
structure) are analyzed to assess the currently available HR inventory level. After the
analysis of external and internal forces of the organization, it will be easier for HR
manager to find out the internal strengths as well as weakness of the organization in
one hand and opportunities and threats on the other. Moreover, it includes an
inventory of the workers and skills already available within the organization and a
comprehensive job analysis.
2. Demand Forecasting: HR forecasting is the process of estimating demand for and
supply of HR in an organization. Demand forecasting is a process of determining
future needs for HR in terms of quantity and quality. It is done to meet the future
personnel requirements of the organization to achieve the desired level of output.
Future human resource need can be estimated with the help of the organization's
current human resource situation and analysis of organizational plans an procedures.
It will be necessary to perform a year-by-year analysis for every significant level and
type.
3. Supply Forecasting: Supply is another side of human resource assessment. It is
concerned with the estimation of supply of manpower given the analysis of current
resource and future availability of human resource in the organization. It estimates the
future sources of HR that are likely to be available from within an outside the
organization. Internal source includes promotion, transfer, job enlargement and
enrichment, whereas external source includes recruitment of fresh candidates who are
capable of performing well in the organization.
4. Matching Demand And Supply: It is another step of human resource planning. It is
concerned with bringing the forecast of future demand and supply of HR. The
matching process refers to bring demand and supply in an equilibrium position so that
shortages and over staffing position will be solved. In case of shortages an
organization has to hire more required number of employees. Conversely, in the case
of over staffing it has to reduce the level of existing employment. Hence, it is
concluded that this matching process gives knowledge about requirements and
sources of HR.
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5. Action Plan: It is the last phase of human resource planning which is concerned with
surplus and shortages of human resource. Under it, the HR plan is executed through
the designation of different HR activities. The major activities which are required to
execute the HR plan are recruitment, selection, placement, training and development,
socialization etc. Finally, this step is followed by control and evaluation of
performance of HR to check whether the HR planning matches the HR objectives and
policies. This action plan should be updated according to change in time and
conditions.
Determining the human resources required by an organization involves identifying the jobs,
skills and knowledge required by those jobs and the performance level of the current
workforce. Using this data, you can forecast hiring or reorganizing needs for both the short
and long term. Forecasting methods typically includes using past data to predict future
staffing. Additionally, organizations can use survey, benchmarking and modeling techniques
to estimate workforce staffing numbers. Use several methods and cross-check your findings
to obtain the most accurate results.
1. Analyze your work operations. Conduct a detailed job analysis for each function in
your company and list the policies and procedures required to complete each task.
Document the standard output per hour per person. Determine the desired level of
output in order to calculate the number of people you need to produce that volume of
operations.
2. Conduct a series of online surveys using the Delphi technique--asking several experts
in your organization their opinion on forecasting needs based on their experience
managing the employees in your organization who directly contribute to the creation
of products or services. Experts typically do not share their opinions with each other.
Create and distribute your survey using a tool such as Zoomerang, Survey Monkey or
Qualtrics to gather your data. Examine the input and prepare a forecast. Send the
forecast to the original participants to get their new input. Repeat the survey process
until all participants reach consensus that the forecast appears accurate.
3. Use calculators available from the Society of Human Resource Management website
(see Resources) to calculate metrics such as the “average length of service” and “90-
day turnover” rates based on your current human resources data. Use this information
to help predict future staffing needs.
4. Read reports available from the Department of Commerce on workforce planning
needs to help you learn about trends and forecast your budget for hiring, training and
paying staff required to compete in a global marketplace. For example, the
Department of Defense estimates it spends about $250 annually to support workforce
foreign language needs.
5. Document your forecasting process and follow it consistently throughout your
company so that all managers align their forecast to your strategic direction, identify
skill gaps, create action plans to address shortages, implement plans to hire and retain
skilled personnel and evaluate forecasts on an ongoing basis. Using this model, you
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can more accurately guide workforce planning efforts for all skill areas such as
information technology and knowledge management.
HR forecasting is the heart of the HR planning process. The purpose of HR forecasting is to
ascertain the net requirements for staff by determining the levels of demand for, and supply
of, human resources now and in the future.
Forecasting Activity Categories:
1. Transaction-based forecasting focuses on tracking internal change instituted by the
organization’s managers.
2. Event-based forecasting is concerned with changes in the external environment.
3. Process-based forecasting is not focused on a specific internal organizational event
but on the flow or sequencing of several work activities.
Benefits of HR Forecasting
• Reduces HR costs.
• Increases organizational flexibility.
• Ensures a close linkage to the Macro Business Forecasting Process.
• Ensures that organizational requirements take precedence over issues of resource
constraint and scarcity.
HR Demand is the organization’s projected requirement for human resources, whereas HR
Supply is defined as the source of workers to meet demand requirements, obtained either
internally (current members of the organization’s workforce) or from external agencies.
Key Personnel Analyses Conducted by HR Forecasters
• Specialist/Technical/Professional Personnel: These employees tend to be in high
demand due to trade qualifications that are essential.
• Employment Equity-Designated Group Membership: Should be a proportional
representation of each grouping. Examples of these groups include African
Americans, women, and those with disabilities.
5 Stages of the Forecasting Process
• Identify organizational goals, objectives, and plans.
• Determine overall demand requirements for personnel.
• Assess in-house skills and other internal supply characteristics.
• Determine the net demand requirements that must be met from external,
environmental supply sources.
• Develop HR plans and programs to ensure that the right people are in the right place.
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HR Forecasting Time Horizons

• Current Forecast: The current forecast is the one being used to meet the immediate
operational needs of the organization (up to the end of the current operating cycle, or
a maximum of one year into the future).
• Short-Run Forecast: The short-run forecast extends forward from the current
forecast and states the HR requirements for the next one-to-two year period beyond
the current operational requirements.
• Medium-Run Forecast: Typically, the medium-run forecast identifies requirements
for two to five years into the future.
• Long-Run Forecast: The long-run forecast extends five or more years ahead of the
current operational period. Due to the number of changes that could affect an
organization’s operations, the long-run forecast is extremely flexible.
2. Discuss the concept of ‘performance appraisal’. Explain any two methods of
performance appraisal that you are familiar with citing suitable organisational
examples.
Ans.: The performance appraisal is the process of assessing employee performance by way of
comparing present performance with already established standards which have been already
communicated to employees, subsequently providing feedback to employees about their
performance level for the purpose of improving their performance as needed by the
organisation.
Performance uprising is to know performance of employee, subsequently to decide whether
training is needed to particular employee or to give promotion with additional pay hike.
performance appraisal is the tool for determining whether employee is to be promoted,
demoted or sacked (remove) in case of very poor performance and no scope for
improvement.
Performance appraisal is a systematic process that evaluates an individual employee’s
performance in terms of his productivity with respect to the pre-determined set of objectives.
It is an annual activity, which gives the employee an opportunity to reflect on the duties that
were dispatched by him, since it involves receiving feedback regarding their performance. It
also evaluates the individual’s attitude, personality, behaviour and stability in his job profile.
There are various applications of appraisals like compensation, performance improvement,
promotion, termination, test validation, and much more. Various performance appraisal
methods are followed by organisations to ensure fair appraisals to their employees.
Appraisals facilitate communication between the management and the employees, which
helps in conveying the expectations of the management to the employee and vice versa. The
frequency of appraisals varies. Most MNCs offer them annually, some opt for shorter cycles
like half yearly, or quarterly, or even monthly, if the employees performs exceptionally at his
job. It is subjective to the performance appraisal method that is used, and the purpose of the
appraisal. In case of startups, it has been observed that shorter cycles are preferred, so that
they can motivate their employees more frequently to perform better.
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The criteria for performance appraisal methods are based on various aspects like productivity,
quality of work, duration of service and training. Productivity is measured mostly in the case
of manufacturing i.e. the number of units manufactured or delivered by the employee. In case
of quality of work, precision of the work done is taken into consideration. Duration of
services is used as a criterion by Government entities, where they assume the longest serving
employee to be the deserved one for an appraisal. When an employee is hired in an
organisation, his appraisal is subjective to the speed at which he grasps things and
information he is exposed to
The purpose of this method is to test candidates in social situations. It can be used by startups
for evaluating employees serving at senior level. This method of evaluation is helpful for
assessing managers, who have to deal with their subordinate, peers and supervisors for day-
to-day business. It helps employers understand the capacity and the capability of the
individual in social settings. It involves using situational exercises like an in-basket exercise,
role-playing incident, business game and many other similar exercises. It gives the employer
an insight to the personality of the employee like openness, tolerance,
introversion/extroversion, acceptability, etc.
Numerous methods have been devised to measure the quantity and quality of performance
appraisals. Each of the methods is effective for some purposes for some organizations only.
None should be dismissed or accepted as appropriate except as they relate to the particular
needs of the organization or an employee.
Broadly all methods of appraisals can be divided into two different categories.
• Past Oriented Methods
• Future Oriented Methods
Past Oriented Methods
1. Rating Scales: Rating scales consists of several numerical scales representing job related
performance criterions such as dependability, initiative, output, attendance, attitude etc. Each
scales ranges from excellent to poor. The total numerical scores are computed and final
conclusions are derived. Advantages – Adaptability, easy to use, low cost, every type of job
can be evaluated, large number of employees covered, no formal training required.
Disadvantages – Rater’s biases
2. Checklist: Under this method, checklist of statements of traits of employee in the form of
Yes or No based questions is prepared. Here the rater only does the reporting or checking and
HR department does the actual evaluation. Advantages – economy, ease of administration,
limited training required, standardization. Disadvantages – Raters biases, use of improper
weighs by HR, does not allow rater to give relative ratings
3. Forced Choice Method: The series of statements arranged in the blocks of two or more
are given and the rater indicates which statement is true or false. The rater is forced to make a
choice. HR department does actual assessment. Advantages – Absence of personal biases
because of forced choice. Disadvantages – Statements may be wrongly framed.
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4. Forced Distribution Method: here employees are clustered around a high point on a
rating scale. Rater is compelled to distribute the employees on all points on the scale. It is
assumed that the performance is conformed to normal distribution. Advantages – Eliminates
Disadvantages – Assumption of normal distribution, unrealistic, errors of central tendency.
5. Critical Incidents Method: The approach is focused on certain critical behaviors of
employee that makes all the difference in the performance. Supervisors as and when they
occur record such incidents. Advantages – Evaluations are based on actual job behaviors,
ratings are supported by descriptions, feedback is easy, reduces recency biases, chances of
subordinate improvement are high. Disadvantages – Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback may be too much and may appear to
be punishment.
6. Behaviorally Anchored Rating Scales: statements of effective and ineffective behaviors
determine the points. They are said to be behaviorally anchored. The rater is supposed to say,
which behavior describes the employee performance. Advantages – helps overcome rating
errors. Disadvantages – Suffers from distortions inherent in most rating techniques.
7. Field Review Method: This is an appraisal done by someone outside employees’ own
department usually from corporate or HR department. Advantages – Useful for managerial
level promotions, when comparable information is needed, Disadvantages – Outsider is
generally not familiar with employees work environment, Observation of actual behaviors not
possible.
8. Performance Tests & Observations: This is based on the test of knowledge or skills. The
tests may be written or an actual presentation of skills. Tests must be reliable and validated to
be useful. Advantage – Tests may be apt to measure potential more than actual performance.
Disadvantages – Tests may suffer if costs of test development or administration are high.
9. Confidential Records: Mostly used by government departments, however its application
in industry is not ruled out. Here the report is given in the form of Annual Confidentiality
Report (ACR) and may record ratings with respect to following items; attendance, self
expression, team work, leadership, initiative, technical ability, reasoning ability, originality
and resourcefulness etc. The system is highly secretive and confidential. Feedback to the
assessee is given only in case of an adverse entry. Disadvantage is that it is highly subjective
and ratings can be manipulated because the evaluations are linked to HR actions like
promotions etc.
10. Essay Method: In this method the rater writes down the employee description in detail
within a number of broad categories like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of performing jobs, strengths and
weaknesses and training needs of the employee. Advantage – It is extremely useful in filing
information gaps about the employees that often occur in a better-structured checklist.
Disadvantages – It its highly dependent upon the writing skills of rater and most of them are
not good writers. They may get confused success depends on the memory power of raters.
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11. Cost Accounting Method: Here performance is evaluated from the monetary returns
yields to his or her organization. Cost to keep employee, and benefit the organization derives
is ascertained. Hence it is more dependent upon cost and benefit analysis.
12. Comparative Evaluation Method (Ranking & Paired Comparisons): These are
collection of different methods that compare performance with that of other co-workers. The
usual techniques used may be ranking methods and paired comparison method.
• Ranking Methods: Superior ranks his worker based on merit, from best to worst.
However how best and why best are not elaborated in this method. It is easy to
administer and explanation.
• Paired Comparison Methods: In this method each employee is rated with another
employee in the form of pairs. The number of comparisons may be calculated with the
help of a formula as under.
3. Define mentoring and distinguish it from performance coaching. Assume you are
responsible for mentoring of employees in a large organisation. Discuss how you will
make mentoring a strategic function. Illustrate.
Ans.: In an organization, various employee development programs are undertaken, so as to
raise their level of performance. Two such programs are coaching and mentoring. While
coaching is the process of training and supervising a person to better their performance. On
the other hand, mentoring refers to the counseling process carried on to guide and support a
person for his career development.
Coaching is an on-the-job management development program, that occurs between an
employee and his immediate line manager, for a specific and short-term purpose, to improve
the performance and develop skills. Conversely, Mentoring is a career development initiative
taken by the management, in which an experience person guides and motivates a less
experienced one, in gaining competencies for professional development.
Coaching is a capacity development process, in which an individual or a group learns to
improve their performances through workshops, seminars, and other similar activities. In this
process, an expert is provided to the learners who may be a senior employee or an external
brought to the organization, to give training to the employees and analyze their performances
and other job behaviors for the purpose of increasing efficiency and identifying training
needs for further improvement. Coaching is time bound and well planned.
The person who directs or instructs is known as coach while the person who is being directed
is known as coachee. Coaching helps in uncovering their professional capabilities of an
employee, understanding their strengths and weaknesses, knowing their potential, building
key skills, etc. which are helpful for the accomplishment of the organizational goals.
Mentoring is a human development activity, in which a person known as a mentor, possesses
good knowledge and experience shares it with another person called mentee who is having
less knowledge and expertise to help him out in the development of his career, improving his
self-esteem, enhancing productivity, etc. It is all about general development and
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psychological well-being of a person. Mentoring can be provided either by a person outside

the organization or an individual who is within the organization.
It provides encouragement, insight, and counseling to the protege for the development of his
career. The relationship between the parties is considered as mentorship, which is a long-term
informal one. The mentor may include teacher, guide, adviser, consultant, host, counselor,
etc. The main purpose behind mentoring is to provide open and face to face communication
between the mentor and mentee to help an employee to attain social & emotional maturity
and effectiveness.
Mentoring is a special partnership between two people based on commitment to the
mentoring process, common goals and expectations, focus, mutual trust and respect.
Mentoring can also encompass activities that allow for transfer of knowledge and skills from
one employee to others. Both the mentor and the mentee give and grow in the mentoring
process. The mentee can learn valuable knowledge from the mentor’s expertise and past
mistakes and competencies can be strengthened in specific areas. Mentees will have the
opportunity to establish valuable connections with higher level employees.
The following documents will be provided to support a smooth process for potential mentees
and mentors, to evaluate and continuously improve the mentoring program:
• Application - Mentees and mentors must apply to participate in the mentoring
program by completing an application, submitting it to their supervisor for approval
before submitting it to the organization’s Program Manager. An exception is made for
targeted matching of new hires to experienced personnel working in similar
occupations.
• Confidentiality agreement - The mentoring program must be a safe environment for
mentees and mentors to freely share information with one another. To help build trust,
they must be able to establish clear boundaries on how the shared information is to be
treated.
• Mentoring agreement - The mentoring agreement establishes how and when the
mentee and mentor will meet.
• Mentee action plan - To determine activities that ensure mentoring goals are met; a
mentee action plan is a must. The mentee will complete the plan with help from the
mentor.
• Mentoring log - The mentee and mentor should record their meetings and activities
to show progress achieved and assist with end-of-program feedback.
• Evaluation - At the mid-point of the program and at the end, mentees and mentors
will be asked to evaluate the program. Their input will help make any necessary
adjustments to ensure the program remains effective. For targeted mentoring pairs, a
competency assessment tool will be used at the start and end of the mentoring
relationship.
The primary beneficiary of a business mentoring programme will be the mentee, but those
who mentor can find themselves benefiting in unexpected ways. In the most successful
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business mentoring relationships there is always something in it for the mentor, not just for
the mentee.
Benefits for the business mentor can include:
• personal development – growing by growing others
• increased job satisfaction
• honing of skills such as coaching, listening, giving feedback and adapting your
leadership style
• development of self-knowledge and self-awareness.
A business mentor, by virtue of their experience, will be able to help the mentee steer through
the organisation. Perhaps more importantly, the business mentor will help the mentee to
understand some of the more informal ways of getting things done and some of the unwritten
and unstated ways of working (the world of corporate politics!), and therefore develop the
mentee's professional expertise and career.
The business mentor is someone with whom the mentee can discuss and work through
concerns or opportunities that they may not want to expose to their immediate superior.
Indeed, it may be that the superior is one of the mentee's concerns. Remember, the superior
may well be under pressure to come up with short-term deliverables, and may therefore not
be sympathetic to the mentee's longer-term career goals.
The mentee may feel that they are working in an environment that does not fit with their
preferred ways of working. They may not even be aware of this, perhaps just having an
undefined feeling of things not being quite right.
Talking with someone such as a business mentor, who can bring a wider perspective, may
help the mentee to recognise what is happening and identify the culture that is right for them.
The labour enactments in India, is divided into 5 broad categories, viz. Working Conditions,
Industrial Relations, Wage, Welfare and Social Securities. The enactments are all based upon
Constitution of India and the resolutions taken in ILO conventions from time to time. Indian
labour law refers to laws regulating employment. There over fifty national laws and many
more state-level laws. Traditionally Indian Governments at federal and state level have
sought to ensure a high degree of protection for workers through enforesement of labour
laws. While conforming to the essentials of the laws of contracts, a contract of employment
must adhere also to the provisions of applicable labour laws and the rules contained under the
Standing Orders of the establishment.
Indian labour laws divide industry into two broad categories:
1. Factory Factories are regulated by the provisions of the Factories Act, 1948 (the said Act):
All Industrial establishments employing 10 or more persons and carrying manufacturing
activities with the aid of power come within the definition of Factory. The said Act makes
provisions for the health, safety, welfare, working hours and leave of workers in factories.
The said Act is enforced by the State Government through their ‘Factory’ inspectorates. The
said Act empowers the State Governments to frame rules, so that the local conditions
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prevailing in the State are appropriately reflected in the enforcement. The said Act puts
special emphasis on welfare, health and safety of workers. The said Act is instrumental in
strengthening the provisions relating to safety and health at work, providing for statutory
health surveys, requiring appointment of safety officers, establishment of canteen, crèches,
and welfare committees etc. in large factories. The said Act also provides specific safe guards
against use and handling of hazardous substance by occupiers of factories and laying down of
emergency standards and measures.
2. The Shops & Establishment Act The: Shops and Establishment Act is a state legislation act
and each state has framed its own rules for the Act. The object of this Act is to provide
statutory obligation and rights to employees and employers in the unauthorized sector of
employment, i.e., shops and establishments. This Act is applicable to all persons employed in
an establishment with or without wages, except the members of the employers’ family. This
Act lays down the following rules:
• Working hours per day and week.
• Guidelines for spread-over, rest interval, opening and closing hours, closed days,
national and religious holidays, overtime work.
• Employment of children, young persons and women.
• Rules for annual leave, maternity leave, sickness and casual leave, etc.
• Rules for employment and termination of service. The main central laws dealing
with labor issues are given below:
Minimum Wages Act 1948: The Minimum Wages Act prescribes minimum wages for all
employees in all establishments or working at home in certain employments specified in the
schedule of the Act. Central and State Governments revise minimum wages specified in the
schedule. The Minimum Wages Act 1948 has classified workers as unskilled, semi-skilled,
skilled; and highly skilled.
Industrial Employment (Standing orders) Act 1946: The Industrial Employment Act
requires employers in industrial establishments to clearly define the conditions of
employment by issuing standing orders duly certified. Model standing orders issued under the
Act deal with classification of workmen, holidays, shifts, payment of wages, leaves,
termination etc. Generally, the workers are classified as:
1. apprentice/trainee;
2. casual;
3. temporary;
4. substitute;
5. probationer;
6. permanent; and
7. fixed period employees
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Payment of Wages Act 1936: Under the Payment of Wages Act 1936 the following are the
common obligations of the employer:
• Every employer is primarily responsible for payment of wages to employees. The
employer should fix the wage period (which may be per day, per week or per month)
but in no case it should exceed one month;
• Every employer should make timely payment of wages. If the employment of any
person is being terminated, those wages should be paid within two days of the date of
termination; and
• The employer should pay the wages in cash, i.e. in current coins or currency notes.
However wages may also be paid either by cheque or by crediting in employee’s bank
account after obtaining written consent.
Workmen’s Compensation Act 1923: The employer must pay compensation for an accident
suffered by an employee during the course of employment and in accordance with the Act.
The employer must submit a statement to the Commissioner (within 30 days of receiving the
notice) giving the circumstances attending the death of a worker as result of an accident and
indicating whether the employer is liable to deposit any compensation for the same. It should
also submit an accident report to the Commissioner within seven days of the accident.
Industrial Disputes Act 1947: The Industrial Disputes act 1947 provides for the
investigation and settlement of industrial disputes in an industrial establishment relating to
lockouts, layoffs, retrenchment etc. It provides the machinery for the reconciliation and
adjudication of disputes or differences between the employees and the employers. Industrial
undertaking includes an undertaking carrying any business, trade, manufacture etc. The Act
lays down the conditions that shall be complied before the termination/retrenchment or layoff
of a workman who has been in continuous service for not less than one year under an
employer. The workman shall be given one month’s notice in writing, indicating the reasons
for retrenchment and the period of the notice that has expired or the workman has been paid,
in lieu of such notice, wages for the period of the notice. The workman shall also be paid
compensation equivalent to 15 days’ average pay for each completed year of continuous
service. A notice shall also be served on the appropriate government.
Employees Provident Funds and Miscellaneous Provisions Act 1952: This Act seeks to
ensure the financial security of the employees in an establishment by providing for a system
of compulsory savings. The Act provides for establishments of a contributory Provident Fund
in which employees’ contribution shall be at least equal to the contribution payable by the
employer. Minimum contribution by the employees shall be 10-12% of the wages. This
amount is payable to the employee after retirement and could also be withdrawn partly for
certain specified purposes.
Payment of Bonus Act 1965: The payment of Bonus Act provides for the payment of bonus
to persons employed in certain establishments on the basis of profits or on the basis of
production or productivity. The Act is applicable to establishments employing 20 or more
persons. The minimum bonus, which an employer is required to pay even if he suffers losses
during the accounting year is 8.33% of the salary.
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Payment of Gratuity Act 1972: The Payment of Gratuity Act provides for a scheme for the
payment of gratuity to all employees in all establishments employing ten or more employees
to all types of workers. Gratuity is payable to an employee on his retirement/resignation at the
rate of 15 days salary of the employee for each completed year of service subject to a
maximum of Rs. 350,000.
Maternity Benefit Act 1961: The Maternity Benefit Act regulates the employment of the
women in certain establishments for a prescribed period before and after child birth and
provides certain other benefits. The Act does not apply to any factory or other establishment
to which the Employees State Insurance Act 1948 is applicable. Every women employee who
has actually worked in an establishment for a period of at least 80 days during the 12 months
immediately proceeding the date of her expected delivery, is entitled to receive maternity
benefits under the Act. The employer is thus required to pay maternity benefits and/or
medical bonus and allow maternity leave and nursing breaks.
4. Discuss the laws covering wages. Analyse the recent amendments and trends in laws
covering wages in India.
Ans.: Wages and job benefits are two of the most important employment-related concerns for
many workers. Federal and state laws concerning wages and fair pay have evolved over the
years, and the rules governing employee benefit plans can be fairly difficult to understand, so
below is an overview of this key area of employees' rights law.
Federal and state laws set out in detail the minimum wage every worker is entitled to receive.
These laws also identify which workers are entitled to receive overtime pay for working
longer hours. Unfortunately, and often unintentionally, some employers fail to comply with
these legal requirements. Common violations of the law related to employment wages
include:
Not paying the correct minimum wage.
Paying the lower "training wage" or "youth minimum wage" to workers who should be paid
more.
Not paying overtime or improperly classified exempt employees.
Making employees work "off-the-clock," and not paying them for it.
Deducting too much for tips.
Deducting for wages paid in goods, such as meals or food.
The wage and hour laws are meant to protect employees, and to ensure that their employers
treat them with fairness in terms of payment for work done.
Many people throughout the world work in horrible conditions for extremely little pay.
Fortunately, in the U.S., there are a group of laws that protect workers' rights with respect to
pay and hours worked. Among the most powerful of them are “wage and hour laws,” which
set the minimum amount someone may earn per hour worked. Each state has its own set of
wage and hour laws. Many also make provisions for how many hours someone can work per
day, and set different minimums for overtime pay, weekend pay, and overtime pay. Click
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through the articles below to learn about the general rules for wage and hour laws, as well as
some state specific information.
Wage and hour law refers to the body of law that establishes and regulates wage standards,
including, but not limited to, minimum wage and overtime. The Fair Labor Standards Act
(FLSA) sets the majority of wage and hour law at the federal level. Other factors, however,
control minimum wage as well. The IRS, for example, sets the parameters for when an
individual working for tips can work for less than the federal standard minimum wage.
The Indian government has increased the monthly salary threshold for applicability of the
Payment of Wages Act, 1936 (“Wages Act”), from Rs. 18,000 (~US$280) per month to Rs.
24,000 (~US$375) per month. As a result of this change, which is effective from August 28,
2017, a larger population of the workers shall get covered. This threshold was previously
changed in September 2012 prior to which it was Rs. 10,000 (~US$ 155).
The Wages Act is a federal law which regulates the payment of wages to certain classes of
employed persons. It contains provisions in relation to, inter alia, the responsibility for
payment of wages, fixing of wage-periods, time of payment of wages, and maintenance of
registers and records.
The Wages Act defines the term "wages1” as follows:
"Wages" means all remuneration (whether by way of salary, allowances, or otherwise)
expressed in terms of money or capable of being so expressed which would, if the terms of
employment, express or implied, were ful-filled, be payable to a person employed in respect
of his employment or of work done in such employment, and includes-
• any remuneration payable under any award or settlement between the parties or order
of a Court;
• any remuneration to which the person employed is entitled in respect of overtime
work or holidays or any leave period;
• any additional remuneration payable under the terms of employment (whether called a
bonus or by any other name);
• any sum which by reason of the termination of employment of the person employed is
payable under any law, contract or instrument which provides for the payment of such
sum, whether with or without deductions, but does not provide for the time within
which the payment is to be made;
• any sum to which the person employed is entitled under any scheme framed under any
law for the time being in force,
but does not include-
• any bonus (whether under a scheme of profit sharing or otherwise) which does not
form part of the remuneration payable under the terms of employment or which is not
payable under any award or settlement between the parties or order of a Court;
13

• the value of any house-accommodation, or of the supply of light, water, medical

attendance or other amenity or of any service excluded from the computation of
wages by a general or special order of the State Government;
• any contribution paid by the employer to any pension or provident fund, and the
interest which may have accrued thereon;
• any travelling allowance or the value of any travelling concession;
• any sum paid to the employed person to defray special expenses entailed on him by
the nature of his employment; or
• any gratuity payable on the termination of employment in cases other than those
specified in sub-clause (d).
Besides the Wages Act, this definition is also referred to in numerous other Indian labour
enactments, including the Industrial Disputes Act, 1947, the Industrial Employment
(Standing Orders) Act, 1946, and the Contract Labour (Regulation and Abolition) Act, 1970,
which are some of the most important labour laws of India. Some state-specific shops and
establishments acts (“SEAs”) have also made the Wages Act applicable to all shops and
commercial establishments in their respective States. However, the increase in the wage
threshold may not directly have an impact in those cases given the way those provisions have
been drafted.
One of the most important provisions of the Wages Act relates to the nature and extent of
deductions that may be made from wages, thereby protecting employees from unauthorised
deductions. It also provides the circumstances for which fines may be levied on employees,
the nature of deductions that can be made in absence from duty, deductions of any damage or
loss caused by an employee, deductions for services supplied by the employer (such as house
accommodation), deductions for recovery of advances or loans granted to employees and
deductions for social security (provident fund) contributions and insurance coverage for
employees.
Given that the Parliament is currently considering enacting the Labour Code on Wages,
which will consolidate the Wages Act, the Minimum Wages Act, 1948, Payment of Bonus
Act, 1965 and the Equal Remuneration Act, 1976, the reason for such an increase in the
salary threshold to the Wages Act at this stage is unclear. It would also have been helpful if
the government could publish the basis for the increase along with some statistics on the
impact and the extent of the working class population that are likely to get covered by this
increase. As such, no other Indian labour law contains such a high salary threshold for its
applicability and this amendment could eventually pave way for an increase in the salary
limit in other labour laws, including the Employees’ Provident Funds and Miscellaneous
Provisions Act, 1952, the Employees’ State Insurance Act, 1948, and the Payment of Bonus
Act, 1965, which currently have lower thresholds. The Labour Code on Wages also proposes
a national level base for minimum wages which is expected to be far higher than the current
rates of minimum wages in most states. All of this would substantially increase the labour
cost in the country and may make India less competitive globally.
14

5. Critically evaluate the state of workers’ participation in Management in the present

day business scenario. Explain with examples your answer giving due details of the
organizations and the sources you are referring to.
Ans.: Workers’ participation in management is an essential ingredient of Industrial
democracy. The concept of workers’ participation in management is based on Human
Relations approach to Management which brought about a new set of values to labour and
management. Traditionally the concept of Workers’ Participation in Management (WPM)
refers to participation of non-managerial employees in the decision-making process of the
organization. Workers’ participation is also known as ‘labour participation’ or ‘employee
participation’ in management. In Germany it is known as co-determination while in
Yugoslavia it is known as self-management. The International Labour Organization has been
encouraging member nations to promote the scheme of Workers’ Participation in
Management.
"Workers participation in management is not a new concept; it is as old as the institution of
owners and workers. Only its importance has increased and has been brought into sharp focus
with the industrial revolution and the advent of large enterprises". In the feudal system before
the Industrial Revolution, the units were small and there used to be a joint decision making
through consultation between the owner and worker. The owner took a paternalistic approach
and interest in the employee.
At times interests of workers and of management clash with each other and effective
discussion becomes essential. Groups representing both sides negotiate to derive common
ground for finding solutions for the conflict. Such a common ground can also be prepared
through cooperation, mutual trust and understanding of issues between the management and
workers.
Workers’ participation in management implies mental and emotional involvement of workers
in the management of Enterprise. It is considered as a mechanism where workers have a say
in the decision-
• The philosophy underlying workers’ participation stresses:
• democratic participation in decision-making;
• maximum employer-employee collaboration;
• minimum state intervention;
• realisation of a greater measure of social justice;
• greater industrial efficiency; and
• higher level of organisational health and effectiveness.
It has been varyingly understood and practised as a system of joint consultation in industry;
as a form of labour management cooperation; as a recognition of the principle of co-
partnership, and as an instrument of industrial democracy. Consequently, participation has
assumed different forms, varying from mere voluntary sharing of information by
management with the workers to formal participation by the latter in actual decision-making
process of management.
Reasons for failure of Workers participation Movement in India:
• Employers resist the participation of workers in decision-making. This is because they feel
that workers are not competent enough to take decisions.
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• Workers’ representatives who participate in management have to perform the dual roles of
workers’ spokesman and a co-manager. Very few representatives are competent enough to
assume the two incompatible roles.
• Generally Trade Unions’ leaders who represent workers are also active members of various
political parties. While participating in management they tend to give priority to political
interests rather than the workers’ cause.
• Schemes of workers’ participation have been initiated and sponsored by the Government.
However, there has been a lack of interest and initiative on the part of both the trade unions
and employers.
• In India, labour laws regulate virtually all terms and conditions of employment at the
workplace. Workers do not feel the urge to participate in management, having an innate
feeling that they are born to serve and not to rule.
• The focus has always been on participation at the higher levels, lower levels have never been
allowed to participate much in the decision-making in the organizations.
• The unwillingness of the employer to share powers with the workers’ representatives, the
disinterest of the workers and the perfunctory attitude of the government towards
participation in management act as stumbling blocks in the way of promotion of participative
management.
Measures for making Participation effective:
• Employer should adopt a progressive outlook. They should consider the industry as a joint
endeavor in which workers have an equal say. Workers should be provided and enlightened
about the benefits of their participation in the management.
• Employers and workers should agree on the objectives of the industry. They should recognize
and respect the rights of each other.
• Workers and their representatives should be provided education and training in the
philosophy and process of participative management. Workers should be made aware of the
benefits of participative management.
• There should be effective communication between workers and management and effective
consultation of workers by the management in decisions that have an impact on them.
• Participation should be a continuous process. To begin with, participation should start at the
operating level of management.
• A mutual co-operation and commitment to participation must be developed by both
management and labour.
Modern scholars are of the mind that the old adage “a worker is a worker, a manager is a manager;
never the twain shall meet” should be replaced by “managers and workers are partners in the progress
of business”
The following are the levels of participation listed in hierarchical ascending order:
(a) Informative Participation: This is merely information sharing of major aspects like product
mix, productivity, balance sheet etc. Workers are not allowed close scrutiny of accounts.
16

(b) Consultative Participation: Here workers are consulted on such aspects like welfare, work
methods, safety programmes. Worker’s body or joint councils can make recommendation. It
is left to management to accept the recommendations or not.
(c) Associative Participation: Here, the consultation is extended to more areas. In addition,
management has a moral responsibility to implement recommendation made by joint
councils.
(d) Administrative Participation: Here, management having accepted the recommendations of
joint councils refers alternatives of implementation plans or strategies for the consideration
of the councils to suggest the best one. Here authority of decision making is delegated.
(e) Decisive Participation: Here decisions are taken jointly by management and workers on all
important matter concerning the firm. Here both are equally responsible and accountable for
the success or failure based on such decision. This, in a true sense, is the sharing of “profits”
and “pains”.
A number of analysis have shown that significant changes of human behaviour is possible rapidly if
persons who are expected to change are allowed to decide “what” and “how” about such changes. To
make any of the participative methods successful, the following conditions have to be fulfilled:
1. The participants, namely, the management and the operatives, must have clearly
defined and complementary objectives. The objectives of one party should not work
at cross purposes with the objectives of the other party.
2. There must be a free flow of information and communication between the
management and the workers. In this way, distrust and suspicion are avoided, and
workers become responsible and mature when they discuss their problems with the
management.
3. The representative of workers must be drawn from the workers themselves. The
participation of outside trade union leaders should be discouraged. This is necessary
because the problems and difficulties of the workers are better understood by the
workers themselves than by outsiders. Company workers can put across their points
of view to the management with confidence.
4. Strong and effective trade unionism is necessary for the success of participative
management. Politicisation and multiplicity of trade unions defeat the purpose of
participation in management.
5. Worker’s education and training make a significant contribution to the purpose in
working of participative management. Trade unions and the Govt can play a major
and meaningful role in organizing and conducting training programmes.
6. Neither party should feel that their position is threatened by participation.
7. To make worker’s participation meaningful and purposeful, workers should be
associated at all levels of decision making.
8. The success of participation depends on a suitable participative structure and a
change of heart on the part of employers and employees, which may take a long time
to develop. To expedite this development, some sort of legislative action is necessary.
9. There could be the danger of a major position of the resources of the enterprises being
diverted to workers without much consideration for further investments. It may be
17

desirable to reserve a certain percentage of the resources for re-investment, either
through mutual agreement or legislation.
10. The financial cost of participation should not exceed the values, economic and
otherwise, that come from it. Employees cannot spend all their time in participation to
the exclusion of all other work.
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psychological well-being of a person. Mentoring can be provided either by a person outside

• the value of any house-accommodation, or of the supply of light, water, medical

5. Critically evaluate the state of workers’ participation in Management in the present

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