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Q9 What are the components of an effective compensation system? How is

unpaid employee likely to behave?

Ans: Compensation is the reward employees receive in exchange for performing

organizational tasks. Compensation is direct and indirect wages.

Direct compensation includes wages, salaries and bonuses or commission.

Indirect compensation is paid as medical benefits, housing allowance and such
others that are what part of direct compensation.
Design of a compensation program is significant in PM because of its direct influence
on employees’ behaviour and performance in the company .The components of an
effective compensation system is, if salaries and perquisites are:

• Adequate :In line with what is paid in similar companies in the same geographical
area. Salaries and perquisites should be similar to what is paid in the other companies
for the similar work e.g. people working in the night shifts and doing similar hours
and in the same geographical area should be paid equally otherwise they will shift for
better salary or facilities.

• Equitable: Salaries and perquisites should commensurate with the effort put in not
be less than the work and the ability used by the individual for hard work. Salaries
should be equal to the work put in.

• Balanced: The compensation includes a reasonable combination of direct and indirect


• Cost Effective: Salaries and perquisites should be such that the company can afford
to pay or should not exceed the benefits the company gets from the employees. The
benefits should not be more than what they get, then only company will be able to
make more profit.

• Secure: The salary should be such, as the employees do not feel that even their basic
needs are not fulfilled. It should be sufficient to satisfy the employees basic need and
make him full secure.
• Incentive providing: Both monetary and non-monetary incentives should be given to
the employees as they motivate employees to work effectively and productivity.

Factors Affecting Compensation are:

• Supply and demand: The availability of people and the demand determine the
“going wage rate” when the demand is high and the availability low, salaries are high,
when the availability exceeds the demand, salaries are low.

• Ability to pay: In general if a company is doing well and has the ability to pay the
tendency is to raise the compensation level. However if a company is highly
successful there is little need to pay for more then the compensation rate to attract the
best available in the industry.

• Cost of living: The cost of living index does not determine the base compensation .It
indicates what the rate of increase in salary should be, to keep up with inflation so
that employees real wages do not reduce.

A proper compensation (salaries and perquisites is very imp) if the company wants to
survive or retain its present employee may:

 Leave the company: He may switch over to another company; he may look for better
opportunities where he is fully or not underpaid.

 Absenteeism: Underpaid employees may increase the rate of turnover and

absenteeism may increase and ultimately, it will affect the productivity of the

 Low morale of the employee: If an employee is underpaid according to the job then
his morale will come down.

 Low motivation: A low motivated employee of the company will not be productive
employee. He will not feel happy or will not be attached to the company.

 Bad image for the company: Underpaid employees create bad image for the
 Productivity suffers: Due to absenteeism, low motivation &morale, productivity
automatically comes down etc.

Q11.What are the various ways in which a person can help look for a new job?

Ans: A person can look for a new job through internal as well as external sources. A
person can look for a new job or new opportunity within his own organization or
where he is currently working through promotions, transfers, ex-employees who have
left the job now.

A person can also look for a new job through the following external sources:

• Newspapers: Companies usually advertises in newspapers according to their

Requirements. If the requirements of the company match the person’s profile he/she
can apply for the new job.

• Employment Agencies: Government creates them and a person who seeks a new job
can register themselves at these agencies. Companies who want people come there
with their requirements & employee’s people from they’re only.

• Casual Callers: On occasions, people drop in without any announcement of

vacancy to find out for a new vacancy.

• Gate Hiring: Small factories to fill up vacancies at the lower level generally follow
it. In such cases the organization look on casual workers who present themselves at
the factory gates.

• Employees’ recommendations: People who are currently working with the

organization on recommendation, some new people for the past vacant in the
company, as they know the person very well. Existing employees generally stand
surety for a new employee.
• Education institution: Schools, colleges and unprofessional institutes offer
opportunities for recruiting their students .The prospective employees verify the
credentials of students and conduct interviews directly.

• Union list: Sometimes trade unions maintains a list of candidates seeking

employment in the company, such candidates could be recruited in consultation with
the union.

These are some of the ways in which a person can look for new job in both his own
organization whenever there is a requirement due to retirement of ex employees or
the employees changing jobs or he can look for a new outside the present company if
he felts that there is no opportunity, in the present company as he can find better
opportunities outside he can look for advertisement, newspapers, go to government
agencies or give bio data to the companies, gate hiring etc…

Q1.what is meant by Quality of work life? What role does the human resource
manager play in contributing to the QWL of employees?

Ans. To introduce, the HRD practices into the organization, it is important to have
conductive atmosphere. Quality of work life is one of the most important factors, which
leads to such conductive atmosphere. Good quality of work life leads to an atmosphere of
good interpersonal relations and highly motivated employees who strive for the
Monetary benefit occupy the first place in the list of elements of QWL, other
elements are like physical working condition, job redesign etc are gaining imp rapidly.
Provided good quality of work life, employees concentrate more on their individuals and
group development .The management can get their attention with their high motivation
and morale which leave way by rapid and smooth HRD.
By providing good QWL one can eliminate the exploitation, injustice,
inequality oppression which hamper the continuous growth of human resources which in
turn leads to its overall development.
QWL has its root in scientific management advocated by F.W.Taylor way back in 1940’s.
The mechanical approach or quantitative approach that scientific management assessed
gave way to the frustration of workers, which leads to human relations movement and
later so on technical movement which is the basic by today’s quality of work life. Thus
the evolution of the concept QWL was mainly in 3 phases: Scientific management,
Human relation movement and finally Socio technical system advocates such an
organization design which ensure high quality of work life.
Improving QWL was not considered as important factor in India until recently because
there were more factors like resource deficiency, environmental threats and serious
financial problems. There is a need to limit positive attitude in workers, union and
management to improve QWL.
Measuring QWL:

Walton’s & factors are considered as most comprehensive criteria for measurement of

The 8 point criteria of Walton to measure quality of work life individuals:

 Adequate and fair compensation

 Soft and healthy working conditions

 Opportunity for career growth

 Social integration in the work force

 Constitutionalism

 Work and quality of life

 Social relevance

Barrier to QWL

 All parties of the organization still resist to any schemes to improve QWL at present
level is satisfactory arrange and no steps need to be taken to improve it. They fail to
measure the impact of improved QWL on the psyche of the employee.

 Another barrier is financial resources.

 Employees on the other hand resist to change with a pre-concerned notion that any
scheme the management taken up would be to increase production without extra cost.
However the situation changing for good .All parties organization i.e. employee,
employers and union are realizing the spontaneous of QWL.

Today, the role of personnel management is changing .Its includes:

• Investment in overall organization planning and change.

• Decentralisation of tradition personnel management activities from personnel

specialists to line manages.
• Creation of organization culture and facilitation of organizational commitment.

Strategies are made for improving quality of work life through self managed work,
job design and enrichment, effective leadership and supervisory behavior, career
development, alternative work schedules, job security, administrative or organization
justice and participating mgt. By implementing such changes management can create
sense of investment, commitment and togetherness among the employees, which
paves for better quality of work life.
The personnel management function has never become broad and strategic involving
all managerial and personnel and regarding employees as the most important
organisational assets.

Q7.What is succession planning. What information is necessary to evaluate the

potential of an employee?

Ans: Succession Planning :It refers to the plans a company makes to fills most imp
executive position .In practice the process involves a fairly complicated and
integrated series of steps.
A most comprehensive definition of succession planning is that it is the process of
ensuring a suitable supply of success or for current and future senior or key jobs
arising in the business strategy, so that the career of individuals can be planned and
managed to optimize the organization needs and the individual aspirations.

Succession planning is done in 3 time frames:

Immediate - within one year

Intermediate - one year to 3 years
Long Range - Beyond three years

Organizations gear most by their management succession activities to the immediate

future. This is mostly because it is integrated closely with the annual budgets and
business plans. However, the real succession plan should be geared towards
intermediate and long-range time frames.

Elements of Succession Planning:

As a first step, management staffing plans should be developed. These plans should
be prepared on an individual basis for all anticipating needs in the intermediate years
ahead and for key position in the intermediate and long-range future. The potential
effects by external factors, such as economic forecasts and overall manpower market
forecasts should be received and considered. The business plans should be received
to determine their effect all-managerial needs. As business plans for both the near
and long term are developed, the organizations plans and human resources forecasts
should be formed.

The Second Step concerns staffing and development. Staffing includes recruitment,
selection and placement of candidates from the outside and inside the organization
and development of managerial personnel should be ensured through approaches such
as formal training both within the organization and outside, planned job rotation
performance planning and appraisal, counseling and coaching.

The third step concerns needing a congenial environment, where people give their
best. The organization’s environment should ensure the retention of the most
desirable employee.

The Fourth Step consists of doing appraisals. Appraisals and analysis of results
achieved should provide an organization with essential feedback on the performance
of managers.

The Fifth Step is the S.P exercise in the preparation of management resource
statutory consisting of the following:

Personal Data
Skills Career Goals
Career Plans

Potential appraisals are done to know the potential of the employees so that the
employees who have more potential become eligible for promotions.

As assessment center is used to assess the potential of management candidates

considered are asked to perform realistic tasks under observation of expert appraisers.
Simulated exercises in a typical assessment center includes:

In basket:
The candidate is given a number of reports, names, and notes on incoming phone
calls, letters and the material collected in the in-basket of the simulated jobs he is
supposed to take over. The candidate is asked to take appropriate actions on each of
these materials.

Group Discussion:
A leaderless group discussion is given a topic for discussion and asked to arrive at a
group discussion. The raters then evaluate each group member’s personal skills,
acceptance by the group, leadership ability and individual inference.
Management Games:
Participants engage in realistic problem solving. E.g., as member of two more
companies that are competing in the marketplace. Decisions would have to be made
about matters like how to advertise and manufacture and how much inventory to keep
in stock.

Individual Presentation:
A participant’s communication skill and persuasiveness evaluated by having the
person take an oral presentation on an assigned topic.

Objective Tests: Papers and pencil tests for personality, mental ability, interests and
achievement may be conducted to measure the participant’s sense on factors to be

Interview: are conducted to determine the participant’s current interests, background,

past performance and motivation.

Through these processes, the participant’s potential is assessed and management

development and placement decisions taken. Potential of the existing candidates
working with the company can be evaluated by their past performances with the

Q4. Describe some common rating errors in performance appraisals? How does
the personal bias of the appraiser affect performance appraisals?

Ans. Performance appraisal is the process by which organizations evaluate employee

performance. Appraisals are both formal and informal. While informal appraisals
take place on a continuous basis where feedback is given to the employee by his
immediate supervisors. They are no documented. Formal appraisals are conducted
periodically and documented.

Some common rating errors in Performance Appraisal System are:

Halo Effect: This occurs when the rater’s personal opinions of the employee affects
his assessment. Halo errors can be positive or negative meaning that internal
impressions can cause the rating to be too high or too low.

Leniency or Strictness: When rater tries to be easy in their evaluation it is called a

leniency effect. On the other hand, there are some raters who see all performers as
poor. This is the strictness effect.

Central Tendency Error: Some raters prefer neither high nor low ratings and assign
average ratings to all the subordinates. This fails to discriminate between people in
the same department and therefore, of little use to performance management

Regency Effect: Raters often tend to forget past behaviors and remember actions
that occurred recently. Some appraisers use this tendency among their appraisals to
be more visible nearer the time of the assessment, particularly if the date of the
assessment is known.

Contrast Error: At times appraisals lets one person’s appraisal affect that of the next
person where an average performer is evaluated immediately after an outstanding one
in which case the average performer may get rated as a poor performer.

Personal Pre-justice: Personal biases occur due to pre-justice against a group or a

class of people. Sometimes appraisers give a high rating to a person who has qualities
or characteristics similar to their own. Some appraisers at times rate person they like
higher than those they don’t.

Perceptual Set: There is, at times a tendency among raters to see what they want to
see and their assessment is affect by their attitude.

These are some of the common ratings errors.

Personal bias of the appraiser affects the performance appraisal as the right
performance appraisal is not done or the right candidate is not promoted due to
personal liking or dislike of the appraiser. Personal bias could be due to personal
liking of the appraiser. He may like the appraise personally though he may not be
deserving of promotion and persons who have better performance or better potential
are not promoted if the appraiser does not like them personally.

Personal bias may occur a group or class of people who the appraiser may have
personal pre-justice against their religion, cast, creed, and colour. He may not
promote them though they may be more capable of promoting the business. The
appraiser may see things his own way to a person who has qualities or characteristics
similar to his own. The appraiser may like the persons who are similar to his own
personality but that is not the way the appraisal should be done as it includes the
personal bias of the appraiser.

The appraiser may see what they want to see to or except see and then assessment is
effected by this attitude.

At time male appraiser have personal bias for female candidate and may think they
are not capable of getting high ratings though they may be capable of getting better

At times of appraisal the appraiser finds or makes an opinion based on his personal
opinion or the way he thinks. The appraisee may get confused at that times or he is
not able to respond properly due to nervous or he may feel uncomfortable with the
appraiser .the appraiser rates according to that meeting or appraisal only who the
appraisal behaves between that appraisal time.

So, the personal bias of the appraisal effects the appraisal system, as the may give
higher rating to the persons he thinks is capable of getting higher rating due to his
things, his attitude and his own .He may like the similar to his own and may give
higher rating to them and the desiring candidates may not get good rating or the
incapable candidates will be promoted by getting higher rating.

This sports the whole effect at the whole purpose the appraisal by not giving chance
to the right candidate for promotion due to personal liking or disliking of the
appraiser. This personal opinion about the candidate effect the whole procedure.

Q5 What is management by objective? What are its advantages and

Ans: The management by objective approach involves establishing performances
goals jointly by the superior and subordinates for this programme to be effective both
the superior and subordinate must be actively involved in objective formulating and
agree on the methods to be used to assess performances.

This MBO programme involves:

• Defining key tasks for the subordinate and setting a limited number of objectives.

• Establishing criteria for evaluation of objectives.

• Determining data for review of progress and making modification in original


• Having final evaluation secession for counseling and encouragement.

• Setting objectives for the next cycle.

Advantages of MBO

• Improvement in management: MBO results in generally improved management

objectives cannot be set without planning and result oriented planning is the only
one that make sense. MBO therefore forces managers to think about planning for
results rather than merely planning activities or work.

• Development effective control: MBO also aids in developing effective controls.

Now control involves measuring results and taking actions to correct deviations
from plans to ensure goals are reached.

• Clarification of organization: Another benefits of MBO is that it forms

managers to clarify organizational roles and structure even to the extent where
position could be limit around the key results expected areas, of the people
occupying them companies that have effectively on the MBO program have
discovered deficiencies in the organization. Such lack of delegation of authority
accordingly to the results expected, decentralization management etc.

• Encouragement of personal commitment: One of the greatest advantages of

MBO is that it encourages the people to commit themselves to their goals. They
have an opportunity to put their ideas .In planning programmes; they understand
their areas of discreating their authority.

Some of the problems faced by the MBO programme are:

• Too much paper work

• Setting too many objectives may create a problem of prioritization

• May be difficult to establish measurable objectives for some jobs

• Too much emphasis on short term performance and loosing sight of long-term

• May be used by some supervisors as a control devise that intimidates rather than
motivates subordinates

Q6.How does long term career development of employees help an organization?

What are the different phases in the career of an employee?

Ans Career development: It provides a supply of talents and abilities. Individuals

must be committed to and accept responsibility for their career development .A
number of action prove useful in career development. These are:
• Job performance: Career progression depends largely on job performances, the
better the performance the higher the chances of going up the corporate ladders.

• Resignation: when an individual sees career opportunities else where which are
not available in the existing, transfer may be the only alternative. When used
spontaneously it results in promotion, salary increased and a new learning

• Mentors: Mentors can aid career development by sharing their knowledge and
insight and wisdom to help their junior managers.

• Growth opportunities: Individuals can expand their abilities by enrolling for

training programme, acquiring additional degree, seeking new work assignments.
When an opportunity arises in an organization, employee with the required skills
would be placed in that position.

Employees’career development cannot take place without support from top

management. Commitment of top –management is crucial, employee also need to be
given feedback about their career development efforts. It is difficult for an employee
to sustain years of preparation to reach career goals unless they receive feedback.
Career development does not guarantee success but without it employees would not
be ready for a job when the opportunity arises.

Career development looks at the long term career effectiveness and success of
organization personal .The long term career development of employees through
career development programmes help the organization .in the following ways:

By the availability of talent:

Career development efforts are consistent with, and a natural extension of human
resource & planning. Changing staff requirement over the intermediate and long term
should be individual employees to help them identified in human resources planning
working with better align their needs and aspiration with those of the organization
will increase the probability that the right people will be available to meet the
organization changing staff requirement.

Attract & retain high talent personal:

Outstanding employees will always be scare and they usually find there is
considerable competition to secure their services. Such individuals may give
performances to employers who demonstrate a concern for their employees’ future.
If already employed by an organization that offer career advice, their people exhibits
greatly loyalty and commitment to their employers .As more and more people seeks
jobs that offer challenges, responsibility and opportunities and advancement realistic
career planning becomes increasingly necessary career development should result in a
better individual organization match for such individual and lead to less turnover.
Unfortunately the recent years where characterized by a strong economic growth and
reduced advancement opportunities. The result is increased frustration of employees
when they see a significant disparity between their aspirations and actual
opportunities. Career counseling can result in more realistic employee expectation.

Different phases in the career of an employee:

Most working people go through career stages and it has been found that an
individual moves through these stages:

• Establishment Stage: The first five years of a career are linked to establishment
stage where safety needs are the highest. This is the beginning of a person’s work
life and the focus is on earning well to acquire assets the person believes are
essential like a car, house, furniture and such other.

• Advancement Stage: The advancement stage begins from the age of 30-45.
During this period the person’s safety needs would have been largely satisfied.
Hence there is considered less concern for hygiene factors (house, car) and focus
shifts to achievement, esteem and autonomy on the job.

• Maintenance Stage: During this period gains of the past are consolidated. Since
the individual has satisfied the psychological and financial needs this phase is a
period of creativity. The employee now wishes to satisfy his esteem and self-
actualization needs. However, many people experience psychological xxxxx.

• Retirement Stage: During this phase individual completes one career and moves
onto another. The individual now has the freedom to take an activity that he may
have been interested in such as social work, teaching which were difficult to
pursue while working.


Q.4. What are the key elements in the disciplinary process?

Ans: Discipline is action taken by management to encourage compliance with

organization’s standards. It’s a process to correct and mould employees for better
performance. There are two types of disciplines – preventive and corrective.

Preventive Discipline: is action taken to encourage employees to follow standards

and rules so that indiscipline is prevented. The Personnel Department plays a major
role in preventive discipline. They communicate rules to employees, conduct training
programmes and even counsel employees, if necessary.

Corrective Discipline: is action taken when there is non-compliance with the rules.
Typically, corrective discipline is a penalty like warning or suspension.

Types of Discipline Action

Oral Reprimand: In most cases, an oral reprimand is sufficient to achieve desired

results. Superiors must know their employees well to know whether to mention the
offence casually is fine or severe dressing down is necessary to get attention and
cooperation and bring about change.

Written Reprimand: When the offence is more serious, written reprimand may be
given. Since this would remain on the employees record it is regarded as a more
severe penalty.

Loss of Privileges and Fines: Loss of privilege means losing a good assignment or
the right to work on a machine of one’s choice for offences. Leaving the work place
without permission a time may be imposed which would have a relationship with the
amount of time lost due to the offence.

Lay off demotion, discharge: There are several penalties and usually out of the
preview of the supervisor alone. These disciplinary actions have to be taken in
consolation with the personal department and senior managers after a proper enquiry.

Key elements in the disciplinary process:

• First of all the root causes: Two supervisors needs to identify reasons for
indiscipline. This can be achieved by interacting regularly with employees and
their co-workers and observing them closely on the job.
• Analyse reason purpose performances: through frequent interaction and
observation determine if the indiscpline is due to lack of skill and training low
effort or circumstances beyond the employees’ control.

• Prepare for discipline interview: After determining causes and reason for poor
performance, prepare for an interview with the employees by examining past
records and taking to previous supervisor.
• Conduct the interview core and professionalism: Conduct the interview
privately and discuss the problem, not the person give the employees on
opportunity to speak and listen to his point of view also.

• Some discipline: Prescribe the discipline steps to taken according to the problem
in specific terms with a clean timetable.

• Win respect Administer disciple in a firm and equitable manner and earn respect.

Thus, These are some of key elements in a discipline process.

Q3.what are the limitation to applying the hot stove rule to all employees?

Ans. Hot stove rule is an approach to disciple. This disciplinary action has the same
characteristic, as the penalty a person would receive if he touched a hot stove.
The consequences are:

• Warning: Before any behaviour has taken place the consequences of undesirable
behaviour are communicated to the employees.

• Immediate turn: If any disciplinary action has to be taken, it is taken immediately

after the undesirable act has accrued. The employee must be able to see the
connection between the act and the punishment.

• Consistency: The same action is taken against any person performing the undispable
act: there is no discrimination.

• Impersonality: The disciplinary action is not against an individual, it is meant to

eliminate undesirable behaviour.

In hot stove approach the progressive discipline approach is administrative to give an

employee a chance to take corrective action (warning) before more serious penalties are
improved .therefore the of penalty is increased every time the offence is repeatedly .The
objective of the discipline programme is to create and maintain a productive responsive
work force.

Limitation of the hot stove rule

Hot stove rule like the progressive discipline focus as the past behaviour the employees is
punished in the present for employees is punished in the present for what he has done in
the past through he may realize that he was wrong in the past.
It spoils the image of the company in the eyes of the employees as they fell
insecure and there morale comes down or some employees who are discipline in positive
way may not remain committed to their job or feel good about the company.
It doesn’t focus much on seeing that indiscipline does not occur in the first place. It first
starts with warning and communicating the penalties .It is not future oriented like positive
The person who is punished so severely doesn’t remain loyal to the company and create
fans in other employees as well.
In spite of all these limitation,

Hot stove rule has certain advantages also:

Due to its serve punishment employee remain in discipline organization, rate of

productivity increase when there is an atmosphere of discipline.
There is no discriminate all the employees who does the same indiscipline are punished
Before, any punishments given warning is given in the satisfy before any behaviour has
taken place the consequence as of undesirable behaviour are communicated to the
It is not against: any individual, in personal .It is directed formal a person; it is meant to
eliminate undesirable behaviour.
Creates an atmosphere of discipline in the organization.

Q1.How can conflicts are avoided in an organization? What are the differences
between arbitration and mediation?

Ans: Conflicts are part of the natural order of the things .In an organization, employees
and management have divergent resources may be allocated and this leads to grievances.
The PM plays and important role in handling disagreements while each supervisor deals
only with problems occurring in his department The personal executive has a company
wide perspective of complaints and can identify the types and cause of the problems with
this information the personnel department can create formal procedure for problem
Conflicts generally arise on certain issues between the union and the management and the
workers. It is necessary to avoid the rest cause of all the conflicts for that is important
first of all to discover the reasons for conflicts generally conflicts due to following
reasons on the part of union, management, workers etc.

Manifestation of conflict
Manifestation of organization group conflict: Manifestation of individual
(Union management conflict) (Unorganized conflicts)

Manifestation of manifestation of workers managers

Union management

Non co-operation unwillingness to unorganized with automatic

Negotiate holding of efforts supervision

Argument termination international waste over-strict

And inefficiency discipline

Hostility demotion labour turnover penalties

Stresses Lay offs unnecessary


Unwillingness Lockouts absenteeism demotion

To negotiate complaints

Resentment instances of lays offs

Breaking of rules

Absenteeism strikes lock outs

Work to rule


Loss of production


If the conflict occurs then there are certain resolution like:

The first step in the resolution of conflict is their discovery and exposure.

• Direct observation: Not all problems are express but a good supervisor
known the customary behaviour of his subordinates. When a significant
change occurs in his behaviour or work it may be assumed that employee has
a problem.
• Open door policy: A formal open door procedure allows an employee to
discuss his problem with his supervisor and then up the hierarchy to the
highest level, if necessary.

• Personnel counselors: employees can discuss these problems with these

experts who would protect their identity.

• Suggestion boxes: Companies can set up a suggestion box in which the

employee may write their problem.

• Exit interview: If the conflict is so great that the employee resign the exit
interview provides are best opportunities to discover the nature of

• Ombudsman approach: Ombudsman approach is investigation as mediator

who solves the problem and give a solution which is except able to both the
management and the employee etc.


The grievance handling procedure does not always work and when a deadlock occurs
the union management or the employees are unable to solve the conflict on arbitration
is required. The arbitrator acts as Judge, hear both sides of the dispute and after
weighing the facts renders abiding decision which is to be accepted by both the


It is different from arbitration in that the mediator is a third party who enters a dispute
but has no power of decision. He can only suggest, coax, recommend or keep the two
parties talking with each other.