Q1. Write a short note on Hawthorne Studies.

The human relations or behavioral school of management began

in 1927 with a group of studies conducted at the Hawthorne plant
of Western Electric, an AT&T subsidiary. Curiously, these studies
were prompted by an experiment carried out by the company’s
engineers between 1924 and 1927. Following the scientific
management tradition, these engineers were applying research
methods to answer job-related problems.

Two groups were studied to determine the effects of different

levels of illumination of worker performance. One group received
increased illumination, while the other did not. A preliminary
finding was that, when illumination was increased, the level of
performance also increased. Surprisingly to the engineers,
productivity also increased when the level of illumination was also
decreased almost to moonlight levels. One interpretation made of
these results was that the workers involved in the experiment
enjoyed being the centre of attention; they reacted positively
because the management cared about them. Such a phenomenon
taking place in any research setting is now called the Hawthorne
effect.

As a result of these preliminary investigations, a team of

researchers headed by Elton Mayo and F. J. Roethlisberger from
Harvard conducted a lengthy series of experiments extending
over a six year period. The conclusions they reached served as
the bedrock of later developments in the human relations
approach to management. Among their key findings were the
following:

• Economic incentives are less potent than generally believed

in influencing workers to achieve high levels of output.

• Leadership practices and work-group pressures profoundly

influence employee satisfaction and performance.
 • Any factor influencing employee behavior is embedded in a
social system. For instance, to understand the impact of pay
on performance. You also have to understand the climate
that exists in the work group and the leadership style of the
superior.

Q2. Trace the growth of Trade Union Movement from

Factories Act 1881 to Factories Act 1948.

HISTORICAL EVOLUTION OF TRADE UNIONS IN INDIA

Trade union as per Trade Union Act 1926 – “Any combination

formed primarily for the purpose of regulating the relations
between workmen and employers or workmen and workmen or
employers and employers or for imposing restrictive conditions on
the conduct of any trade or business and includes any federation
of two or more trade unions”.

From the above definition it is clear that Trade union is not just an
association of the workmen of a factory or a trade or a business
but also can be formed by officers and managers. Trade union
movement in India was started and led by philanthropists and
social organizations and not by the workers.

• Bombay Presidency - by servants of India society

• Eastern India - by Brahma Samaj

• South India centered around Madras - by Theosophical

Society

Trade union is a direct product of Industrialization and a very

recent development. In India, the foundation of modern industry
was laid between 1850 and 1870. Prior to that trade was confined
to individuals and families like craftsmen and artisans. They had
expertise and specialized skills which was inherited by their
offspring’s. After Industrial revolution, these people started losing
their individual identities and had to join factories to earn their
livelihood and compete with mass production. There was a
psychological dislocation as they were losing their identities.

Indian trade union movement can be divided into three phases.

The first phase falls between 1850 and 1900 during which the
inception of trade unions took place. During this period of the
growth of Indian Capitalist enterprises, the working and living
conditions of the labor were poor and their working hours were
long. Capitalists were only interested in their productivity and
profitability. In addition to long working hours, their wages were
low and general economic conditions were poor in industries. In
order to regulate the working hours and other service conditions
of the Indian textile laborers, the Indian Factories Act was enacted
in 1881. As a result, employment of child labor was prohibited.
Mr. N M Lokhande organized people like Rickshawalas etc.,
prepared a study report on their working conditions and
submitted it to the Factory Labor Commission. The Indian Factory
Act of 1881 was amended in 1891 due to his efforts. Guided by
educated philanthropists and social workers like Mr. Lokhande,
the growth of trade union movement was slow in this phase. Many
strikes took place in the two decades following 1880 in all
industrial cities. These strikes taught workers to understand the
power of united action even though there was no union in real
terms. Small associations like Bombay Mill-Hands Association
came up.

The second phase of The Indian trade union movement falls

between 1900 and 1947. This phase was characterized by the
development of organized trade unions and political movements
of the working class. It also witnessed the emergence of militant
trade unionism. The First World War (1914-191 and the Russian
revolution of 1917 gave a new turn to the Indian trade union
movement and organized efforts on part of the workers to form
trade unions. In 1918, B P Wadia organized trade union
movements with Textile mills in Madras. He served strike notice
to them and workers appealed to Madras High Court because
under ‘Common Law’, strike is a breach of law. In 1919, Mahatma
Gandhi suggested to let individual struggle be a Mass movement.
In 1920, the First National Trade union organization (The All India
Trade Union Congress (AITUC)) was established. Many of the
leaders of this organization were leaders of the national
Movement. In 1926, Trade union law came up with the efforts of
Mr. N N Joshi that became operative from 1927.

The third phase began with the emergence of independent India

(in 1947), and the Government sought the cooperation of the
unions for planned economic development. The working class
movement was also politicized along the lines of political parties.
For instance Indian national trade Union Congress (INTUC) is the
trade union arm of the Congress Party. The AITUC is the trade
union arm of the Communist Party of India. Besides workers,
white-collar employees, supervisors and managers are also
organized by the trade unions, as for example in the Banking,
Insurance and Petroleum industries.
Q3. Elaborate the HR planning System.

Human resource and manpower planning is ‘the process by which

a management determines how an organization move from its
current manpower position to its desired manpower position.
Through planning, a management strives to have the right
number and the right kind of people at the right places, at the
right time, to do things which result in both the organization and
the individual receiving the maximum long-range benefit’.

According to Wickstorm, Human-resource planning consists of a

series of activities, viz.

1. Forecasting future manpower requirements, either in terms

of mathematical projection of trends in the economic
environment and development in industry, or in terms of
judgmental estimates based upon the specific future plans of
a company;

2. Making an inventory of present manpower resources and

assessing the extent to which these resources are
employed/optimally;

3. Anticipating manpower problems by projecting present

resources into the future and comparing them with the
forecast of requirements to determine their adequacy, both
quantitatively and qualitatively; and

4. Planning the necessary programs of requirement selection,

training, development, utilization, transfer, promotion,
motivation and compensation to ensure that future
manpower requirements are properly met.

Thus, it will be noted that ‘manpower planning consists in

projecting future manpower requirements and developing
manpower plans for the implementation of the projections’.
Q.4 Discuss the Multiple Person Evaluation Methods.

There are three techniques that can be used to evaluate an

employee in comparison with other employees:

1. Ranking: In ranking method, the evaluator is asked to rate

employees from highest to lowest on some overall
criterion. This is very difficult to do if the group of
employees being compared number over 20. It is also
easier to rank the best and worst employees than it is to
evaluate the average ones. Simple ranking can be
improved by alternative ranking. In this approach the
evaluators pick the top and bottom employees first, then
select the next highest and next lowest, and move
towards the middle.

2. Paired comparison: This approach makes the ranking

method easier and more reliable. First, the names of the
persons to be evaluated are placed on separate sheets (or
cards) in a predetermined order, so that each person is
compared to all others to be evaluated. The evaluator
then checks the person he feels is the better of the two on
a criterion for each comparison. Typically the criterion is
overall ability to do the present job. The number of times
a person is preferred is tallied, and this develops an index
of the number of preferences compared to the number
being evaluated.

These scores can be converted into standard scores by

comparing the scores to the standard deviation and the
average of all scores. This method can be used by
superiors, peers, subordinates, or some combination of
these groups.

Forced distribution: The forced-distribution system is similar to

‘grading on a curve’. The evaluator is asked to rate employees in
some fixed distribution of categories, such as 10 percent in low,
20 percent in low average, 40 percent in average, 20 percent in
high average, and 10 percent in high. One way to do this is to
type each employee’s name on a card and ask the evaluators to
sort the cards into five piles corresponding to the ratings. This
should be done twice for the two key criteria of the job
performance and promotability. One reason forced distribution
was developed was to try to alleviate such problems as inflated
ratings and central tendency in the graphic rating scale.
Q5. Write a note on different theories for Managing
Compensation.

Labor was always looked upon as a commodity governed by the

law of supply and demand. Certain theories were propounded for
determination of wages but these could not stand the test of
time. A few theories are:

Subsistence theory: This theory, also known as ‘Iron Law of

Wages’, was propounded by David Ricardo (1772-1823).
According to this theory, wages tend to settle at a level just
sufficient to maintain the workers and his family at minimum
subsistence levels. The theory applies only to backward countries
where laborers are extremely poor and are unable to get their
share from the employers.

Standard of living theory: This theory is a modified form of

subsistence theory. According to this theory, wages are
determined not by subsistence level but also by the standard of
living to which a class of laborers becomes habituated.

Residual claimant theory: Francis A. Walker (1840-1097)

propounded this theory. According to him, there were four factors
of production/business activity viz., land, labor, capital and
entrepreneurship. Wages represent the amount of value created
in the production which remains after payment has been made for
all these factors of production. In other words, labor is the
residual claimant.

The wage fund theory: According to this theory, after rent and
law materials are paid for, a definite amount remains for labor.
The total wage fund and the number of workers determine the
average worker’s share in the form of wages.

Demand and supply theory: According to this theory, wages

depend upon the demand and supply of labor.
Marginal productivity theory: This is an improved form of
demand and supply theory. Wages are determined by the value of
the net product of the marginal unit of labor employed.

Purchasing power theory: According to this theory the

prosperity, productivity and progress of industry depend on their
being sufficient demand to ensure the sale of its products and
pocketing of reasonable profits. A large pact of products of
industry is consumed by workers and their families and if wages
are high, demand will be good. However, if wages and the
purchasing power of the workers are low, some of the goods will
remain unsold; output will go down, which will result in
unemployment.

The bargaining theory of wages: John Davidson propounded

this theory. According to him, wages are determined by the
relative bargaining power of workers or trade unions and of
employers. When a trade union is involved, basic wages, fringe
benefits, job differentials and individual differences tend to be
determined by the relative strength of the organization and the
trade union.
Q6. Write the advantages and limitations of Job
Evaluation Method.

Advantages:

1. Job evaluation is a logical and an objective method of

ranking jobs relatively to each other. It may thus help in
removing inenquities in existing wage structures and in
maintaining sound and consistent wage differences in a
plant or an industry.

2. The method replaces accidental factors occurring in less

systematic procedures of wage bargaining by more
impersonal and objective standards, thus establishing a
clearer basis for negotiation.

3. The method may lead to greater uniformity in wage rates

and simplify the process of wage administration.

4. Information collected in a process of job description and

analysis can be used for improvement of selection, training,
transfer and promotion, procedures on the basis of the
comparative job requirements.

Limitations:

1. Though there are many ways of applying job evaluation in a

flexible manner, rapid changes in technology and in the
supply of and demand for particular skills, create problems
of adjustment that may need further study.

2. When job evaluation results in substantial changes in the

existing wage structure, the possibility of implementing
these changes in a relatively short period may be restricted
by the financial limits within which the firm has to operate.
3. When there are a large proportion of incentive workers, it
may be difficult to maintain a reasonable and acceptable
structure of relative earning.

4. The process of job rating is, to some extent, inexact because

some of the factors and degrees can be measured with
accuracy.

5. Job evaluation takes a long time to complete, requires

specialized technical personnel and is quite expensive.