Spring 2010(Jan-June)

Master of Business Administration-MBA Semester 3

MU0003 Employee Relations Management - 2 Credits
(Book ID: B0775)
Assignment Set- 1 (30 Marks)
Note: Each question carries 10 Marks. Answer all the questions.

Q.1 Elaborate on the framework of Employee Relations [10]

Answer:
The Framework of Employee Relations

Any organization, in order to attain its goals successfully, must always endeavour to develop and
maintain healthy employee relations. The framework for such relations must be based on the
following:
a) Integration:
The needs of individuals, groups and the organization must be seamlessly integrated. Such
cross-matching of interests will invariably result in a healthy organizational climate and
promote creativity and productivity. It is a management responsibility to initiate measures to
create an atmosphere of mutual trust and understanding so that the employees appreciate
both organizational and environmental constraints and support the company at all times.
b) Employee Participation:
Supportive climate and mutual trust and confidence can be created by involving workers and
their groups in the decision-making process. Management should be open to ideas and
accept or reject an idea or suggestion based on its merits and not on the source of the idea
or suggestion. The management must appreciate the problem of the employees and strive to
resolve these at the earliest. Communication channels must be kept open and the employee
must be given an opportunity to be heard. Such involvement not only improves the quality of
decisions but also leads to the satisfaction of ego needs of employees. They feel recognized
and their attitude is always positive. Joint management councils or committees consisting of
equal representative of workers and management may be constituted. Frank and fair
discussions/meetings help to secure and preserve unity among workers and managers.
Effective use of group dynamics is a must.
c) Congenial Work Environment:
Management must create a work environment wherein workers can perform their jobs with a
sense of security and camaraderie. They must value the task they are performing.
Simultaneously, the management must ensure job security, a meaningful and challenging
job, scope for opportunity and advancement and satisfying interpersonal relationships for the
employees.
d) Communication:
Most of the employee relations problems arise due to lack of communication or inadequate
or a distorted communication. The desire to have knowledge about the current situation,
future prospects, company policies and contemplated changes is one of the basic needs of
an employee. Lack of communication leads to fear, misunderstanding and distrust.
Therefore, management should maintain open channels of communication, particularly
upward communication. Employee handbooks, grievance procedures, suggestion schemes,
etc. enable management to understand the feelings, fears and aspirations of employees.
Informal communication or grapevine is generally used to supplement and support the formal
channels of communications. However, strict vigil on rumours must be kept with all efforts to
arrest them at the earliest.
e) Adaptive Leadership:
Leadership style must be determined by the situation and must be flexible. An effective
leader is one who fully understands his employees and adapts his approach to the
requirements of the situation. In order to develop healthy relations, managers should listen
carefully, talk less and give decision in the opportune time. Decision delayed is harmful to the
organization as it leads to mistrust. Managers must uphold the dignity of the individual
employees and must have a positive attitude. Orders must be clear and unambiguous.
f) Resolving Conflicts:
Continuous efforts must be made to reduce and minimize inter-personal and inter-group
conflicts. The genesis of the conflict must be identified and the solution must be such that it
satisfies the interest of both parties albeit not fully. Healthy employee relations can be
developed through an integrative and problem-solving approach in which both the parties
gain satisfaction of their needs in a co-operative manner and not at the expense of one
another. Such a situation requires impartial, continuous and positive communication with the
parties concerned.
g) Conditioning Behaviour:
Conditioning the behaviour of people is one of the effective ways of building healthy
employee relations at work. This involves the use of positive and negative reinforcements.
Rewards must be used to reinforce desirable behaviour while punishment must be used to
 discourage undesirable behaviour. The most important aspect being that the managers must
themselves have exemplary conduct.
h) Personnel Counseling:
An ideal manager must have big ears to listen to all the problems, a pair of big eyes to
observe things, a big head to analyze and arrive at an effective solution, a big tummy to keep
things confidential and a small mouth to speak less. Thus a manager must listen patiently and
help expeditiously resolve the problems faced by workers both inside and outside the
organization. Counseling reduces the build up of tension and improves their self-confidence.
The employee feels at home in the four walls of the factory or office.
---------------------------------------------------------------------------------------------------------------------------------

Q.2 Discuss any five important elements of good organizational culture. [10]

Answer:
Essential Elements of a Good Organizational Culture
a) Vision, Mission and Values
The vision, mission and core values of the organization must not only be clearly written down,
displayed prominently but also be integrated as key statements of purpose and philosophy into
the recruitment and orientation programs, internal company communications, training and
development schemes, methods of appraisal, recognition and reward. It must be ensured that
each and every employee of the organization is aware of the vision, mission and values of the
organization and is able to relate to it from his own sphere of activities.
b) New Staff Recruitment
All new recruitments must be done keeping the organizations values and mission central.
Aspiring employees must be given adequate time to get to know these aspects before they come
and join as members of the team. All prospective employees must be screened with tools like
profiling available in the market today.
c) New Staff Orientation
The new employees joining the organization must be actively helped in settling down and given
confidence of a long and productive career. Studies show that employees who get thorough and
thoughtful orientations will stay longer and contribute more throughout their careers.
d) Training & Development Programs
Investing in training and staff development programs is good. But many companies engage a
wide assortment of trainers and programs, making little effort to ensure a smooth and beneficial
integration. It must be ensured that all the trainers, be it outside or in-house, are clearly aware of
the organizations vision, mission and values. They must be able to describe the issues and major
challenges facing their company today.
 e) Annual Appraisals
Annual appraisals must be a stamp of quality. If talent has to be retained, then the assessment
must be on the range, depth and volume of the employees ideas. If the organization encourages
open culture, the appraisals must also be on an open format. If, however, a cross-functional and
non-hierarchical communication is desired, a 360-degree appraisal process must be employed.
No amount of broadcasting company values will matter if people are measured by other
standards.
---------------------------------------------------------------------------------------------------------------------------------

Q.3 Mr.Kapoor is the CEO of Dream Dcor Furnitures Company. He has to diversify his business.
He wants to assess the leadership style of some of his senior managers.
Manager 1- (Has a high consideration for people and low for structure)
Manager 2 (Has a high consideration for people and also high for structure)
Manager 3 (Has a low consideration for people and high for structure)
Manager 4 (Has a low consideration for people and low for structure)

Refer to the Grid approach and help Mr Kapoor to clearly understand the leadership styles for all
the managers. Which style is best, according to you? Explain. [10]

Answer:
Grid Approach of Leadership (Blake Mouton)
The grid approach to leadership has been developed by R.R. Blake and J.S. Mouton. It was
primarily developed for assessing the personality of a leader in terms of his concern for task and
concern for people, and later, attempting behavioural modification in him through Managerial Grid
training program. Since each axis of the grid has 9 steps, a leaders performance can be plotted
anywhere on 81 small boxes of grid by obtaining his score with the help of a questionnaire.
However, for the purposes of studying the styles of leadership the grid can be divided into five
main areas. These are shown in Figure Below:
Figure: Grid Approach of Leadership
i) Location 9, 1 Style (Task)
This style represents the task or mission oriented leader. He cares little about the feelings of his
group members. He believes in close supervision and proves impatient about the slackness,
delay or failure on the part of group members. This type of behaviour of leader is suited for
handling certain types of emergency conditions.
ii) Location 9, 9 Style (Team)
This type of leader tries to integrate both mission accomplishment and welfare of men. He helps
the development of those members of his group who are committed to the achievement of
organizational goals. Such members, with their stake in the organizations purpose, co-operate
with each other and work in an interdependent manner. They trust and respect each other and
that helps them in creating a congenial work environment. This makes the task of the leader easy.
He works with conviction that people support what they help to create.
iii) Location 1, 9 Style (Country Club)
The leader belonging to this quadrant of the grid is also called the club manager. The welfare of
people is his sole aim. He is likely to fail in achieving organizations time bound objectives. Since
his heart is full of compassion and he cannot see people suffering. He lives with the idea that a
happy team produces the best results.
iv) Location 1, 1 Style (Impoverished)
This is the non-involved type of leader. He neither causes any event nor directs any event taking
place on its own. He considers that mission accomplishment and welfare of people are conflicting
goals. The best results are achieved if the procedures established in the past are allowed to
continue. An organization headed by such a leader can consider itself lucky if it could just
maintain the standards of efficiency achieved under an earlier dynamic leader.
v) 5, 5 Style (Middle Road)
This is the leader who follows middle-of-the-road policy. He thinks that by being firm but fair he
can achieve the best results. He is a compromiser. He strives to achieve results without unduly
upsetting the people. Such a leader is best suited to play the role of a conciliator in the labor
management conflicts.
---------------------------------------------------------------------------------------------------------------------------------
 Master of Business Administration-MBA Semester 3
MU0003 Employee Relations Management - 2 Credits
(Book ID: B0775)
Assignment Set- 2 (30 Marks)
Note: Each question carries 10 Marks. Answer all the questions.

Q.1 Explain the disciplinary procedure in detail. [10]

Answer:
Disciplinary Procedure
The disciplinary procedure involves the following steps:
a) Preliminary Investigation: First of all, a preliminary inquiry should be held to find out whether
a prime facie case of misconduct exists.

b) Issue of a charge-sheet: Once the prima facie case of misconduct is established, charge
sheet is issued to the employee. Charge sheet is merely a notice of the charge and provides the
employee an opportunity to explain his conduct. Therefore, charge sheet is generally known as a
show cause notice.
In the charge sheet, each charge should be clearly specified. There should be a separate charge
for each allegation and charge should not relate to any matter which has already been decided
upon. The charges so framed should be communicated to the individual along with the statement
of allegations on which the charges are based.

c) Suspension Pending Enquiry: Depending on the gravity of charges, an employee may be

suspended along with serving him the charge sheet. The various circumstances which may
warrant suspension of an individual are:

i) When disciplinary proceeding is pending or contemplated.

ii) When engaged in the activities prejudicial to the interest or security of the state.
iii) Where a case in respect of any criminal offence is under investigation, inquiry or trial.
iv) Where continuance in office will prejudice investigation/ inquiry/trial.
v) When the presence of the employee in office is likely to affect discipline.
vi) When his continuous presence in office is against the wider public interest.
vii) Where a prima face case has been established as a result of criminal or departmental
proceedings leading to the conviction, revival, dismissal, etc.
viii) In case of the following acts of misconduct:
 Moral Turpitude
Corruption, embezzlement
Serious negligence in duty resulting in loss
Desertion of duty
Refusal or failure to carry out written orders
According to the Industrial Employment (Standing Orders) Act, 1946, the suspended worker is to
be paid subsistence allowance equal to one-half of his wages for the first ninety days of
suspension and three-fourths of the wages for the remaining period of suspensions, if the delay in
the completion of disciplinary proceedings is not due to the workers own conduct.
a) Notice of Enquiry: In case the worker admits the charge, in his reply to the charge
sheet, without any qualification, the employer can go ahead in awarding punishment
without further inquiry. But if the worker does not admit the charge and the charge merits
major penalty, the employer must hold an enquiry to investigate into the charges. Proper
and sufficient advance notice should be given to the employee indicating the date, time and
venue of the enquiry so that the worker may prepare his case.
b) Conduct of Enquiry: The enquiry should be conducted by an impartial and responsible
officer. He should proceed in a proper manner and examine witnesses. Fair opportunity
should be given to the worker to cross-examine the management witnesses.
c) Recording the Findings: On the conclusion of the enquiry, the enquiry officer must
record his findings and the reasons thereof. As far as possible, he should refrain from
recommending punishment and leave it to the decision of the appropriate authority.
d) Awarding Punishment: The management should decide the punishment purely on the
basis of findings of the enquiry, past record of the worker and gravity of the misconduct.
e) Communicating Punishment: The punishment awarded to the worker should be
communicated to him in written and the earliest available opportunity. The letter of communication
should contain reference
to the charge sheet, the enquiry and the findings. The date from which the punishment is to be
effective should also be mentioned.

Q.2 Discuss the process of collective bargaining, along with the illustration for bargaining process.
[10]

Answer:
a) Problem Identification
This involves identifying and analyzing the problem to understand its gravity and applicability.
Since collective bargaining is not the forum for solving individual problems, such an analysis
is essential. It also influences selection of representatives, their size, period of negotiations
and period of agreement that is reached ultimately. As such, it is important for both the
parties to be clear about the problem before entering into the negotiations.
b) Data Collection
Both labour and management initially spend considerable time collecting relevant data
relating to grievances, disciplinary actions, transfers and promotions, lay-offs, overtime,
former agreements covering wages, benefits, working conditions (internal sources) and
current economic forecasts, cost of living trends, wage rates in a region across various
occupations, competitive terms offered by rivals in the field, etc.
c) Selection of Negotiators
The success of collective bargaining depends on the skills and knowledge of the negotiators.
Considerable time should, therefore, be devoted to the selection of negotiators with requisite
qualifications. Effective negotiators should have a working knowledge of trade unions
principles, operations, economics, psychology, and labour laws. They should be good judges
of human nature and be able to get along with people easily. They must know when to listen,
when to speak, when to stand their ground, when to concede, when to horse-trade, and when
to make counter proposals. Timing is important. Effective speaking and debating skills are
essential.
d) Climate of Negotiations
Both parties must decide an appropriate time and set a proper climate for initial negotiations.
At this stage, the parties must determine the tone of the negotiations i.e. hostile or of mutual
trust.
e) Bargaining Strategy and Tactics
 The strategy is the plan and the policies that will be pursued at the bargaining table. Tactics
are the specific action plans taken in the bargaining sessions. The following aspects should
be covered:
(i) Likely union proposals and management responses to them.
(ii) A listing of management demands, limits of concessions and anticipated union
responses.
(iii) Development of a database to support proposals advanced by management and to
counteract union demands.
(iv) A contingency operating plan if things do not move on track.
Generally, each side tries to find how far the other side is willing to go in terms of
concessions, and the minimum levels each is willing to accept. Parties should avoid taking a
rigid and inflexible stand initially. Each party should be willing to concede up to a certain
extent depending on ones own compulsions and pressures, with a view to win over the other
party. This is popularly known as bargaining zone which is the area bounded by the limits
within which the union and employees are willing to concede. If neither party is willing to
concede a little bit, negotiations reach a deadlock or impasse. Impasse is a collective
bargaining situation when the parties are not able to overcome their differences, usually
because one party is demanding more than the other will offer. One way to avoid impasse is
postponement of difficult issues to a later stage and take up easier ones first with a view to
have a smoother passage initially. Another way to avoid breakdowns is for each side to be
prepared to offer propositions and to accept alternative solutions to some of the more
controversial issues.
f) Formalizing the Agreement
When a solution comes through a formal document must be prepared expressing everything
in a simple, clear and concise form. After this, both parties must sign the agreement and
abide by its terms and conditions during the entire term of the contract.
g) Enforcing the Agreement
Collective bargaining does not come to an end with the signing of the agreement. For the
agreement to be meaningful and effective, both parties must adhere to the conditions agreed
upon and implement every thing scrupulously.
---------------------------------------------------------------------------------------------------------------------------------

Q.3 TechPro is a company dealing with the manufacturing of UPS. It has more than 25
employees. The company was established 4 years ago. The company owner wants to keep in
place all the legal implications. Will the organization be covered in the Factories Act? What all
provisions need to be taken care of to abide by the regulations? [10]
Answer:
Important Statutory Provisions in the Factories Act, 1948
1. Cleanliness
(a) Every factory shall be kept clean and free from effluvia arising from any drain, privy or other
nuisance.
(b) Accumulation of dirt and refuse shall be removed daily by some effective method,
(c) The floor of every work room shall be cleaned at least once in every week by washing, using
disinfectant where necessary, or by some effective method,
(d) Where a floor is likely to become wet in course of any manufacturing process to such an
extent as is capable of being drained, effective means of drainage shall be provided,
(e) Walls, partitions, ceilings, doors, windows. etc. shall be painted, varnished, white colour
washed in the prescribed manner.

2. Disposal of Wastes and Effluents

a) Effective arrangements shall be made in every factory for the treatment of wastes and
effluents due to manufacturing process carried on therein, so as to render them innocuous and for
their disposal.

3. Ventilation and Temperature

(a) Effective and suitable provision shall be made in every factory for securing and maintaining in
every workroom the circulation of fresh air and such a temperature as will secure to workers
therein reasonable conditions of comfort and prevent injury to health,
(b) The walls and roofs shall not be exceeded but kept as low as practicable,
(c) The process which produces high temperatures shall be separated from the workroom by
insulating the hot parts or by other effective means.

4. Dust and Fumes

(a) Where dust or fumes or impurity of such a nature as is likely to be injurious or offensive to
the workers is given off as a result of the manufacturing process being carried on in a factory,
effective measures shall be taken in the factory for prevention of inhalation or accumulation of
dust and fumes in workrooms. If for such a purpose any exhaust appliance is necessary it shall
be applied as near as possible to the point of origin of the dust, fumes or other impurity and such
point shall be enclosed so far as possible,
(b) A stationary internal combustion engine shall not be operated unless the exhaust is
conducted into the open air. Other internal combustion engines shall not be operated in any room
unless effective measures have been taken to prevent accumulation of fumes there from which
are injurious.
5. Artificial Humidification
In any factory in which the humidity of the air is artificially increased, the water used for the
purpose shall be taken from a public supply or other source of drinking water or shall be
effectively purified before it is so used.

6. Over-crowding
There shall be in every work-room of a factory at least 9.9 cubic metres (for the factories existing
before this Act) and 14.2 cubic metres for factories built after this Act) and 14.2 cubic metres (for
factories built after this Act) of space for every worker. In calculating such space, no account shall
be taken of any space which is more than 4.2 metres above the level of the rooms floor.

7. Lighting
a) In every part of the factory where workers are working or
passing there shall be provided and maintained sufficient and suitable lighting, natural or artificial
or both,
b) All glazed windows and sky lights used for lighting shall be kept clean and free from
obstruction,
c) Effective provision shall be made to prevent glaze and the formation of shadows.

8. Drinking Water
(a) In every factory, effective arrangements shall be made to provide and maintain at suitable
points conveniently situated for all workers employed therein a sufficient supply of wholesome
drinking water,
(b) All such points shall be legibly marked drinking water in a language understood by a
majority of the workers employed in the factory. No such points shall be situated within six metres
of any washing place, urinal, latrine, spittoon, open drain carrying effluent or any other sources of
contamination unless a shorter distance is approved in writing by the Chief Inspector,
(c) In every factory wherein more than 250 workers are ordinarily employed, provision shall be
made for cooling drinking water during hot weather by effective means and for distribution thereof.

9. Latrines and Urinals

(a) In every factory:
(i) Sufficient latrine and urinal accommodation of prescribed types shall be provided
conveniently situated and accessible to workers at the time while they are at the factory;
(ii) Separate enclosed accommodation shall be provided for male and female workers;
(iii) Such accommodation shall be adequately lighted and ventilated and no latrine or urinal shall
unless specially exempted in writing by the Chief Inspector, communicate with any work-room
except through an intervening open space or ventilated passage;
(iv) All such accommodations shall be maintained in a clean and sanitary condition at all times;
(v) Sweepers shall be employed whose primary duty would be to keep clean latrines, urinals and
washing places.
(b) In every factory wherein more than two hundred and fifty workers are ordinarily employed:
(i) All latrine and urinal accommodation shall be of prescribed sanitary types;
(ii) The floors and internal walks, up to a height of 90 centimeters, of the latrines and urinals and
the sanitary block shall be laid in glazed tiles or otherwise finished to provide a smooth polished
impervious surface;
(iii) The floors, portions of the walls or blocks so laid or finished and the sanitary pans of latrines
and urinals shall be thoroughly washed and cleaned at least once in every seven days with
suitable detergents or disinfectants or with both.

10. Spittoons
(a) In every factory, there shall be provided a sufficient number spittoons at convenient places
and they shall be maintained in a clean and hygienic condition.
(b )No person shall spit within the premises of a factory except in the spittoons provided for the
purpose. A notice containing the provision of spittoons in the factory and the penalty for spitting
any where except in the spittoons shall be prominently displayed at suitable places in the
premises.
---------------------------------------------------------------------------------------------------------------------------------