1. Training refers to the process of imparting specific skills.

“Training
need analysis” is required for effective training program. Explain in detail, all
the three factors of Thayer and McGhee model of identify training needs.

Given the investment that organizations make in training it is critical for organizations to
ensure that the money is rightly spent. Training needs consider both the organization’s demands
and that of the individual’s. Diversification of product lines, new technology, and hence a new
kind of job, or a shift in organizational culture or ways of conducting business are common
organizational needs that cover most employees in the company. On the other hand demands that
pertain to individual’s growth and development, including induction training for new hire’s, or
training necessitated by job rotation due to an organization’s internal mobility policies are
examples of individual need based training.

The model we shall examine here is the Thayer and McGhee model. It is based on the following
three factors:

1. Organization analysis

2. Task analysis

3. Individual analysis

Organization Analysis

Total Organization Analysis is a systematic effort to understand exactly where training effort
needs to be emphasized in an organization. It involves a detailed analysis of the organization
structure, objectives, human resources and future business plans, and an understanding of its
culture.

The first step in organization analysis is establishing a clear understanding of both short-run and
long-run business and people goals. Long-term objectives are the broad directions in which the
organizations would move over a long duration. These long-term objectives are then broken
down into specific strategies and short-term goals for each of the units/departments. In an
organization, the cumulative effect of all these would ultimately lead to the long-term goal.
Short-term goals are constantly in need of adaptation to the changing environment, both external
and internal.

For an organization analysis, there are three essential requirements: (1) an adequate number of
employees available to ensure fulfilment of the business operation; (2) that employee
performance is up to the required standard; and (3) that the working environment in their
units/departments is conducive to fulfilment of tasks.
In order to ensure the first two requirements a human resource inventory needs to be made. Data
regarding positions, qualifications, vacancies, replacements and training time required for
replacements have to be worked out. Job standards must also be worked out.

Various efficiency and productivity indexes, or ratios such a productivity ratios, cost per unit etc,
can be worked out to determine not only efficiency but also adequacy, in terms of under-
manning or over-manning, of the workforce.

An important dimension of organizational need-based analysis, is the diagnosis of the state of the
organization "climate" or “culture”. While rules, procedures, systems and methods all contribute
to the making of the environment, much of it is also determined by the attitude that the "people"
have in the organization-for instance, the attitude that top management has towards its
subordinate staff and the attitudes that members have towards work, Managers and company
procedures. These attitudes are learnt, they result from the person’s experience both within and
outside the organization, and training inputs could be used to effect changes of attitude and
consequently of the organizational climate.

In analyzing the organization climate, both direct and indirect methods could be used. Direct
methods are observation, use of questionnaires, and interviews. Reliance or indirect methods
would not give a clear understanding of the attitudes and predispositions of employees. In fact,
factors such as low absenteeism and low turnover are not by themselves indicators of positive or
negative attitudes, and high or low morale. It would be better to make a careful analysis and
study each indicator in a particular situation in conjunction with more direct methods like
attitude surveys. Analysis and interpretation of the data may give clear clues not only to
attitudinal training needs but possibly also to kill training needs.

Task Analysis

This activity entails a detailed examination of each job, its components, its various operations
and the conditions under which it has to be performed. The focus here is on the "task" itself and
the training required to perform it, rather than on the individual. Analysis of the job and its
various components will indicate the skills and training required to perform the job at the
required standard.

Standard of Performance: Every job has an expected standard of performance (SOP). Unless
such standards are attained, not only will inter-related jobs suffer, but organizational viability
will be affected, and so will the expectations that have been set for that particular job itself. If the
standards set for the performance of a job are known, then it is possible to know whether the job
is being performed at the desired level of output or not. Knowledge of the "task" will help in
understanding what skills, knowledge and attitudes an employee should have.

Methods: If an employee is asked to perform a job, the exact components of the job and the
standard of performance must be known. Task analysis entails not merely a simple listing of the
various job components, but also of the various sub-tasks. Conventional methods of job analysis
are usually suitable for task analysis. They are:

1. Literature review regarding the job.

2. Job performance.

3. Job observation,

4. Data Collection regarding job interviews.

For blue-collar employees, more precise industrial-engineering techniques, like time and motion
studies, could be used, and for white-collar employees, work sampling observation, interviews,
and job performance data analysis could be employed. The focus in task analysis approach to
identifying training needs is with the clear objective of enhancing the performance standard of a
given task. This information is then utilised to establish the training programme for the
employee. It helps identify the skill required, either in terms of education or training, to perform
the job, knowledge, and finally attitudinal pre-dispositions such as the attitudes, towards safety,
or interpersonal competence that will ensure that the job is performed optimally.

Individual Analysis

Individual analysis is the third component in identifying training needs. The focus of individual
analysis is on the individual employee, his abilities, and the inputs required for job performance,
or individual growth and development in terms of career planning.

The common source for this needs analysis usually forms parts of the performance assessment
process. Clues to training needs can also come from an analysis of an individual’s or a group’s
typical behaviour. The primary sources of such information are:

(1) Observation at place or work, examination of job schedules, quantum of spoilage, wastage,
and clues about interpersonal relations of the employees; (2) interviews with superiors and
employees; (3) comparative studies of good vs. poor employees, to identify differences, skills
and training gaps; (4) personnel records; (5) production reports; and (6) review of literature
regarding the job and machines used. Job-knowledge tests, work sampling and diagnostic
psychological tests also provide information about employees.

2. India is considered as the leading emerging economy’. India’s

organizational success is rooted in its culture; bring out Indian culture and
historical perspective to HRM. Write a brief note on Human relation
movement in India.

HRM in India

As it stands today the Indian organization could not have hoped for more. In addition to being
strategically positioned on the corporate world map as a low-cost, highly skilled destination, the
Indian corporate is emerging as a base for committed, intelligent and a knowledgeable
workforce. This has been achieved by the help of a strong foundation provided by the Indian
education system at the primary, secondary, technical and at professional level. It is a undisputed
fact that the Indian Institute of Technology, the National Institute of Technology and the famed
India Institute of Management are among the world-class institutions to name a few. Quality
education and research are encouraged on these campuses and across the country, which mould
and contribute to the practices in Indian organizations.

The HRM practices in Indian organizations are a parody of sorts. There is a strong foundation
that is a simple extension of the HR practices from the established western organizations and the
developed countries. However there is a equally strong cultural impact on the hiring practices,
compensation standards, benefits and statutory benefits, performance linked rewards and payout,
which though in-step with international HRM practices have a flavour their own. We will discuss
a few distinct differentiators that impact HRM practices in Indian organizations:

· The Indian culture is one that is deeply rooted in its societal and collectivistic values whereby
there is a natural urge to collaborate at the workplace, work in teams and groups with ease.

· The diversity that is seen in the Indian society w.r.t. diverse religions and states are reflected in
the ability of the Indian to accept diversity of views and thought without inhibitions. Not much
effort needs to be expended to practice tolerance towards others points of view.

· The tolerance for ambiguity and uncertainty however is low in the Indian which requires a lot
more detailing of jobs and roles and responsibilities. There is need therefore to establish definite
boundaries of authority and responsibility.

· Work culture-wise, the natural ability to work hard and long hours, perseverance and the need
to earn money impact the way the work is organised in Indian organizations. It is not uncommon
for the Indian to compromise personal time with family / friends to instead attend to work and
satisfy a customer. There is a overwhelming sense of ‘service’ that manifests itself at the
workplace.

· Availability of a large educated group of individuals of different calibre of knowledge and skill
allows the country to undertake different nature of work beginning with lower skilled activities
such as BPO’s(Business Process Outsourcing) and moving up the value curve to far more
advanced activities ….KPO’s (Knowledge Process Outsourcing).

· Compensation and benefits costs continue to provide a competitive advantage for India making
it a preferred business location the world over.

· There is a natural expressed need ‘to belong’. This again is typical of the Indian and has
brought about a significant amount of customisation of the workplace and its norms to allow for
cultural events and activities through the year. There is a lot more scope for socialising that
exists in the Indian organizations.
· Current trend in the over populated urban part of the country are quickly fading out to tire 2 and
tire 3 cities and town where the cost of living and wage levels are not as competitive, further
expanding the Indian resource base for hiring and building talent, contributing to the overall gain
of the country.

HRM in India however is not structurally well-researched and hence a lack of theoretical
information to track and document its progress. Unlike in the emerged countries like the USA
and the UK where the research networks are mature and well established. Research is yet at its
infancy in India and there is a lot of dependence on the emerged countries in emulating best
practices in the way people are hired and managed. Today the organizations of Indian origin
have their unique HR strategies that work best for them. Work more and earn more is a common
and accepted philosophy at the Indian workplace. Work is respected and revered and almost
worshipped in Indian organizations. Benefits are basic yet equitable and adequate. There is a
high focus on cash in hand as opposed to benefits and perks.

Our statutory and legal frameworks, as a result, are a lot more liberal and less restrictive as
compared to the emerged countries. An open society drives openness at the workplace and
hypocrisy is largely discouraged, leading to well structured policies and processes that drive
workplace behaviour. Diversity for India is a challenge very different from its existence in the
rest of the world. Diversity initiatives in India normally focus around challenges related to
gender diversity. It’s only in the past few years that there is a pattern of women in the Indian
corporate. Today this is a key issue. There is a lot of strategising and initiatives in all Indian
MNC’s as well as Indian domestic firms toward wooing this critical potential talent for
organizational advantage.

Human Relations Movement

Kautilya provides an account of the techniques of human resources management as early as 4th
century B.C. in the "Artha-Shastra". As per the book, there existed logical procedures and
principles in organizing labour namely the Shreni or guild system and in the principles of the co-
operative sector. The wages were in terms of quantity and quality of work turned out and
punishment for unnecessarily delaying the work or spoiling it. The writing of Kautilya provides
an excellent discussion on staffing and personnel management, including the detailing of what
today are called job descriptions, qualifications for jobs, methods of selection, employee and
supervisor development, formally established incentive methods (Sarasa- saama- daana- bheda-
danda- catura, the Carrot and Stick approach) and even the science of performance evaluation.
The guild system was pioneered and closely followed by the establishment of the co-operative
sector of craftsmen and traders organizing themselves to promote their professional interests.
Numerous professional societies were similarly formed each establishing systematic procedures
and policies to nurture their own interests.

Significantly, these practices also respected the principles of the division of labour, which can
easily be traced to the caste system that even today is a inseparable part of the Indian cultural
system. The society got divided into
  Individuals engaging themselves in activities such as teaching, sacrifice or state
management were designated as Brahmins

 While those specialising in fighting were termed as Kshatriyas.

 Individuals engaged in the areas of trade, business and agriculture were called Vaishyas
and

 Those devoting themselves in manual work were known as Shudras.

Herein hereditary facilitated the transfer of skills and training from one generation to another.
Quickly even specialised skills became hereditary suchas goldsmiths, weavers, potters,
blacksmiths, carpenters, hunters, charioteers, snake charmers, architects, sculptors, armourers
identified as separate communities by themselves. Between the employer and employees justice
and equity laid a sound foundation for successful enterprise.

During the medieval period, India experienced aggressions for around 700 years, during the
Mughal rule. While trade and commerce flourished, majority of the artisans and the craftsmen
remained poor and lived simple lives compounded by the large and joint family system that
prevailed. Low wages, oppressive political conditions and poor physique characterised the
workplace. Nothing significantly changed during the British rule. Oppression and poor working
conditions prevailed in all industries and intensified in the tea estates that were the key focus of
the British for obvious reasons that tea was a key export product.

This prevailed till the enactment of the Factory Act of 1881. This coincided with the waves of
industrialization and urban growth that India witnessed. The Act brought about the first set of
formal guidelines and rules that the industries had to comply with. Workers employed in the
factories were allowed a week off-day and provisions were made for supervision, quality and
hours of work. Sadly the act also established the minimum age of children for employment to be
seven years and the maximum working hours for them to not exceed seven hours a day and only
in the day-shift.

This set the stage for the organization of employees to ensure fair work and pay and in 1890, the
first labour organization Bombay Mill Hands Association was established. In 1905, the printers’
Union at Calcutta and in 1907, the Postal Union at Bombay were established. The Madras
Labour Union was organized thereafter in 1918. The Central Labour Board was established in
1922 to bring together the different unions in the Bombay city and the All India Trade Union
Congress was organized. The formal implementation of the Indian Trade Unions Act took place
in 1926, one more landmark in the history of industrial relations in the country. There was a
large scale expansion of the trade union movement after the Second World War – especially after
the independence. The union-government interactions significantly stepped up to accommodate
for the removal of the war-time restrictions on strikes, formation of three more central labour
organizations and the competition among them and the use of adjudication rather than collective
bargaining techniques to resolve issues. In 1960, 45 percent of the total industrial workforce was
claimed to be unionised. Today, the total membership is estimated to be around 4.3 million i.e.,
28 percent of total workforce.
The post-independence period also marked the formation of the Personnel Department in
different public and private sectors. Under the Factories Act, 1948, employers had to employ a
Welfare Officer in a factory employing 500 or more workers. Similarly the Mines Act, 1952,
empowers the Government to specify employment of welfare officer/officers. While welfare
constituted a large part of the responsibilities of the Personnel department, there were other tasks
and responsibilities that were assigned as well.

The responsibilities included other varied functions including the employment of suitable people,
workplace safety and driving awareness, training and wage and salary administration. The
Personnel department however operated in a somewhat isolated manner and executed tasks as
assigned by the head of the organization / core business teams. The interactions with the other
heads of departments were limited and only on a need-based rationale.

In the past two decades the workforce in India has evolved rapidly to emerge as a nation of
intelligent, skilled and highly aware and mature professional, who stand shoulder-to-shoulder
with the professional from the world over. The workplace is an equitable one which believes in
the values of respect for the individual and aspiration to be the best in the world. The role of the
Human Resources function can no longer be ignored or sidelined. It is viewed as a strategic
partner and has found a place at the top management table. The Head of Human Resources
function is selected with as much care and attention as the CEO and is consulted in all business
decisions, irrespective of its direct/ indirect implications to human resources. Being a HR
professional is a conscious decision that a individual takes early in his / her life and pursues it
with dedication and commitment

3. A company is being set up by a group of professionals. The business

objective is to sell mobile phones of a Chinese company which has come up
with an inexpensive range of handset ranging from Rs. 1200 to Rs 7000. They
need to submit a human resource plan to their investors. Explain the process
of Human Resource Planning system for this company, which covers all
important steps needed for HRP

Process of Human Resource Planning

The process of Human Resource Planning is one of the most crucial, complex and
continuing managerial functions which, according to the Tata Electrical Locomotive Company,
"embraces organization development, management development, career planning and succession
planning".

It may be rightly regarded as a multi-step process, including various issues, such as:

1. Deciding goals or objectives;

2. Estimating future organisational structure and manpower requirements;

3. Auditing Human resources both internally and externally

4. Planning job requirements and job descriptions/person specifications; and

5. Building a plan

Human Resource Planning is not only done by organizations and corporate bodies. It is a
prevalent practice at different levels:

i) At the country’s national level, it is generally done by the Government and covers items like
population projections, programme for economic development, basic and advanced educational
infrastructure and opportunities, occupational distribution across urban and rural areas, industrial
and geographical mobility of employable people.

ii) At the state level, it may be done by the state government and would include manpower
planning for the needs of the agricultural, industrial and service sector.

iii) At the specific industry level, it would include manpower needs forecast for specific
industries, such as engineering, heavy industries, consumer goods industries, public utility
industries, etc.

iv) At the level of the individual organization/ unit, it would relate to the planning of manpower
needs for each department and for various types of personnel.

Human Resource Planning System

The steps in the HRP process is a systematic set of activities carried out in a chronological
manner. Each step needs to be evaluated and debated with all possible information gathered from
the external as well as internal environment. Table 3.1 highlights the steps in the process.

We will attempt to discuss in details the critical steps that are part of the above system.

A. Purpose of Human Resource Planning: Human Resource Planning fulfils individual as well
as organizational goals. What it essentially amounts to is “striking a balance” between the future
human resources needs and the future enterprise needs. And this is done with the clear objective
of maximizing the future return on investment in human resources. And this objective may be
laid down for a short-term (i.e. for one year).
B. Estimating/Forecasting the future Manpower Requirements: the first step in the process is to
arrive at the desired organizational structure at a given point in time. Mapping this structure with
the existing structure helps in identifying the gap in resources requirement. The number and type
of employees needed have to be determined. In addition to the structure there are a number of
external factors that affect this determination. They include business forecasts, competitor
strategy, expansion plans, product/skills mix changes, profit/revenue growth projections, in
addition to management philosophy and government policies. This step also includes an analysis
of the external labour/talent environment, its demographics, demand/supply of the required
talent, and cost considerations.

Forecasting provides the basic premises on which manpower planning is done. Forecasting is
necessary for various reasons, such as:

a) The challenges of the general economic business cycles have an influence on the short-range
and long-run plans of all organizations. These are inflation, wages, prices, costs and raw material
supplies.

b) An expansion / growth initiative might need the business to use additional machinery and
personnel, and a re-allocation of facilities, all of which call for adequate advance planning of
human resources.

c) Changes in management philosophies and top management leadership styles.

d) The use of new technology (such as the introduction of automatic controls, or the
mechanization of materials handling functions) requiring a change in the skills of workers, as
well as a change in the number of employees needed.

e) Very often, changes in the quantity or quality of products or services require a change in the
organization structure. Plans have to be made for this purpose as well.

C. Auditing Human Resources: Once the future human resource needs are estimated, the next
step is to determine the present supply of manpower resources. This is done through what is
called "Skills Inventory". A skills inventory contains data about each employee’s skills, abilities,
work preferences and other items of information which indicate his worth to the company. Skills
inventory are also referred to as competency dictionaries. This information is usually retained as
part of the performance management system with the HR department. This step in the HRP
system helps identify the existing profile of the manpower and its efficiency. It helps highlight
where the organization is vs. where it ought to be. The step concludes with identifying clear gaps
in the skills / manpower mix required to meet the upcoming business objectives.

D. Job Analysis: After having decided how many persons would be needed, it is necessary to
prepare a job analysis. The recorded details of training, skills, qualification, abilities, experience
and responsibilities, etc. as needed for a job are studied. Job analysis includes the preparation of
job descriptions and job specifications.
 E. Developing a Human Resource Plan: This step refers to the development and implementation
of the human resource plan, which consists in finding out the sources of labour supply with a
view to making an effective use of these sources. Some important considerations at this point
are:

F.

· Specific roles/disciplines being hired for, of them which roles are pivotal for the business

 Competencies and capabilities needed

 Manager vs. employee hiring
 Hire internally vs. External sourcing
 Planning for new skills through training existing staff vs. hiring new teams
 In case of surpluses, planning for redeployment / reduction in workforce as required
 Succession planning for key positions in the company

4. Organizations hire candidate through various sources. Discuss all the possible
sources of recruitment.

The sources of employees can be classified into 2 types,internal and external,. Filling a
job opening from within the firm has the advantages of stimulating preparation for
possible transfer of promotion,increasing the general level of morale and providing more
information about job candidates through analysis of work histories within the
organization. A job posting has a number of advantages. From the viewpoint of
employees ,it provides flexibility and greater control over career progress.

Internal applications are often restricted to employees,the guidelines for one company
including

 Good or better on most recent performance review

 Dependable attendance record
 Not under probationary sanction
 Having been in present position for 1 year

The present supervisor must at some time be informed of his/her subordinates interest
in another job.

The firm has number of outside sources available,among which are the following:

 Advertising-there is a trend toward more selective recruitment in advertising.

This can be affected in atleast 2 ways. First ,advertisements can be placed in
media read only by particular groups. Secondly more information about the
company,the job,and the job specification can be included in the ad to permit
some self-screening
 Employment agencies-additional screening can be affected through the
utilization of employment agencies,both public and private. Today ,in contrast to
their former unsavoury reputation,the public employment agencies in several
states are well-regarded,particularly in the fields of unskilled semi-skilled and
skilled operative jobs.
 Employee referrals-friends and relatives of present employees are also a good
source from which employees may be drawn. When the labour market is very
tight,large employers frequently offer their employees bonus or prizes for any
referrals that are hired and stay with the company for a specific length of time.
Some companies maintain a register of former employees whose record was
good to contact them when there are new job openings for which they are
qualified.
 Schools ,colleges and professional institutions-offer opportunities for
recruiting their students. They operate placement services where complete
biodata and other particulars of the students are available. The companies that
need employees maintain contact with guidance counsellors of employment
bureaus and teachers of business and vocational subjects.
 Labour unions-firms with closed or union shops must look to the union in their
recruitment efforts. Disadvantages of a monopolistically controlled labour source
are offset,atleast particularly,by savings in recruitment costs. With one-fifth of
the labour force organized labour organized labour constitutes an important
source of personnel
 Casual applicants-unsolicited application,both at the gate and through the
mail,constitute a much used source of personnel. These can be developed
through provision of attractive employment office facilities and prompt and
courteous replies to unsolicited letters.
 Professional organizations or recruiting firms or executive recruiters-
maintain complete information record about employed executives. These firms
are looked upon as head hunters,raiders and pirates by organizations may
employ executive search firms to help them find talent
 Indoctrination seminars for colleges professors are arranged to discuss the
problem of companies and employees. Professors are invited to take part in
these seminars. Visits to plant and banquets are arranged so that the participant
professors may be favourably impressed
 Unconsolidated applications-for positions in which large numbers of
candidates are not available from other sources,the companies may gain
keeping files of applications received from candidates who make direct
enquiries about possible vacancies on their own,or may send unconsolidated
applications
 Nepotism-hiring of relatives will be an inevitable component of recruitment
programmes in family owned firms,such as policy does not necessarily coincide
with hiring on the basis of merit,but interest and loyalty to the enterprise are
offsetting advantages.
 Leasing-to adjust short term fluctuations in personal needs the possibility of
leasing personnel by the hour of day should be considered. This practise has
been particularly well-developed in the office administration field
  Voluntary organization-such as private clubs,social organizations might also
provide employees-handicapped ,widowed or married,women,old
persons,retired hands,etc in response to advertisements

 Computer databanks-when a company desires a particular type of employee

,job specifications and requirements are fed into a computer,where they are
matched against the resume data stored there in.

5. Write short notes on:

MBO

Management by objectives: one of the most popular individual evaluation methods in use today
is Management by Objectives (MBO). In this system, the Manager and employee to be evaluated
jointly set objectives/targets in advance for the employee to try to achieve during a specified
period. And usually the objectives framed are of quantitative nature. MBO is a very common
industry practice. At the beginning of the year clear objectives are laid down for achievement
during the course of the year. These objectives are popularly called by the following names:

1. KRA-key result areas

2. KPA -key performance areas

3. Targets

4. Commitments

These objectives are designed using the SMART framework as in… Specific, Measurable,
Achievable, Results oriented and Time bound. All objectives must conform to this framework.
Thereafter the objectives are broken up into half yearly, quarterly and maybe monthly objectives,
again keeping in mind the SMART framework. All along the process both the employee and the
manger are in consensus of the objectives and the timelines as well as the deliverables.

MBO is one of the most effective methods for performance review primarily because it is
identified at the beginning of the review period and is regularly reviewed for achievements and
modified on-going again in consensus between the employee and the manager.

At the end of the review year, the MBO’s are reviewed for completion with the SMART
framework.

In case of a new employee or someone moving jobs/assignments between teams; after about 6-8
weeks of being in the job this process is undertaken and the objectives are set.
The evaluation too is a joint review of the degree of achievement of the objectives. This
approach combines the manager and self-evaluation systems.

360 Degree.

360 Degree Appraisal

Typically, performance appraisal has been limited to a feedback process between employees and
Managers. However, with the increased focus on teamwork, employee development, and
customer service, the emphasis has shifted to employee feedback from the full circle of sources
depicted in the diagram below. This multiple-input approach to performance feedback is
sometimes called "360-degree assessment" to connote that full circle.

Figure 7.1: The 360 degree matrix

There are no prohibitions in law or regulation against using a variety of rating sources, in
addition to the employee’s Manager, for assessing performance. Research has shown assessment
approaches with multiple rating sources provide more accurate, reliable, and credible
information. For this reason, HR Management supports the use of multiple rating sources as an
effective method of assessing performance for formal appraisal and other evaluative and
developmental purposes.

The circle, or perhaps more accurately the sphere, of feedback sources consists of Managers,
peers, subordinates, customers, and one’s self. It is not necessary, or always appropriate, to
include all of the feedback sources in a particular appraisal program. The organizational culture
and mission must be considered, and the purpose of feedback will differ with each source. For
example, subordinate assessments of a Manager’s performance can provide valuable
developmental guidance, peer feedback can be the heart of excellence in teamwork, and
customer service feedback focuses on the quality of the team’s or agency’s results. The
objectives of performance appraisal and the particular aspects of performance that are to be
assessed must be established before determining which sources are appropriate.
 We shall discuss the contributions of each source of ratings and feedback. In addition,
precautions are listed to consider when designing a performance management program that
includes 360-degree assessment.

Superiors: Evaluations by superiors are the most traditional source of employee feedback. This
form of evaluation includes both the ratings of individuals by Managers on elements in an
employee’s performance plan and the evaluation of programs and teams by senior managers.

6. Hawthorne study has played a critical role in human resource development:

Elucidate the Hawthome study and explain its contribution to relations
movement.

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 problem 

Two groups were studied to determine the effects of different levels of illumination on
worker performance. One group received increased illumination while other did not. A
preliminary finding was that,when illumination was increased ,the level of performance
also increased. Surprisingly to engineers ,productivity also increased when the level of
illumination was 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 management cared about them. Such a
phenomenon taking place in any research setting is now called 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 workgroup 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 may also have
to understand the climate that exists in the work group and the leadership style
of the superior.
SUBMITTED BY: NISHA ANTONY THANNIKOTT

ROLL NO: 511022230

SET NO: 2

SUBJECT CODE: MB0043

SUBJECT TITLE: HUMAN RESOURCE MANAGEMENT

1. It is assumed that high morale leads to high productivity. Explain what
morale is and how it is related to productivity?

Meaning of Morale / Employee Engagement

Morale is also known as employee engagement in the modern day technology companies.

Morale Defined: Morale has been variously defined by different authors. Professor Ralph C.
Davis says, "Good organizational morale is a condition in which individuals and groups
voluntarily make a reasonable subordination of their personal objectives for their organization".
According to Dale Yoder and Paul D. Standohar, "Morale means evident commitment, that is,
demonstrated spirit, enthusiasm, and confidence in the organization’s policies, programmes, and
accomplishments. Morale is revealed by what individuals and groups say and do to show an
interest in, understanding of, and personal identification with work-team survival and success.”
Edwin B. Filippo has described morale as “a mental condition or attitude of individuals and
groups which determines their willingness to co-operate. Good morale is evidenced by employee
enthusiasm, voluntary conformance with regulations and orders, and a willingness to co-operate
with others in the accomplishment of an organization’s objectives. Poor morale is evinced by
surliness, insubordination, a feeling of discouragement and dislike of the job, company and
associates."

According to Haimann, "It is a state of mind and emotions affecting the attitude and willingness
to work, which in turn, affect individual and organizational objectives." Joseph D. Mooney
describes morale as "the sum total of several psychological qualities which include courage,
fortitude, resolution, and above all, confidence."

Morale and Productivity

It is assumed that high morale and high productivity/ high quality and creative work all go hand
in hand. Since morale manifests itself in the attitudes of employees, it is important to know about
the results of high and low morale. One of the most unpredictable effects of the level of morale is
its impact on employee productivity. The productivity of a group is a composite of many factors,
at least one of which is the general state of mind or the commitment of the group. Formerly it
was thought that high morale resulted in high productivity. Research is repeatedly proving that
this correlation is not as simple. Various studies have revealed that the group having the highest
morale need not always be the highest in productivity. As morale is made up of so many factors,
so is productivity, the result of a series of complex factors. When a group is convinced that high
productivity will result in its getting the things it wants most, it is reasonable to believe that
productivity will be high. It is likewise reasonable to believe that if the group’s satisfactions in
the work situation are high and high productivity will enable it to get the things it wants most,
the productivity may be high.

Though high morale may not be the single cause of the high productivity, a high-producing
group nearly always has a reasonably high morale, in terms of the company as a whole. Morale
development is almost certain to accompany successful operations where the individuals can
relate their respective endeavours and objectives to the success of the enterprise as a whole. "A
 morale-building organization tends to utilize fully the skill, initiative, judgement, and training of
its members, and through such utilization succeeds in building up these and other qualities in
everyone, so that the abilities of all constantly expand, and the organization thus is able to
succeed and grow."

2. “Coxen” is a medium size, plastic manufacturing company. In this Company,

workers have developed grievances against management. For past 2 years. In
spite of making profit, company is not paying bonus to workers. It is expected
that, if the grievances are not dealt with, it might lead to severe consequences.
Imagine this situation and explain the grievance handling procedure, list each
step of the procedure. Suggest few measures to avoid grievances.

The definition of a grievance often varies from company to company and from author to author.
The broadest interpretation of the term would include any discontent or dissatisfaction that
affects organizational performance. As such, it can be stated or voiced, written or oral, legitimate
or ridiculous.

The word grievance is often used in a generic form to indicate various forms and stages of an
employee’s dissatisfaction while at work. While the dissatisfaction could be defined as anything
that disturbs an employee, a complaint is spoken or written dissatisfaction brought to the
attention of the manager or to the HR department/team member. Often employees view the HR
team as the custodian of employee content/discontent and take up their grievances with the HR
team. Grievance could also be voiced by a group of employees; it need not necessarily be a
single employee with a complaint.

The Grievance Handling Procedure

Principles suggested by the Indian Institute of Personnel Management for addressing the
grievance are as follows:

a) A grievance should be dealt within the limits of the first line manager.

b) The appellate authority should be made clear to the employee so that if he cannot get
satisfaction from his immediate manager, he should know the next step.

c) The grievance should be dealt with speedily.

d) In establishing a grievance procedure, if the grievance is against an instruction given by a

superior in the interest of order and discipline, the instructions must be carried out first and then
only employee can register his protest.
There should be no recourse to official machinery of conciliation unless the procedure has been
carried out without reaching any solution.

Grievance Machinery

A grievance machinery is usually thought of in connection with a company that deals with a
labour union. Though the union must be given some credit for stimulating the installation of such
procedures, all companies, whether unionized or not, should have established and known
methods of processing grievances.

To establish new grievance machinery, workers in each department and each shift shall select,
from among themselves and for a period of not less than one year at a time, departmental
representatives, and forward the list of persons so selected to the management. Where the unions
in the undertaking are in a position to submit an agreed list of names, recourse to election may
not be necessary. Nor will this be necessary when a Works Committee is functioning
satisfactorily, for the Works Committee’s member of a particular constituency shall act as the
departmental representative.

Grievance Handling

The details of the grievance procedure vary from industry to industry and from trade union to
trade union because of the variations in the size of organizations, trade union strength, the
management philosophy, the company traditions, industrial practices and in the cost factor. An
important aspect of the grievance machinery is the reassurance given to an individual employee
by the mere fact that there is a mechanism available to him which will consider his grievance in a
dispassionate and detailed manner, and that his point of view will be heard and given due
consideration. An employee’s conception of his problem(s) may be quite biased. Venting his
grievance and being heard gives him a feeling of being cared for. He gets it "off his chest", so to
say, and it does a lot of good for his morale as revealed by the famous Hawthorne Studies.

Fig.: Grievance Handling Procedure

Initial step

The greatest opportunity for the settlement of a complaint or grievance lies in the initial step of
the procedure. If there is no formal procedure and the firm announces an open-door policy, then
it is possible that the manager may get bypassed by the worker who would take his grievance
directly to the higher levels of management. But such bypassing not merely undermines the
manager’s authority, who loses face, but also creates an atmosphere of win-or-loose in which
both the worker and manager will try to prove the other wrong.

Intermediate step

As the figure indicates, the next step on the management side of the procedure is to submit the
dispute to middle management. Involving the manager’s, middle and senior-line managers in the
grievance process helps in two ways. Initially, the social barriers between the various categories
are, to some extent, broken by personal contact and mutual understanding. Secondly, the
problem-solving approach integrates the various levels in the organization into a team to jointly
overcome the problem which concerns not only the worker but the manager as well. However, it
is important to ensure that the line management assumes prime responsibility for the settlement
of a grievance. In many organizations, the Personnel Department is injected into the procedure as
a decision-making power. On the union side, intermediate levels are represented by higher
personnel in the union hierarchy. In most of the organizations, the business agent, a full-time
negotiations specialist of the union, takes over the intermediate and sometimes the final step. The
presence of a business agent may explain why management is often outmanoeuvred by the
union. Business agents are specialists in union-management negotiations, and it is also their full-
time job. The line manager often considers grievance processing a minor, incidental, and
distasteful duty. This lack of specialization and interest on the part of line management has led to
the situation in which the staff personnel department is given authority to make decisions about
grievances.

Final Company-union step

Usually, the final step to be undertaken by the company and union is a discussion of the
grievance between representatives of top management and top union officials. For management,
it may be the President in important grievances, a Vice-president, or a high-level Industrial
Relations Executive but, for the union, it may be the President of the local union, the Union
Executive Committee, or a representative of the International Union. It is difficult to secure an
integration of interests at this high level. Importance of Grievance Handling

What might happen if an organization does not provide some method by which a employee can
voice his complaints and obtain a explanation? The employee will be unhappy, his productivity
is impacted, he openly begins to share his discontent with not just his colleagues but also
outsider’s, friends, relatives, maybe even customers and vendors. Just as the employee has all the
right to voice a grievance, as employer (or the management) owes it to the employee to respond
suitably to the grievance. It is but commonsense that the resolution of a problem rests on
management. The earliest and clearest opportunity for issue resolution is found at the first stage,
before the grievance has left the jurisdiction of the manager. For this reason, many firms have
specifically trained their managers on how to handle a grievance or complaint properly. If the
dispute or grievance constitutes a managerial problem it can often be resolved by the manager
himself with the help of the HR team. The following steps discuss how a grievance can be
redressed:

1. Receiving the grievance: The manner and attitude with which the manager receives the
complaint of grievance is important. The basic premise is that the manager should at the outset
assume that the employee is fair in presenting his/her opinion/complaint. The complaint should
not be prejudged on the basis of past experience with this or other employees. When a employee
approaches the manager with a issue the manager needs to make himself available to listen it all
out and provide him/her the undivided attention. Research confirms that managers who were
more task-oriented, as contrasted with managers who were more people-oriented, tended to
experience a significantly higher number of grievances being filed in their units.

2. Reviewing the grievance: Once a complaint is received all facts supporting the issue needs to
be gathered. Proper record keeping such as performance ratings, job ratings, attending records,
and suggestions are reviewed. In addition, with the increasingly legal implications of modern
labour-management relations, the manager should keep records on each particular grievance. All
action taken, discussions with the employee, summary and what is agreed to all of it needs to be
recorded.

3. Analysis and decision: With the problem defined and the facts in hand, the manager must
now analyze and evaluate them, and come to some decision. It is important for the manager to
involve others in the process to ensure that it is fair and is the best solution. The manager must
include the views of his own manager as he might not be aware of all the implications of the
problem and its resolution. Involving HR too is a recommended process in all organizations. HR
can then seek finance or legal counsel if required, before any decision is taken. All involved in
the decision making process need to be aware that the decision may create an undesirable
precedence within the department as well as the company.

4. Response: Often it might not be possible to provide a positive resolution to the problem. If the
solution decided is adverse to the employee’s views, attention needs to be given to the method of
communication. Employees dislike managers who will take no stand, good or bad. Clearly
communicating the message and sharing as much information as possible about the decision
making process helps in establishing credibility to the process used to make the decision. The
manager can also invite HR or his manager to sit-in on the conversation with the employee. As
far as possible this should happen in a face-to-face meeting. In the event an employee wishes to
take the appeal beyond to the next stage of the procedure he must be allowed to do so. The
manager must have the opportunity to explain his decision to the other members so they can take
a well-informed decision.

5. Follow up: The objective of the grievance procedure is to resolve a disagreement between an
employee and the organization. Open communication is important for this process. The purpose
of phase is to determine whether the employee feels that the problem has been sufficiently
redressed. If follow up reveals that the case has been handled unsatisfactorily, then redefinition
of the problem, further fact-finding, analysis, solution and follow up are required. At this stage
the manager can step aside and allow someone else in a position of authority like the HR or the
manager’s manager to lead the process and close it.

Among the common errors of management encountered in the processing of grievances

are:

1. Lack of in-depth review of the issue and its facts;

2. Expressing policy/management opinion prior to the time when all pertinent facts have been
discovered;

3. Failing to maintain proper records;

4. Resorting to authoritative orders rather than having open conversations with the employee;
and

5. Watch out if making exceptions / setting a precedence which could then become a rule.

3. Write a brief note on Succession planning.

Succession Planning

Succession planning involves having senior executives periodically review their top executives
and those in the next-lower level to determine several backups for each senior or key position in
the firm. It takes years of grooming to develop effective senior managers and this is a talent
challenge that all organizations face today. Traditionally succession planning was restricted to
senior-level management positions and this was either an informal or formal process.

Over the years succession planning has established itself as a key HR activity in most
organizations with formal processes that ensure it is reviewed regularly and scientifically. In
smaller organizations it is yet an informal succession planning process where the individual
manager identifies and grooms his or her own successor.

Succession planning involves an examination of strategic (long-range) plans and HR forecasts

for all identified key positions in an organizations. It includes positions that are critical for the
business and for its continuity and not just the senior level positions. It includes a review of the
data on all potential candidates who might be able to move to these positions either right-away or
in the near future. The objective is to identify employees with potential and increase managerial
depth as well as promoting from within the company. This is usually an exercise undertaken one
a year and usually runs parallel to the performance appraisal process. This exercise is carried out
by the senior management team of the unit/subsidiary and facilitated by the HR team. Usually,
committees of top managers’ work together to identify high potential candidates within their
team and then out-line developmental activities for them. They may also include a formal
assessment of the performance and potential of candidates and written individual development
plans for candidates.
All member’s voice opinions about the potential candidates that are proposed and disagreements
are openly debated, before the final document is signed off. The succession planning process
includes determining and clarifying the requirements of the managerial position and
development plans for how these potential candidates can be groomed to occupy these positions
in the eventuality they fall vacant. These development plans then translate into the individual’s
development plan and HR along with the immediate manager work with the individual to
execute the same.

A succession planning exercise concludes with an organization chart of all key positions with
listing of possible potential candidates and the readiness rating for each potential candidate. For
example a position that can immediately be filled is rated higher than a position which does not
have a ready-now candidate. Other components include performance appraisal of these
employees, and individual development plans and management development programs.
Additionally, the factors rated as most important in selecting specific internal/external potential
candidates for grooming includes: past job performance, past positions or prior employment,
perceived credibility, area of expertise and career paths and values and attitudes.

Benefits: There are many benefits of having a formal Succession Planning System:

1. Provides a clear context to strategic business planning as the key positions for the business’s
success are what are being planned for.

2. Provides a more systematic basis to judge the risk of making particular succession and
developmental moves.

3. Bring focus to systematized succession a plan that scientifically identifies potential candidates
to ensure business continuity.

4. Enables the identification of high potential and future leaders, whereby the thereafter the
manager/HR can engage with them for leadership development initiatives.

5. Reduces randomness of managerial movements.

6. Helps anticipate problems before they get started – and thereby avoid dysfunctional situations.

7. Provides scientific approach for arriving at succession decisions as part of the overall human
resource planning exercise – connecting formats (data, timing) with process (judgement,
discussions, analyses)

8. Helps plan for internal promotion opportunity

9. Provides early warning if succession does not exist for a position allowing for lateral hiring
from the market.

Regardless of what type of succession planning program is used (formal or informal); most
successful programs obtain the support of top management.
4. Think of a situation in which an employee is to be dismissed from the
organization, what will be fair steps of dismissal followed by the organization?
Dismissal and Discharge of an Employee

According to Article 311 of the Indian Constitution, which states that “no person shall be
dismissed or removed from service until he has been given a reasonable opportunity to show
cause as to why the proposed action should not be taken against him?"

The Model Standing Orders, similarly states that, "before an employee is dismissed, he should be
given an opportunity to explain the circumstances against him."

The following steps are followed for dismissal of an employee:

a) Charge Sheet is Framed and Issued:

The first step in the procedure is to have in-place a written complaint against the employee in
question, and which contains details of the offence with which he is charged, policy breach and
the allegation of misconduct made against him, and indicating the time limit within which a reply
to the charge sheet should be submitted to the due authorities. The employee is called to put forth
his case why a disciplinary action should not be taken against him.

The contents and implications of the complaint/charge sheet may be explained to him in his own
language and in the presence of some reputable witness, before a copy of it is handed over to
him. If he refuses to accept it, it should be sent to his residential address "registered post with
acknowledgement due". If the employee refuses to take delivery of the registered letter, or when
it has been returned undelivered, it should be published in a local paper to ensure its wide
publicity.

b) Explanation Receipt:

The employee provides his explanation within the scheduled time allotted. He can also ask for an
extension of time for its submission, all in good faith.

c) Issue of Notice of Enquiry:

Upon receipt of the explanation from the employee it is reviewed. If found unsatisfactory, a
notice of enquiry, mentioning the time, date and place, has to be given to him in which the name
of the person or officer conducting the enquiry would also be mentioned. The employee is
required to be present at the appointed time and place, together with his witness, if he has any.

d)  Conducting the Enquiry:

On the appointed day and at the appointed place and time, the enquiry is held by the Enquiry
Officer in the presence of the employee. The contents of the charge sheet and an explanation of
the procedure to be followed at the enquiry are communicated to the worker. If he pleads his
 innocence, the enquiry proceeds; but if he pleads guilty, unconditionally and in writing, the
enquiry is dropped.

e) Sharing Findings:

Once the enquiry is over, the Enquiry Officer has to give his findings, which should invariably
contain the procedure which was followed, the employee’s statements, all of the documents
produced and examined, the charges made and the explanations given and the evidence
produced. The officer should then record his own findings on each of the charges and the
grounds on which he has come to a particular conclusion. He should specifically mention which
charges have been proved and which have not been proved. He then submits his findings to the
authorities empowered to take the disciplinary action against the employee. He, however, is not
required to make any recommendations.

a) On receiving the report, the executive authorized to take a decision thereon passes an order of
action

b) Communication of the decision

A copy of the orders is then handed over to the employee.

In terminating the employment of a employee the following conditions must necessarily be

complied with for misconduct.

a) The misconduct of the employee is of such a nature as to indicate that his discharge or
dismissal would be an appropriate punishment and that this kind of punishment has been
provided in the companies policies or per statute

b) A fair and open enquiry must be held by the employer into the misconduct which an employee
has been charged with.

c) The enquiry should be held in such a manner as to ensure that it would be fair and proper and
in conformity with the principles of natural justice. The employee must be given an adequate
opportunity to defend himself and to present witness in support of his contention or case.

d) The person holding the enquiry should not be someone who’s known to be biased has
personal/vested interest or was in anyway associated with the misconduct.

e) The order must be sensitively communicated to the employee against who it has been passed.

5. Describe the process of wage fixation and the machinery available for it.

Managing Wages

The main purpose of wage and salary administration is to establish and maintain equitable wage
and salary programs. The secondary objective is to design and implement an equitable labour-
cost structure. Therefore payout cannot be out-of-sync with the organizations ability to pay it
needs to be able to satisfy the employees as well as employers, profits maximised and conflicts
minimised.

Wage and salary administration is concerned with the financial aspects of needs, motivation and
rewards. Managers, therefore, analyse and interpret the needs of their employees so that reward
can be suitably designed to satisfy these needs. We will now review a few of the important
theories that support the design of wage systems.

The word ’salary’ is defined in the Oxford Dictionary as ‘fixed periodical payment to a person
doing other than manual or mechanical work’. The payment towards manual or mechanical work
is referred to as wages. The word pay refers to the payment for services done which would
include salary as well as wages.

Wages are commonly understood as price of labour. In ordinary parlance, any remuneration paid
for services is etymological wage. Benham defines wage as “‘a sum of money paid under
contract by an employer to a worker for services rendered.”

Labour 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 discussed below:

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 labourers 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 labourers become habituated.

Residual claimant theory: Francis A. Walker (1840-1897) propounded this theory. According to
him, there were four factors of production/ business activity viz., land, labour, 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, labour is the
residual claimant.

The wage fund theory: According to this theory, after rent and raw materials are paid for, a
definite amount remains for labour. 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 labour.
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 labour employed.

Purchasing power theory: According to this theory the prosperity, productivity and progress of
industry depend on there being sufficient demand to ensure the sale of its products and pocketing
of reasonable profits. A large pact of the 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.

The Tribunals and Wage Boards have generally followed the-principles laid down in the Fair
Wages Committee’s Report on fixing wages. The Committee, in its report, has focused on wage
differentials and has identified the following factors for consideration for fixation of wages:

1. The degree of skill.

2. The strain of work.

3. The experience involved.

4. The training involved.

5. The responsibility undertaken.

6. The mental and physical requirements.

7. The disagreeableness of the task.

8. The hazard attendant on the work, and

9. The fatigue involved.

Classification of wages: The International Labour Organization (ILO) in one of its publications,
classified wages as under:

1. The amount necessary for mere subsistence;

2. The amount necessary for health and decency; and

3. The amount necessary to provide a standard of comfort.

In India, wages are classified as below :

a. Minimum wage

b. Fair wage; and

c. Living wage

Minimum wage: A minimum wage has been defined by the Committee as "the wage which must
provide not only for the bare sustenance of life, but for the preservation of the efficiency of the
worker. For this purpose, the minimum wage must provide for some measure of education,
medical requirements and amenities". In other words, a minimum wage should provide for the
sustenance of the worker’s family, for his efficiency, for the education of his family members,
for their medical care and for some amenities. It is very difficult to determine the minimum wage
because conditions vary from place to place, industry to industry and from worker to worker.
However, the principles for determining minimum wages were evolved by the Government and
have been incorporated in the Minimum Wages Act, 1948, the important principle being that
minimum wages should provide not only for the bare sustenance of life but also for the
preservation of the efficiency of the workers by way of education, medical care and other
amenities.

Fair Wage: According to the Committee on Fair Wages, "it is the wage which is above the
minimum wage but below the living wage." The lower limit of the fair wage is obviously the
minimum wage; the upper limit is set by the "capacity of the industry to pay". Between these two
limits, the actual wages should depend on considerations of such factors as:

i) The productivity of labour;

ii) The prevailing rates of wages in the same or neighbouring localities;

iii) The level of the national income and its distribution; and

iv) The place of industry in the economy.

Living Wage: This wage was recommended by the Committee as a fair wage and as ultimate
goal in a wage policy. It defined a Living Wage as "one which should enable the earner to
provide for himself and his family not only the bare essentials of food, clothing and shelter but a
measure of frugal comfort, including education for his children, protection against ill-health,
requirements of essential social needs and a measure of insurance against the more important
misfortunes including old age". In other words, a living wage was to provide for a standard of
living that would ensure good health for the worker, and his family as well as a measure of
decency, comfort, education for his children, and protection against misfortunes.

Generally, ascertaining wages and deciding who to pay what is a activity undertaken in the
beginning when a organization is set up. Thereon it is annual reviews to make corrections per the
country’s economic and market/industry trends. The management considers the state of the
labour market and takes into account of what he can afford to pay and the value of the worker to
him. The workers’ willingness for employment at the rate offered implies that they agree to work
at that rate, though they have had no part in fixing it.

1. Collective Bargaining: Collective bargaining is still in the initial stage in India. Although it is
a desirable development in the relations between management and labour, it cannot be imposed
upon either side by compulsion and should evolve naturally from within.

2. Voluntary Arbitration: In voluntary arbitration, both parties agree to refer their dispute to
mutually agreed arbitrator and his award becomes binding on the parties.

3. Wage Legislation: Wages are fixed according to law in some industries. The Central
Government and State Governments may fix minimum wages under the Minimum Wages Act of
1948 for industries in which workers are exploited or too unorganized to protect their own
interests. In order to advise them in the matter of fixing minimum wages, the Governments
appoint Minimum Wages Committees and the Advisory Boards. The Committees and the
Advisory Boards consist of equal number of workers and employers representatives and also
independent members whose number should not exceed one- third of the total number of
members.

4. Conciliation: The Industrial Disputes Act, 1947, provides for consideration in case of disputes
between employers and workers. If an agreement is reached in the course of conciliation
proceedings, it becomes binding on the parties and takes effect from the date agreed upon or
from the date on which it is signed by the two parties. In case no agreement is reached, the
Conciliation Officer sends a full report of the proceedings. On receipt of this report, the
government may decide to refer the case to Industrial Tribunal for award.

5. Adjudication: Labour courts and Industrial Tribunals are set up under the Industrial Disputes
Act, 1947. On studying the awards one gets the impression that the adjudicators are attempting to
justify their decision in social and ethical terms. At the same time, there is a desire to satisfy both
parties to the dispute, and therefore, economic factors such as capacity to pay, unemployment,
profits, condition of the economy or welfare of the industry concerned, are given due
prominence.

6. Wage Boards: The boards are appointed by the Government and usually consist of seven
members – two representatives of management, two of labour, two independent members and a
chairman. The board is expected to take into account the needs of the specific industry in a
developing economy, the special features of the industry, the requirements of social justice, and
the necessity for adjusting wage differential in such a manner as to provide incentives to workers
for advancing their skill. Its recommendations may be accepted by the Government either
completely or partly, and may be statutorily imposed on the industry in question, or may be
rejected.

In a nutshell, wages are influenced both by social and economic factors. In one case, economic
factors may play a major role, whereas in another, social factors may be predominant. Thus,
wages are product of both social and economic factors.
6. Write short notes on:

(a) Charismatic Leadership

Charismatic Leadership points out that charisma is a personal trait. Often it is confused and
interpreted as the highest form of transformational leadership, but increasing research supports a
different thought. Charismatic or ‘heroic’ leaders easily build allegiance in followers but do not
necessarily change the organization.
(1) Inspirational motivation: the degree to which the leader articulates a vision that is appealing
and inspiring to followers. Leaders with inspirational motivation challenge followers with high
standards, communicate optimism about future goals, and provide meaning for the task at hand.
(2) Intellectual stimulation: The degree, to which the leader challenges assumptions, takes risks
and solicits followers’ ideas. Leaders with this trait stimulate and encourage creativity in their
followers. (3) Individualized consideration or Individualized attention: The degree to which
the leader attends to each follower’s needs, acts as a mentor or coach to the follower, and listens
to the follower’s concerns and needs. This also encompasses the need to respect and celebrate the
individual contribution that each follower can make to the team (It is the diversity of the team
that gives it its true strength).

Transformational leadership and charismatic leadership theories have a lot in common and
complement each other in important ways. Another research however suggests that charismatic
leaders create dependent followers, whereas transformational leaders support follower
empowerment, which reduces leader dependency.

Charismatic Leader

Charismatic Leader is the degree to which the leader behaves in admirable ways that cause
followers to identify with the leader. Charismatic leaders display convictions, take stands and
appeal to followers on an emotional level. This is about the leader having a clear set of values
and demonstrating them in every action, providing a role model for their followers.

(b) Participative Leadership

Participative Leadership (Democratic)

Lewin’s study found that participative (democratic) leadership is generally the most effective
leadership style. Democratic leaders offer guidance to group members, but they also participate
in the group and allow input from other group members. While it is possible that this style
productivity is lower than the that in the authoritarian group, but the contributions were of a
much higher quality. This could also be more time taking. Participative leaders encourage group
members to participate, but retain the final say over the decision-making process. Group
members feel engaged in the process and are more motivated and creative.
(c) Delegative Leadership

Delegative (Laissez-Fair)

Delegative leaders offer little or no guidance to group members and leave decision-making
entirely to group members. While this style can be effective in situations where group members
are highly qualified in an area of expertise, it often leads to poorly defined roles and a lack of
motivation.

(d) Transformational Leadership

Transformational Perspective of Leadership: The term transformational leadership was first

coined by J.V. Downton in 1973. James MacGregor Burns (1978) first introduced the concepts
of transformational and transactional leadership in his treatment of political leadership, but this
term is now used in organizational psychology as well. According to Burns, the difference
between transformational and transactional leadership is what leaders and followers offer one
another. This is a leadership perspective that explains how leaders change teams or organizations
by creating, communicating and modelling a vision for the organization or work unit, and
inspiring employees to strive for that vision. This is best understood then compared with the
transactional leadership, which is defined as leadership that helps organization achieve their
current objectives more efficiently such as linking job performance to valued rewards and
ensuring that employees have the resources needed to get the job done. Transformational leaders
are change agents who energize and direct employees to a new set of corporate values and
behaviours. These leaders steer the organization onto a better course of action. It si best suited in
organizations that need significant alignment with the external environment. Key elements of
transformational leadership include (1) Creating a Strategic Vision – reflect a future for the
company or work unit that is accepted and valued by organizational members, creating a higher
purpose/super-ordinate goal that energizes and unifies employees, (2) Communicating the Vision
– elevating the importance of visionary goals to employees, by bring it to life through symbol,
metaphors, stories and other vehicles that go beyond plain language and where the leader ‘walks
the talk’ and model the visionary behaviour that is expected from the employees, and (3)
Building Commitment to the Vision – such leaders create in employees’ a ‘can do’ attitude by
including them in the vision process. Their persistence and consistency reflects an image of
honesty, trust and integrity.

Transformational Leader

Transformational leaders offer a purpose that transcends short-term goals and focuses on higher
order intrinsic needs (as discussed above). This results in followers identifying with the needs of
the leader.