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Contents
Major Functions in Human Resources .................................................................................................... 5
Employee Engagement ....................................................................................................................... 5
Employee Value Proposition ............................................................................................................... 5
Human Resource Planning .................................................................................................................. 5
Compensation and Benefit ................................................................................................................. 6
Base Compensation ............................................................................................................................ 6
Allowances .......................................................................................................................................... 6
Benefits ............................................................................................................................................... 6
Variable Pay ........................................................................................................................................ 6
Recruitment and Selection...................................................................................................................... 6
Separation: .............................................................................................................................................. 7
Three R: ............................................................................................................................................... 7
Three D:............................................................................................................................................... 7
Cost of Separation............................................................................................................................... 7
Training and Development: .................................................................................................................... 7
Human Resource Development (HRD)................................................................................................ 7
Training Evaluation Models: ............................................................................................................... 8
Kirkpatrick’s Model: ............................................................................................................................ 9
Performance Management: ........................................................................................................................ 9
Absolute Evaluation: ........................................................................................................................... 9
Relative Evaluation: ............................................................................................................................ 9
360 degree Feedback System ............................................................................................................. 9
Errors to avoid in Performance Evaluation ....................................................................................... 10
HR Analytics .......................................................................................................................................... 11
Great Places to Work Survey 2018 Result: India's Best Companies to Work for.................................. 11
BASIC TERMS AND DEFINITIONS ........................................................................................................... 12
ORGANISATION ................................................................................................................................. 12
JOB SATISFACTION ............................................................................................................................ 12
JOB INVOLVEMENT ........................................................................................................................... 12
ORGANISATIONAL COMMITMENT.................................................................................................... 12
COGNITIVE DISSONANCE .................................................................................................................. 12
PERCEIVED ORGANISATIONAL SUPPORT .......................................................................................... 12
EMPLOYEE ENGAGEMENT ................................................................................................................ 12
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EMOTIONS ........................................................................................................................................ 12
EMOTIONAL LABOUR ........................................................................................................................ 13
EMOTIONAL DISSONANCE ................................................................................................................ 13
AFFECTIVE EVENTS THEORY .............................................................................................................. 13
EMOTIONAL INTELLIGENCE .............................................................................................................. 13
PERSONALITY .................................................................................................................................... 13
MYERS-BRIGGS TYPE INDICATOR (MBTI) .......................................................................................... 13
BIG FIVE PERSONALITY MODEL - 5 Dimensions ............................................................................... 14
EXTRAVERSION.............................................................................................................................. 14
AGREEABLENESS ........................................................................................................................... 14
CONSCIENTIOUSNESS.................................................................................................................... 14
EMOTIONAL STABILITY OR NEUROTICISM .................................................................................... 14
OPENNESS TO EXPERIENCE ........................................................................................................... 14
TYPE A AND TYPE B PERSONALITY .................................................................................................... 14
Type A Personality ........................................................................................................................ 14
Type B personality......................................................................................................................... 14
VALUES .................................................................................................................................................. 15
JOHN HOLLAND’S PERSON JOB FIT ................................................................................................... 15
HOFSTEDE’S FRAMEWORK FOR ASSESSING CULTURE...................................................................... 15
POWER DISTANCE ......................................................................................................................... 15
INDIVIDUALISM VS COLLECTIVISM ............................................................................................... 15
MASCULINITY VS FEMINITY........................................................................................................... 15
UNCERTAINTY AVOIDANCE ........................................................................................................... 16
LONG TERM VS SHORT TERM ORIENTATION ................................................................................ 16
PERCEPTION ...................................................................................................................................... 16
FUNDAMENTAL ATTRIBUTION ERROR .............................................................................................. 16
SELF-SERVING BIAS ........................................................................................................................... 16
SELECTIVE PERCEPTION .................................................................................................................... 16
HALO/ HORN EFFECT......................................................................................................................... 17
CONTRAST EFFECT ............................................................................................................................ 17
STEREOTYPING .................................................................................................................................. 17
SELF-FULFILLING PROPHECY ............................................................................................................. 17
BOUNDED RATIONALITY ................................................................................................................... 17
ANCHORING BIAS .............................................................................................................................. 17
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AVAILABILITY BIAS............................................................................................................................. 17
CONFIRMATION BIAS ........................................................................................................................ 17
ESCALATION OF COMMITMENT ....................................................................................................... 17
RANDOMNESS ERROR ....................................................................................................................... 18
HINDSIGHT BIAS ................................................................................................................................ 18
THREE ETHICAL DECISION CRITERIA.................................................................................................. 18
UTILITARIANISM ............................................................................................................................ 18
MORAL-RIGHTS APPROACH .......................................................................................................... 18
JUSTICE APPROACH ....................................................................................................................... 18
MOTIVATION THEORIES ........................................................................................................................ 18
MASLOW’S HIERARCHY OF NEEDS.................................................................................................... 18
PHYSIOLOGICAL............................................................................................................................. 18
SAFETY ........................................................................................................................................... 18
SOCIAL ........................................................................................................................................... 19
SELF-ESTEEM ................................................................................................................................. 19
SELF-ACTUALIZATION .................................................................................................................... 19
APPLICATION ..................................................................................................................................... 19
LIMITATIONS ..................................................................................................................................... 19
ALDERFER’S ERG THEORY.................................................................................................................. 19
Differences between ERG theory and Maslow's model ............................................................... 19
Workplace Implications ................................................................................................................ 20
MCGREGOR THEORY X AND Y ........................................................................................................... 20
CONTRACT LABOUR REGULATION & ABOLITION ACT, 1970 ................................................................ 21
Applicability....................................................................................................................................... 21
Important Sections............................................................................................................................ 21
Important case laws .......................................................................................................................... 21
Factories Act, 1948................................................................................................................................ 22
Applicability....................................................................................................................................... 22
Important Sections............................................................................................................................ 22
Important Case Laws......................................................................................................................... 22
Trade Unions Act, 1926 ......................................................................................................................... 23
Applicability....................................................................................................................................... 23
Important Sections............................................................................................................................ 23
Important Facts ................................................................................................................................. 23
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General HRM
Major Functions in Human Resources
• Selection / Recruitment / Talent Acquisition
• HR Planning
• Training & Development
• Performance Management
• Compensation & Benefits
• Industrial/ Employee Relations

Employee Engagement
A heightened emotional connection that an employee feels for his or her organization that
influences him or her to exert greater discretionary effort to his/her work.

Employee Value Proposition

The job markets are often very dynamic with a lot of to and fro movements of employees between
organizations. In such an environment, it is imperative for organizations to hold on to their top
performers. This is where Employee Value Proposition comes into play.

EVP encompasses everything an employer is doing to attract and retain employees. It includes all of
the pay, benefits, rewards, and perks that come with being an employee of that organization.
Basically, it’s the reason why an employee would want to work there as opposed to finding
employment somewhere else.

Some major tools used by organizations to accentuate their EVP practices are:

1. Future career opportunities 6. Work life balance

2. Compensation 7. Innovation

3. Development opportunities 8. Recognition & Respect

4. Organisational stability 9. Organisational growth rate

5. Job interest alignment

Human Resource Planning: Human Resources Planning / Manpower Planning aims at:
1) Balancing demand, supply, distribution, and allocation of manpower
2) Controlling cost of human resources
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3) Formulating policies on transfer, succession, and relocation of manpower

It is about balancing the supply and demand of people at every level of the organization.
Supply generally refers to the number of people reaching a particular level in the organization

Demand is generally given by departmental heads - the number of people required to do a

particular job
Supply > Demand: Retrenchment, VRS, Outplacement assistance (help people to get placed in
other companies)
Supply = Demand: Ensure HR practices are good enough to retain the talent
Supply < Demand: Check if the shortage is qualitative or quantitative
If the shortage is qualitative: Provide training, transfer appropriate people, reposition the staff
If shortage is quantitative but small: Improve the productivity through technology, incentives
etc.
If shortage is quantitative but large: Hire more people from the labour market

Compensation and Benefit

Compensation, quite simply put, is the sum total of direct and indirect rewards and benefits
(monetary or otherwise) provided to an employee in return for service provided to the organization.

Some of the components in compensation are:

Base Compensation: Includes Basic pay (Pay is that decided for a position in an organization
rather than an individual)

Allowances: Given as cash directly. This is a component of pay given based on the conditions in
which we work.

Examples: Hardship Allowance for working in remote villages, Travel allowance for salesmen etc.

Benefits: Employees feel the benefit of this part of pay, as cash is given for a particular purpose. It
is aimed at directing a particular behaviour from the employees. Example: PF, Gratuity etc.

Variable Pay: Compensation Contingent on performance organizational parameter like Sales,

productivity etc.

Recruitment and Selection

Basis Recruitment Selection

Meaning This establishes initial contact between The actual process of picking up the most
interested employees and employers competent candidates and offering them the
position

Objective It looks to attract a large pool of It looks to reject all unsuitable candidates
candidates
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Approach It is a positive approach It is a negative approach

Sequence It precedes selection It is the terminal step of the entire recruitment

process

Separation:

Three R:
(a) Retirement: As per the contract of employment between the employer and employee -
reaching the age of superannuation and there by termination of his service
(b) Resignation: Employee voluntarily opting out of service
(c) Retrenchment: (All ways of termination of service) except VRS, Retirement, termination due
to non-renewal of contract or due to ill health. Has to be carried out as per ID Act.

Three D:
a. Dismissal: Removal of employee with a stigma attached.
b. Discharge: Removal of employee without a stigma attached. (For eg. Removal of employee
due to ill health)
c. Death

Cost of Separation
Organizations, at times, need to remove or separate with some employees for a number of possible
reasons. At all such instances, the following costs are associated with the same:

1. Recruitment Costs 3. Training Costs

2. Selection Costs 4. Separation Costs

Training and Development:

Human Resource Development (HRD) is the framework for helping employees develop
their personal and organizational skills, knowledge, and abilities. It comprises a wide range of
organizational practices that focus on:
• Training and Development
• Career Development
• Organization Development
• Organizational Knowledge and Learning
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Knowledge Skill Ability

Knowledge focuses on the actual Skills reflect Abilities are those innate
understanding of particular capabilities or capabilities that you bring to
concepts. It is theoretical and not proficiencies a particular task or situation.
practical. An individual may have developed through There is a fine line
an understanding or textbook training or actual between skills and
knowledge of a topic or tool, but
experience. Skills abilities. Most people
have no experience attempting to
reflect the practical would say the
apply it or to leverage it as part of
his or her job activities. application of the differentiator is whether
theoretical knowledge the thing in question was
learned or innate.

Coaching Mentoring Training

Definition Involves enhancing It is the provision of It is concerned with

self-awareness, skills & opportunities, guidance, & developing a particular skill to
self-management. protection to aid career a desired standard by
Leads to task success. Relationshipis instruction and practice.
proficiency, dedicatedtobuilding Training is a highly useful tool
personal & sustainableprofession& that can bring an employee
professional personaleffectiveness & into a position where they
development. career advancement can do their job correctly,
effectively, and
conscientiously

Emphasis Performance or Career, behavior or all Skill training – upgrading

behavior around personal skills or skill advancement
transformation development

Type Formal, task Informal, relationship Formal, structured with

oriented oriented measurable learning
outcomes

Training Evaluation Models:

• Kirkpatrick Four-Level Framework
• Kaufman Five Levels Model
• CIRO Model (Warr, Bird, & Rackham)
• Hamblin's Five Levels of Evaluation
• CIPP Model (Galvin)
• Philips ROI ProcessModel
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Kirkpatrick’s Model:
• Level 1: Reaction
• Level 2: Learning
• Level 3: Behavior
• Level 4: Result

Performance Management:
Performance management is a process by which managers and employees work together to plan,
monitor and review an employee’s work objectives and overall contribution to the organization.
More than just an annual performance review, performance management is the continuous process
of setting objectives, assessing progress and providing on-going coaching and feedback to ensure
that employees are meeting their objectives and career goals.

Absolute Evaluation:
• Performance expectations are communicated to employee in form of targets/ goals.
• Appraisal hinges on the gap between the actual performance and the pre-set goal.

Problem: Where performance is not objectively defined, may result in majority being rated very high,
and hence financial implication is high if ratings are tied to bonus pay-outs.

Relative Evaluation:
• Employee’s performance is assessed relative to other employees holding comparable
responsibilities.
• Supervisors forced to rank certain percentage as poor performers.
• Typical methods: Normal (or bell) curve, percentile-wise gradation etc.

Problem: Works fine as a one-time measure; repeated use results in good performers leaving organization as
someone is forced to be average even if his/her performance was good.

360 degree Feedback System

It is a system or process in which employees receive confidential, anonymous feedback from the
people who work around them, including managers, peers, and direct reports. These people fill out
an anonymous online feedback form that asks questions covering a broad range of workplace
competencies that are measured on a rating scale. The person receiving feedback also fills out a self-
rating survey that includes the same survey questions that others receive in their forms.
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Drawbacks

• Breakdown in chain of command

• Emergence of ‘mutual admiration’ clubs
• Defensiveness in the face of negative feedback
• Misuse of anonymity to ‘hit out’ against individuals
• Difficulty in preserving confidentiality in small groups

Errors to avoid in Performance Evaluation

• First Impression (primacy effect): Raters form an overall impression about the employee
being rated on the basis of some particular characteristics of the employee identified by
them. The identified qualities and features may not provide adequate base for appraisal.
• Halo Effect: The individual’s performance is completely appraised on the basis of a
perceived positive quality, feature or trait. In other words, this is the tendency to rate a man
uniformly high or low in other traits if he is extra-ordinarily high or low in one particular
trait. If a worker has few absences, his supervisor might give him a high rating in all other
areas of work.
• Horn Effect: The individual’s performance is completely appraised on the basis of a negative
quality or feature perceived. This results in an overall lower rating than may be warranted.
“He is not formally dressed up in the office. He may be casual at work too!”.
• Excessive Stiffness or Lenience: Depending upon the raters own standards, values and
physical and mental makeup at the time of appraisal, ratees may be rated very strictly or
leniently. Some of the managers are likely to take the line of least resistance and rate people
high, whereas others, by nature, believe in the tyranny of exact assessment, considering
more particularly the drawbacks of the individual and thus making the assessment
excessively severe. The leniency error can render a system ineffective. If everyone is to be
rated high, the system has not done anything to differentiate among the employees.
• Central Tendency: Appraisers rate all employees as average performers. That is, it is an
attitude to rate people as neither high nor low and follow the middle path. For example, a
professor, with a view to play it safe, might give a class grade near the equal to B, regardless
of the differences in individual performances.
• Personal Biases: The way a supervisor feels about each of the individuals working under him
- whether he likes or dislikes them - as a tremendous effect on the rating of their
performances. Personal Bias can stem from various sources as a result of information
obtained from colleagues, considerations of faith and thinking, social and family background
and so on.
• Spillover Effect: The present performance is evaluated much on the basis of past
performance. “The person who was a good performer in distant past is assured to be okay at
present also”.
• Recency Effect: Rating is influenced by the most recent behaviour ignoring the commonly
demonstrated behaviours during the entire appraisal period.
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HR Analytics
Human resources analytics, also called talent analytics, is the application of sophisticated data mining
and business analytics (BA) techniques to human resources (HR) data. Google is the pioneer in this field.
From recruitment to policies, Google uses a lot of analytics in HR decision making. HR analytics is an
upcoming field. The biggest challenge faced by companies right now with respect to analytics is data
management.

Great Places to Work Survey 2018 Result: India's Best Companies to Work for
• SAP Labs India Pvt Ltd • Godrej Consumer Products Ltd
• Intuit • Music Broadcast Ltd
• American Express India • Intercontinental Hotels Group (India)
• Adobe Systems India Pvt Ltd Pvt Ltd
• DHL Express India Pvt Ltd • Mahindra & Mahindra
• Marriot Hotels India Pvt Ltd
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OB
BASIC TERMS AND DEFINITIONS

ORGANISATION
A consciously organized social unit, composed of 2 or more people, which functions on a
continuous basis to achieve a common set of goals.

JOB SATISFACTION
A positive feeling about one’s job after analyzing its characteristics.

It is often measured in two ways, either by asking a single global rating question like are you
satisfied with your job, or by identifying key elements in a job and then asking for a rating for
those individual items.

Interesting jobs that provide training, variety, independence and control satisfies most
employees. From the co-workers, we expect interdependence, feedback, social support and
interaction.
When people are dissatisfied with their jobs, their response ranges from active to passive and
constructive to destructive. The employee may constructively either voice his displeasure, or stay
back in the company hoping that things will improve. A destructive response would be them
quitting, or neglecting work itself, leading to absenteeism and lack of efficiency.

JOB INVOLVEMENT
Degree to which an employee identifies with the job, actively participates in it and considers
performance important to self-worth.

ORGANISATIONAL COMMITMENT
The degree to which an employee identifies with a particular organization and wishes to maintain
his membership.

COGNITIVE DISSONANCE
Any incompatibility between behavior and attitude or in between two attitudes.

PERCEIVED ORGANISATIONAL SUPPORT

The degree to which an employee feels that the organization values his or her contribution and
cares about their well-being.

EMPLOYEE ENGAGEMENT
An employee’s involvement in, satisfaction with and enthusiasm for the work he does.

EMOTIONS
Intense feelings that are directed at someone or something.
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EMOTIONAL LABOUR
A situation in which an employee expresses organizationally desired emotions during
interpersonal transactions. E.g. Airhostess, customer care representative

EMOTIONAL DISSONANCE
Inconsistencies between emotions people feel and the emotions they project.

AFFECTIVE EVENTS THEORY

A model that suggests that workplace events cause emotional reactions on the part of the
employees, which then influences workplace attitudes and behaviors.

EMOTIONAL INTELLIGENCE
Following are the components of emotional intelligence:

Perceive emotions
Conscientiousness
of self & others

Understand the
Emotional
Cognitive meaning of
Intelligence
emotions

Regulate emotions
Emotional Stability according to
situations

PERSONALITY
The sum total of the ways in which an individual reacts to and interacts with others.

MYERS-BRIGGS TYPE INDICATOR (MBTI)

• Extraverted Vs Introverted
• Sensing Vs Intuitive
• Thinking Vs Feeling
• Judging Vs Perceiving
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BIG FIVE PERSONALITY MODEL - 5 Dimensions

EXTRAVERSION
Sociable, Gregarious, Assertive
Extraversion Good interpersonal skills

AGREEABLENESS (Individual’s propensity to defer to others)

Warm, Cooperative, Trusting

CONSCIENTIOUSNESS (Measure of reliability)

Responsible, Organized and Dependable

EMOTIONAL STABILITY OR NEUROTICISM (Ability to withstand stress)

emotional stability calm and self-confident
Neuroticism means emotionally unstable.

OPENNESS TO EXPERIENCE
Creative, Curious, Artistically Sensitive

TYPE A AND TYPE B PERSONALITY

Type A Personality
• Very competitive and self-critical
• Strive toward goals without feeling a sense of joy in their efforts or
accomplishments
• Experience a constant sense of urgency
• Quickly become impatient with delays and unproductive time
• Schedule commitments too tightly
• Try to do more than one thing at a time
• Easily aroused to anger or hostility

Type B personality
• More tolerant of others
• More relaxed than Type A individuals
• More reflective
• Experience lower levels of anxiety
• Display higher level of imagination & creativity
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VALUES

These are basic convictions that a specific mode of conduct is personally or socially preferable.
There are stable and enduring.
Terminal Values are the desirable end states of existence.
Instrumental Values are preferable means of achieving one’s terminal values.

JOHN HOLLAND’S PERSON JOB FIT

John Holland talks about six types of personalities which are each suited for a particular
occupation and environment. The six types are as follows:

Personality Description Job Fit

Realistic(Doers) Prefers activities that require skills and Mechanic
strength
Investigative(Thinkers) Prefer activities involving thinking & Scientist
organizing
Artistic(Creators) Prefer ambiguous and unsystematic Writer
Social(Helpers) Prefer activities that involve helping others Teacher
Enterprising(Persuaders) Influencing and attaining power Lawyers
Conventional(Organizers) Prefer rule regulated and orderly Accountant

HOFSTEDE’S FRAMEWORK FOR ASSESSING CULTURE

This framework is used to analyze various cultures. The following characteristics were observed
by Hofstede in a cross-cultural study performed for IBM:

POWER DISTANCE
Degree to which people in a country accept that power is distributed in-equally and are
comfortable with it.

INDIVIDUALISM VS COLLECTIVISM

In individualistic cultures people believe that an individual’s life belongs to him & he has an
inalienable right to live it as he sees fit, to act on his own judgment, to keep & use the product of
his effort, and to pursue the values of his choosing.
USA and most other European countries display traits of individualistic culture.

Contrary to this, collectivistic cultures believe that an individual’s life belongs not to him but to
the group or society of which he is merely a part, that he has no rights, and that he must sacrifice
his values and goals for the group’s “greater good.”
Indian Culture can largely be seen as an example of collectivistic culture

MASCULINITY VS FEMINITY
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Masculinity is the degree to which the culture favors traditional masculine roles such as
achievement, power and control as opposed to viewing men and women as equals.
They tend to advertise and stick to traditional roles of males being breadwinners and females
being homemakers.
A high femininity rating means the culture sees little differentiation between male and female
roles and treat women equally in all aspects. Here we are referring to cultures with lower degree
of gender based differentiation of job roles.

UNCERTAINTY AVOIDANCE

It refers to the degree to which people in a culture are comfortable with uncertainty. People in
high uncertainty avoidance cultures value structures and feel threatened by uncertainty. Whereas
people with low uncertainty avoidance are comfortable with the lack of structure and have made
peace uncertainties.
India can be seen as a country with high uncertainty avoidance whereas a Japan would display
lower uncertainty avoidance.

LONG TERM VS SHORT TERM ORIENTATION

People in long term oriented cultures look to the future, value thrift, persistence and tradition.
Whereas people in a short term orientated culture value Here and Now, accept change more
readily and don't see commitments as impediments to change.

PERCEPTION
A process by which individuals organize and interpret their sensory impressions in order to give
meaning to the world. The way we perceive things determines our behaviour. The factors which
influence perception are the perceiver, situational factors and factors in the target.

FUNDAMENTAL ATTRIBUTION ERROR

The tendency (of managers) to underestimate the influence of external factors and overestimate
internal factors when making judgments about the behaviour of others. For Example, managers
who will always blame the laziness of salespeople as being the primary driver behind the lack of
sales without recognizing that it might also have been a function of poor market conditions.

SELF-SERVING BIAS
Tendency to attribute positive outcomes to internal factors and put blame on external factors for
negative outcomes.
This bias refers to people who like to hog all credit when the going is good but the first ones to
shift blame on externalities when the fortunes reverse.

SELECTIVE PERCEPTION
The tendency to selectively interpret what one sees on the basis of one’s interest, background,
experience etc. For example, a physicist always looking at everything through Physics perspective.
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HALO/ HORN EFFECT

Tendency to draw general impressions about an individual on the basis of a single characteristic.
It causes you to allow one trait, either good (halo) or bad (horns), to overshadow other traits,
behaviours, actions, or beliefs. This is a potentially dangerous trait because it can result in forming
unnecessary pre-conceived notions about people without knowing them or giving them a fair
chance.

CONTRAST EFFECT
Evaluation of a person is affected by comparisons with someone else. For Example, a performer
who follows a brilliant performance will always be judged as a comparison to that previous
performance.

STEREOTYPING
Judging someone on the basis of one’s perception of the group to which he belongs. An example
of a stereotype would be ‘All blondes are dumb’

SELF-FULFILLING PROPHECY
Also known as Pygmalion effect. A situation where a person inaccurately perceives another
person, and then the resulting expectations cause the second person to behave in ways consistent
with original perception.

BOUNDED RATIONALITY
It is the process of making decisions by constructing overly simplified models that extract the
essential features from problems without capturing all their complexity.

ANCHORING BIAS
The tendency to fixate on initial information, from which one fails to adequately adjust to new
information. For Example, a lot of people might be anchored to the fact that Indo-Pak relations
are bad and will not be willing to accept or envisage an altered reality where that may not be the
case, thereby ensuring that the status quo of Indo-Pak rivalry continues.

AVAILABILITY BIAS
The tendency of individuals to base their judgment based on information that is readily available.

CONFIRMATION BIAS
The tendency to stick to choices made in the past and then seeking information that reaffirms
them, and not giving importance to contradictory evidence. Example, I believe that drinking is
good for health, so I will only seek out those research journals and papers which reaffirms the
same.

ESCALATION OF COMMITMENT
An increased stubborn commitment to a previous decision in spite of negative information.
Example, when you realise too deep into an argument that you are wrong but you feel it’s too
late to backtrack so you go along with it anyway.
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RANDOMNESS ERROR
Tendency to think that they can predict outcomes of random events.

HINDSIGHT BIAS
The tendency to falsely believe, after the outcome of an event is actually known, that one would
have accurately predicted that outcome. Example, looking back at the recently concluded football
World Cup, one can say that France was always the obvious choice to win it.

THREE ETHICAL DECISION CRITERIA

An individual can use three different criteria in making ethical choices.
UTILITARIANISM
This approach asserts that decisions are made to provide the greatest good for the greatest
number. A kind of faith in doing good work for the majority even if it hurts a few. It dominates
business decision making. It is consistent with goals such as efficiency, productivity and high
profits.
MORAL-RIGHTS APPROACH
This approach asserts that human beings have fundamental rights that cannot be taken away by
an individual's decision. An ethically correct decision is one that best maintains the rights of those
people affected by it. Six moral rights should be considered during decision making.
JUSTICE APPROACH
This holds that moral decisions must be based on standards of equity, fairness, and impartiality.
Three types of justice are of concern to managers are:
a) Distributive justice requires that different treatment of people not be based on arbitrary
characteristics. Men and women should not receive different salaries if they are performing the
same job; however, people who differ in a substantive way can be treated differently.
b) Procedural justice requires that rules be administered fairly. Rules should be clearly stated and
be consistently and impartially enforced.
c) Compensatory justice argues that the party responsible should compensate individuals for the
cost of their injuries. Individuals should not be held responsible for matters over which they have
no control.

MOTIVATION THEORIES

MASLOW’S HIERARCHY OF NEEDS

The theory says that the lower order needs have to be satisfied first before acting on the higher
order ones in order to motivate somebody. Once a lower need is sufficiently satisfied, the next
ones becomes dominant. The following are the 5 needs of human beings as identified by Maslow:
PHYSIOLOGICAL
Includes hunger, thirst, shelter, sex and other bodily needs
SAFETY
Security and safety from emotional and physical harm.
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SOCIAL
Affection, belongingness, acceptance and friendship.
SELF-ESTEEM
Internal factors such as self-respect, autonomy and achievement and external factors such as
status, recognition and attention.
SELF-ACTUALIZATION
Drive to become what we are capable of. It includes growth, achieving our potential and
fulfillment.
The lower order needs (Physiological and Safety) are predominantly satisfied by external things
like pay, unions, contracts etc., the higher order needs (Self Actualization and Esteem) are
satisfied internally by the person

APPLICATION
To motivate anyone according to Maslow, one needs to understand what level of the hierarchy
the person is currently in and focus on satisfying those needs.
Basic need: Basic pay, House rent allowance
Security need: Seniority plans, health insurance, employee assistance plans, severance pay,
pension
Social needs: Formal and informal work groups or teams
Esteem needs: Titles, status symbols, promotions, job assignments etc.
Self-Actualization needs: Work place autonomy, Challenging work

LIMITATIONS
• Maslow’s theory lacks empirical support
• The pattern of hierarchy of needs as suggested by Maslow may not be applicable
uniformly for different individuals
• People may be driven by different needs at same point of time
• Difficult for manager to identify the need level for employees- There will be some
difficulty for managers in deciding which need level employees are on, and this might
curb the motivation of employees at the workplace
• Basic Needs may not need to be satisfied to acknowledge higher needs

ALDERFER’S ERG THEORY

Existence: Physiological and safety needs
Relatedness: Social and external esteem needs
Growth: Internal esteem needs and Self-actualization

Differences between ERG theory and Maslow's model

1) A lower level need does not have to be gratified
2) The ERG theory acknowledges that if a higher level need remains unfulfilled, the person may
regress to lower level needs that appear easier to satisfy.
3) Alderfer's ERG theory allows the order of the needs to differ for different people (e.g., it
accounts for the "starving artist" who may place growth needs above existence ones).
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Workplace Implications
According to ERG theory, managers must recognize that an employee has multiple needs to satisfy
simultaneously. Furthermore, if growth opportunities are not provided to employees, they may
regress to relatedness needs. If the manager is able to recognize this situation, then steps can be
taken to concentrate on relatedness needs until the subordinate is able to pursue growth again.

MCGREGOR THEORY X AND Y

McGregor presented two different views of individuals and suggested that there are two
fundamental approaches to managing people (employees). One of the approach is negative, and is
known as Theory X and the other is positive, known as Theory Y. An average employee intrinsically
doesn’t like work & tries to escape it whenever possible. Since the employee does not want to work,
he must be persuaded, compelled, or warned with punishment to achieve organizational goals. A
close supervision is required on part of managers. The managers adopt a more dictatorial style.
Many employees rank job security on top, and they have little or no aspiration/ ambition. Employees
generally dislike responsibilities. Employees resist change and an average employee needs formal
direction. Employees can perceive their job as relaxing & normal. They exercise their physical and
mental efforts in an inherent manner in their jobs. Employees may not require only threat, external
control & coercion to work, but they can use self-direction & self-control if they are dedicated and
sincere to achieve the organizational objectives. If the job is rewarding & satisfying, then it will result
in employees’ loyalty & commitment to organization. If the job is rewarding & satisfying, then it will
result in employee loyalty & commitment. An average employee can learn to admit and recognize
the responsibility. In fact, he can even learn to obtain responsibility.
21

LAW & IR
CONTRACT LABOUR REGULATION & ABOLITION ACT, 1970

The act serves essentially two purposes, as reflected in the title:

• To abolish the practice of contract labor, as far as possible

• Where abolishing contract labor is not possible for reasons of practicality, to regulate the
same

Applicability
• To every establishment employing 20 or more workers on any day of the preceding 12
month
• To every contractor employing 20 or more workmen on any day of the preceding 12 months

Act not applicable to any establishment in which the work of intermittent or casual nature is
performed. Intermittent – less than 120 days in the year & seasonal work – less than 60 days.

(The number of days is not supposed to be the sole test; the nature of work has to be considered as
well.)

Important Sections
Section 2(definitions), 7, 8, 10, Sham & Camouflage, 12, 14, 20, 21, 25, 31

Rule 25 (Same & Similar kind of work)

Important case laws

1) Air India Case (Prohibition of CL - automatic absorption of CL as regular employees of
PE)
2) SAIL-1 (Prohibition of CL will not lead to automatic absorption of CL (overruled AI &
Consultation with Board and consideration of S.10 (2) before prohibition)
3) SAIL-2 (Labor Court or Writ Court cannot prohibit employment of CL)
22

Factories Act, 1948

An act to consolidate and amend the law regulating labor in factories primarily with the
object of protecting workers against industrial and occupational hazards by imposing
obligation on the owner.

It is a penal statute.

Applicability

• Applicable to the whole of India including Jammu & Kashmir.

• Applicable to any premises, wherein any manufacturing process is being carried
o using power and employing 10 or more workers
o If not using power, employing 20 or more workers on any day of the preceding 12
months.

Important Sections
2(definitions), 11-20 (facilities), 21-32(safety), 51, 52, 54(working hours), 59(overtime), 67-73(Child
Employment)

Important Case Laws

1. IOCL v. Chief Inspector of factories (Litmus test : Who is deemed to be the occupier of a factory
(of a Govt. company incorporated under Indian companies Act with respect to the given case)?

2. Dharangadhara Chemical Works Ltd. V. State of Saurashtra (Essential condition for person to be a
workman (taken from ID Act) and the same test can be invoked for a worker)

3. State of Gujarat v. Jethalal Ghelabhai Patel (Safety Obligation with respect to workers)
23

Trade Unions Act, 1926

Applicability

An act to provide for the registration of Trade Unions and in certain respects to define the law
relating to registered Trade Unions.

Important Sections

Section 2, 4, 5, 9A, 11, 16, 18, 22

Important Facts

• The first organized labor movement in India was in 1884 by N.M.Lokhande

• Shri. N.M. Joshi is the father of modern trade unionism in India, and he introduced the Trade
Union Bill in the Assembly in 1921
• “a dispute raised by a dismissed employee/workman will not be treated as an industrial
dispute, unless it is supported by a trade union, registered or not, or by a body or section of
workmen”
• Registration of a trade union is not mandatory. As the registered trade unions enjoy various
privileges and immunities, it is better to get the trade union registered