Master of Business Administration-MBA SEMESTER III

MU0012 Employee Relations Management

Assignment Set-2 Note: Each question carries 10 marks. Answer all the question

Q.1) Explain the approaches for management of overseas branches. [10 Marks] There are four major approaches to manage overseas branches. They are: Ethnocentric Polycentric Regiocentric Geocentric Ethnocentric: It is often seen that the decisions relating to value, culture and strategies are determined by the parent company. Very little power is vested in the subsidiaries. The subsidiaries of a company are managed by an expatriate or a former staff of the parent company. The locals have very little to do with the way things are carried out in accompany. Lines of communication are usually uni-directional as commands are issued by the headquarters. The host-country branch has a diplomatic role to play but is dominated by the customs of the parent company. It is believed that this is during the first stage of development of companies intending to go international and the management at the headquarters takes an alternative step only after a specific period of time (when the company has made progress or established itself internationally).Many American and Japanese companies have been charged of trying to introduce employee relations policies and strategies which are suitable to their home culture but incompatible with the host-country tradition. This strategy is followed in organizations as they believe that their strategies are not only the best but also the only way to proceed. The organization runs the risk of not taking notice of the tradition and culture of the host-country thereby offending the local employees. The local employees in the subsidiary may not believe in the same values and thoughts and hence do not adapt to the parent company regime. McDonalds follows the ethnocentric approach. Polycentric : Here the local conditions, values and system are taken into consideration in a company. The subsidiary is governed by a home-country (the country in which the headquarters is located) staff and considered as a self-governing business unit. Major decisions, strategy planning and financial investments are decided at the headquarters. However, in this approach the manager of the subsidiary is a local staff and manager-employee relationship is better. This approach helps in maintaining the policies in employee relations as it is compatible with the culture and regime of host-country. Companies like Lever Brothers and Unilever follow the polycentric approach.

Regiocentric and Geocentric:

Here the subsidiaries are not limited to boundaries such as home country or the region where an organization has presence. It is organized on a regional basis or geographic basis such as worldwide or global. Control of staff and decision making responsibility is based on regional or geographic constraints. In case of re geocentric, the managers are appointed from the hostcountry and in case of geocentric, the managers are from any part of the world, that is, the most suited person is appointed for the job. Colgate and Palmolive are examples of companies that follow geocentric approach. It is seen that the companies which follow Polycentric, Regiocentric or Geocentric are truly globalised. In such companies we can expect development of a region or world wide approach to employee relations policies and practices

Q.2

List the core issues of employee relations management?

Ans:- Employee Relations Management (ERM) is a vital business process that manages employer employee and employee-employee relations. It goes by the maxim that a satisfied employee is a productive employee. Organizations following good employee relations realize that employees are important stakeholders in the organization. Employees who are content with their employers contribute more effectively towards the goals of the organization. This course explains the importance of ERM in organizations and the organizational aspects that govern employee relations in a organization. ERM is influenced by organizational strategies, culture and other factors like employee commitment and employee engagement. Managing organizational conflicts is also an important part of ERM. This course familiarizes you with behavioral aspects like motivation, leadership, decision making and communication that play an important role in employee relations management. ERM is facilitated by tools like Human Resource Information Systems (HRIS). Importance of organizational discipline and grievance handling are also discussed in this course. Further in this course we will see how trade unions contribute towards maintaining good employee relations in an organization. Many laws govern employee relations, and an effective ERM considers the laws of the land. We will learn how factors like employee participation, empowerment and employee rewards influence ERM. Further, we will study how to manage employee relations in organizations that have a global presence. The contemporary issues like managing employees during crises like recession are also discussed in this course. In this unit, you will study the concepts of Employee Relations, Employee Relations Management, and the importance of ERM in an organization. This unit introduces ERM tools and core issues like career management and employee retention addressed by ERM. The objectives of Employee Relations Management are as follows: Improve the effectiveness of the workforce. Ensure employee satisfaction. Gain and retain employee commitment. Prevent conflicts amongst employees Promote retention of employees. Improve employee-management and employee-employee communication. some of the core issues of ERM. Conflict Management Conflict management refers to the manner in which mangers handle grievances and disputes. According to Gennard and Judge, Employee Relations aims to resolve difference between the various interest

groups regardless of whether these groups comprise different categories of managers or employees. Workplace conflicts arise due to differences in perceptions, culture, employee biases, gaps in communication, and so on. A win-win approach is used to resolve conflicts. Mediation and counseling are adopted for resolving conflicts rather than using formal discipline measures. Managers are trained both to avoid and to resolve disputes. External mediators can also be called in if necessary. Large organisations like public sector companies prefer to use internal mediators to resolve conflicts. Unresolved work place conflicts can have a negative impact on the organization. For example, if the production manager and the quality control manager have differences about implementation of quality procedures, then the work of both the divisions is affected. Figure 1.1 depicts some causes of workplace conflicts.

Figure: Causes of Workplace Conflicts Conflict management skills help employees get along with the other employees, their managers and the customers. These skills help managers identify conflicts, respond to them, get better co-operation from the employees, and avoid conflicts from spreading to other parts of the organisation. The following skill set help managers deal with conflicts: Conceptual skills: Managers need to first understand the causes of conflicts and the different strategies and tactics they can use to resolve the conflict. Communication skills: Managers require good listening skills and the ability to ask the right questions to ascertain the cause of the conflict. They must avoid harmful statements and remain rational. Negotiation skills: Managers need to know the policy of give and take required to resolve conflicts. Conflicts are resolved by adopting the following strategies: Counseling: Only a few organisations have professional counselors on their staff. Many organisations train their managers to counsel their subordinates. Often, just by employing nondirective counseling (listening and understanding), managers can help frustrated employees. Discussions and Debates: Task conflicts are resolved by discussing or debating the options. Consensual decision is made after considering every option. Compromise: This method tries to resolve conflicts by arriving at a solution which satisfies at least part of the requirement of each party involved. Using third parties: As serious conflicts have a negative impact on organisations; third parties with specialized skills are used as arbitrators, mediators or ombudsmen to resolve them.

Internal Communication Employee engagement can only be obtained if the senior management communicate frequently on a wide range of business and organizational issues. Organisations with good employee relations give a high priority to internal communication. Such organisations ensure that the employees completely understand the communications made to them.

For example, The South-West Trains Company has a very good relationship with its unions. But when the management realized that not all employees were being kept informed about the different issues, they decided to use more direct means of communication. At present, ad-hoc forums are held to get feedback from employees. Time with the manager sessions keep the line managers in touch with the operations staff. The intranet and e-mail are used in addition to team briefings to communicate with all the employees. Employee Engagement Mike Johnson describes employee engagement as a combination of commitment and organisational [2] citizenship . Organisations can be successful only if the employees have a feeling of job security, respect, recognition, and purpose. Organisations that have good employee relations value teamwork and employee feedback. Engaged employees are more committed, helpful, productive and less inclined to take leave. Figure 1.2 depicts the indicators of employee engagement.

Figure : Employee Engagement Indicators People management and development activities like training and job design contribute to employee engagement. A positive psychological contract with the employees enhances performance. HR professionals are employee champions and focus on the needs and aspirations of the employees. Employee involvement can be achieved by the following practices: Having formally designated teams Having regular team briefings Undertaking performance appraisals Using problem-solving groups Involving employees in decision making Dell is a computer manufacturing company and has been ranked among the top ten companies by Fortune magazine. It aspires to be a great company and a great place to work. It focuses on the team and individual contributions to the team. Line managers interact with individual team members. All employees are judged on the basis of how they interact with people and their technical proficiency. Quarterly results meetings are held across the business and senior managers answer questions posed to them. Managers share results with the team and develop team action plans. Tell Dell surveys are held every six months. These surveys help in finding if the managers give regular feedbacks, manage people properly, set a good example of ethical behavior and so on. Thus Dell engages its employees by constant employee involvement. Career Management Career development of employees is organizationally supported, manager facilitated, and employee driven. The career management process is based on the establishment of specific goals and objectives.

The career management process commences with the formulation of specific goals and objectives. The goals can be of the following kinds: Short-term goals: These are goals to be achieved within the next 1 to 2 years. These are more specific and easy to formulate. Intermediate goals: These are goals to be achieved in the next 3 to 5 years. These are more difficult to formulate as compared to short-term goals. Long-term goals: These are goals to be achieved after 5 years. They are more fluid and very difficult to formulate.

Figure : Employee Career Development As the nature of the work changes employees may have to modify and update their goals. Figure 1.3 shows the employee career development cycle where managers guide, motivate and provide opportunities to employees in every step towards developing career. Organisations exercising good employee relations have an environment in which employees take control of their own development and maintain their employability. Such organisations ensure that employees are given fair career advancement opportunities. Discriminations are not made on the basis of race, gender or ethnic group. The framework of such organisations enhances employee potential.

Commitment Employee commitment can be defined as the psychological bond of the employee with the organisation and the degree to which the employee identifies with the organisational goals. Employee commitment is an important factor that determines the success of an organisation. Employee commitment is influenced by the following factors: Organisational Values: Organisational values influence employee behaviour. If the organisation values employee participation, the employee feels more committed to contribute to the success of the organisation. Relationship with Supervisor: If the employee has a good relation with the supervisor, it improves commitment. A supervisor has to share information, provide timely feedback and reward good performance. Job Nature: When the job satisfies the employee, commitment increases. Employees given routine or repetitive tasks with no challenges to stimulate them have their levels of commitment decreases. Entrusting employees with responsibility and giving them more autonomy increases commitment.

Organisational Justice: When employees work in a fair and just environment, their commitment increases. Promotions and wage increments need to be awarded in a fair and transparent manner. Employee grievances also need to be addressed and conflicts resolved immediately.

Increasing commitment is a business necessity. The benefits of gaining employee commitment are as follows: Organisational performance is improved. Employee motivation increases and this increases productivity. Profits increase as sales increases Employee retention is increased. Cost savings is enabled. Training costs of new employees gets reduced. Conflicts in the organisation reduce. Talent Management and Retention Successful organisations have an effective employee retention strategy in order to maintain their growth and leadership. Organisations which do not give priority to retaining employees lose them to their competition. It is much easier to retain satisfied employees than recruit newcomers. Training newcomers to become productive is very costly and requires more effort and resources. Talent can be retained only by enhancing employee motivation and job satisfaction. Figure 1.4 shows a diagrammatic representation of the factors affecting employee retention.

Figure : Factors Affecting Employee Retention The following are some of the strategies that organisations adopt to retain their employees: Employee Motivation with Learning: Use Money as a Motivational Tool: Brand Building: Training Many organisations have a policy of personal development of employees. Training programs are undertaken by organisations when the results of a performance appraisal indicate that training is essential. Training programs are also undertaken to enable employees to undertake new roles which require more skills. The training programs undertaken by an organisation deal with the following:

Communications: People with different languages and customs are employed and they need to be trained in interpersonal communication. Computer skills: These skills have become very essential even for routine administrative tasks. Quality initiatives: Implementation of programs like Total Quality Management, Quality circles, benchmarking require training of employees in quality procedures, concepts and standards. Customer service: Employees need to understand and meet the needs of the customers to stay competitive. Human relations: Employees are trained to avoid misunderstanding and conflicts and build interpersonal relations. Safety: Employees are trained in safety measures especially if they handle heavy equipment, work in hazardous conditions or deal with hazardous chemicals. Ethics: Organisations today are more socially responsible. Hence employees are made familiar with the corporate values and morals. Sexual harassment: Employees are made aware of what constitutes sexual harassment in order to avoid such behaviour.

Training and development activities contribute to the personal development of the employee and enhance employee engagement. The benefits of having training programs in an organisation are as follows: They enhance job satisfaction and improve employee morale. They make processes more efficient thus increase productivity and profits. They increase employee motivation. They improve the corporate image of the company. The organisation becomes more capable of adapting to new ideas and technology. The organisation has more innovative strategies and ideas. They increase employee retention and reduce turnover. Benefits Administration Employees are the most important asset of an organisation. Organisations that practice good employee relations management have many benefits programs in order to attract and retain employees. The problems in implementing an efficient benefits program arise due to the following reasons: The employer is unable to collect key information and verify them. The employee is unable to access information about the different benefits program. This increases job dissatisfaction and turnover. The benefits administration process has to be streamlined and automated. The features of an effective benefits administration process are as follows: It is easier to create and manage multiple benefits programs. It creates employee benefit plan profiles. It creates eligibility criteria. It maintains beneficiaries and dependents information. It facilitates performance reviews, tracks past review details, and schedules future reviews. It interfaces directly with insurance providers and payroll systems. It merges and audits monthly insurance or benefits. It complies with government requirements. There is an annual review of the benefits program. Employee Self-Service

Employees feel empowered when organisations have employee self-service modules to manage personal data. The accuracy of employee information is improved with the introduction of such modules. The administrative workload of the HR staff is also significantly reduced. The following list enumerates the features of an employee self-service module: It facilitates creating and updating personal details like name, address, telephone numbers, etc. It maintains passwords for security of information. It maintains information about emergency contacts, beneficiaries, and dependents. It facilitates enrollment in benefits programs. It allows updating of tax related information like exemptions and savings details. It allows viewing of salary details like gross pay, deductions made, and net pay. It maintains bank related information for direct deposits of salary and reimbursements. It allows employees to apply for leave and check for leave balance. Employers can review the leave details of the employees. It allows employees to submit details about expenses. It allows internal and external job applications. It also permits checking of job application status. It facilitates viewing of training program details and enrolment. It maintains health and safety records. The employee self-service module enables employees to manage their personal data. The accuracy of the data improves and the work of the Human Resource staff is also made easier.

Q.3 Write note on organizational justice. [ 10 marks] Organisational Justice is the main factor of citizenship behaviour and its related outcomes are satisfaction, and commitment towards work. It also focuses on employee's equality in outcomes such as payment and the procedures to determine those outcomes.Organisational justice builds trust in employee, which in turn gets displayed in citizenship behaviour.The concept of justice differs based on the people's cultural values. The peoplewith collectivistic cultures differ from the people with individualistic cultures, in terms of equity and equality.With good organisational justice, you can have more positive outcomes from an employee in the workplace. If employees are treated with full justice, they follow all the rules and regulations of an organisation. They will be more committed towards work,have more trust in organisation, and feel more satisfied with the justice they receive. Type of Organisational Justice Organisations focus on three specific forms of justice. They are: Procedural Justice Procedural justice is identified by the equality of processes that helps to determine the type of outcomes used, the way they are distributed, and to whom the outcomes are given. Some of the organisational procedural justice includes freedom from bias, accuracy, consistency, and correction of errors. Distributive Justice Distributive Justice is identified by the reasonable employees in an organisation that recognise the actual outcomes they obtain. Issues may arise if the employee experiences something 8

negative in the workplace that cannot be prevented.Issues may also arise if they do not get the same outcome they expected to have or when the outcomes are inadequate. Interactional Justice Interactional justice is identified by the awareness of equality in the procedural treatment of others. Issues may arise if the employees are judged wrongly and denied of respect or privacy.A low level of interactional justice can be related to possibility of sexual harassment.Recent study shown that differences in personality and aggressive behaviour of anindividual effect the way they react to the inequality in the organisation. Employees perception of procedural justice is determined by re-organising their performance rating.With this rating system, employees' view of organisational justice increases.

Q4) Describe the main actors involved in industrial relations. [10 marks] The following are the main actors, who are directly involved in Industrial Relations: Employers: Are those who engage a worker and pay the worker a fixed salary on return for services rendered. Employers have the right to employ and fire employees. Their decisions like relocation, introduction of new technologies, mergers and acquisitions affects their employees. Employee: Is an individual who is hired by a person or a business and is remunerated for the services rendered. Employees need a good working environment. They have aright to voice their opinions and convey their grievances. Employees generally form a union in order to obtain their rights from the management. Employees expect the union to support them on all issues. Government: They influence employee relations by means of laws, rules, regulations, and policies. The government establishes the legal framework for management-trade union interaction. The government also helps in settlement of industrial disputes. They also regulate incomes and establish minimum wages. For example, in Australia, the Commonwealth has enabled employers under their jurisdiction,to bypass unions and negotiate directly with individual employees. But the individual states have reaffirmed the collective bargaining process and the role of unions. Trade Unions: They promote and protect employee interests. Trade unions help in making decisions by following the process of collective bargaining and negotiations, with the management. Good trade unions improve communication between the management and the employees. Trade unions also help in settling of industrial disputes. For example, the United States has low levels of unions compared to the European Union. Hence, the companies in the United States hire and fire employees at will, while their European counterparts have to consult the trade unions. Employer Associations:

They help in enhancing the performance of enterprises. Employer Associations represent employers in collective bargaining, depose before tribunals and courts, and engage in public and media relations. They also provide a forum for discussions and debates on specialized subjects. Employer Associations advise, educate, and assist members in industrial disputes. They also lobby with the government for industrial reforms. Courts and Tribunals: These help in resolving industrial disputes. Labor courts examine the legality of orders passed by the employers, the discharge of employees, withdrawal of concessions or privileges, matters relating to lock-outs and strikes. Industrial tribunals deal with matters related to wages, compensations and other allowances, bonuses, rules of discipline, retrenchment, and closure of organisations. For example, the Australian Industrial Relations gives great importance to courts. The courts give quick binding decisions thus, minimize economic losses. The influence of each actor varies in different industrial systems. In some systems, the government dominates the relationships and in some others, it only plays a minor role. Some industrial systems emphasize employee interests while others emphasize employer interests. Employees usually interact with their employers through representative unions. Some countries facilitate these trade unions, whereas some countries discourage them. Hence, the goals and actions of the trade unions vary from country to country. Q5) Explain the steps in formal grievance redressal procedure. [10 Marks] There are three formal stages to redress any grievance. Each stage has a form which is numbered according to the stage it belongs. First, it has to be noted that the grievance have to fall under one of the following categories to be considered as one: Amenities Compensation Conditions of work Continuity of service Disciplinary action Stage I of Grievance Redressal An employee who has a grievance meets the shift-in-charge and discusses it. If necessary, the employee obtains a copy of grievance form 1. It is done within a week of occurrence of the aggrieving incident or when the employee became aware of the situation. In case of promotion, a time limit of six weeks from the date of the promotion is permitted. The employee fills up the particulars and hands it over to the shift-in-charge and obtains an acknowledgement receipt in return. The shift-in-charge makes the necessary enquiries and returns the form to the employee with remarks filled in the form within two working days from the date of receipt of the form. In cases where reference to higher authorities or to another department is necessary, more time is provided. Stage II of Grievance Redressal If the matter is not resolved at Stage 1, the employee obtains grievance form 2 and submits it to the next senior manager. The senior manager arranges a meeting within three working days. The department head discusses the issue with the concerned supervisor and the employee and

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returns the grievance form to the employee with remarks. A unionized member may assist the employee at this stage of grievance redressal. Stage III of Grievance Redressal If the employee is not satisfied with the reply of the departmental head, the employee appeals to the Chairman of his Unit Grievance Redress Committee within seven working days of the receipt of reply at Stage II. The employee obtains a copy of grievance form 3from the shift-incharge. The recommendations of the Unit Grievance Redress Committee are considered unanimous and binding on the employee, if no objections are raised by either the management or the union. If objections are raised, the matter is sent for further consideration to the resident director who discusses it over with the president or the deputy president before arriving at a definite conclusion. Figure depicts the formal flow of grievance procedure.

Grievance Handling Procedure within an Organisation

Q6) What are the different types of disciplinary problems. [10 Marks] The main types of disciplinary problems are explained as follows: Excessive Absenteeism: Absenteeism occurs when an employee does not report to work due to time off, illness or any other reason. Excessive absenteeism results in loss of productivity. Absenteeism is corrected by employing progressive discipline. Employees need to be aware of the absenteeism policy of the company. They also have to be aware of the fact that the company monitors employee absence. Employees need to take responsibility for their absenteeism and substantiate their absenteeism with valid records like medical certificates in case of health related absences. Poor Timekeeping: Reporting late to work, leaving early, indulging in extended teaor lunch breaks, doing personal work during office hours, and other time-wasting practices reduce the time spent doing productive work. Poor timekeeping disrupts business and creates a bad atmosphere. These

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habits have to be curbed and employees need to know that it is mandatory for them to spend certain fixed hours at their workstations or premises doing productive tasks. Improper Personal Appearance: Dress codes are enforced in organisations to project a professional appearance or for safety reasons. Employees are to be made aware of the consequences of their inappropriate attire. For example, synthetic clothes can catch fire easily. Company policy also needs to describe situations where the employee has to dress formally.

Substance Abuse: Alcohol and drug abuse can lower employee concentration and decrease performance. Substance abuse also results in absenteeism, accidents at workplace and inappropriate behavior. Organizational policies on substance abuse need to be communicated with the staff. Employees who are addicted to alcohol or drugs have to be counseled or helped in other ways like therapy and detoxification programmers. Defective Performance: Defective performance results when a task is not completed on time, or is of sub-standard quality, or the task is not done according to requirements. An employee may perform poorly either due to lack of interest or due to lack of capability. Managers need to assess poor performances individually, determine the constraints and take corrective actions. Poor Attitudes: Sleeping on the job, being careless while working, fighting with co-workers, gambling in the work place, insulting supervisors, being rude to customers and colleagues, and such practices reflect poor attitudes. These actions can adversely affect other employees. Thus, these attitudes have to be corrected to maintain a good and productive work atmosphere. Violation of Health and Safety Rules: Smoking in unauthorized places, failure tousle safety devices, not following safety rules regarding fire safety, dealing with hazardous chemicals, electrical and mechanical equipment and radiation protection are serious violations and have to be dealt with immediately and effectively. Insubordination: Insubordination can take the form of refusing to perform a legitimate task that has been assigned, ignoring the instructions of managers, criticizing challenging the orders of a superior, using abusive language or making disrespectful gestures like rolling the eyes. Insubordination can affect the morale of the entire team. Organisations need to spell out their policies on insubordination. Managers have to be equipped with proper procedures to deal with insubordination. Workplace Violence: 12

Companies need to have training programmes to its security personnel so that they recognise warning signs and know how to deal with violent behaviour of employees. Employee handbooks need to clearly state that violent behaviour will not be tolerated and will result in termination. Harassment: This behaviour causes discomfort to the co-workers and reduces employee morale. Making crude and sexual remarks or forcing another co-worker to do certain non-legitimate tasks constitutes harassment. For example, a manager may repeatedly ask an unwilling subordinate for a date. Companies need to have in place aclear sexual harassment policy and employees have to be trained on what constitute sharassment.

Theft and Sabotage: Sometimes employees steal money, equipment, supplies or confidential information belonging to the company. Some aggressive employees may damage or destroy organisational equipment and facilities. Some employees may falsify records and accept bribes and indulge in actions that are detrimental to the organisation. Organisations have to strictly deal with such problems.

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