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  • 1. Fo rI BS U se O nl y Cl as s of 20 1 0 Introduction to Human Resource Management ICFAI Center for Management Research Road # 3, Banjara Hills, Hyderabad 500 034
  • 2.  ICMR March 2004. All rights reserved. Fo rI BS U se O nl y Cl as s of 20 1 0 No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means – electronic, mechanical, photocopying or otherwise – without prior permission in writing from ICFAI Center for Management Research. Ref. No. IHRMWB – 032K4 09 For any clarification regarding this book, the students may please write to ICMR giving the above reference number, and page number. While every possible care has been taken in typesetting and printing this book, ICMR welcomes suggestions from students for improvement in future editions. Please use the Courseware Feedback Form available at www.icmrindia.org
  • 3. Contents Part A – Multiple Choice Questions 3 31 0 Part B – Caselets 141 of 20 1 Part C – Applied Theory 243 Fo rI BS U se O nl y Cl as s Part D – Model Question Papers
  • 4. nl y Cl as s of 20 1 0 Part A: Multiple Choice Questions Fo rI BS U se O This section consists of multiple-choice questions that test the student’s understanding of the basic concepts discussed in the textbook. Answering these questions will help students quickly recollect the theories they’ve learnt and apply these to real-life business situations.
  • 5. Part A: Multiple Choice Questions 3. a. b. c. d. Who was the pioneer of Hawthorne studies? Fredrick Taylor Elton Mayo Fred Luthans Henry Mintzberg An HR manager in a large multinational firm is involved in establishing an intentional structure of roles for people and assigning responsibilities. What is the managerial function that the HR manager is performing? Organizing Staffing Directing Controlling Fo rI BS U 4. a. b. c. d. 5. a. b. Selection Placement 6. What is the process of training and developing employees to improve and update their knowledge and skills so as to perform their jobs better known as? a. b. c. d. Employment Human resource development Managing employee relations Compensation management 7. A control technique that helps in measuring the cost and value of people for an organization and helps management to value its human resources is a. b. c. d. Human resource accounting Employee control systems Organizational control systems Value based accounting 8. The specialist role of a HR manager takes a number of roles. Of these roles, which role ensures that all members of the management perform their respective roles concerned with effective use of human resources? a. b. c. d. The facilitator The consultant The executive The auditor 9. An organization provides employees benefits in the form of conveyance facilities, housing facilities and educational facilities for children. What kind of benefits is the organization providing to the employees? a. b. c. d. Incentives Bonus Fringe benefits Security benefits of 20 1 0 c. d. Cl as s a. b. c. d. The concept of 'economic man' led Taylor to propose a system where workers get a higher rate of pay for every unit of output that exceeds the daily output. What is this system termed as? Differential piece-rate system Differential price-rate system Similar piece-rate system Similar price-rate system nl y 2. O a. b. c. d. The development function of human resources has three dimensions. Which of the following does not fall under the development function of human resources? Employee training Management development Career development Identifying ways to motivate employees se 1. __________ is the process by which the knowledge of an employee, his skills, abilities and motives to perform a job must match the requirements of the job? Recruitment Job analysis
  • 6. Introduction to Human Resource Management (i), (ii) and (iii) (ii), (iii) and (iv) (i), (ii), (iii) and (iv) (i), (ii) and (iv) O nl y 11. The HR manager of a manufacturing firm was given the task of providing information on market statistics of personnel availability, pay rates etc. What role of an HR executive is the manager performing? a. The executive b. The service provider c. The consultant d. The facilitator Fo rI BS U se 12. Which of the following is not a key characteristic of a successful quality improvement program? a. Education and training b. Team work c. Total systems approach d. Short term-goal perspective 4 c. d. Employee relations management Strategic human resource management Compensation management Human relations management 0 15. What is the organization termed as, if the reporting channels of work relations are pre-defined and accountability and responsibility are fixed for all the roles? a. Informal organization b. Semi-formal organization c. Formal organization d. Autonomous organization of 20 1 a. b. c. d. a. b. 16. Which of the following is not a characteristic of a flat organization structure? a. Wide span of control b. Fewer hierarchical levels c. More people under the control of one manager d. Close supervision Cl as s 10. The relationship between an employee and his manager plays a critical role in determining the job satisfaction level of the employee. Which of the following are the ideal characteristics that an employee would like his manager to possess? i. Lend support and guidance ii. Reward the employee for his contribution iii. Identify the employee’s strengths and weaknesses iv. To keep to himself, his expectations from the employee 13. The extent to which an employee's work meets his professional needs is termed as a. Quality of work life b. Quality circles c. Quality program d. Quality cycle 14. _________ helps the organization in the achievement of long-term and short-term goals through optimum utilization of human resources. It involves the development of HR objectives and their alignment with the organizational objectives. 17. The right to give orders and the power to exact obedience from others in the process of discharging the responsibility is termed as a. Authority b. Accountability c. Responsibility d. Adaptability 18. Vinay Sinha, the HR manager of a pharmaceutical firm was given the task of identifying the broad policy issues related to human resources like the employment policy, welfare policy, and development etc., after taking into consideration the changing business scenario. What level of HR planning will Vinay have to undertake? a. Corporate-level planning b. Intermediate-level planning c. Operations planning d. Short-term planning 19. Planning that includes determining the recruitment/layoff strategy, development strategy etc. based on the corporate policies and strategies is the
  • 7. Part A a. b. c. d. 24. __________ is the simplest unit of work and involves very elementary movement. a. Position b. Task c. Job d. Micromotion 25. Which of the following is the first step in the process of job analysis? a. Developing a job description b. Job specific competency determination c. Information gathering d. Developing a job specification Cl as s 20. An HR manager was involved in the process of human resource planning. The first step he undertook was assessing current resources and making an inventory. What is the next step that the manager has to take in HRP? a. Start recruiting to meet the requirements b. Forecasting c. Matching the inventory with future requirements d. Developing an action plan to meet future requirements Job evaluation Job description Job analysis Job design 0 Corporate-level planning Intermediate-level planning Operations planning Short-term planning of 20 1 a. b. c. d. se O nl y 21. An IT firm wanted to reduce the number of employees because of the decrease in its number of projects. But the organization promised its employees that it would search for other opportunities for its displaced employees. What is the type of services being offered by the organization? a. Outplacement b. Placement c. Career growth d. Poaching Fo rI BS U 22. During slack periods organizations do not want their middle/top level managers to stagnate. The employees are asked to work for other organizations for a specified period of time. The employees work on projects with these organizations but continue on the rolls of the parent organization. What is the above process termed as? a. Loaning b. Work sharing c. Outplacement d. Attrition 23. The process of determining and recording all the pertinent information about a specific job, including the tasks involved, the knowledge and skill sets required to perform the job, is termed as 26. Motion and time studies are examples of which method of job analysis? a. Observation method b. Technical conference method c. Group interview method d. Questionnaire method 27. In a job analysis method, information was being gathered regarding a particular job from experts. What is the method of job analysis being used here? a. Observation method b. Technical conference method c. Group interview method d. Questionnaire method 28. A job analysis where the job analyst conducts background research, interviews job incumbents and supervisors and prepares a detailed document is a. Position analysis questionnaire b. Functional job analysis c. Diary method d. Technical conference method 29. A questionnaire propounded by Ernest J Mc Cormick that provides job requirement information and contains 194 elements that fall into six major categories is the 5
  • 8. Introduction to Human Resource Management 30. Which method of job analysis is more suitable for the middle and top level management jobs and not for the lower level jobs? a. Position analysis questionnaire b. Functional job analysis c. Diary method d. Critical incident technique 36. Which approach to job design has a key element called the 'task idea' that led to job specialization? a. Engineering approach b. Human relations approach c. Socio technical approach d. Job characteristics approach Cl as s 31. What describes in detail, the various aspects of a job like the tasks involved the responsibilities of the job and the deliverables? a. Job description b. Job specification c. Job evaluation d. Job enlargement a. b. c. d. to be performed by him and the responsibilities attached to the job and the relationship with other jobs in the organizational set-up. The above process will help Prashanth gain knowledge about the Job description Job analysis Job depth Job content 0 Position analysis questionnaire Job analysis questionnaire Performance analysis questionnaire Employee analysis questionnaire of 20 1 a. b. c. d. se O nl y 32. In the process of job specification, the specifications that include analytical ability, data interpretation ability, decision-making ability etc., are a. Physical specifications b. Emotional specifications c. Mental specifications d. Behavioral specifications Fo rI BS U 33. Which of the following are the uses of job analysis? a. Organization audit b. Promotion and transfer c. Health and safety d. All the above 34. The process of structuring work and designating the specific activities at the individual or group level is called as a. Job design b. Job description c. Job analysis d. Job specification 35. Prashanth Kumar on joining as a software engineer in a major IT firm, was given an account of the various tasks or activities that have 6 37. In the engineering approach to job design the workers felt that overspecialization hindered the skills and experience. Which of the following are the demerits of such overspecialization? i. Repetition of tasks ii. Limited social interaction iii. Mechanical pacing iv. Scope for personal input a. b. c. d. i and ii i, ii and iii i and iii All the above 38. Working conditions, organizational policies, interpersonal relations, all these come under which factors of job satisfaction as proposed by Herzberg? a. Motivators b. Organizers c. Providers d. Hygiene factors 39. Ravinder was employed with a large MNC. Though the pay and working conditions were good, he was not satisfied. He felt that there was no achievement, growth, responsibility and recognition. What are these factors, under the motivation theory proposed by Herzberg?
  • 9. Part A Motivators Organizers Providers Hygiene Factors c. d. a. b. c. d. i, ii iii and iv Only iii All the above nl y Cl as s 41. Supriya Verma joined a pharmaceutical firm and there she was given the freedom and discretion in scheduling her work. What is the core dimension according to the job characteristics model that is being followed? a. Task identity b. Task significance c. Autonomy d. Skill variety 45. Which of the following are the techniques of job enrichment? i. Developing management generalists at higher organizational levels ii. Increasing the length and operating time of each job iii. Minimizing controls and providing freedom of work when the employees are clearly accountable for attaining defined goals. iv. Providing wider scope, greater sequencing and increased pace of work. 0 40. Which theory of job design by Hackman and Oldham states that employees work hard when they are rewarded for the work they do, and when the work gives them satisfaction? a. Job characteristics approach b. Employee characteristic approach c. Performance characteristic approach d. Group characteristic approach Job rotation Job specification of 20 1 a. b. c. d. Fo rI BS U se O 42. The core job dimensions for a job are analyzed and combined into a single predictive index under the job characteristic approach. What is this index called? a. Performing potential score b. Motivating potential score c. Employee potential score d. Motivating potential significance 43. __________ helps in developing management generalists at higher organizational levels as it exposes them to several different operations. a. Job analysis b. Job rotation c. Job enrichment d. Job enlargement 44. Which of the following helps in increasing the length and hence the operating time of each cycle of work for the job holder? a. Job enlargement b. Job enrichment 46. A software firm allowed its employees to choose their working hours but within some specified limits. This is an example of a. Job sharing b. Flextime c. Condensed work d. Job enlargement 47. The practice of working at home or while traveling and at the same time keeping in contact with the office is termed as a. Telecommuting b. Job sharing c. Flextime d. Condensed work 48. From which of the following approaches is the engineering approach derived? a. Scientific management approach b. Process approach c. Social systems approach d. Systems approach 49. The process of searching for prospective employees and stimulating them to apply for jobs in an organization is termed as 7
  • 10. Introduction to Human Resource Management 50. A good recruitment policy a. Is flexible enough to accommodate changes in the organization b. Has its own policies and does not comply with government policy on hiring c. Requires more investment for the organization d. Ensures short-term employment opportunities for its employees c. d. The situation in the labor market The stage of development of the industry Culture, social attitudes and beliefs Geographical location of the job nl y a. b. U se O 52. The HR department of Magnus Textiles made sure that any vacancies in the organization first reached the prospective candidates in the organization. Candidates from the organization responded to job postings. What is the source of recruitment being used? Advertisements Internal search Employee referrals Campus recruitment Fo rI BS a. b. c. d. 53. The important information that has to be furnished in an advertisement includes: i. Location or place of work ii. Nature of the job iii. Tasks and responsibilities in the job a. b. c. d. 8 55. A software firm has a vacancy for the post of 'Vice President' (operations). Which of the following methods of recruitment would you suggest? a. Employment pages of a national daily or a business magazine b. Advertisements in a local daily c. Campus placement d. Listing of the vacancy on a placard outside the organization Cl as s 51. Which of the following is not an external environmental factor that determines the effectiveness of a recruitment program? 54. Many human resource professionals are now using the Internet to recruit personnel. Which of the following statements are not true about online recruiting? a. It is a time saving process b. It is cost effective c. It supplements rather than replaces the leg work associated with offline recruitment d. It eliminates completely the work associated with recruitment on the part of the recruiter to his/her total convenience. 0 Promotion Recruitment Selection Placement of 20 1 a. b. c. d. i and ii ii and iii i and iii All the above 56. The success of a recruitment program can be judged based on i. The number of successful placements ii. The number of hirings iii. The number of offers made iv. The number of applicants a. b. c. d. i and ii i, ii and iii i, ii and iv All the above 57. The process of choosing the most suitable candidate for a job from among the available applicants is called a. Recruitment b. Placement c. Appraisal d. Selection 58. ____________ helps in identifying the knowledge, skill and attitude set that enables an individual to deliver the best performance in his job.
  • 11. Part A 64. A formal record of an individual's appeal or intention for employment that helps in gathering information about a prospective candidate is called a. Application blank b. Employee data c. Employee blank d. Data bank 65. Which of the following are the methods for evaluating the application forms in an organization? a. Weighted methodology b. Clinical methodology c. Moving average method d. Both a and b Cl as s 59. Vishal industries committed the mistake of hiring an unsuitable candidate for one of its vacancies. The negative outcomes as a result of selecting an unsuitable candidate are a. Lose the goodwill of other employees b. The cost of employee’s nonperformance c. It will not be able to lay-off such employees d. Reduction in the number of employees. a. b. c. d. selection method enhances the effectiveness of an organization. Generalizability Utility Legality Reliability 0 Competency modeling Competency planning People competency Competency training of 20 1 a. b. c. d. nl y 60. In the process of selection, the step that follows initial screening interview is normally the a. Decision making interview b. Preliminary interview c. Reference check d. Analyze the application blank U se O 61. In which approach of reliability, a group of candidates take the same test twice, within a gap of 2-3 weeks? a. Repeat or test retest b. Alternate form c. Parallel form d. Split-halves procedure Fo rI BS 62. To test the consistency of the selection tests, a HR manager divided the test into two parts and gave it to the candidates. Depending on the degree of similarity in scoring in these two parts, the reliability of the test was determined. What is the approach of reliability that is being used? a. Repeat or test retest b. Alternate form c. Parallel form d. Split-halves procedure 63. ____________ is the degree to which the value provided by the 66. ___________ test measures a person's ability to classify things, identify relationships and derive analogies. It measures several factors like logical reasoning, analytical skills and general knowledge. a. Intelligence test b. Performance tests c. Emotional tests d. Social tests 67. A bank wanted to conduct a test for the applicants for the job of a clerk cum cashier. Most of the applicants were fresh from the college with little experience related to the job. The bank wants to pick and train the right candidates. Which test do you suggest to be given to the candidates? a. Aptitude tests b. Intelligence tests c. Achievement tests d. Situational tests 9
  • 12. Introduction to Human Resource Management Recruitment Placement Selection Training a. b. c. d. 0 73. In an application form design, questions on all the following are ethical except The educational qualifications of the employee The name and addresses of individuals who can be contacted for reference checks Salary drawn by the candidate in the last job Issues that concern the privacy of the applicant Cl as s 69. Mohan Krishna attended an interview and was very upset with the way it progressed. The interviewer repeatedly interrupted him, criticized his answers and asked him unrelated questions. What is the method of interview adopted? a. Panel interview b. Stress interview c. In-depth interview d. Group interview a. b. c. d. of 20 1 68. In a defence organization, the tests conducted concentrated on validity and truthfulness of an applicant's answers, by monitoring the physical changes in his body as he answered a series of questions. What is the type of test being used? a. Polygraph tests b. Situational tests c. Interest tests d. Intelligence tests O nl y 70. Identify the correct sequence in an interview process. i. Closing an interview ii. Evaluation iii. Conduct of interview iv. Reference checks se i, ii, iii, iv i, iv, ii, ii iii, i, ii, iv iv, iii, ii, i U a. b. c. d. Fo rI BS 71. Which of the following steps should be adhered to, when interviewing? a. Ask demanding and leading questions b. Get too engrossed in the interview to follow the plan c. Interrupt the candidate frequently d. Make the candidate feel comfortable and relaxed 10 72. "__________ is the determination of the job to which an accepted candidate is to be assigned. It is a matching of what the supervisor has reason to think he can do with the job demands." 74. Identify the correct statement. a. b. c. d. The time period for orientation is relatively long as compared to socialization The changes resulting out of orientation are more than those out of socialization Orientation is an event where as socialization is an ongoing process More organizational members are involved in the process of orientation as compared to socialization 75. Vishal joined a consultancy firm as a trainee, but soon decided to leave the organization. During the exit interview, it was found that he was not comfortable in the workplace, and also he did not find the work atmosphere to be friendly. What would have gone wrong in the work place? a. b. c. d. The organization did not have an effective induction program The organization did not create a positive perception in the mind of the employee The employee was not able to adapt to the organization All the above
  • 13. Part A 0 82. The metamorphosis stage of socialization is considered to be successful if i. the employee understands and accepts the norms, policies and procedures of the organization ii. he gains the trust and cooperation of the co-workers iii. it results in an increase in employee productivity a. i b. ii c. i and iii d. All the above Cl as s 77. An organization emphasized that its employees should dress formally but did not consider it to be absolutely essential for the firm. What are such norms termed as? a. Relevant norms b. Irrelevant norms c. Flexible norms d. Functional norms a. b. c. d. performed but do not apply it practically? Metamorphosis stage Encounter stage Pre-arrival stage Evaluation stage of 20 1 76. "___________ signifies a system of shared meaning held by the members that distinguish one organization from another organization." a. Organizational change b. Organizational development c. Organizational culture d. Group dynamics se O nl y 78. Vijay Yadav was employed in the production department of a firm manufacturing textiles. He was well behaved and agreed to the noms of the organization. Vijay Yadav who accepts all the organizational norms is a a. Assertive b. Conformist c. Rebel d. Perfectionist Fo rI BS U 79. What is the process by which an individual acquires the attitudes, behavior and knowledge he or she needs to participate as a organizational member called? a. Performance appraisal b. Management development c. Socialization d. Employee Training 80. All the following are included in the process of socialization except a. Pre-arrival stage b. Metamorphosis stage c. Encounter stage d. Evaluation stage 81. In which stage of socialization, employees or candidates have knowledge about the job to be 83. A worker performing effectively in a manufacturing unit was designated as a supervisor. What is the type of socialization strategy being used in the manufacturing unit? a. Fixed b. Sequential c. Non-sequential d. Collective 84. In a contest strategy, a. The channels of movement in a socialization process are kept open and an individual is given an opportunity to perform better in the next stage b. Employees are segregated on the basis of their knowledge and abilities c. An individual passes through a sequence of activities for the accomplishment of a particular target d. There are no discrete or identifiable transition stages and the targets are accomplished in one go 85. In an organization, employees were made to pass through grueling work loads to make them prepare for the challenges in the future. This way the organization planned to promote 11
  • 14. Introduction to Human Resource Management 0 d. Views the world as a differentiated market place The organization identifies its best practices and resources from within and outside the organization and employs them where ever they are best suited 90. Which approach to IHRM is based on 'customization?' a. b. c. d. Ethnocentric approach Polycentric approach Geocentric approach Socio-centric approach 91. Which of the following statements regarding IHRM is correct? Cl as s 86. Of the four approaches adopted by international operations, which approach tries to create value by emphasizing on local responsiveness? a. The multi-domestic b. The international c. The global d. The transnational c. of 20 1 a. b. c. d. solidarity and mutual concern among the employees. The organization believes that to learn and adapt to new organizational norms, one has to unlearn the previous set of norms. Which strategy of socialization is the organization following? Investiture Divestiture Serial Disjunctive se O nl y 87. __________is defined as “the interplay among three dimensions – human resource activities, type of employees and countries of operations.” a. International HRM b. Socialization c. HRM d. Employee relations Fo rI BS U 88. Host country nationals are a. Parent-company nationals who are sent to work at a foreign subsidiary b. Natives of a country other than the host country of an overseas subsidiary c. Natives of the country where an overseas subsidiary is located d. An expatriate who returns to home country 12 89. In the Geocentric Approach to IHRM, a. Companies view the world as a single market place b. The transfer of knowledge from the parent to the subsidiaries is smooth and complete a. b. c. d. Domestic HRM has increased complexity of activities than IHRM There is more cultural awareness and tolerance in domestic HRM than IHRM HRM involves management of cross cultural teams IHRM has diluted risk on the business front and increased risk on people front 92. Which of the following is not an assumption for socialization process? a. b. c. d. Socialization does not occur in vacuum People adjust in similar ways Socialization influences employee performance and organizational stability New members tend to eagerly mingle with senior employees 93. Hofstede developed five dimensions of national culture and provided a research instrument to measure them empirically. Which of the following is not one of the dimensions? a. b. c. d. Power distance Individualism Uncertainty avoidance Race
  • 15. Part A Host Country nationals Third country nationals Expatriates Repatriates a. b. c. d. Human resource approach Systems approach Contingent approach Statistical approach nl y 96. Which approach states that "no one particular management action or design will be suitable for all situations?" O Human behavior approach Role approach Systems approach Contingent approach se a. b. c. d. Fo rI BS U 97. HR department maintains a set of proposals and actions that act as reference points for managers in their dealings with employees. What is this called? a. b. c. d. HR guide HR ethics HR policy Managerial policy 98. Which of approaches currently? a. b. c. d. the is 100. Which of the following is not indicated by high motivating potential score? a. High employee motivation b. High employee performance c. High employee satisfaction d. High employee turnover Cl as s 95. There are different approaches that explain the importance of human resources management. Which of the following options is not one of the approaches to HRM? 0 a. b. c. d. 99. Which of the following gives the motivating potential score? a. ((Skill variety + task identity + task significance)/3) * autonomy * feedback b. ((Autonomy + Feedback)/2) * (skill + task identity * task significance) c. ((Autonomy * Feedback)/2)* (skill + task identity + task significance) d. ((Skill variety * task identity * task significance)/3) * (autonomy + feedback) of 20 1 94. Consider the following example. An Indian firm with operations in European countries sends employees of US origin to work with their counterparts in European countries. What is the term used to refer to the employees of US origin working in European countries? following HR most popular Human resources approach Scientific management approach Systems approach Technical approach 101. Given below are steps in job enrichment. Identify the correct sequence of steps. i. Selecting jobs, which permit close relation between motivation and job performance ii. Make a list of changes that might enrich jobs by brainstorming iii. Providing adequate training, guidance, encouragement and help to employees a. i, iii, ii b. i, ii, iii c. ii, iii, i d. ii, i, iii 102. Which of the following are guidelines for drafting and maintaining a good job description? a. Indicating the scope and nature of the work and all important relationships. b. Indicating the work and duties of the position c. Explaining the supervisory responsibility to the individuals d. All the above 103. __________ is defined as the degree to which its validity, established in one context, can be extended to other ‘primary contexts’. 13
  • 16. Introduction to Human Resource Management 104. One of the following is not a managerial function of human resource management a. Planning b. Organizing c. Staffing d. Retrenching nl y 106. Decision-making is faster in a a. Tall organization b. Flat organization c. Centralized organization d. None of the above Fo rI BS U se O 107. One of the major reasons for the line-staff conflict is a. Empathy towards the limitations of each other b. Complete understanding of the business by the staff function c. Prejudice and bias against each other d. Strategic orientation of the staff function 108. Some of the big IT firms in the country withdrew their campus placement offers to some students when the IT market plummeted last a couple of years back. It shows that there was a. Problem with the recruitment policy b. Problem with the selection c. Problem with the human resource planning d. None of the above 109. ________________ should not be one of the first steps in dealing with surplus manpower for a short period. 14 Leave of absence without pay Work-sharing Loaning Retrenchment 110. Employee referrals a/an___________ source recruitment a. b. c. d. External Internal Hybrid None of the above is of 111. Concealed identity or blind advertising helps organizations a. b. Restrict the number of applicants Escape from the notice of competitors when critical positions are vacant Lessen the burden of the applicants Lessen the cost of advertising Cl as s 105. All except one of the following are the different aspects of Human Resource Development (HRD) a. Job evaluation b. Training & development c. Career planning d. Performance appraisal a. b. c. d. 0 d. Legality of the selection method Utility of the selection method Generalizability of the selection method Validity of selection method of 20 1 a. b. c. c. d. 112. The individuals who reject all the organization standards are labeled as "misfits," as their actions contrast organizational goals. They are also called as a. Rebels b. Fire fighters c. Questioners d. Agitators 113. In India, workers’ participation has limited success because of the following factor: a. b. c. d. The differing perceptions and attitudes between the workers and the management regarding the degree of participation. The trade unions are poorly fragmented and organized. Inter-union rivalry and influences of different political philosophies All the above 114. In India, according to the Industrial Policy Resolution, 1956 the aim of the government in advocating workers’ participation in management is
  • 17. Part A i. To create a socialist society where the workers share the managerial powers ii. To increase industrial peace, iii. To have better relations and increased cooperation from workers 0 i and ii ii and iii iii and i i, ii and iii Cl as s 115. ____________ council studies absenteeism at the workplace and recommends steps to reduce it at the lowest level of worker participation. a. Shop council b. Plant council c. Unit council d. Joint council 120. Maniflex refers to a. The flex time in which an employee is given the freedom to opt for the start and quit time for a particular period, say, a week or a month b. The flex time where an employee can start and quit any time on condition that he has to complete 8 hours of work a day c. Flextime which requires an employee to complete 40 hours per week and the number of hours he/she works in a day can be varied d. A flex time which is similar to variable day and there is no need to work for specific hours of 20 1 a. b. c. d. a. b. c. d. time for a week. What is the type of flex time being followed by the firm? Gliding time Flexi tour Variable day Maniflex O nl y 116. The ______ council usually deals with matters pertaining to the – operational, economic and financial, personnel, welfare and environment areas at a level above the shop/department level. a. Shop council b. Plant council c. Unit council d. Joint council Fo rI BS U se 117. According to _____________ approach, the problems in industrial relations arise because of the differing perceptions and attitudes of the management and the workers. a. Sociological approach b. Psychological approach c. Human relations approach d. Gandhian approach 118. All the following are innovative methods to improve the quality of work life except a. Flex time b. Job enrichment c. Job rotation d. Demotion 119. An employee in a textile manufacturing firm was given the freedom to opt for the start and quit 121. A work schedule that includes a fixed core period each day like a 7 a.m. - 3:30 p.m. 2:00 p.m.-10:30 p.m., or 11 a.m. - 7:30 p.m. with a half an hour lunch break is called a. Permanent work schedules b. Temporary work schedules c. Alternative work schedules d. Shared work schedules 122. Job sharing, work sharing, phased retirement, all these are examples of a. Part time employment b. Full time employment c. Compressed work week d. Alternative work schedules 123. What are the systems termed as, when the programs involve redesigning the workplace not only technologically but also physically with human considerations for the workplace? a. Socio-technical systems b. Psychological systems c. Human relations system d. Physical systems 15
  • 18. Introduction to Human Resource Management b. c. d. Promoting and communicating the need for a quality circle Composition of a quality circle Presentation of suggestions Execution 0 a. 129.This technique creates an open environment free of criticism, encouraging employees to participate and come up with their own ideas. One idea leads to another and impractical and unreasonable ideas are also stimulated and recorded without being suppressed. What is this process termed as? nl y Cl as s 125. "__________is a self-governing group of workers, with or without their supervisors, who voluntarily meet on a regular basis to identify, analyze and solve problems in their work field." a. Employee groups b. Quality circles c. Quality systems d. Employee circles 128.In the development of a quality circle, what is the phase that follows the stage of initial problem solving? of 20 1 124. When the management conducts QWL programs in association with the union, it: a. Leads to effective negotiations that enable designing contracts that satisfy both the parties b. Improves the efficiency of the management and strengthens employee organizations. c. Encourages participative management and involves employees in decision making. d. All the above Fo rI BS U se O 126. The difference between quality circles and task groups is that a. In task groups, members skill does not matter while in quality circle it is important to have skilled employees b. Employees in task force are selected by management whereas in quality circle, they are selected by members of the group c. The only aim of task group is people building whereas in quality circles it is problem solving d. The source of members in task group is from the same work group whereas in quality circles it is from various functions 16 127. Which of the following is not a basic objective of the quality circle? a. To enhance, develop and utilize human resources effectively b. To develop quality of products as well as productivity c. To improve quality of work life d. To increase employee benefits and incentives a. b. c. d. Cerebral popcorn Group popcorn Group storm Idea storm 130. Which committee looks after the activities of the QCs in a particular unit/division and acts as an advisory board? a. Quality committee b. Steering committee c. Employee committee d. Standard committee 131. Who introduced the concept of quality circles? a. b. c. d. Dr. Edward Deming Dr. Caldwell Dr. Kaoru Ishikawa et al Dr Kim Yung Duc 132. What is the likely composition of a quality circle? a. b. c. d. Six to twelve members Two to three members Fifteen to twenty members More than twenty members 133. In a plant council, when is it obligatory to appoint a woman representative?
  • 19. Part A d. 134. a. b. c. d. ___________is “a continuous association of wage-earners for the purpose of protecting and advancing the conditions of their working lives.” Management Trade union Quality circle Productivity circle U se O nl y 135.Under extramural functions, a. Trade unions fight with employers to achieve economic interests of their members b. Trade unions act as benefit organizations providing financial and non-financial assistance to their members during sickness, strikes, lockouts, boycotts, temporary removal from service, etc c. Trade unions involve themselves in various activities to serve a social cause and accomplish their social responsibility towards different sections of the society d. Under these functions, trade unions associate themselves with a political party, get affiliated to the party and help it by enrolling members, campaigning for it during the elections, collecting donations, etc BS Fo rI Intramural Extramural Political Social 137. The main objective of a reformist union is a. To conserve the capitalist society, to continue the employer-employee relationship and the competitive system of production b. To demolish the prevailing structure and replace it with a new one based on the ideals they believe in c. Not to cooperate with their employers instead they aim at using whatever and whomever they can in order to achieve their goals d. To enjoy a large part of the booty earned from the customers and give only a small portion to the workers 0 c. a. b. c. d. of 20 1 b. If the number of women workers is 5 percent or more of the total workforce If the number of women workers is 15 percent or more of the total workforce If the number of women workers is 30 percent or more of the total workforce Even if there is one woman worker Cl as s a. 136. In India, BMS (Bharatiya Mazdoor Sangh) is affiliated to the BJP (Bharatiya Janata Party), CITU is affiliated to CPM (Communist Party Marxist) and INTUC (Indian National Trade Union Congress) is affiliated to the Congress (I). What is the function being performed by the trade unions? 138. Business unions and uplift unions are types of a. Reformist unions b. Revolutionary unions c. Guerilla unions d. Anarchist unions 139. ____________ unions are ideal in nature and aim at broader issues such as education, benefits, health and insurance. a. Uplift Unions b. Business Unions c. Political unions d. Anarchist Unions 140. Trade unions based on the Marxist ideology can be termed as a. Friendly b. Revolutionary c. Uplift d. Business 141. Predatory unions a. Use revolutionary means to completely dissolve the current economic system. They believe that capitalism is a system that does not work 17
  • 20. Introduction to Human Resource Management d. a. b. c. d. General union Industrial union Craft union Staff union 146. All the following are the problems faced by trade unions except a. b. c. d. Uneven growth Small size Few unions Inter-union rivalry Cl as s 142. The Cine Dancers’ Association and the Indian Pilots’ Guild are examples of a. Craft unions b. Staff union c. Industrial union d. General union 145. The Rashtriya Mill Mazdoor Sangh, Bombay; the Engineering Mazdoor Sabha, Bombay; the Labor Mines Mazdoor Sangh, Udaipur, etc., are a few examples of 0 c. Do not stick to a particular ideology or a specific methodology to achieve their objectives Destroy the power of capital and capitalists through laws, attain power by participating in political action and apportion wealth and offer effective power to the workers Are ideal in nature and aim at broader issues such as education, benefits, health and insurance of 20 1 b. se O nl y 143. A staff union a. Is experienced and works on a single craft or trade or any number of crafts or trades b. Generally employs workers from non-manual sectors c. Is based on the industry in which the members work rather than the craft, grade, skill, position or sex d. Consists of members belonging to various industries with varied skills and experience Fo rI BS U 144. All the following are the advantages of the mutual insurance method adopted by the trade unions, except a. It attracts the people to join the union with its varied welfare activities; b. Under this method, members donate more if they need more benefits. This helps in improving the financial condition of the union and enhances its bargaining power when the need arises; c. It restricts outsider interference like that of political leaders and helps maintain friendly relations with the management d. In case a strike continues for a long time, it helps the members to stay united by offering the required financial assistance 18 147. What is the tenure of the joint councils formed in an organization? a. b. c. d. 5 years 10 years 1 year 2 years 148. The extent to which employees are a. b. c. d. aware of their interests, skills, strengths and weaknesses regarding their career goals is termed Career motivation Career resilience Career insight Career identity 149. One of the following is not an example of a Career Anchor a. b. c. d. Functional competence Security and stability Entrepreneurial creativity Aspiring capability 150. ________________ helps organizations identify employee strengths and weaknesses to determine avenues for their career development. a. b. c. d. Gap analysis Individual assessment Organizational assessment Opportunity analysis
  • 21. Part A 158. Clear and well-defined goals, a definite time plan and an action plan to achieve these goals, combined with timely feedback, are characteristics of a. Work standards approach b. Management by objectives c. BARS d. Balanced scorecard method nl y Cl as s 153. Employees who feel that there is nothing more to achieve and that their career has become stagnant are said to have reached a a. Career island b. Career plateau c. Career peak d. Career goal 0 152. Career planning and development programs for employees a. Increase employee frustration b. Promote only a lucky few c. Increase the employee turnover rate d. Ensure future availability of resources 157. Evaluation of an employee’s performance by his colleagues is called a. Peer appraisal b. Management by objectives c. Formal appraisal d. Group appraisal of 20 1 151. Understanding the career aspirations of an employee, determining his capabilities and competencies and identifying the gaps is termed a. Need analysis b. Gap analysis c. Opportunity analysis d. Employee analysis U se O 154. The employee at this stage strives to maintain a reputation and desires to be looked up to, in the organization. This is the a. Exploration stage b. Establishment stage c. Maintenance stage d. Disengagement stage 160. Paired comparison of employees is a method of a. Ranking b. Checklist c. Point allocation d. Forced choice rating 155. Reassignment of an employee to a higher level job that involves greater responsibility or status or pay is termed a. Transfer b. Cross-functional transfer c. Demotion d. Promotion 161. Appraisal of an employee performance by supervisor, self, peers, subordinates and customers is termed as a. Team appraisal b. Balanced scorecard method c. 360 degree appraisal d. Critical incident method 156. The process of selecting and developing employees in the organization to occupy key positions in the future is termed a. Career planning b. Succession planning c. Career development d. Human resource enhancement 162. The method of appraisal where the appraiser makes a list of all the important situations and employee reactions/behavior at that time is the a. Checklist method b. Critical incident method c. Graphic rating method d. Work standards approach BS Fo rI 159. The main disadvantage of the essay appraisal is that a. It consumes a lot of paper b. Different writing skills can portray employee performance differently c. Some points can be missed out by the evaluator d. Both b & c 19
  • 22. Introduction to Human Resource Management 168. Supratim has been promoted to the post of an Area Sales Manager just last week, but finds himself lacking in some areas. His performance can be improved by a. Reprimanding him b. Training him c. Linking his pay to performance d. Providing him with an assistant 164. Rajan believes that all those from Xavier’s are very arrogant and complacent. This is reflected in his performance appraisal of Preethi, who is from Xavier’s. This is an example of a. Halo effect b. Perceptual set c. Stereotyping d. Stringency effect 169. Rapid Creations has been acquired by Indigo Hues. Employees of the acquired company need basic training in a. Human relations b. New technology c. Managerial aspects d. Company policies and procedures Cl as s of 20 1 0 163. If the appraiser allows a single characteristic of the appraisee to dominate his judgement of the employee performance, it is termed as a. Halo effect b. Stereotyping c. Perceptual set d. Primacy effect se O nl y 165. Priyank is a good salesman and works for an IT company. But, his performance in 2001-02 was affected because of the slump in the IT market. However, his boss fails to acknowledge it and rates his performance as poor. This is an example of a. Stereotyping b. Primacy effect c. Fundamental attribution error d. Halo effect Fo rI BS U 166. Veena always awards high ratings to all her subordinates irrespective of their performance levels. She is affected by a. Leniency effect b. Primacy effect c. Recency effect d. Tringency effect 20 167. One of the main reasons for the negative attitude of employees towards performance appraisal is a. It is associated with pay b. It gives away how bad they are c. It tends to become subjective because of poor implementation d. It is not useful for any other organizational activity 170. Employees resist participating in training programs mainly because a. They are not convinced about their benefits b. They do not like to be away from their colleagues and friends c. They feel that they are ill-equipped that they need training d. None of the above 171. _________________, as a training method, helps the trainee gain crossfunctional knowledge a. Apprenticeship b. Simulation c. Job rotation d. Job enlargement 172. The method of training in which the trainee is given a series of questions to answer after reading the relevant material is called a. Role playing b. Simulation exercises c. Programmed instruction d. Committee assignments 173. ________________ helps in improving the communication, people-management and relationship management skills of the trainees.
  • 23. Part A Computer modelling Role playing Class room lectures Vestibule training 179. Traditionally, the pay scales in companies were associated with 180. __________________ is the systematic process of analyzing and evaluating jobs to determine their relative worth in an organization. a. b. c. d. Job analysis Job design Job evaluation Job enrichment 181. The different factors associated with the jobs in an organization, which form the basis for job evaluation are termed a. Job specifications b. Job descriptions c. Job dimensions d. Job definitions Cl as s 175. The process of developing an understanding of the self and one’s relationships with other group members through unstructured group interaction is termed as a. Role playing b. Simulation exercise c. Sensitivity training d. Transactional analysis Employee performance Organizational hierarchy Worth of the candidate Charm of the employee 0 174. The basic yardstick to measure the success of a training program is a. No. of participants b. Reputation of the trainer c. Learning benefits to the trainees d. The amount paid in TAs & DAs paid to all the trainees a. b. c. d. of 20 1 a. b. c. d. se O nl y 176. Response, learning, performance and results, are the four levels in evaluating a management development program. This system of evaluation is called a. Taylor’s system b. Kirkpatrick’s system c. Werther & Davis’s method d. Armstrong’s method Fo rI BS U 177. A meeting of people to study and analyze a problem from different angles for developing the participants’ ability to exchange ideas and change their own views is a a. Class room lecture b. Case study c. Conference d. Sensitivity training 178. A person who is either obedient or manipulative, charming at one time and repulsive at another time, is in a a. Child ego state b. Adult ego state c. Parent ego state d. Chameleon ego state 182. The process of ranking in which the relative importance of each job is determined in comparison with the representative job is called a. Relative ranking b. Comparative ranking c. Paired comparison d. Single factor ranking 183. The main disadvantage of the job grading method is that a. It is more comprehensive b. It is not supported by job description or specification c. It is very expensive d. The grade definitions have to cover jobs from different functions 184. Example of a quantitative method of job evaluation is a. Single factor ranking method b. Factor comparison method c. Job classification method d. All of the above 21
  • 24. Introduction to Human Resource Management 186. Compensation administration should match/follow all the following basics except a. Employee expectancy b. Principle of equity c. Legal requirements d. None of the above Executive compensation program Fixed compensation program Variable compensation program Performance pay program 0 a. b. c. d. 192. The main hurdle in having a National Wage Policy in India is a. b. c. d. Opposition from trade unions Opposition from workers Regional & industrial disparities Opposition from the heads of state 193. Performance bonus is an example of a/an nl y Cl as s 187. The financial capacity of the employer is taken into consideration in the concept of a. Minimum wage b. Fair wage c. Living wage d. Just wage 191. The system of compensating employees in accordance with their performance is termed the of 20 1 185. Decision band method of job evaluation is based on the premise that the value of a job depends on its __________ requirements a. Relationship management b. Hierarchical c. Decision-making d. Decision-abiding U se O 188. Radha works in a small scale industry where she is paid Rs. 100 as a daily wage like all her coworkers. This is an example of a. Time wage plan b. Piece wage plan c. Skill-based pay d. Competency-based pay Fo rI BS 189. Satwik is an IT engineer, who earns Rs. 40000 p.m., working for his company. His pay is an example of a. Qualification-based pay b. Skill-based pay c. Time wage plan d. Piece wage plan 22 190. Under which system, the wage for each piece of work is fixed and the workers are paid once the work is completed. a. Piece-wage plan b. Skill-based pay c. Time wage plan d. Payment by results a. b. c. d. Intrinsic reward Extrinsic reward Intrinsic wage payment Extrinsic wage payment 194. The process of rewarding employees by giving them a stake in the company, which further enhances their performance is called the a. b. c. d. Gain-sharing Annual bonus Employee stock plan Profit sharing 195. The fringe advantages that accrue to an employee over and above his salary, as a result of his employment and position in an organization are termed a. b. c. d. Benefits Incentives Compensation Wages 196. The flexible benefit plan for employees, where the employee gets a chance to choose from a lot of benefits, is also called the a. Holiday benefit plan b. Restaurant benefit plan c. Cafeteria benefit plan d. Variable benefit plan
  • 25. Part A 203. “________________ is employee self-control which prompts him to willingly cooperate with the organizational standards, rules, objectives etc.” a. Culture b. Behavior c. Discipline d. Trust 198. The basic difference between incentives and benefits is a. Incentives are service related and benefits are performance related b. Incentives are performance related and benefits are service related c. Incentives are non-monetary and benefits are monetary d. Incentives are monetary and benefits are non-monetary 204. Triumph Chemicals awards the “Safest Place” annual award to the unit with the best safety record every year, across its 16 units. This is an example of a. Positive discipline b. Negative discipline c. Enforced discipline d. Reward discipline Cl as s of 20 1 0 197. The provision of compensation or lucrative benefits for the top management, in case of a job loss/changeover when there is a change of guard, is the a. High-flier scheme b. Retention planning scheme c. Cool landing scheme d. Golden parachute scheme nl y 199. Halsey plan, Rowan plan, Barth system etc. are all examples of a. Long-term incentive plans b. Short-term incentive plans c. Non-monetary incentive plans d. Employee benefit plans U se O 200. The first sign of an employee’s discontent either with the job or the organization is a. Conflict b. Industrial unrest c. Grievance d. Strike Fo rI BS 201. The first stage in grievance redressal is handled by the a. Organizational head b. HR department c. Arbitrator d. Supervisor 202. The method of smoothing out differences to resolve a conflict between two parties, in view of larger interests is a. Avoidance b. Accommodation c. Arbitration d. Mediation 205. Being late to work is an example of a. Minor infraction b. Major infraction c. Medium infraction d. Intolerable offence 206. Corrective action should be immediate, impartial and consistent with a warning – this is called the a. Common disciplinary rule b. Red hot stove rule c. Cisco’s disciplinary rule d. Yellow hot stove rule 207. All the following are the features of a good disciplinary process except, a. Consistency b. Impartiality c. Immediate action d. Unpredictability 208. The in charge of the acid storage plant at Sirpi was suspended for the accident that took place. Investigation revealed that he had actually approached the management with a request for repairing a leaking pipe, but the management ignored it. His suspension is an example of a. Late intervention b. Negative feedback 23
  • 26. Introduction to Human Resource Management 209. Ratan got a shock when he was suspended for smoking in the office premises. He says he never knew a puff came with such a heavy tag attached to it. This is an example of a. Negative feedback b. Lack of communication c. Immediate action d. Late intervention 215. The production targets are fixed with the mutual consent of the management and the workers in Calcio Tubes & Bulbs Pvt. Ltd. This is an example of a. Associative participation b. Administrative participation c. Decisive participation d. Informative participation Cl as s 210. _____________ can be defined as the relationship between the management and employees of an industry. a. Interpersonal relations b. Industrial relations c. Organizational relations d. Employment relations 214. ‘Most of the problems in industrial relations arise out of the differing perceptions and attitudes of the management and the workers’ – this is the a. Sociological approach b. Human relations approach c. Gandhian approach d. Psychological approach 0 Misplaced responsibility Punitive discipline of 20 1 c. d. O nl y 211. Paternalistic style of management, adopted during the ‘human relations’ era is also called the a. Exploitative authoritative style b. Benevolent authoritative style c. Consultative management style d. Participative style Fo rI BS U se 212. _______________ bodies like Indian Labor Conference, Standing Labor Committee and Industrial Committees help the government in settling industrial disputes. a. Bipartite b. Tripartite c. Constitutional d. Autonomous 24 213. _______________ is a managerial tool that facilitates an amicable and mutually acceptable agreement between the management and the employees to solve employment related problems. a. Adjudication b. Industrial conflict c. Collective bargaining d. Strike / Lockout 216. A trade union’s primary objective is to a. Conduct strikes b. Force lockouts c. Fight with the management on employment related issues d. Achieve economic benefits for employees 217. The workers in these unions are a. b. c. d. experienced and work on a single trade or possess similar skills and specialization. Craft union General union Industrial union Staff union 218. The difference in the wages paid to workers in the same unit, occupation or region is called a. Wage inequality b. Wage differential c. Compensation differential d. Compensation difference 219. Ramya analyzed the market opportunities and the future of the IT industry in-depth before taking up a career as a Systems Analyst. However, she is not very happy today as she feels she is unfit for the job. The most probable reason is
  • 27. Part A c. d. 225. The approach that stresses on the fact that individuals should not be treated as mere factors of production is a. Human Relations Approach b. Scientific Management Approach c. Humanistic Approach d. None of the above Cl as s 220. As a student, when one is trying to assess one’s self and the opportunities available in the market to choose the right career, he/she is said to be in the a. Exploration stage b. Establishment stage c. Maintenance stage d. Disengagement stage 224. Both Raunak & Dilip work for View real Inc. Though Dilip is two years senior to Raunak, he earns Rs.5000 less than Raunak per month. This is because of the difference in their performances. View real follows the system of a. Standard compensation b. Variable compensation c. Executive compensation d. Biased compensation 0 b. She failed to do a proper selfassessment before taking the decision She is unhappy that all her friends are in the same industry She is unhappy that none of her friends are in the same industry She sees her friends in other fields doing better of 20 1 a. O nl y 221. The role of a legal advisor in an organization is very important. However, it has very little scope for career advancement because of a high degree of specialization. Such careers are called a. Declining careers b. Low-ceiling careers c. Career plateaus d. Glass-ceiling careers Fo rI BS U se 222. Virtuous Services Pvt. Ltd. believes that it pays quite handsome salaries to its employees. However, the turnover rate has been quite high in the recent past and all the exit interviews point to one factor – compensation, as the culprit. The company failed to a. Meet the legal requirements b. Follow the principle of equanimity c. Match the employee expectations d. Match the pay scales abroad 223. In the job classification system for job evaluation, job grades are defined and determined based on a. Organizational structure & pay packages b. Job dimensions & pay packages c. Pay packages & grade definitions d. Organizational structure & job dimensions 226. Hawthorne Studies gave raise to this approach of human resource management a. Mathematical Approach b. Human Relations Approach c. Human Resources Approach d. Contingent Approach 227. An average sincere employee expects his boss or manager to have all the following characteristics except a. Be genuinely interested in the employee and his work b. Ignore all the employee’s mistakes c. Be fair and frank in his dealings with the employee d. Recognize and reward the employee for his contributions 228. As an auditor, the HR professional a. Ensures that all managers of the organization perform their respective roles b. Conducts training and development activities c. Solve employee grievances d. Provides support to other departments in conducting appraisals etc. 25
  • 28. Introduction to Human Resource Management Job design Job enrichment 0 235. If a selection method produces consistent results across different situations and times, it is termed to be a. Reliable b. Valid c. Legal d. None of the above 236. An interview where the interviewer does not chart out the formal structure of the interview but lets it take a natural course is called a a. Formal interview b. Unstructured interview c. Group interview d. Stress interview Cl as s 230. The marketing manager was asked to handle the product re-launch of toothpaste by VP-Marketing. The manager’s obligation towards the VP is called a. Responsibility b. Accountability c. Authority d. None of the above c. d. of 20 1 229. ________________ organizations are characterized by rigid structures ,directives and rules and are appropriate for static environments. a. Mechanistic b. Organic c. Flat d. Decentralized nl y 231. The process of ensuring that there are the right number of qualified people in the right jobs for best results is termed a. Human Resource Planning b. Recruitment c. Retrenchment d. Downsizing 237. The performance appraisal method that channelises employee efforts with organizational goals is a. BARS b. 360 degree appraisal c. Balanced scorecard d. Management by objectives 238. The employees of IIVB lose a halfday’s leave if they are late to work even by 15 minutes. This is an example of a. Punitive discipline b. Preventive discipline c. Positive discipline d. Precautionary discipline 233. One of the following is not a job characteristic under the Job characteristics Approach to Job analysis. a. Skill Variety b. Task significance c. Reporting authority d. Task significance 239. In India, regulation of employment and conditions of employment are governed by a. The Trade Union Act, 1926 b. The Industrial Disputes Act, 1947 c. The Factories Act, 1948 d. The Workmen’s Compensation Act, 1923 234. Adding more responsibility, providing wider scope, greater sequencing and minimizing controls, all constitute a. Job enlargement b. Job expansion 240. Registration and cancellation of trade unions is governed by a. The Trade Union Act, 1926 b. The Industrial Disputes Act, 1947 c. The Factories Act, 1948 d. The Workmen’s Compensation Act, 1923 Fo rI BS U se O 232. The statement of the required set of knowledge, skills and competencies for a job is called the a. Job specification b. Job description c. Job classification d. Job analysis 26
  • 29. Part A 246. Munnalal & Sons. is a mediumsized traditional family business which wants to introduce some modern management practices like performance appraisal. The best suited method for the company is a. 360 degree performance appraisal b. BARS c. Management by objectives d. Balanced scorecard method 242. Rishabh has an adventurous spirit and loves trekking, rock-climbing etc. He wants to be a fighter pilot. His career anchor most probably is a. Service b. Pure challenge c. Autonomy d. Life style 247. Sugandhi works in a bank but works from 9 a.m. to 2 p.m. (instead of 9 to 6) so that she is at home when her kids are back from school. This is an example of a. Flextime b. Part-time c. Compressed work week d. Telecommuting 243. Ramesh, the Marketing Manager in a large firm meets the Production Manager, Sr. Manager-HR and the VP-Operations almost every day in the officers’ club. Some topic or the other, related to their organization and business comes up for discussion. This is an example of a. Formal organization b. Informal organization c. Conference d. Rumors 248. HR Manager, Pavithra, arranges training programs and coordinates with different departments to conduct the same. She plays the role of a __________ in this case. a. Specialist b. Facilitator c. Change agent d. Controller se O nl y Cl as s of 20 1 0 241. Sameer, a fresh chemical engineer has been provided training in a simulated work environment using the same equipment and materials that he would be using on the job. This training is termed a. Case exercise b. Computer modelling c. In-basket training d. Vestibule training Fo rI BS U 244. Sarita left her job as a receptionist as she was not happy with the job profile and wanted a more challenging job that would suit her qualification. Her leaving the organization is termed a. Layoff b. Outplacement c. Attrition d. Loaning 245. One of the reasons for over-staffing in the government and the public sector enterprises is a. Minimal turnover rates b. Long-term planning c. Continuous assessment d. Highly qualified employees 249. Raghavan, Manager in the ER division of the HR department in a large firm ensures that the production, engineering and other departments comply with the statutory requirements of the contract labor laws. He plays the role of a a. Specialist b. Facilitator c. Change agent d. Controller 250. Radiant Recordings is a small 8-year old company employing around 40 people. The company wants to forecast its manpower requirements for the next 2-3 years. It can rely on a. Time series analysis b. Regression analysis c. Past experience d. Delphi technique 27
  • 30. Introduction to Human Resource Management Key 1. d 2. a 3. b 4. a 5. b 6. b 7. a 8. d 9. c 10. a 13. a 14. b 15. c 16. d 17. a 18. a 19. b 20. b 21. a 22. a 23. c 24. d 25. c 26. a 27. b 28. b 29. a 30. d 31. a 32. c 33. d 34. a 35. d 36. a 37. b 38. d 39. a 41. c 42. b 43. b 44. a 45. b 46. b 47. a 48. a 49. b 50. a 51. d 52. b 53. d 54. d 55. a 56. d 57. d 58. a 59. b 60. d 61. a 62. d 63. b 64. a 65. d 66. a 67. a 68. a 69. b 70. c 71. d 72. b 73. d 74. c 75. d 76. c 77. a 78. b 79. c 80. d 81. c 82. d 83. c 84. a 91. d 92. d 93. b 94. d 101. b 102. d 103. c 104. d 111. b 112. a 113. d 121. c 122. a 131. c 132. a of 20 1 Cl as s 87. a 88. c 89. d 90. b 95. d 96. d 97. c 98. a 99. a 100. d 105. a 106. b 107. c 108. c 109. d 110. a 114. d 115. c 116. b 117. b 118. d 119. b 120. d 124. d 125. b 126. b 127. d 128. c 129. a 130. b 133. b 134. b 135. b 136. c 137. a 138. a 139. a 140. b 143. b 144. c 145. b 146. c 147. d 148. c 149. d 150. b O nl y 86. a 123. a 152. d U 151. a 40. a 85. b se 141. b 142. a 0 11. b 12. d 153. b 154. c 155. d 156. b 157. a 158. b 159. d 160. a 162. b 163. a 164. c 165. c 166. a 167. c 168. b 169. d 170. a 171. c 172. c 173. b 174. c 175. c 176. b 177. c 178. a 179. b 180. c BS 161. c 183. d 184. b 185. c 186. d 187. b 188. a 189. b 190. d 191. c 192. c 193. b 194. c 195. a 196. c 197. d 198. b 199. b 200. c 201. d 202. b 203. c 204. a 205. a 206. b 207. d 208. c 209. b 210. b 211. b 212. b 213. c 214. d 215. c 216. d 217. a 218. b 219. a 220. a 221. b 222. c 223. d 224. b 225. a 226. b 227. b 228. a 229. a 230. b 232. a 233. c 234. d 235. a 236. b 237. c 238. a 239. c 240. a 241. d 242. b 28 182. a 231. a Fo rI 181. c 243. b 244. c 245. a 246. c 247. b 248. b 249. d 250. c
  • 31. Cl as s of 20 1 0 Part B: Caselets Fo rI BS U se O nl y The caselets in this section are designed to encourage students to apply theoretical concepts to various business situations. Analyzing these cases requires not only theoretical knowledge, but also a comprehensive understanding of the business environment. These cases test the student’s reasoning and comprehension skills.
  • 32. Part B: Caselets Caselet 1 of 20 1 0 Sushma Sharma was excited about her first job at Aarohan, an established software development firm. Having completed her masters degree in computer applications, Sharma attended the initial selection process at Aarohan. She was quite impressed with the way she was treated all through the selection procedure. She was therefore glad to have received the offer letter for the position of junior programmer in the firm. She was to report at the regional office to attend the Welcome to Aarohan program by 9am the following Monday. Cl as s Sharma was among the ten new members recruited by Aarohan for the positions of junior and senior programmers. Once she reached the premises of the office, Sharma was pleased to be welcomed by the HR manager himself, who directed her to the conference room. The Welcome to Aarohan program started as scheduled. It began with a brief introduction of the company by the HR manager, Sreekanth Reddy. nl y Reddy introduced the team to the history of the company, its founders, the values and culture it upheld, the expectations of the organization, the basic norms to be followed, the key personnel in the organization, and gave a brief insight into its various procedures and processes. Reddy also talked about the company’s vision, mission, and objectives and the way it intended to achieve them. He also briefed them about the role each one of them had to play in order to accomplish the objectives of the organization. This helped the team members along with Sharma, understand the organization and their responsibilities and roles in it. Fo rI BS U se O Sharma, along with the rest of the team was trained in soft skills, basic system skills of the company and other technical aspects of her job as well. Reddy also spoke about the intranet at Aarohan which was meant to be used by the organizational members to interact with each other. They were given their e-mail ids. Each of them was provided with all the necessary office equipment like the PC, telephone, internet, and other accessories required to perform their jobs, once they reached their workstations. Reddy then introduced the incumbents to their respective supervisors and other team members. Each incumbent was given a mentor who was supposed to help him/her during his/her association with the organization. Sharma found her mentor to be an extremely approachable and friendly person from whom she could take help and support. After this, Sharma, like the rest of the group had to complete a project that was very helpful in understanding the job procedures and systems. This project required coordination and cooperation among all the members of the team. At the end of the project, Sharma and other incumbents were asked to make a power point presentation of their projects and their understanding of the organization as a whole. They were also encouraged to discuss their experiences while working on the project, with the rest of the team. These presentations and the discussions that followed helped the incumbents understand the culture of the organization better. At the end of the 15-day Welcome to Aarohan program, a feedback was taken from the incumbents about their perceptions of the organization, its systems, procedures, culture, etc. The feedback was also intended to elicit information from the new employees about their personal goals and objectives and how they would contribute to the growth of the organization. The incumbents were given complimentary gifts on the last day of the program.
  • 33. Introduction to Human Resource Management The program left a pleasant feeling among the incumbents as they were made to feel important during the initial days itself. Sharma could now evaluate her ‘fit’ into the organizational culture and the work processes. She could now judge her skills and abilities that would help her perform well and identify the areas for her improvement. of 20 1 0 Thus, Aarohan conducted an effective socialization process called the Welcome to Aarohan program that aimed at familiarizing the incumbents with the culture, values, norms and procedures of the organization. This in turn, helped Aarohan in developing a workforce that understood the organizational objectives and their role in achieving them. Questions for Discussion: 1. Discuss the significance of Welcome to Aarohan program in the present case, in developing a knowledgeable and committed workforce that worked towards the accomplishment of organizational goals and objectives. 2. Citing the example of Welcome to Aarohan, describe a model for an effective socialization process in an organization. Cl as s Caselet 2 nl y Ecstatic Automobiles (Ecstatic) is a large manufacturer of two-wheelers, known for its innovation in designing vehicles that never failed to attract customers. This led the company to become the market leader within 10 years of its inception. However, a recent change in the top management saw the value of its stocks dipping, and its sales reached an all-time low. This was a serious cause for concern to the management, which probed into the reasons for such a dismal performance. The study revealed that two consecutive ventures in new model introduction had failed miserably in the market. Fo rI BS U se O The chief engineer, Rakesh Iyer, was called for, to attend a meeting with the CEO and the Managing Director, Ravi Ganesh. When asked for an explanation, Iyer explained that the decreasing morale and motivation of design engineers was the main reason for the low quality performance of the department. “Why don’t we motivate them by doling out more incentives and bonuses for better performance?” asked Ganesh. In reply, Iyer said that no amount of incentives or bonuses succeeded in enhancing their morale and motivation. “Nothing seems to boost their motivation and productivity levels,” said Iyer with a concerned voice. To this, Ganesh offered, “Then let me first talk to your team and then we shall decide the plan of action.” After discussing a few other issues, Ganesh informed Iyer that he would have a meeting with all the members of the engineering department the following Monday. Iyer then left the room. It was Monday morning, and every member of the design & engineering department assembled in the conference room. Ganesh had a free and open interaction with the entire department and emphasized the role they played in bringing the company to the top position. He then talked about the deteriorating performance of the design engineers in the recent past. “It has been observed that the design team, which has been instrumental in bringing the company so many laurels and unparalleled success, is now not contributing its mite towards the company’s profitability,” said Ganesh with a concerned voice. He then discussed with the team, the problems being faced by the members in their day-to-day activities. This discussion led to the conclusion that it was the monotonous nature of the job that demotivated the design engineers. They wanted more autonomy and freedom in their jobs. Lack of freedom in their jobs led to a demotivated group of design engineers in the organization, which in turn, affected the productivity and profitability of the firm. It was therefore decided that the design engineers would be given more autonomy in 32
  • 34. Part B their jobs in terms of running their projects, selecting outside consultants, etc. The management also decided that representatives from the design team would be present during the selection process for new employees in the department. As a result, the design team now had the autonomy to decide the projects they would work on, how they would go about it, and the composition of the team. After these changes were implemented in the department, the design team showed substantial improvement in their performance. of 20 1 0 The next two models of the sports bike launched by the company were a hit in the market and the company registered a record profit, which was around 40% more than the previous year’s. The job enrichment effort thus resulted in increased productivity among its employees. This initiative also enhanced the morale and motivation levels of the engineering department. It was evident from the fact that within a short span of 8 months, three other models were also ready for production. Iyer too, was extremely satisfied with the performance of his team members. Question for Discussion: Cl as s Having experienced this unprecedented rate of success of the organization through the process of job enrichment, the management decided to extend this concept to the rest of the departments as well. As expected, the other departments also produced similar results and recorded huge profits for the organization. Thus, Ecstatic is an organizational example for the success of job enrichment method of job re-design. Ecstatic Automobiles had benefitted immensely by introducing the concept of job enrichment, not only in terms of increased productivity levels but also in the form of enhanced employee morale and motivation. Discuss the ways in which modern organizations like Ecstatic are being benefitted by enriching the jobs of their employees. 2. Discuss the variety of ways in which organizations can enrich the jobs of their employees. O nl y 1. Caselet 3 Fo rI BS U se Esteem Enterprises (Esteem), is a leading producer of computer hardware equipment in the industry. In an interview with a national daily, the company’s CEO stated that the secret behind the success of Esteem was its ability to adapt to changes in the environment. This adaptability was possible due to an ongoing succession planning process that takes place through out the year. Named “Leadership Development Program,”(LDP), the succession planning at Esteem aims at creating and developing strong leadership, that is capable of addressing all the skills and competencies required to face the challenges posed by today’s dynamic business environment. The LDP strives towards attaining organizational excellence through its talented workforce. The LDP was the brainchild of the CEO of Esteem, Shivraj Dixit, who felt that the organization must be ready to face any eventuality or crisis at any point of time. Dixit strongly believed that the organization must not be dependent on a single individual or a group of individuals for its development. On the other hand, it must nurture a number of leaders who will lead the firm towards the accomplishment of organizational goals and objectives. The LDP followed a simple but continuous process that aimed at developing necessary skills and competencies among its employees that would help the organization meet the present and future demands of the ever-changing external environment. The LDP is headed by a group of experienced employees from the top management. They first identify the existing competencies of the employees and key 33
  • 35. Introduction to Human Resource Management of 20 1 0 personnel in the company and compare them with the requirements of the industry it competes in. Through a series of evaluation processes, the team assesses the training needs of the existing employees, which help in achieving the organizational goals. The team then plans for the implementation of the necessary training, mentoring or coaching sessions to enhance the skills and competencies of employees to meet the organizational objectives. The team at this stage also considers the probability of having to recruit people from outside the company, in order to meet the future needs of the organization. The LDP then drafts a plan of action for the next three months. It uses succession planning applications like the human resource information systems (HRIS) that provide the firm with an insight into its future requirements. Since Esteem is a large organization, the use of such applications proves to be very beneficial to the organization. Esteem also took the support and assistance of an external recruiting consultant to provide the right personnel to the firm at the right time. This became necessary when there was a dearth of internal talent among the existing employees. It provided Esteem the additional benefit of focussing on strategic issues in human resource management. Questions for Discussion: Cl as s Thus, with the top management investing sufficient time and resources on succession planning, Esteem’s LDP was successful in being able to provide just the right kind of people not just for the present, but for the future as well. The succession planning program at Esteem is thus a constant and ongoing process that prepares the company to handle even unforeseen challenges and eventualities. Discuss in brief, the various phases in the succession planning process at Esteem, that helped it to become one of the top manufacturing companies in an industry that was sensitive and adaptive to the dynamic business environment. 2. Discuss the elements of an effective succession planning program that helps an organization prepare itself to meet its goals and objectives, through constant availability of talented human resources. O nl y 1. se Caselet 4 Fo rI BS U Integrated Solutions was a growing organization in the telecom industry. Its phenomenal growth in the recent past led to a huge manpower requirement in the company. Recruiting the required resources was a challenging task for the HR department as there was a dearth of talent in human resources in the market with too many companies vying for the same talent. The CEO of the company called for a meeting of all the heads of departments to discuss ways in which the manpower requirement could be met. The CEO invited suggestions about innovative ways of recruiting top talent in the industry. 34 Anupama Roy, the HR manager had a point to make. She said, “This is a difficult task for us, as most of the openings in the company are in the middle and top managerial positions, for which we require experienced personnel. Unfortunately, most of them will be already employed and busy in their jobs. So, our job now is to attract this group of passive job-seekers.” At this point, one of the project leaders raised a doubt, “In such a competitive business scenario, how successful will we be in attracting the attention of skilled employees?” The CEO agreed and so did Roy. “Perhaps, we could conduct a study to identify ways of capturing this potential group of candidates,” suggested Roy. It was then decided that a team of members from the HR department will study the way employees in organizations sought for new opportunities in the job market.
  • 36. Part B of 20 1 0 Accordingly, a team of three members headed by Amit Bajaj set out to study ways in which passive job-seekers could be attracted. The survey conducted by Bajaj and his team dealt with issues like how the potential job seekers in the industry spent their free time, the web-sites they visited, their intentions of seeking a new job, their satisfaction levels in their present jobs, their expectations about an ideal work environment, etc. After a week, Bajaj was ready with the report and presented it in a meeting, which was also attended by the CEO, the HR manager and the Systems manager. The report found that a person already possessing a job would approach another organization if invited by a friend or associate working for the same organization. The report also brought to light, the fact that people desist seeking new opportunities elsewhere because of the long time wasted during the entire hiring cycle. Based on the above report, Roy, in consultation with the CEO, Systems manager and Bajaj, drafted the following plan of action: Integrated Solutions initiated a new scheme called, ‘Invite a friend,’ based on the finding that people approach organizations when advised by acquaintances already working for those firms. Accordingly, the Invite a friend scheme was introduced to encourage employees to bring in potential candidates from among friends and acquaintances for the various positions available in the organization. In case the candidate got selected, the employee who referred him/her would be rewarded. Within a year of its introduction, it was found that around 40%-50% of the new employees were recruited through this scheme. • The company also hired in-house head hunters who were completely devoted to the process of hiring talented people. This reduced the cycle time involved during the entire hiring procedure, which in turn attracted potential candidates. • Integrated solutions linked their corporate web-site to the sites that are more likely to be visited by a maximum number of potential candidates. This increased the number of hits by job-seekers to their web-site. This in turn, helped attract passive job-seekers. • The organizational members mingled with people belonging to other companies at various social gatherings and festivals and talked positively about Integrated Solutions. se O nl y Cl as s • Fo rI BS U Thus, the innovative ways of recruitment at Integrated Solutions helped the firm attract nearly 10% of the top talent in the industry. They also helped reduce the costs involved in the hiring process to a substantial extent. Soon, the company gained a strong competitive edge over its rivals in the industry through the strength of its human capital. This reinforced the belief that if an organization can manage to get the best talent present in the industry and succeed in retaining it, then it would remain the leader in the industry, merely on the strength of its human resources. Questions for Discussion: 1. Integrated Solutions initiated a number of steps to attract the top talent in the industry as discussed in the case. Briefly describe the factors that are to be considered by the company before framing its recruitment policy. 2. Evaluate the success of the recruitment process initiated by Integrated Solutions. Caselet 5 Digital Electronics (Digital) was established twenty years ago by Ramprasad Goud. The mission of this manufacturer of consumer electronic goods was to produce high quality, innovative products at the lowest possible costs, that catered to the ever changing needs of its customers. The organizational structure at Digital was 35
  • 37. Introduction to Human Resource Management characterized by a tall hierarchy with a number of managerial levels between the shop floor executives and the CEO. The leadership style that prevailed in the company was the autocratic form, wherein employees were seldom involved in the organization’s decision-making process. All crucial decisions were made by the top management and merely conveyed to employees at the lower rung of the organizational structure. of 20 1 0 Though Digital had been performing well in the industry, its profitability levels and market share were gradually dwindling. This was a serious cause for concern to the CEO, Goud, who invited top level managers to give their suggestions, to tackle this problem. A discussion that followed during the meeting identified the deteriorating quality of their products coupled with lack of innovation (especially during the recent past) as the main reason for the low demand for their products in the market. Mohan Das, the Director HR, blamed the organizational structure for the depressing innovative spirit among its employees, which in turn, hit the sales. He suggested that Digital introduce the concept of self-managed teams (SMTs) to overcome this crisis. By providing enhanced responsibility and authority to a group of individuals through SMTs, Digital might enhance employee commitment which would result in improved quality of goods and in the productivity and efficiency of the workers. Cl as s The whole team was taken aback for a moment, when they heard the proposal of Das. Goud himself felt that the bureaucratic culture at Digital might not encourage the implementation of SMTs. “Besides, there are other issues that have to be dealt with, to ensure success of the SMTs,” said Goud. Das then pointed out recent organizational examples which had benefited by implementing the concept of SMTs. One of the examples was that of a reputed telecom company that had witnessed a 26% increase in its sales after the introduction of SMTs in its sales force. U se O nl y Though the management was not much convinced about the proposal, it decided to introduce SMTs in its production and R&D departments. After a careful analysis of the organizational culture and the benefits likely to be accrued to the organization through its new initiative, Das implemented the concept of SMTs in both the departments. Although Digital faced a few problems during the initial stages, it began reaping the benefits of improved productivity and greater innovation among its employees. Soon, the sales figures picked up and the company recorded huge profits and increased market share. Having realized the potential benefits of SMTs, Digital extended the concept to other departments as well. Thus, by introducing self-managed teams in the organization, Digital Electronics not only experienced a rise in its profitability and market share, but also reaped the benefits of a motivated and a committed workforce. BS Questions for Discussion: Fo rI 1. Mohan Das carefully analyzed the organizational culture at Digital before deciding to implement the concept of SMTs. Discuss the various cultural issues that might have cropped up during the implementation of SMTs at Digital Electronics. 2. Briefly describe the characteristics of self-managed teams and the benefits that are likely to accrue to the organizations which implement them. Caselet 6 Softpro Technologies was a 35-year old manufacturer of computer accessories. With an initial manpower of 80 people, Softpro grew into an established organization with 8000 employees working for it. The founder of Softpro, Bhanu Murthy, opted for a bureaucratic and tall hierarchical structure so as to have a direct control over the various operations of the organization. This centralized structure however, had its own 36
  • 38. Part B drawbacks. There was no direct communication between the top management and the lowest cadre in the organization. The tall structure prevented quick decision-making regarding new initiatives or proposals like new product development. This in turn, made it difficult for Softpro to adapt to changes in the external environment, thereby making it less competitive in the extremely dynamic business environment. The everincreasing size of the organization also made effective supervision impossible. of 20 1 0 In response to the dipping profits and deteriorating employee morale, Murthy decided to decentralize its structure. Accordingly, he divided the organization into a number of divisions. Each division was in charge of a group of related products. The division was made on the basis of the product group. In other words, as the number of product groups/lines increased, the number of divisions increased as well. Each division had its own sales department which took care of marketing its products. Murthy felt that this structure would give each division considerable autonomy, and create an environment that nurtures and encourages individual creativity and initiative. This in turn, would result in a motivated workforce. By decentralizing its operations, Softpro intended to retain the kind of intimacy and ease of communication that once existed when it was very young. Cl as s However, with the increasing size of operations and the growing number of product lines, the decentralized structure at Softpro, began creating new problems for the company. As the number of divisions increased, coordination between them got reduced. This created an impression among customers that each of them was a different organization. It also affected decision-making at Softpro. Bureaucracy crept into the organization again and had a negative impact on its profitability. Softpro soon began losing its market share. U se O nl y Murthy stepped down and invited a dynamic successor, Kailash Nath to lead the organization. Nath was a famous personality in the corporate world, known to have turned around many companies. After studying the organizational structure and the culture at Softpro, Nath proposed to dismantle the decentralized structure. He organized the numerous divisions into six centralized groups which concentrated on two main activities – product development, and sales and marketing. Nath expected the new structure to strengthen collaboration and communication between the two groups, thereby catering to the needs of the customers and solving their problems. Thus the division of the back-end and front-end activities helped Softpro solve a number of its long-standing problems. With clear lines of responsibilities, the R&D strategy of the product development division resulted in filing more patents that year compared to those filed during the previous years. Fo rI BS However, a lack of coordination between the two groups began creating a new set of problems for Softpro. Ineffective communication between the two groups and the lack of authority to the back-end managers to set sales forecast, resulted in the R&D department not being able to allocate funds accordingly. At the same time, front-end sales representatives faced problems meeting their forecast as back-end colleagues came up with the wrong products. This was because back-end designers were not able to stay close enough to the customers to deliver products as per their requirements (and there was no proper communication between the front-end and back-end sales representatives). Thus, despite the efforts of the management at Softpro to strike a balance between a centralized and a decentralized organizational structure, the company continued to face problems due to the size and complexity of the organization. Questions for Discussion: 1. Examine the restructuring plan put in by Kailash Nath and critically comment on the advantages and disadvantages accrued to Softpro. 2. In the light of the above case, discuss the kind of organizational structure that emerges successful in this dynamic business environment. 37
  • 39. Introduction to Human Resource Management Caselet 7 Goutham Ghosh was a regular customer of APN Bank Ltd., a public sector bank that was established forty years ago. The bank has been doing well, in terms of its market share and profitability in the region. However, Ghosh had a bitter experience with the bank when he visited one of its busiest branches recently. of 20 1 0 Ghosh saw an unending queue at almost all the teller counters. There were about 25 customers waiting at the cash counter for their transactions, while the teller counter executive was attending to a call over the telephone for more than fifteen minutes, without attending to the waiting customers. It was only after the assistant manager’s instruction that the executive hung the telephone and attended to the customer. One of the customers then requested that he be given notes of a higher denomination as the amount was huge. His request was turned down with a curt, “We do not hold higher denomination right now. If you insist, come after three hours, we would exchange them.” The plight of customers waiting for other banking transactions was no better. nl y Cl as s While a demand draft had to be processed within ten minutes of application, it took nearly half-an-hour for an elderly person to finally collect the draft. The customer was given no explanation for the delay. In fact, even at the account opening counter, bank executives were seen behaving impolitely with prospective customers who wished to open accounts with the bank. Ghosh observed that the teller counter executive responsible for account opening transactions refused to help an applicant in filling up the complicated application form. “Get the application filled and we shall go ahead with the process,” she sneered. Once the customer filled the form and submitted it to the executive, with a frown on her face, she said, “Your application cannot be accepted as it is not filled in black ink.” The disgusted customer just placed the form on her table and walked away. U se O Ghosh himself had approached the bank to purchase a tax-relief bond. He found it agonizing to wait for more than twenty minutes to get hold of the executive concerned. And even after she finally attended to him, she could not listen to his queries as she was constantly being interrupted by phone calls and other customers who had been waiting for her. “Can you tell me where the cash counter is?” inquired one customer. “I do not know,” came the reply from the executive. This irritated the customer and he began shouting at the executive, blaming her for bad customer service. Fo rI BS People who had come to the bank for various other services like home loans, credit cards, Demat transactions etc., also had similar experiences to share. Ghosh brought this to the notice of the branch manager, who happened to be his old-time friend. The branch manager apologized for the behavior of his team and promised Ghosh that he would look into the matter seriously. 38 The branch manager was in a fix. If this attitude of his employees continued, the bank would soon lose valuable customers. The manager called for a meeting of all his staff members. He expressed concern over the behavior of teller counter executives and explained that customers must be greeted with a smile and treated well. He emphasized exceptional customer service that would create a competitive advantage for the bank. The members of the bank reacted negatively to this. “Well, all this was not mentioned in our job description,” countered one of the executives. This was strongly supported by his colleagues. “You cannot impose new rules each day, and it is anyway not possible to smile and oblige customers amidst all the chaos,” said another. The meeting ended on a negative note, creating ill-will between the manager and the staff.
  • 40. Part B Thus, it was an inadequate job description that perhaps led to this unsolved issue between the management and the employees. This issue eventually resulted in the bank losing valuable customers and thereby, its business. Questions for Discussion: What do you think might have been the root cause of the problem faced by the branch manager in this case? Was it a lapse on part of the HR department that led to this behavior of the employees of APN Bank? 2. Suggest the basic contents of job description of a teller counter executive that could have prevented the above problem in the case of APN Bank. of 20 1 0 1. Caselet 8 Cl as s Cozy Wear was primarily a local garment manufacturing company that gradually grew in its size and operations and has now become one of the leading garment manufacturers in the country. The new CEO of the company, Amitabh Chaturvedi, had great plans for the company. During his first meeting with the management of Cozy, Chaturvedi disclosed his vision for the company. He proposed to take Cozy to the global market and create an identity for it in international business. “Our products are no way inferior to those produced by companies in the world market. In fact, our products have done well in most regional places, both in terms of profitability and market share,” justified Chaturvedi. “Besides, the quality of our products is also world class,” he added. At the end of the meeting, he requested all the members to think about the idea of being a globally operating firm and come up with strategies for further growth of the organization. O nl y Most of the older people who had stayed in the company for years, felt that it was a risky proposition. According to them, this initiative would expose the company’s products to the highly competitive international market, thereby making it vulnerable to competition from all over the world. This in turn, might hit the profitability of the firm. On the other hand, the younger employees of the firm were of the opinion that their products were on par with those produced by other countries. Fo rI BS U se During the next meeting, Chaturvedi invited the views of the members present. One of the oldest members initiated, “We are doing very well in our industry at present. Why then do we have to experiment with globalizing and lose what we have earned till now?” Chaturvedi realized that the older generation were not keen on globalizing and most of them were risk-averse. He then tried to explain to them that the business world was becoming increasingly global and most of the markets are now part of a global network. He brought out the fact that without taking such small risks, they could not develop their organization. “The growth of the firm would remain stagnant for sometime and we might have to eventually close down operations,” said he, in a concerned voice. “We would therefore benefit by starting up our own manufacturing centers in selected countries, and catering to a global market,” suggested Chaturvedi. The discussion that followed, covered various issues involved in becoming a global firm. (We restrict our case to the issues related to human resource management). “But how can we adjust to the culture of the new nation, where we plan to start our operations? And what are its implications?” asked another senior member. Others were concerned about the political and economic forces at the new location that might affect its operations. “We cannot ignore the legal issues and implications associated with initiating such operations as well,” expressed another concerned employee. To this, Chaturvedi replied, “Yours is a valid question, but we do have strategies to overcome them.” 39
  • 41. Introduction to Human Resource Management The group also discussed the additional responsibilities of the HR department in the areas of selection, appraisal, training and development, etc., with emphasis on the ability of the department and the organization to meet the challenges of the global economy. of 20 1 0 The meeting finally ended with the management deciding that the company would go global by initiating its operations in two neighboring countries first. It then drafted its new HR policy which comprised of policies and procedures regarding all aspects of human resource management in the international context. The policy considered the various forces of the new business environment that might affect the functioning of the organization in a global economy. After 10 years of operations as a global garment manufacturing company, Cozy grew to become one of the world’s most successful firms in the industry. Chaturvedi attributed the company’s success to the efforts of the company’s human resources and the human resource department, which played a crucial role in helping the organization to adapt to different cultures and business environments. Questions for Discussion: 2. Are the senior members of Cozy Wear justified in raising concern about the factors that influence international human resource management? Discuss the various factors that have an impact in managing human resources in an international scenario. Do you believe that the role of a HR manager/department in a global organization is in any way different from that of a locally operating firm? Elucidate the difference citing the example of Cozy Wear. Cl as s 1. nl y Caselet 9 U se O Asha Latha and Anitha Priyadarshini have been working as agents for a leading financial services company for the past two years. Both were satisfied with their jobs and were enthusiastic about achieving their targets. However, in the recent past, trouble seemed to crop up. Latha’s new-born baby required her time and attention, which she found it difficult to spare. Piryadarshini too had problems taking care of her ailing mother and found it difficult to strike a balance between her personal and professional life. Both of them agreed that if they had enough time for their personal lives, they would also be able to perform well on the work front. While discussing the problems they faced, Latha came up with the idea of job sharing. Fo rI BS With the option of job sharing, both Latha and Priyadarshini would be sharing the same job, on a flexible work arrangement. They agreed upon complementary work timings so that the entire work schedule could be split into two and both together would work to achieve a common target. They sketched a plan of action covering all the minute details of the job, so that they wouldn’t miss out on any aspect of their job responsibilities. They also made a list of all the additional accessories that they would require from the organization to implement their new concept. Latha and Priyadarshini also came up with an evaluation mechanism that would help them get customer feedback to ensure that their new proposal does not have a negative impact on the sales targets. 40 The next morning, both of them discussed their new strategy with their manager, Prakash Ghai. After studying their new proposal, Ghai felt that it was indeed a viable option for the organization too. He could also visualize the other potential benefits of job sharing. Job sharing could be used as an effective retention tool, which helps retain talented and experienced workforce. This work alternative also helps maintain workforce diversity, by catering to the various needs of different groups of people in the organization. It could also be used as a motivational technique as it increases
  • 42. Part B employee morale and productivity by creating a balance between their personal and professional lives, thereby reducing work related stress. Ghai not only accepted the proposal but also made this option open to all the members of the organization. Latha and Priyadarshini could not ask for more. They now did not need to consider quitting their job to take care of their families. While Latha would spend more time with her baby, Priyadarshini would take of the sales target and while Latha took over the job, Priyadarshini would take care of her elderly parent. 0 Questions for Discussion: Latha and Priyadarshini sketched a plan of action to go about sharing their job. Discuss the prerequisites for implementing job sharing option at organizations. 2. While job sharing has benefits for both employees as well as the employers, there are also potential problems in implementing this type of alternate work arrangement. Discuss the various benefits and potential pitfalls that job- sharing entails. of 20 1 1. Cl as s Caselet 10 nl y It was an important day for Abhay Mittal, a management graduate seeking an employment opportunity in the competitive business environment. He received an interview call from one of the nation’s leading private sector banks for the post of Relationship Manager (RM). His selection as an RM would be just the right break for Mittal in terms of the exposure and experience he would get in this customer-oriented business environment. The responsibility of an RM includes providing important customers with complete and integrated investment advice. The select customers were those who made huge investments in the various products of the bank. The RM must also seek to attract prospective customers who had the potential to make heavy investments with the bank. se O Mittal was excited as he had been waiting for a call from this bank for quite some time. He then prepared for his interview – by reading the company’s performance and history, making a quick SWOT analysis of the bank, and getting his documents ready for the interview. He also organized a mock interview with his friend who was an HR Manager in a consultancy firm. Having brushed up the fundamentals in his areas of interest and study, Mittal was all set for the interview the following day. Fo rI BS U However, the interview proved to be a nightmare. It started an hour behind schedule and Mittal was kept waiting with no intimation of the changed schedule. The reception could not provide him any relevant information. Mittal, however, kept his cool and waited patiently for his turn. Finally, after an hour, he was called in. He firmly knocked on the door before entering the interview hall. The hall was huge with the panel of members seated in a corner. The panel consisted of seven members, none of whom, according to Mittal seemed friendly and approachable. He was made to sit on a chair that seemed likely to break with the slightest jerk. He however, managed to sit, leaning forward slightly and tried to listen to the panel. A long silence followed. Mittal then hesitatingly ventured to initiate the conversation. “Here are the certificates in proof of my academic qualifications,” he said. This was followed by a quick response from the person sitting to his left. “It is not a bundle of certificates we are interested in, young man. They are no proof of how capable you are to handle the stress you would experience in case of your selection.” Mittal was taken aback for a moment. However, he gave a gentle smile and said that he was ready for the interview. Mittal encountered a barrage of questions, most of which seemed irrelevant to the job of an RM. Although he could answer most of the questions, he was never allowed to answer them completely. He was constantly interrupted by the panel members while 41
  • 43. Introduction to Human Resource Management trying to answer the questions posed by each one of them. Most of the questions were sarcastic and cynical in nature. Mittal was given ambiguous instructions and asked to solve a situational case. He was then put through imaginative situations that required him to make tough decisions. Mittal could feel the tension creeping into him. Although he handled the questions well, he felt he could have done better if the panel had been more approachable. There was complete silence for some time. of 20 1 0 The panel members inquired if Mittal had any questions to ask. By then, Mittal was exhausted and longed to leave the room. He kept his calm and said that there was nothing that he would like to ask, even though he had prepared a short list of questions the previous evening. The members assured him that they would get back to him soon. Mittal thanked the panel and left the room in disgust. Questions for Discussion: What kind of interview do you think Abhay Mittal had to face? Describe the basic features of such an interview. 2. Discuss the various other kinds of interviews that could be used by organizations to make their selection process effective. Also discuss the advantages and disadvantages of each of these methods of selection. Cl as s 1. Caselet 11 nl y The economic recession during the late 1990’s had badly affected most organizations, especially those in the IT sector. This resulted in the closure of innumerable small and medium-sized firms. Others suffered severe financial setbacks and huge losses. They were forced to initiate a number of measures for cost-cutting, increasing productivity and profitability, enhancing competitiveness, and organizational efficiency, etc. U se O One such organization which was badly affected by the downturn was Ideal Solutions, a software development firm. The turbulent economic environment and the slump in the IT market resulted in a severe revenue crunch for the four-year old organization. The financial status of Ideal deteriorated to such an extent that the company was finding it difficult to pay salaries to its employees. The situation was not expected to improve in the near future and many in the organization felt that it would only deteriorate further. Fo rI BS Murlidhar Reddy (Reddy), the Chief Executive Officer (CEO) of Ideal, called for an emergency meeting, which was to be attended by all the heads of departments, the line managers, the supervisory staff, and the HR department. The agenda for the meeting was to discuss strategies to cope with the slump in economy. All the members were expected to come up with their own suggestions and strategies to deal with the crisis. 42 Reddy began the meeting with a brief introduction, outlining the prevailing conditions in the business environment and how they were affecting the company. He also threw light on how other organizations in the industry were planning to deal with the recession in the global business scenario. He then invited suggestions from members. Dheeraj Mittal (Mittal), the HR Manager, initiated the discussion by explaining the manpower situation in the company. He said, “Ideal has an employee strength of 650 employees, while the recent manpower assessment reveals that it could perform optimally with a strength of approximately 400 employees, in the present scenario, as the company does not have many projects in hand. Therefore, our company might benefit by downsizing its workforce.” This ignited a series of arguments among the members present. One of the project leaders, Anshu Mishra, raised an objection to this proposal. She said, “We feel that the organization is over-staffed because, at this point of time we do not have projects. It would be unwise to downsize the workforce to suit
  • 44. Part B a temporary situation like this. In case we get a new project within a short period, how will we cope with the manpower requirement then?” Most members, including Reddy himself, felt that it was a valid objection. Cl as s of 20 1 0 Mittal countered Mishra’s objection saying, “Well, in that case, we could opt for a temporary layoff, which means we can re-employ those we have laid-off once the situation improves.” In the hour-long discussion that followed, the group came to the conclusion that a temporary layoff of redundant employees would not only help Ideal reduce its costs, but also help increase the company’s productivity and profitability. Mishra however, expressed serious doubts about the effectiveness of the process. “Won’t this bring about a huge resistance from the employees?” she questioned. “Besides, this will also affect the motivation and morale of the retrenched staff as well as the survivors,” followed another line manager. “Yes, the employees will be demoralized and will have apprehensions about their jobs,” countered Mittal. “But we can handle such situations, by implementing appropriate strategies,” he said. He expressed his confidence that with constant support and backing from all levels of the management, especially the top management, these layoffs could be handled effectively with minimal negative consequences for the organization. By then, all the members present seemed in favor of the idea of a temporary layoff in the company. nl y Reddy then asked Mittal to design a strategic plan to implement the layoff procedure and requested the line managers and the supervisors to support Mittal during the entire process. Once this was done, Ideal formally announced its decision to layoff around 200 of its employees. As expected, there was widespread resistance from the employees. However, the management succeeded in convincing them about the need for the layoffs, and the series of actions taken by the management helped the company achieve its objectives. O Thus, a layoff initiative by Ideal Solutions helped the company withstand the economic downturn and emerge successful in an industry characterized by cut-throat competition. Besides, it also managed to keep a motivated workforce that worked towards the accomplishment of the organizational goals and objectives. Questions for Discussion: se Although the decision to layoff helped Ideal Solutions survive the recession, it might have resulted in a series of problems for the management during its implementation. Discuss the various ill-effects of layoffs that the management might have had to face. U 1. The layoff at Ideal Solutions might have resulted in a demoralized and a demotivated workforce. Suggest ways in which Ideal might succeed in managing employee morale in such a scenario. BS 2. Fo rI Caselet 12 Regal Attires is an upcoming garments manufacturer, which planned to expand its sales to around 15 new cities in the country by the end of the financial year. To achieve this, Regal had to increase its manpower substantially. It placed advertisements in all the leading newspapers and magazines stating its requirements. The HR department worked hard to attract the best resources. It undertook a massive recruitment drive that covered all parts of the country. In response to these advertisements, Regal received a large number of applications for each position. Among the various openings that Regal had, the position of the sales executive was very important, not only in terms of the number of salesmen required but also the competencies they needed to possess. This was because the salesmen played a very crucial role in generating revenues for the company. Vishal Mehra, the HR manager, 43
  • 45. Introduction to Human Resource Management wanted only experienced candidates for this position. The key competencies that Mehra looked for in candidates included the initiative of the candidate, his willingness to learn, his love for traveling, his self-confidence, his ability to convince people, his communication and interpersonal skills, his ability to work in a team, his professionalism at work, etc. The interviews basically aimed at rating the candidates on these competencies. of 20 1 0 Mehra was however not convinced about the effectiveness of the regular interviews as he felt that they do not succeed in selecting the candidates with the right skills and abilities. According to him, most of the traditional interviews comprised of questions that typically required the candidates to answer in ‘yes’ or ‘no.’ This, according to Mehra, was by no means enough to judge the candidate’s skills and abilities for the job. nl y Cl as s The interviews conducted by Mehra, were a little different from the one discussed above. His interview model was a structured one that consisted of a specific set of questions which evaluated the candidates’ capabilities on the above competencies. Though structured, his questions made the candidates describe past and real-life situations that brought out specific job-related competencies. The interview would usually start off with questions like, “Describe a situation where...,” which allowed Mehra to understand how the candidate would behave in a particular business situation. Mehra firmly believed that questions like these brought out the true worth of the candidates and therefore, such behavior-based interviewing helped him select the right candidate for the right job. For example, in this case, where Mehra wants to select candidates for the position of salesmen, questions like, “which was the most difficult sale that you have ever made? And how did you convince the customer to go for the product?” helped him to assess the convincing skills of the candidate. O Although Mehra’s interviews succeeded in selecting the right candidate in more than 50 percent of the cases, there were also some instances in which the candidates selected by him proved to be ineffective at their jobs. U se The above case highlights the fact that even though past performance of a candidate might be effective in predicting his future behavior to a certain extent, it does not completely succeed in selecting the right candidate for a job. This is because, over a period, trends in selecting candidates have been changing and over-reliance on a particular type of interviewing process proves to be ineffective. It is therefore advisable that a combination of selection tools may be used to address the issues arising in the selection process. BS Questions for Discussion: Fo rI 1. Vishal Mehra used the behavior-based interviewing technique to select candidates for the position of salesmen at Regal Attires. Briefly describe the characteristics of a behavior-based interview. 2. Although, Mehra succeeded in selecting the right candidate in more than 50 percent of the cases, there were instances of the selection tool’s failure in its objective. Citing the case of Regal Attires, discuss the various benefits and pitfalls of implementing the behavioral-interviewing technique of selection. Caselet 13 “Imagine that you are retiring today and during the farewell address, you are asked to speak about your career. What would be the gist of it? What would be the achievements that you would like to talk about? And what would be the advice you give to your juniors in the organization?” 44
  • 46. Part B 0 These were a few questions posed to the employees of FastGrowth Inc., a leading firm in the IT industry, during one of the career counseling sessions they attended. FastGrowth is among the favored companies for most students seeking a bright career in IT. The company is also a hot favorite with people in their mid-careers. FastGrowth is known for providing its employees with a challenging and encouraging work atmosphere that is aimed at nurturing their overall development. Among the various aspects that makes FastGrowth the first option among candidates is its employee career management program. Cl as s of 20 1 In an attempt to create and develop a dynamic workforce that easily adapts itself to the changing external environment, FastGrowth offers a comprehensive career management program to all its employees. The company has documented a formal strategy of employee career management that encompasses all aspects of career planning for employees belonging to various levels in the organizational hierarchy. Its career management policy is integrated with the corporate HR strategy. The program includes special career counseling sessions for its employees, wherein experts in career planning are invited to help the employees draft their career graph and attain their career objectives. The top management plays a key role in the career management of its employees. It participates and supports the various activities of the program. While it is the HR department’s responsibility to manage employee career, FastGrowth also encourages its line managers to participate in these activities. The company has designed a reward system that rewards managers who have effectively managed their subordinates’ careers. It also conducts training programs to educate line managers about career planning and career counseling. nl y As part of its career management strategy, FastGrowth provides each employee with a career mentor, who is always available to guide the employee’s progress on the career path envisaged by him. The mentor also helps the employee understand the expectations of the organization and identify the right opportunities. He also provides the employee with information (about the job, its future prospects, career path, etc.,) that could help him decide on his career objectives and career path. U se O The objective of FastGrowth’s career management program is to help its employees to effectively plan their careers and take necessary steps to successfully progress through each phase of their career. This avoids a career drift in the employees and guides them through a planned growth in the organization. The program also provides for changes and modifications, keeping in mind the changing needs of the employees and the demands of the external environment. This results in a motivated workforce. Fo rI BS Therefore, the career management program helps FastGrowth not only in attracting the top talent in the industry, but also in developing and retaining them to gain a strategic advantage over its competitors. FastGrowth, thus gains the advantage of accomplishing the organizational objectives through the achievement of the personal goals of employees. In a way, it ensures a constant availability of talented and motivated human resources within the organization. Questions for Discussion: 1. FastGrowth has drafted career plans for its employees that guide them through all the stages in their careers. Discuss the various stages of career planning that an individual is likely to undergo. 2. Briefly explain how the career management program at FastGrowth helps the company gain a competitive edge over its rivals in the industry. Caselet 14 Manage Consultants is a major consultancy firm with operations all over the world. The company has been in business for more than 10 years and attracts the best talent. It also had large projects from various Fortune 500 firms. Of late however, the 45
  • 47. Introduction to Human Resource Management Director of the Indian office has been a worried man. The annual HR reports showed that the employee turnover rate was very high. This even had an impact on the bottomline, as the revenue target was not met and the recruitment and training expenditure was quite high. He felt that there was a need to take this issue seriously before the company lost any more of its important knowledge assets. The HR manager Prashanth Kumar was called, and asked to present a detailed report on the reasons for the high employee turnover. of 20 1 0 When conducting the study, the HR manager mainly found that the employees felt there were some major lacunae in implementing the performance appraisal system and were therefore not happy with it. The main cause of the employees’ dissatisfaction was that the appraisal system did nothing to add value to their personal growth or contribute to their career goals. The HR manager proposed a new method of appraising the employees. Cl as s In designing the new performance appraisal system, the company relied on the feedback from their new recruits, adhoc potentials and current employees around the world, collected through questionnaires and interviews. This data was used innovatively by the HR department and it enabled them to identify six broad categories that were the main concerns for the employees. These included Continuous learning opportunities • Challenging work environment • Fair compensation • Fun • Reputation • Flexibility nl y • O Noting this, the HR department developed the new performance appraisal system that includes the following features. Tying compensation to performance management • Sharing of knowledge between various departments • Induced adjustments to eliminate overtime so as to reward quality and not just quantity • Having training and development programs where the employees undergo training in inter-personnel, functional and management development modules. Fo rI BS U se • After the implementation of these initiatives, the company observed that the average employee turnover reduced from 28 to 20 percent. The profit target was also met in the next financial. This development showed that the HR department was successful in building an organization where the employees wanted to stay and perform. Above all, the company realized that knowledge retention is the decisive factor to sustain in the competitive market environment. Questions for Discussion: Do you think the HR manager was right in suggesting that the high turnover rate is due to employee dissatisfaction with the performance appraisal system? Is the appraisal system so critical for an organization’s performance? 2. 46 1. What are the various lessons that can be learnt from the above case, on implementing an effective performance appraisal system? What are the various uses of a performance appraisal system?
  • 48. Part B Caselet 15 Paradise Bank is a nationalized bank and has operations spread all over India. The employees are a satisfied lot as they feel that the management is fair in terms of compensation. The Chief HR manager always made it a point to see that the appraisal system being implemented enjoyed the confidence and support of the employees. Hence there was always a feedback session after the appraisal process was over. of 20 1 0 PLN Bank had a high turnover of employees. Even though its compensation packages were similar to those at Paradise Bank, the employees were not happy. The bank HR manager Paresh was worried. Employee appraisal was an annual affair as it was in Paradise. Paresh could not understand why there was a difference in employee satisfaction levels when both the banks had similar appraisal and compensation systems. He planned to discuss this issue with the HR manager of Paradise Bank. nl y Cl as s Paradise Bank had an appraisal system that was similar to the one practiced by other banks, but the implementation was quite different. Traditionally, departmental heads and employees debated on the unattained targets and finally reached a consensus on a pay hike or other related aspects. At Paradise Bank, however, the performance appraisal exercise was an occasion to map out future profitable strategies to be collectively pursued by employees, while taking into consideration the organizational objectives of the firm. The exercise also helped individual employees identify their competency gaps and training needs, with the help of their supervisors. The HR department made performance management a continuous process that involved continuous interaction between the bosses and their teams, to have a continuous review of the targets to be attained. Here, the employees were given freedom to estimate and determine certain targets and were not forced to achieve targets determined and imposed by the management. The main features of the performance appraisal system at the Paradise Bank are as follows: The PM process included certain joint evaluations by the teams and their heads by taking market conditions, consumer feedback, deployable energies and resources into consideration, to prepare strategies • The PM system does not limit itself to a set of metrics to be attained, rather it involves identifying any lacunae in the skills or knowledge of the employees, which hinder their performances. • Apart from providing guidance to the employee, the system effectively nourishes a healthy relationship between the bosses and the employees. This in turn helps build partnerships to hone the emotional intelligence, fine tune attitudes and build healthy organizational culture. BS U se O • Fo rI • The PM function helps employees to develop skills, perspectives and initiatives rather than just confining itself to subjective measurement, which finally gets reflected in the employee compensation. The management believes that performance management is thus an effective tool to increase the value of the human asset. Questions for Discussion: 1. What are the differences, in the appraisal system being implemented by Paradise and PLN Bank? 2. What are the changes you suggest in the implementation of the appraisal system at PLN Bank to make it more effective and acceptable? Caselet 16 Ambassador Hotels and Resorts was slowly establishing itself as a major player in the Indian hospitality industry. The company, which initially had its operations only in the 47
  • 49. Introduction to Human Resource Management state of Tamilnadu, was expanding all over the south and also had major expansion plans to cover the whole of India. The CEO of the firm, Pratap Rangarajan felt that to cater to the challenges of the highly competitive environment, they needed to provide effective employee training. The CEO felt that inspite of being provided world class training, the employees were unable to match the benchmarks of the hospitality industry. of 20 1 0 The HR manager was disappointed that in spite of ensuring that the employees received the best training, their performance did not meet the expectations. He decided to seek professional advice, to help him motivate his employees to put in their best efforts or alternatively, dump them and recruit better performers. When the professional expert Mr Suraj started working for Ambassador, he highlighted that workers desired something more, apart from just training. Some probing questions brought to light the fact that besides the regular pay, the company did not offer much to attract and retain loyal and dedicated employees. Through professional consultation, Rangarajan came to realize that even if he paid higher wages to new trained employees, the problem would persist because the employees expect more than mere wages from their work place. The management nl y Cl as s In order to achieve long-term results through training, the consultant suggested that they have people development as a broader vision as part of strategic planning. According to Suraj, “Although training covers a broad range of subjects under the three main categories (skills, attitude, knowledge), using the term training without linking it to development narrows the concept of the training function and leads to failure.” He also suggested to the CEO that he should broaden his thinking and suggest it to all the branch managers. He also highlighted some important areas where the management was going wrong. Thought of “trainees” as robots expected to perform a job function • Was not taking into consideration individual perspectives. • Was focusing only on “what needs to be done” without adequately preparing the trainees involved, to accept and internalize what was being taught. se O • Fo rI BS U Mr. Suraj also suggested that people should not be regarded as robots, but as talented individuals who can accomplish goals, if given the right autonomy and opportunity to perform. He had conducted a survey in the past and found that when an organization planned for both training and development, it achieved a proper balance between the needs of the company and those of the trainees. He explained to Rangarajan, “The synergy created, takes us to new levels, a continuing trend of company growth.” He shared the results of the survey with Rangarajan. The survey showed that the employees required • Information regarding the business and its customers • Recognition for their role in the company’s success • Acknowledgment of their individual capacities and contributions • Positive discipline / fairness • Involvement in the decision making process. The CEO realized that until then he had treated his employees as robots and this was exactly how they had behaved and performed. The day they had no charge left in them, they collapsed and left the organization. He was ready to change his style of management: he diverted his focus to the needs of his employees, re-structured his organization, planned new operational strategies, a human resources strategy, training and development guidelines, disciplinary rules and regulations. He communicated and 48
  • 50. Part B shared these in a meeting with his employees and handed out the employee handbook prepared for that purpose. He also reminded them their responsibilities towards the business, the customers, and themselves (taking charge of their own training, development, and work performance). They were more than pleased when he asked them to express their opinions, make comments and give suggestions. of 20 1 0 The CEO was surprised at the immediate transformation that took place. He began receiving excellent reviews from his customers; the employees worked as a team; their motivation sky-rocketed and he never had to replace them. All this was accomplished by extending the previous concept of mere training to that of training and people development. He also recognized that when the CEO gave the opportunity for the employee-trainees to perform at the desired levels, they offered to the company and its customers, their hidden individual gifts and talents, and this was reflected in the quality of service. Customers feel and recognize efficient performance, motivation and team-work. They become loyal customers. Questions for Discussion: The above case demonstrates the importance of employee development apart from training. What are the various steps to be taken to bring about employee development? 2. What is the method of employee development that can be undertaken by the Ambassador Hotels? Cl as s 1. Caselet 17 U se O nl y Sampath, Saumya and Shankar were discussing something very important at the lunch table. They all work for the 4000 employee strong Advanced Pharma, a leading firm based in Hyderabad. The topic of their discussion was how disenchanted they were with their jobs and how soon they intend looking elsewhere for better opportunities. Ramana, the HR manager, who was at the adjoining table happened to hear their conversation. What he overheard troubled him to no end. These three employees were star-performers in the organization. While Sampath and Shankar worked in the marketing division, Saumya was in the finance division. From their discussion, Ramana could gather that there was something major brewing and was not just these three who were unhappy. He decided to take some corrective steps immediately to avert the disaster. Fo rI BS The first thing that Ramana did after walking out of the lunch room was to call for a meeting of the HR department. He said that he wanted to conduct a survey immediately on what was it that the employees disliked the most about the organization and how would they like it to be changed. He gave his team only a week and asked them to come up with the findings in a compact and orderly manner. Ramana’s team came up with the following findings. • Performing the same duties day in, day out, without any expectations of change in routine or opportunities for advancement, was found to be the most discouraging aspect for the employees. • In cases where there were any attempts at job enrichment, the manner was not proper, with managers burdening employees, by placing unrewarding responsibilities on their shoulders. This resulted in a feeling of exploitation and had the reverse of the intended effect. The employees also felt that cross-training would help them learn new skills and gain multi-functional knowledge, which would equip them for managerial responsibilities in the future. They also felt that cross-training would provide them respite from their routine jobs once in a while. Ramana, taking a clue from employee suggestions, 49
  • 51. Introduction to Human Resource Management immediately went in for cross-training. Cross-training was implemented horizontally, upward and downward, to increase employee motivation in the organization. Departmental heads, assistants and employees were given an opportunity to crosstrain in different departments or within the department itself. With the requisite background support, employees could even have a one-day training in the position of department head. Questions for Discussion: What are the advantages of cross-training for an organization like Advanced Pharma? 2. What are the various training methods that can be applied to enrich the job of the employees? of 20 1 0 1. Caselet 18 nl y Cl as s General Electric is a diversified services, technology and manufacturing company and operates in more than 100 countries and employs nearly 315,000 people worldwide. The company is committed to achieving customer success and worldwide leadership in each of its businesses and seeks remarkable people to attain that uncompromising goal. In recent years, the company has moved from a focus on heavy industry to a strong emphasis on services and high technology. Senior professionals and executives, identified as high potential candidates and capable of playing key roles in GE’s businesses or functions, attend courses in the executive development sequence. There, they further develop leadership skills necessary to run a global, competitive business. These courses provide a significant development experience, emphasizing strategic thinking, executive leadership and cross-functional integration. Fo rI BS U se O Participants develop executive skills in relation to key business issues, such as developing business strategy, competing globally, managing diversity and globalization, leading teams, managing change and advancing customer satisfaction. The company has long been known for developing some of the best leaders in business, and some of the most widely practised business techniques. GE invests about $500 mn annually on training and education program around the world, from assembly lines to corporate classrooms to boardrooms. Although the scope of its activities is global, the focus of GE’s commitment to excellence in leadership development is Crotonville, the world’s first major corporate business school. Through Crotonville programs, the GE personnel are tackling new business problems around the world and sharing their problems with customers, suppliers and colleagues throughout GE. Beyond leadership education and functional training, Crotonville plays a crucial role as an agent of cultural change in GE. The most important symbol of that culture is the GE Management Values statement, a living document that represents what GE believes to be the most important qualities needed for success. When creating the values statement, Jack Welch used Crotonville participants as a sounding board. Today, thousands of Crotonville attendees continually debate the meaning of GE’s values, suggesting revisions when needed, to ensure that they remain relevant to each individual in GE. Having participated in the discussion, attendees then become messengers who transfer the values to the people with whom they work. Questions for Discussion: 1. 2. 50 GE was one of the first companies to have a corporate university. What are the advantages that companies gain by having corporate universities? GE has achieved good results by establishing corporate university. What are the advantages of having such a management development program?
  • 52. Part B Caselet 19 of 20 1 0 One company that has benefitted immensely from good employee relations and has come out of financial losses is the SM Collieries. The profits at SM collieries were declining in the mid 90’s. Workers did not know the reason for the profit-decline but they always felt that the management was not interested in giving them bonus. The Finance Manager Venkat thought that it was time the employees realized and understood the basics of finance, and the way the collieries are run. The company was incurring huge costs on employees and the low productivity directly hit its bottomline. Retrenching workers was not an option, as the business was jointly owned by the central and the state governments. Any cost reduction would have to come from gaining employee co-operation. He accomplished this task by using basic finance training to instill the will to work, and re-engineering operations, where possible. Cl as s At SM Collieries, the process of educating the workforce opened the channels for a vital flow of information between the miners and management. In order to communicate the financial condition to the miners, the staff went into the mines. The result was that apart from teaching the miners, the finance team itself got to learn about the nitty-gritty details of the business that helped them design and implement a program of cost cutting. nl y Further, SM Collieries had not been profitable for years. For the fiscal year 1997, for example, the mines lost Rs.69 crore on revenue of Rs.500 crore. Part of that loss was due to SM Collieries’ high social welfare cost—it provided its workers with such benefits as schools, housing, and free coal and cooking gas. Part of it was also due to a crushing interest expense after the mines decided to borrow from the government of India, its biggest equity holder. Further, the strikes the mines had been experiencing also contributed largely to the loss. U se O The mines produced 10% of the nation’s coal. Several huge power stations were situated near the mines, which lowered the transportation costs considerably. It gave SM Collieries a guaranteed customer base, but it also meant that SM Collieries had to sell to the government-owned coal-fired plants at a controlled price. Given this situation, SM Collieries could only make more money in one of two ways: producing more coal with the same manpower and reducing operating costs. To do that, Venkat somehow had to find a way to get workers to work harder even when they knew it was unlikely that they would ever get fired. Fo rI BS It was important to make the workers understand that the business could not be run with dwindling finances. Venkat hit upon an idea aimed at weakening the grip of the unions and improving production. He created multi-departmental teams to visit the mines and present the management’s turnaround strategy in a simple way. The mode of presentation was important: the teams had to give their presentations in the local dialect. Group discussions would be encouraged, and local workers would be solicited to speak along with the team leaders. The meetings were held at the pitheads of the mines, and team members would tour the mines later. Workers were encouraged to give their suggestions. Putting across the idea that the mines would be privatised one day and would go out of business if they continued to function the way they were functioning became the center of the discussion. The concept of workers owning a stake in the mine, and so being responsible for its well-being, was not an easy one to grasp for the uneducated workers. Venkat’s education program contributed greatly to changing the worker sentiment. The number of individual wildcat strikes dried to a trickle. At the same time, Venkat’s cost cutting and operational measures have borne fruit. The company turned a net profit of Rs.65crores for the 2002 to 2003 fiscal year, and expects a Rs.75 crores net profit for 2003 to 2004. 51
  • 53. Introduction to Human Resource Management Questions for Discussion: 1. The case highlights the importance of the participative leadership style in organizations. What are the advantages of having such management style? 2. What are the benefits that SM collieries can achieve as a result of workers participation? 0 Caselet 20 Cl as s of 20 1 Ramana joined Pallavi Textiles as a production worker in January, 2003. Pallavi Textiles was a leading player in the textile industry and also offered employees high wages, as compared to other players. All these factors motivated Ramana to join the firm. Moreover, the equipment being used was of the latest technology and hence Ramana felt that working there would be a great learning experience. The division where he was posted had 60 employees who directly reported to the supervisor. The supervisor directly dealt with all the problems of the workers. The workers could report their problems only to the supervisor and did not have any contact with any other official in the firm. Ramana’s past experience was in a small textile firm, where workers could speak to the management regarding their problems. The first six months in the job passed off smoothly as Ramana had established good relations with his co-workers. Fo rI BS U se O nl y In the month of June, the supervisor received orders from the top management that they should speed up the production process as the demand for the company’s products had reached a peak in the market. The supervisor was given huge targets which he imposed on the workers. Most of the workers had to work over-time and Ramana was one among them. In his previous job (in the small textile firm), any overtime would be paid and other benefits of working overtime like food and transportation facilities for employees, were taken care of. Ramana and his colleagues however were not being provided any facilities at Pallavi. Besides, after a month of over-time, Ramana found that he was not being paid for it either. He also observed that the supervisor was being biased towards some employees by giving them travel allowances etc. for over-time. Some of his friends on the floor said that it was a common practice and there was nothing much they could do about it. When Ramana took up this matter with the supervisor, he did not get a satisfactory reply. The supervisor displayed a care-not attitude and was arrogant in his behavior. Ramana was advised by his colleagues to calm down as the supervisor had the strong support of some union leaders. The workers also cautioned him that in case he planned to take up this issue with the management, he would probably lose his job. 52 Ramana however felt that things shouldn’t be left the way they were, and someone had to take up the cause of the workers. He decided to report this matter to the higher authorities. Since the management and the whole plant were under pressure of delivering the goods, the management did not pay much attention to Ramana’s problems. This disappointed Ramana, as he felt that an organization as big as Pallavi Textiles would atleast have a grievance redressal procedure to solve the problems of the employees. The whole episode disturbed Ramana badly and he started thinking on different lines altogether. In addition, the supervisor started troubling Ramana by harassing him on the job. The supervisor nurtured a grudge against Ramana as he had taken the issue to the higher authorities. Ramana however had other plans. He started taking active part in the union activities and started instigating his co-workers against the supervisor and the management. The management, unaware of all this, was busy pursuing its production targets to meet the market demand.
  • 54. Part B Questions for Discussion: 1. What went wrong at Pallavi Textiles and what steps should be taken to prevent such problems in the future? 2. What are the advantages to Pallavi Textiles if it implements an effective grievance redressal procedure? 0 Caselet 21 of 20 1 In a guest lecture on the various grievance procedures adopted by a number of firms, the speaker, a renowned business and HR consultant, Vikas Gupta, took the example of Pramod Technologies. Pramod Technologies is operating in the hi-tech industry, with businesses in Communication Systems, Control Systems, Computers and Nuclear Instrumentation, besides Consumer Electronics. The manpower of the company is essentially highly skilled. Team work among them is strengthened on the basis of job satisfaction, recognition for good work and participation. Values of work culture are instilled among the workforce with focus on achievement, motivation and self esteem. nl y Cl as s Insight is given to the employees on corporate philosophy, the importance of their role in the organization and mutual dependence of various disciplines in carrying out the business. Participative culture is nourished and developed by setting up production targets jointly, tracking the performance and joint decision-making. Cooperation and transparency between the management and the employees at different levels is nurtured and developed even in day-to-day working. The organization lays emphasis on participation through various participative forums like joint advisory councils and production committees. The importance of effective grievance redressal system, for furthering peaceful industrial relations and improving the morale of the employees, cannot be under estimated. Pramod tech has adopted the following grievance procedure for workmen. se O Any matter pertaining to and affecting one or more individua1s, in respect of his wage payment, over time, leave, transfer, promotion, seniority, work assignment, working conditions and interpretation of service agreement is termed as a grievance. Workmen of Pramod could adopt the following procedure for redressal of their grievances. Fo rI BS U An aggrieved employee is expected to present his grievance verbally to his immediate in-charge. If the employee is not satisfied, he may approach the secretary, grievance committee, within one week of the act of grievance. He will present his grievance in Form-I to his Supervisor, Manager or divisional head, as the case may be. In the first stage, the Divisional Head will enquire into the matter and counsel the employee concerned. He may enlist the services of the Secretary, grievance committee, for enquiring into the matter. Grievance at Stage-I will as far as possible be disposed of within 7 days of filing the complaint. In the second stage, if the employee is not satisfied with the decision communicated to him by the divisional head, or fails to receive an answer within a reasonable period, he may request his divisional head, to forward the grievance to the grievance committee. All such grievances at Stage-II will be received by the secretary, grievance committee and presented to the grievance committee. While forwarding the grievance to the committee, the divisional head will include his views on the subject and the counseling he has rendered to the concerned employee. The grievance committee consists of head of the division/AGM, Sr. Managers and worker representatives nominated by the employees’ union. The grievance committee’s unanimous recommendations may be implemented by the management. 53
  • 55. Introduction to Human Resource Management 0 In the event of difference of opinions, amongst the members of the grievance committee, the views of the members along with the relevant papers are placed before the Executive Director (P&A) for his final decision. Thereafter, the final decision of the management is communicated to the worker concerned, by the secretary of the grievance committee. The committee can also invite the aggrieved employee to present his case in person. The decision of the grievance committee or the ED (P&A) as the case may be, will be communicated to the worker within 15 days of receipt of Stage-II form. Questions for Discussion: Cl as s of 20 1 If the worker is still not satisfied with the decision of the grievance committee, he will have the right to appeal to the ED (P&A). The Grievance at Stage-III will be disposed of within 10 days of its presentation. Vikas Gupta emphasized that this was one of the effective grievance redressal procedures and can help employees voice their concerns. One of the members in the audience, who said he was working in an IT firm, responded saying that such a long grievance procedure could not work in the present day organizations, keeping in view the fast paced business environment. Vikas Gupta however emphasized that such a procedure is important for any business to understand the validity of the grievance clearly. The argument continued and finally the member from the audience had to calm down owing to pressure from other members of the audience. Do you agree with the member in the audience that the grievance procedure in the new economy companies is different from what is being adopted by Pramod Technologies? 2. Is the grievance procedure being followed by Pramod Technologies, according to the standard grievance procedure? nl y 1. Caselet 22 U se O Until recently, things were going smoothly for the 57-year-old Richard A. Grasso of the New York Stock Exchange (NYSE). He had everything a Wall Street chief executive could ask for: a board of directors with the unconditional devotion of the employees, market dominance aided by favorable regulations, and above all, an excellent salary. But as word got out that his pay package was a mind-boggling $188 million, not even Grasso’s trusted board could save him. Under mounting public pressure, Grasso stepped down on Sept. 17. Fo rI BS The hefty pay package raised serious questions about governance at the stock exchange. Initially, Grasso resisted calls for his ouster, saying he was the right person for the job. He had worked for most of his career in the exchange and as chairman, he ensured its profitability and monitored any misconduct. The NYSE is known for the large number of transactions that take place among the 1300 buyers and sellers, who trade on the exchange floor. Grasso was one of the directors of the exchange board that monitored the day-to-day activities. The issue brought the board of directors under fire too, amid reports that Grasso had himself chosen the people who approved his pay package. The package was sanctioned despite an economic downturn, declining share prices, weakening earnings at the Big Board itself and mini-scandals, which forced several NYSE board members to resign. Grasso’s earnings were substantially higher than that of the average CEO. According to some, Grasso was the victim of the NYSE’s secretive corporate culture and governance practices. It was because of the support from the board that Grasso was able to claim such high compensation. Indeed, the controversy over Grasso’s pay has turned the spotlight onto CEO compensation policies. The unanswered question is 54
  • 56. Part B whether companies have learnt their lessons from the scandals that rocked the US over CEO compensation. After Grasso’s resignation, the stock exchange was expected to have a tougher time than ever in maintaining its strong competitive position. His successor, former Citigroup Chairman, John S. Reed, put in place an independent board and separated the NYSE regulators from the Big Board’s management. 0 Questions for Discussion: The recent scandals that have rocked the corporate world in relation to CEO compensation have raised a storm in the business world. What steps should be taken by HR departments to avoid such situations? 2. Grasso’s pay attracted a lot of criticism because analysts believed that his pay was decided by the board members who were appointed by him. What steps should an organization take to design a compensation committee? of 20 1 1. Caselet 23 Cl as s Mumbai’s Pratheeksha Spinning & Weaving Company wore a festive look as workers with their families, union leaders and management officials jointly participated in a puja organized to pray for the development of the mill. It was workers’ participation in the management with a difference. They all sat together with a resolve to work jointly for the prosperity of the mill, especially when the entire textile industry was going through a rough patch. U se O nl y During their discussion, the workers and the management spoke about how a major fire, which had broken out two months earlier, had damaged the units and godowns. Trade union leader, Vikas Bharadwaj pointed out that because of the management’s support and guidance at the right time, the workers did not heed to the disinformation campaign that had been unleashed when the fire broke out, and had instead, collectively worked towards bringing the mill back towards normalcy. He blamed business adversaries and members of certain political parties for running the disinformation campaign. The members at the meeting felt that the situation had been blown out of proportion. They ridiculed allegations that the management had engineered the fire with the intention of ousting the workers so that it could carry out modernization. Fo rI BS When the fire broke out, there was a rumor that the management had triggered it deliberately in order to gain insurance benefits. It was alleged that the money thus obtained from the insurance agency would be used to modernize its other mills, and employ workers who could work with the new machines. There were also other rumors that workers would lose their jobs as a result of all the changes taking place in the organization. The management intervened at the right time. With the support of the top management, a meeting was called, wherein the chairman explained the cause of the fire and assured the workers that they would not lose their jobs. He sought the support of the workers in bringing the mill back to normalcy. The next week, the mill was restarted. The workers agreed to take a pay cut until the mill got back to its normal capacity of production. Thus, with the continued support and participation of the workers and the management, the mill regained its lost glory. The chairman of the spinning mills, Ajay Chowdhary thanked the workers for their contribution to the growth of the mill, and assured them of the management’s wholehearted cooperation towards their welfare. He said the modernization project would be implemented as per schedule. Trade union leaders thanked both the management and workers for rising to the occasion and said the management had set an example for other textile mill owners. 55
  • 57. Introduction to Human Resource Management Dinkar Desai, who had been working since 1975 in the spinning section, said the allegations against the management had been made with certain vested interests. He praised the management for restarting operations within a week of the fire and for its commitment towards the implementation of the Rs 150 crore modernization project. He pointed out that despite several odds, the mill was running and that the welfare of the workers had always been on the high priority list of the chairman, Ajay Chowdhary. of 20 1 0 Desai asked legislators, ministers and trade unionists to visit the mill and see how it was functioning unhampered, despite the fire disaster. He assured the management, which had secured the ISO 9002 certification for its exports of worker’s cooperation. Questions for Discussion: Prateeksha Mills is a perfect example of labor-management cooperation. What are the advantages that organizations gain as a result of such cooperation between management and labor? 2. One of the workers, Desai, commented that his firm would be the best model for the ministers, legislators and trade unionists to visit. What impact will the visit of ministers and trade union leaders have on the functioning of the industry? Cl as s 1. Caselet 24 O nl y In a speech to the employees, the chairman of Praveen Metals said that to survive in the dynamic market, they must be able to switch gears and perform differently in response to change. According to him, traditional job titles and descriptions indicated a restricted set of work duties. Paying employees according to these structured duties led to rigidity during times of change. Paying employees according to their competencies seemed to be a more rational approach, allowing the organization to speedily change employee assignments and motivate their employees to gain skills and become more valuable. The workers would be motivated as they were being paid according to their skill sets. U se The chairman felt that by doing this, the employees would gain some control over their pay. All in all, such a pay system had the potential of being more motivating as well as of retaining employees. More motivated and performance-oriented employees would be drawn to such a system because it allowed them to realize their potential. Such people were often the high achievers and effective employees. Fo rI BS The management initiated skill-based pay in the organization, replacing the earlier system of job grades based pay. During this transition, employees assisted in writing skill definitions and benchmarking skills. Jobs, based on job scope and complexity, defined the benchmarked competencies. The company conducted training sessions and made sure that employees understood the new system. Supervisors and team leaders assessed employee application of knowledge. If employees were applying skills beyond their designated skill base pay level, the supervisors initiated certification and approval processes to promote them to the next higher level. If employees’ performance was below the standard, their pay remained the same. However, the supervisor and the employee were required to establish a training plan of action. After a year of operation, employees were asked to provide inputs in three areas: (1) access to training and job rotation, (2) how well they understood the new plan and (3) their view of advancement under the new plan. After the implementation, the following results were identified. Employees who had a positive perception of their access to training and job rotation during the first year of the new pay plan, were also satisfied with their skill based pay in the second year. Employees who understood the 56
  • 58. Part B new plan in year one were also satisfied with their skill based pay benefits in year two. Overall, these employees felt that the system was fair. So, from these findings, the management found that both employee understanding of the pay system and their being able to affect their pay through access to training and job rotation were important for the success of the skill-based pay plan. Questions for Discussion: The Chairman suggested the replacement of job grades. Can you suggest some of the modern approaches to wage determination? 2. According to the Chairman, employees do not have control over their pay by using the traditional approach. Is it possible for employees to have control over their pay? of 20 1 0 1. Caselet 25 O nl y Cl as s The northern division of Gautam Appliances met every month to analyze its targets and the actual sales. Shravan Kumar, a jovial and friendly manager who was respected by all the sales personnel, headed the meeting. His suggestions and other contributions during the meetings always helped sales personnel exceed their targets. He also gave a patient listening to employee problems and suggestions. During one such review meeting, one of the sales executives, Pavan Kumar, raised the issue of the uniform compensation system being implemented by the management. He felt that despite their achieving a greater percentage of the sales target than the southern division, they were not being compensated appropriately. The incentives being received by the employees of both the regions were also the same. There were times when the northern division achieved double the sales of the southern division. But the management did not recognize or acknowledge this. Pavan felt that it was demotivating for them to work hard and put in extra effort when the other division was not matching their performance, but were getting the same compensation. U se Shravan explained his inability to provide a solution to the problem as it was an organizational issue. He told the employees that despite his suggesting to the management that they adopt the performance-based variable pay system, they had not considered it. He said the management believed in the standard pay system based on the number of days the employees worked. However, he assured the employees that he would put forward this suggestion to the top management at the next meeting. The meeting was adjourned and the sales personnel left the room in a state of hope. Fo rI BS After a month, when the staff assembled again for the review meeting, Shravan was not his usual jovial self. The employees realized that the management had not reacted positively to the idea of performance-based compensation packages. Shravan tried to convince the employees that the management was looking into this issue and would resolve it as quickly as possible. However, even two months later the sales personnel did not receive any information from the management on this issue. The next two months saw a very high employee turnover rate in the northern division of Gautam Appliances. The employees who remained also did not put in their best efforts. Their sales performance came down drastically. At the monthly meetings, the top management questioned Shravan about the poor performance and the high employee turnover. Shravan made it clear to the management that even at this stage if they did not consider rewarding the employees for their performance, they would be losing a valuable employee base. He suggested that they should at least consider giving employees incentives to reward their performance. After two days, Shravan was called and asked to present his views on designing an appropriate performance-based compensation system for the organization. 57
  • 59. Introduction to Human Resource Management Questions for Discussion: 1. The organization was following the traditional method of compensation. What are these methods and how do they function? 2. Shravan requested the manager to provide the employees with at least incentives based on the targets being achieved. What are the various incentive schemes that can be implemented? of 20 1 0 Caselet 26 Cl as s The workers of Bharat Fertilizers had been on strike for one month as the management did not pay them the bonus it had promised. The company employed 3000 workers and marketed its products across the country. The management tried to convince the workers that because of the decrease in profits, it would not be able to pay them the promised bonus. A close relative of one of the prominent members of the ruling political party owned the firm. The opposition parties took advantage of the situation and instigated the workers to go in for an indefinite strike till their demands were accepted. The trade unions affiliated to the opposition parties also joined the strike and threatened the management that they would go on a rampage if their demands were not met. The management was worried as the company was losing out on its daily production, which would amount to huge losses. If the strike continued for another month, the management might have to shut down the plant. O nl y Sensing the urgency of the situation, the management appointed workers from other districts on a part-time basis to ensure that the production process did not stop. This angered the workers who were on strike and a few union leaders went to the management and warned them that if they did not stop employing workers from other districts, they would have to face dire consequences. When the CEO tried to leave the room, the workers turned violent and assaulted him. BS U se Soon after the incident, the management dismissed the three employees who were involved. These employees accepted their dismissal letters but subsequently provoked other workers to go in for a gherao to protest the management’s move. Late in the evening, a fight ensued between the permanent and part-time workers, resulting in injuries to many. The police had to intervene to bring the situation under control. The opposition parties made big issue of the whole situation and finally the government ordered a lockout. The management also felt that it would be better to close down the unit rather than run into losses. The issue of bonus was not resolved but most of the workers were left jobless, thanks to the interference of the political parties. Fo rI Questions for Discussion: 1. The above case suggests that the interference of political parties aggravated the situation. Do trade unions only serve the purpose of taking advantage of the workers’ weaknesses? 2. Now that the workers have lost their jobs, is there any other method through which the workers could again compromise with the management and get back their jobs? Caselet 27 Ranvir Singh has toiled in the power loom sheds of Bhiwandi, some 50 kms from Mumbai, for almost a decade. When the looms were shut down on as part of a nation58
  • 60. Part B wide agitation against the levy of excise duty on grey fabric, he was left unemployed. He got neither his bi-weekly salary, nor any allowance to ride out the crisis. Four lakh workers suffered the same fate in Bhiwandi, India’s largest power loom centre, where around six lakh power looms operate 12 hours a day on an average, for seven days a week. of 20 1 0 Although the looms resumed work following a rollback of the excise duty, only 40 per cent of them were operational. Some of the power loom owners said that unless the government conceded all their demands, they would continue the agitation. However, not all the workers were prepared to wait endlessly for that day. Unable to cope, about 70 per cent of the workers in the area left for their villages elsewhere in the country. Strikes and closures were not uncommon in Bhiwandi. Lower import duties on fabric, for instance, led to the closure of several hundred power looms earlier too. Again when the government ordered the Maharashtra State Electricity Board to crack down on those pilfering power in Bhiwandi, the drive affected the profits of many power loom owners, who subsequently downed shutters. Thousands of workers, predominantly migrants, were forced to return home. Cl as s In addition to these problems, Bhiwandi has historically been a communally sensitive town. Communal riots have affected production over the years, inevitably resulting in the closure of many looms. nl y The power loom industry in Bhiwandi for some time has been in a precarious situation owing to fluctuating demand for fabric, power problems and communal trouble. Bhiwandi’s workers have had to grab and hold on to any job at any wage, for they never know when a loom will close down. Workers like Ranvir, who are a little more aware than others of the reasons for the recent strike, fear that ultimately, the fresh tax burden will be passed on to them in the form of wage reduction. BS U se O A government ruling in 1971 set down minimum wages for workers, but rarely are they given the stipulated monthly salary of approximately Rs.3000. Loom owners have exploited a situation where there is no dearth of labor who would toil even if paid well below the minimum wage. Lakhs of workers work under miserable conditions. Several power looms are housed in dingy sheds, which have minimal light and hardly any ventilation. There are no toilets, nor even water to drink. Several thousands of workers in Bhiwandi suffer from tuberculosis (TB), the harsh working conditions having weakened their lungs. The town does not have a hospital for TB patients and the TB ward in the general hospital was shut down a few years ago. Over the years, Bhiwandi has become extremely ghastly, clearly benefiting loom owners and politicians. The workers, thus, remain exploited in more ways than one. Fo rI Questions for Discussion: 1. The power looms have not been following the Minimum Wages Act or the Factories Act. What are the main provisions of these acts that the industry should follow? 2. The safety and health aspects of the workers in Bhiwandi are being totally ignored. What steps should be taken to prevent such exploitation by the management? Caselet 28 Sharp Motors is one of the leading car manufacturers in India. The firm established a strong hold in the Indian market because of the quality and variety of cars that it manufactured. With the opening up of the economy in the year 1991, Sharp faced 59
  • 61. Introduction to Human Resource Management strong competition from the foreign automobile players. It began to lose its market share because of the varied designs and products that the other firms were offering. Some of the cars also had a better technology. The one advantage that Sharp Motors had over the other car companies, however, was the cost factor. The prices of Sharp’s cars were relatively less than those of its competitors. of 20 1 0 The CEO of Sharp Motors called a meeting of the design engineers and union leaders to discuss the situation and the steps that the company should take to handle the competition from the foreign manufacturers. The meeting began with the CEO briefing them about the market condition and the strengths and weaknesses of Sharp vis-à-vis their competitors. He suggested that the firm bring out new designs and models that would cater not only to the middle class market but also increase the market share. This, he felt, was the best way of taking the company forward in a highly competitive market. Cl as s The head of the design team, Varun Naik, said that for designing a car that would cater to the middle class, they needed the support and coordination of the other departments. The workers were also invited to participate and give their suggestions regarding the time and resources needed to produce such a car. The CEO gave autonomy to Varun for designing the company’s dream car. He gave him a time of three months and said that a report should be presented on the proposed design at the next meeting. However, Varun was not ready with the design for the next meeting. In his report, he stated that he did not have enough finances and cooperation from the employees of the other departments. The CEO was disappointed as he had fully expected that Varun would come out with a solution. Santosh Kumar, the production manager, who was also present at the meeting, requested the CEO to give him an opportunity to design the proposed car. U se O nl y Santosh had previously worked in the design division of a car manufacturing firm. He joined Sharp two years ago but was posted in the production department. He had a good idea of car designing and was a specialist in computer aided design. The first task that he undertook was to form a quality circle consisting of members from the design, production and other departments. The team consisted of eight members. The members with their knowledge and coordination were able to submit the design for a car model that would cost around two lakh rupees. When the design was presented to the management in 2 months, the CEO was a happy man. He appreciated the efforts of Santosh and his team and advocated the formation of more quality teams that would not only help the firm in improving the quality of products, but also in increasing the coordination between the various departments. Questions for Discussion: The management at Sharp Motors decided to implement quality circles in the organization. What are the various issues that are dealt with by quality circles? 2. What are the common concerns that Sharp Motors can experience when implementing quality circles? Fo rI BS 1. Caselet 29 60 Praneetha, the Personnel Manager of Ever Green Fertilizers was not satisfied with the way the organization was functioning. She felt that in the changing times and business environment, the organization should take steps to change its style of functioning. She was especially worried about the way the personnel department was being treated by the management. All the department did was just routine administrative work. The management did not bother to involve the department in its meetings for strategy formulation. According to her, when organizations were realizing the importance of human resources and focusing on developing and retaining them, and involving the HR department in strategy formulation, Ever Green was far behind. She needed an opportunity to explain to the management the growing importance of HR.
  • 62. Part B An opportunity finally arrived. She received a call from the head office to meet them to discuss the costs and administrative aspects of appointing staff in the distribution department. Praneetha thought that this was the right time to present her views and decided to make the maximum use of it. Cl as s of 20 1 0 When the day finally arrived, Praneetha requested the top management to allow her to present an important matter, which would benefit the organization in the long-run. She started her presentation by referring to the high turnover rate in the distribution division. She said that the traditional approach to personnel management, laying emphasis on command and control, no longer holds good. She requested the management to give more autonomy and freedom to the territory managers of the distribution centers to make their work more interesting. She further explained that the traditional standardization, consistency and conformity, which were the hallmarks of the management policy, would not work anymore. She emphasized that flexibility is the hallmark of today’s management. Praneetha looked around and found that the management was interested in what she was saying. She added that though physical assets are important, it is now an accepted fact that employees, i.e. the human resources, are the critical factors. For this, the human resource department has to be given more importance in strategy formulation. She requested the management to ponder over her submission. Then, after thanking the management for giving her a patient hearing, she took the requirements for the employees of the distribution centers and left the room. O nl y Praneetha wondered what the management, with its traditional mindset, would have thought about the way she spoke. Yet she felt that she did the right thing by drawing the management’s, attention to the changing role of the human resource department. A week after her presentation, she received a call from the management asking her to meet them. She was a bit tense as to what the management’s reaction would be. When she entered the room, the general manager asked her to sit down. Then, he said, “Ms. Praneetha, the management has discussed your proposal to include the HR department in strategy formulation. We are glad to invite you to attend the next meeting. We are sure that your suggestions will be of great value to the firm.” The case presents that the management did not lay much emphasis on human resources. What do you think were the reasons? What kind of approach should the management follow? U 1. se Questions for Discussion: Now that Praneetha has been asked to involve her HR team in the strategy meetings, what challenges will she face in proving the role and worth of HR in the organization? BS 2. Fo rI Caselet 30 Neetha, the finance manager of Shivam Lubricants asked Giridhar, one of the workers in the manufacturing unit to meet her. Giridhar had requested a loan and it was in this regard that he had to meet the finance manager. As Giridhar entered the room and spoke to Neetha, she felt very uncomfortable talking to him. She quickly finished the talk and asked him to meet her again after two days. During the lunch hour, Neetha looked irritated. When questioned by the personnel manager Pratima, she said “How can anyone be so irresponsible towards his work and come to the office drunk?’ Pratima did not understand initially. Then Neetha narrated how Giridhar walked into her office in an intoxicated state when she asked that he meet her regarding his loan application. Pratima was shocked to know that employees come to the manufacturing unit drunk. She also felt a little embarrassed that being the 61
  • 63. Introduction to Human Resource Management personnel manager, she did not know about such incidents of indiscipline. Neetha further stated that an employee like Giridhar not only causes problems for himself but for the other workers too and that giving a loan to such a person is a risk for any organization. of 20 1 0 Immediately after lunch, Pratima asked the supervisor in charge of the manufacturing unit to meet her. Pratima was very upset and spoke to him in very harsh tone. She questioned the supervisor on how he was allowing such an irresponsible person to come to work. Further, she said that if disciplinary action was not initiated against Giridhar the other employees would take advantage and also would come to work in the same condition. The absence of disciplinary action was tacit encouragement to the other employees to do likewise. nl y Cl as s The supervisor expressed his inability to dismiss Giridhar. He stated that Giridhar had the strong support of the trade unions, and if he took any action against him, it would result in a major conflict. He also reported that Giridhar was always late for work and even slept during working hours. Pratima thought for a moment, and asked the supervisor if he had taken any action before. The supervisor replied that when the organization decided to take action in the past, he was manhandled by the trade union members and was given a strong warning. These incidents deterred him from informing the higher authorities about Giridhar. Pratima asked the supervisor to send Giridhar to her cabin. After the supervisor left, she decided that for someone like Giridhar, warnings and dismissals would not work. She resolved to implement positive discipline and prepared a plan for this. She did not want to take any risks with an employee like Giridhar who had the strong support of the unions. Her only aim was to make him more interested and committed to his work. Questions for Discussion: 2. If the personnel manager decides to discharge Giridhar, what are the conditions that have to be satisfied? se Caselet 31 For an employee like Giridhar, what kind of disciplinary procedures will work? O 1. Fo rI BS U In 1999, IBM launched the pilot Basic Blue management training program, which was fully deployed in 2000. Basic Blue was an in-house management training program for new managers. It imparted 75 percent of the training online and the remaining 25 percent through the traditional classroom mode. The e-learning segment included articles, simulations, job aids and short courses. 62 The founding principle of Basic Blue was that ‘learning is an extended process, not a one-time event.’ Basic Blue was based on a ‘four-tier blended learning model.’ The first three tiers were delivered online and the fourth tier included a week long traditional classroom training. The program offered basic skills and knowledge to enable the incumbents become effective leaders and people oriented managers. The managers were divided into groups of 24 members each. Each group then entered the first tier of the Basic Blue program (without interaction with the other members of the group – learning from information). The content for the first tier was delivered through IBM’s Intranet. The first tier trained them on the fundamental skills required to be an IBM manager and offered ‘just-in-time’ performance support. In this tier, the managers were provided access to a lot of information including a database of questions, answers and sample scenarios called Manager QuickViews. This information addressed issues like evaluation, retention, conflict resolution etc., which are relevant for managers. A manager who faced a problem could either access the
  • 64. Part B concerned topic directly, or find the required information using a search engine. He had direct access to materials on the computer’s desktop for online reading. The material also highlighted other important web sites to be browsed for further information. IBM believed that its managers should be aware of practices and policies followed in different countries. Hence, the groups were formed virtually by video conferencing with team members from all over the world. of 20 1 0 In the second tier, the managers were provided with simulated situations. Senior managers trained the managers online. The simulations enabled the managers to learn about employee skill-building, compensation and benefits, multicultural issues, work/life balance issues and business conduct in an interactive manner. Some of the content for this tier was offered by Harvard Business School and the simulations were created by Cognitive Arts of Chicago. The online Coaching Simulator offered eight scenarios with 5000 scenes of action, decision points and branching results. IBM Management Development’s web site, Going Global, offered as many as 300 interactive scenarios on culture clashes. Cl as s In the third tier, the members of the group started interacting with each other online. This tier used IBM’s collaboration tools such as chats and team rooms, including IBM e-learning products like TeamRoom, CustomerRoom and Lotus Learning Space. Using these tools, employees could interact online with the instructors as well as with peers in their groups. This tier also used virtual team exercises and included advanced technologies like application sharing, live virtual classrooms and interactive presentations on the web. In this tier, the members of the group had to solve problems as a team by forming virtual groups and using these products. Hence, the focus on this tier was on developing the collaborative skills of the learners. U se O nl y Though training through e-learning was very successful, IBM believed that classroom sessions were also essential to develop people skills. Therefore, the fourth tier comprised a classroom training program known as ‘Learning Lab.’ By the time the managers reached this tier, all of them had similar level of knowledge, having mastered the content in the first three tiers. Managers had to pass an online test on the content provided in the earlier three tiers before entering the fourth. In the fourth tier, the managers had to master the information acquired in the above three tiers and develop a deeper understanding and a broader skill set. There were no lectures in these sessions, and the managers had to learn by doing and by coordinating directly with others in the classroom. Fo rI BS The tremendous success of the Basic Blue initiative encouraged IBM to extend training through e-learning to its sales personnel and experienced managers as well. The e-learning program for the sales personnel was known as ‘Sales Compass,’ and the one for the experienced managers was called ‘Managing@ IBM.’ Prior to the implementation of the Sales Compass e-learning program, the sales personnel underwent live training at the company’s headquarters and training campuses. They also attended field training programs, national sales conferences and other traditional methods of training. However, in most cases these methods proved to be expensive, ineffective and time-consuming. Apart from this, coordination problems also developed, as the sales team was spread across the world. Moreover, in a highly competitive market, IBM could ill afford to keep its sales team away from work for weeks together. Questions for Discussion: 1. Though e-learning was very successful, IBM believed that classroom training was also essential to develop people skills. Do you agree? 2. What are the advantages that IBM can achieve as a result of implementing elearning for its sales force? 63
  • 65. Introduction to Human Resource Management Caselet 32 of 20 1 0 SAIL is the world’s 10th largest and India’s largest steel manufacturer. The major worry for SAIL’s CEO Arvind Pande was the company’s 160,000-strong workforce. Manpower costs alone accounted for 16.69% of the company’s gross sales in 19992000. This was the largest percentage, as compared with other steel producers such as Essar Steel (1.47%) and Ispat Industries (1.34%). An analysis of manpower costs as a percentage of the turnover for various units of SAIL showed that its raw materials division (RMD), central marketing organisation (CMO), Research & Development Centre at Ranchi, and SAIL’s corporate office in Delhi were the major culprits. There was excess manpower in the non-plant departments. Around 30% of SAIL’s manpower, including executives was in the non-plant departments, merely adding to the superfluous paperwork. Cl as s As a part of the restructuring plan submitted in 1998, McKinsey had advised Pande that SAIL needed to cut down the 160,000-strong labor force to 100,000 by the end of 2003, through a voluntary retirement scheme. Pande was banking on natural attrition to reduce the number by 45,000 within these five years. In a bid to ‘rationalize’ its huge workforce, SAIL launched a VRS in mid-1998 for employees who had put in a minimum service of 20 years or were 50 years in age or above. As benefits, the scheme provided an income that was equal to 100 per cent of the prevailing basic pay and DA of the eligible employees. About 5,975 employees opted for the scheme. Of them, 5,317 were executives and 658 non-executives. Most were above 55 years. O nl y On March 31, 1999, SAIL introduced a ‘sabbatical leave’ scheme, under which employees could take a break from the company for two years for studies/employment elsewhere, with the option of rejoining the company (if they wanted to), at the end of the period. The sabbatical allowed the younger members of the SAIL staff to leave without pay for “self-renewal, enhancement of expertise/knowledge and experimentation,” which broadly translated into higher studies or even new employment. se On June 1, 1999, SAIL launched another VRS for its employees. Those who had completed a minimum of 15 years of service or were 40 years or above, could opt for the scheme. The new VRS, which was opened to all regular, permanent employees of the company, was to be operational till January 31, 2000. Its target groups included: Those who were habitual absentees, regularly ill, or those who had become surplus because of the closure of plants and mines; • Poor performers. Fo rI BS U • 64 Under the new package, the employees who opted for the scheme, would get a monthly income as a percentage of their prevailing basic salary and dearness allowance (DA) for the remaining years of their service, till superannuation. Employees above 55 years of age would be given 105 per cent of the basic pay and DA every month. Those between the age of 52 and 55 would receive 95 per cent of basic pay and DA, and those below 52 years would get 85 per cent of basic pay and DA. The new scheme, like the earlier one, was a deferred payment scheme, with extra carrots like a 5% increase in monthly benefits for each of the three age groups. On December 27, 1999, SAIL initiated a company-wide information dissemination program to educate the staff on restructuring. The company drafted an internal communication document entitled “Turnaround and Transformation” and a special team of 66 internal resource persons (IRP) was assigned the task of preparing a detailed plan to take this document to a larger number of people within the company. The 66-member IRP team conducted half-day workshops across plants and other units based on three specific modules:
  • 66. Part B • A video film conveying a message from the chairman of the company. • A generalized module of the recommendations of the turnaround plan focusing on restoring the financial foundation, reinforcing marketing initiatives and regaining cost leadership. • A module covering plant-specific or unit-specific issues and strategies for action. of 20 1 0 The trade unions were on the warpath against the recommendations of McKinsey. Posters put up by the Centre of Indian Trade Unions (CITU) at SAIL’s central marketing office said that the McKinsey report was meant neither for the revival nor survival of SAIL. Questions for Discussion: Cl as s Though the TUs had no objection to voluntary retirements, they were not happy about the situation. They were worried that employment opportunities were shrinking in the steel industry, and that reduction of manpower would mean an increase in the number of contractors and their workforce. On February 17, 2000, workers went on a strike against the government’s decision to restructure SAIL. The strike was called by eight unions affiliated to CITU, INTUC, ADMK and PMK. 1. What steps can SAIL take to educate employees about VRS? 2. According to the McKinsey proposals, offering VRS to employees was a part of the restructuring plan. Do you think VRS is sufficient without restructuring or vice-versa? nl y Caselet 33 O Neelam Kothari is the regional manager of the southern division of Tasty Foods, a chain of supermarkets in northern India. Five district supervisors report to her. Each of these district supervisors, in turn oversees the activities of eight to twelve stores. U se One fine morning as Neelam was going over the day’s reports, her secretary buzzed her on the intercom and asked, “Ms. Kothari, did you see the business section in this morning’s paper?” “No, why?” Neelam answered, “Well, it says that Nitin Sen has accepted the position of north-east regional manager for Safeway.” Leaping to her feet, Neelam quickly went to see the write-up for herself. Fo rI BS Neelam’s concern was not unwarranted. Nitin was one of her district supervisors. He had been with Tasty for four years in his current job. Tasty had hired him from Apex Markets, where he had been a store manager. Neelam was hurt that she had to learn of Nitin’s departure through the newspaper, but she knew she would soon get over that. What was more relevant was that Nitin was a very effective supervisor - his district consistently outperformed the other four. Where was she going to find a competent replacement? When Nitin put in his papers, the following week, Neelam sincerely wished him well in his new job. She also discussed with him the problem of finding a replacement. Her final decision was to transfer one of the supervisors from a smaller district in the region into Nitin’s district, and to begin an immediate search for someone to fill the smaller district’s supervisor vacancy. Neelam went to her files and pulled out the job description for a district supervisor’s position (no job specification was available). It described the job’s duties: ensuring that corporate standards of cleanliness, service, and product quality are maintained; supervising store managers and evaluating their performance; preparing monthly, quarterly, and annual revenue and expense forecasts for the district; making cost 65
  • 67. Introduction to Human Resource Management savings suggestions to head office and/or store managers; coordinating buying; negotiating cooperative advertising programs with suppliers; and participating in union negotiations. of 20 1 0 To find the right replacement immediately, Neelam needed to have a job specification in place. She had not faced such a situation before. She sought Nitin’s help in jotting down the competencies required for a successful district supervisor. Together they identified some of the competencies Nitin and a few other successful supervisors possessed to compile a list of qualities that the company should look for in the prospective candidate. Then, Neelam started her search armed with the list of competencies, which she could call the job specification for the position of district supervisor. Questions for Discussion: 1. Which recruitment sources should Neelam pursue and why? 2. What are the personal characteristics and qualifications that predict success in the job of a district supervisor at Tasty Foods? Caselet 34 Cl as s The Global Associates Bank of India is one of the largest banks in the country. It has fifty-five branches, with over two thousand employees. The bank’s headquarters is in Mumbai. nl y Every year, GAB regularly hires several dozen recent college graduates each year to participate in the bank’s management training program. The objective of the program is to prepare future lending officers and branch managers. In the summer of 2002, Pallavi Rao was promoted from her position as a compensation analyst to assistant personnel manager. The major responsibility of her new job would be to direct the bank’s management training program. U se O Pallavi collected all the information she could get on the training program and took it home one weekend. It made fascinating reading. The program had been in effect for sixteen years. Over that period, 221 individuals had been recruited for the program, all directly out of college. Approximately 10 percent of these entered with a master’s degree, and the rest with bachelor’s degrees. With a few exceptions, the latter had graduates in business administration. Of the 221 recruits, 47 were still working for GAB. The average length of time recruits stayed with the bank was less than two years. More surprising was the fact that 34 of the 47 had been hired in the past three years. Fo rI BS Pallavi was interested to know how much of this turnover was attributed to voluntary resignations and how much to bank firings. The personnel records indicated that less than 15 percent of those who left were terminated because the bank was unhappy with their performance. At least, Pallavi thought, this suggested that the bank’s selection procedure was effective in identifying people who would make good employees. But why was such a large percentage leaving the bank? The management training program took thirty months to complete. All trainees went through a program which gave them exposure to six main areas within the bank. It was estimated that the recruits who successfully completed the training program and sought to be branch managers should achieve their goal within four years of finishing the thirty-month program. Questions for Discussion: 1. 2. 66 What factors could be attributed to the low retention rate? What changes would you consider to increase the retention rate? An effective socialization process is important for retaining employees. What are the important steps the Bank has to follow in implementing a socialization process?
  • 68. Part B Caselet 35 0 Synergy Technologies is a growing organization in the booming industry of outsourcing. Having established itself as a reputed call center within a span of just five years, Synergy plans to diversify into other domains of Business Process Outsourcing (BPO). In order to plan for the future manpower requirements of the company, the HR manager, Aditi Arora, conducted a human resource planning exercise that helped her compare the existing manpower resources vis-à-vis the resources needed for diversification. of 20 1 After studying the existing resources and the future needs, Arora determined that Synergy must recruit over six hundred employees across various departments in the organization for the next operational year. Arora studied the pros and cons of using various sources of recruitment. Since manpower requirement was mostly at the entry level of the organizational structure (customer care executives), Arora felt that it would be better if Synergy hired an external recruitment agency, so that the initial screening of candidates would be done by the agent. This in turn, would save valuable time of the company’s HR department. Cl as s Even though the top management was skeptical about the effectiveness of a recruitment drive using an agency, it finally consented. After a thorough study of a number of recruiting agencies, Arora decided to offer the project to People Consulting Services Ltd., (People Consulting). People Consulting was a reputed recruiting agency that specialized in serving the BPO units. O nl y People Consulting had its own large database, from which it selected a few candidates. It also placed an advertisement in a reputed daily, which attracted a good number of applicants. People Consulting conducted a written test for all the candidates and short-listed the top few candidates for the openings at Synergy. The written test was aimed at assessing the technical competence of the applicants. The candidates who passed this were asked to attend another round of interview conducted by Synergy. Fo rI BS U se Arora herself was present on the interview panel. While the interviews went on, it dawned upon Arora as to how much of her time and efforts were saved because of People Consulting. She could see the amount of work put in by People Consulting in short listing suitable candidates for the positions, as she found that most of the candidates were suitable for the job. This was unlike the traditional method of selection, wherein she had to spend a lot of time browsing through the resumes of thousands of people to shortlist the desired candidates. In contrast, she now has to select from only a limited number of candidates for the position of call center executives. However, while selecting employees for the manager’s position, Arora found that the candidates did not possess the right job competencies. She felt that the basis on which People Consulting selected those candidates did not suit/match the culture at Synergy. They seemed to be a misfit in the organization in terms of their technical skills and their values. Their managerial skills also did not match the standards expected by Synergy. Arora therefore, met the recruitment head of People Consulting, and modified the contract, stating that the recruiting agency could henceforth focus only on call center executives. She then sought alternative sources of recruitment for candidates for the managerial cadre at Synergy. By the end of the financial year, Arora successfully recruited all the required resources for its new unit. After a while, the top management was also convinced that the recruitment and selection procedures drafted by Arora were appropriate and effective. Synergy continued its association with People Consulting on a long-term basis. 67
  • 69. Introduction to Human Resource Management Questions for Discussion: Though the top management was initially apprehensive about the effectiveness of hiring an external agency to support its recruitment activity, it was later convinced about the various benefits it accrued to Synergy. Delineate the advantages of an external recruitment agency to organizations like Synergy Technologies. 2. People Consulting could not provide candidates with the right competencies for managerial positions at Synergy. Discuss the probable factors for the failure of People Consulting in this case. Also suggest a better source of recruiting candidates for managerial cadres. of 20 1 0 1. Caselet 36 Cl as s Rajesh Nair is one of the many employees of Federal Technologies, who are now able to spare more time for their families and personal commitments. Federal is a leading player in the software development industry, employing over 800 people across the nation. Due to the untiring efforts of the new CEO of the company, Rohan Saxena, the company has now been successful in creating a worker-friendly environment for its employees. One of the striking initiatives of Saxena towards this end is the introduction of a new concept called “Flexible Work Option” (FWO). This option, available to all the permanent employees of Federal, allows them to design a flexible work schedule for themselves. Accordingly, employees can now have a variable and customized work schedule that facilitates them to spend more time with their family members and to meet their personal needs. O nl y Ritu Bajaj has a similar experience. The manufacturing company she works for provides its employees the facility of telecommuting, another type of FWO. Bajaj, who avails of this opportunity, is now able to strike a balance between her personal and professional life. With small accessories at home like a personal computer and an Internet connection, Bajaj not only does her job in the comfort of her home but also spends quality time with her young children. Fo rI BS U se Deepti Reddy is a financial advisor at a furniture manufacturing and exporting company. Reddy advises the company on various strategic issues relating to investments and diversification. She is however, found in the office premises only for four hours a day as she works only for half a day. This helps her and other women employees like her in the organization, to attend to their domestic chores at home and take care of their elders or children. 68 Xcel Enterprises offers an option of annualized hours to its employees to facilitate flexibility at workplace. Employees opting for this schedule are expected to sign a contract for a fixed number of hours that they are expected to work, within a year’s time. This allows them to schedule their work according to their convenience, without affecting their productivity levels. Xcel, a marketing and distributing agent of pet foods, has immensely benefitted from this option. Various other organizations have come up with a variety of such FWOs that are aimed at attracting and retaining talented workforce. Some of them include compressed workweeks, part-time jobs, job-sharing, phased and partial retirement schemes, voluntary reduced work time, leave options, and flexi place. While compressed weeks allow employees to work in longer shifts (say for twelve hours instead of eight), so they can have the rest of the week days off, part-time options help people mostly in secretarial and accounting jobs by providing the flexibility of work hours. Part-timers generally work for fewer hours a day, during a particular time slot. Job-sharing is also a popular FWO in which more than one person works on a single job. This however
  • 70. Part B of 20 1 0 demands additional care to ensure good coordination and a smooth transfer of work among the sharers. Certain companies also offer a phased and partial retirement option by which senior employees could work for fewer hours a day so that they can postpone their date of retirement. A few other organizations offer a reduced work time option to their employees by which members could reduce their work time from 5% to 30%. This is the voluntary reduced work time option. A few other organizations offer leave options wherein employees are granted one-six months leave to pursue any social service activity that is recognized by the local community. A few organizations allow employees to work from home using company equipment. This option is generally provided to employees who are involved in telemarketing and customer service. Organizations belonging to a range of industries like health care, insurance, retail, media and entertainment have been employing various such FWOs to gain a competitive edge through their human capital. Organizations thus benefit by providing their employees with a facilitative work environment that enhances their quality of work life. Questions for Discussion: Discuss the various strategies that organizations use to enhance the quality of work life (QWL). 2. In the light of the various Flexible Work Options (FWO) discussed above, bring out the possible ways in which the employees and the organizations might benefit. Cl as s 1. Caselet 37 se O nl y Universal Manufacturers (Universal), a newly established firm, was yet to recruit a large part of its workforce for its various operations. The organization was established by Ashutosh Ghosh and Avinash Chopra. While Ghosh was an engineering graduate from a top university, Chopra had a rich experience of handling various operations in different companies. Universal’s objective was to produce and develop high quality consumer goods that catered to the changing needs of its customers. For this, they needed highly talented people at all levels of the organizational structure. They had to initiate a mass recruitment drive that attracted the right talent pool for the firm. Fo rI BS U On the suggestion of Chopra, an external human resource consultant (Aparna Rao), was hired by the company. Rao suggested that a detailed job analysis be conducted in the firm to study the manpower requirements. “This would not only help select the right people for the jobs but will also provide important cues to design the compensation package for each job position in the organization,” said Rao. “The results of this job analysis, like the requirements, tasks and responsibilities associated with each job (job description) will help us understand the skills and abilities to be possessed by a prospective job holder (job specification). Based on his skills, qualification, and experience, the job holder may be compensated accordingly,” continued Rao. Thus, Rao felt that the process of job analysis provides critical inputs for the design of compensation plans for each position in the organization. Rao appointed a two-member team to study the important tasks and responsibilities associated with each job position at Universal. They analyzed the qualifications, skills, and abilities that each job holder should possess so that the company could gain optimum advantage of its manpower deployment. The team, with the help of Ghosh (who had a wide range of technical qualifications and experience), determined the Key Result Areas (KRAs) for all the jobs in the organization. The KRAs helped in determining the important responsibilities and deliverables of a job-holder. This in turn, helped in determining the competencies required in each job. Depending upon the performance of the candidates in each of the identified KRA, the qualified candidates are distinguished from the non-qualified. 69
  • 71. Introduction to Human Resource Management After determining the responsibilities and the qualification criteria of various job positions, the team reported to Rao. After a detailed study of the findings of the team, Rao prepared the job description and job specification for each job activity. She then ranked the KRAs according to their importance, in relation with the effective performance on the job. Rao proposed to use this ranked list to rate the candidates’ suitability to the jobs. of 20 1 0 Based on the levels of the vacant positions in the organizational hierarchy, Rao used various sources of recruitment like newspaper advertisements, campus recruitment, her own database, etc., to select people for the different openings. The advertisements explicitly stated the content of the job and the company’s expectations of applicants in terms of their qualifications and experience. Universal received a good response from qualified people. After an initial screening of the candidates, Universal called the short-listed candidates for an interview and the selection procedure was thus initiated. Cl as s Rao also used the findings of the job analysis to design the compensation plan for the various positions in the firm. She attached weightages to each of the KRAs listed for the different jobs. She then used the KRAs associated with each job, and the weightages attached to each of the KRAs to determine the compensation to be granted for each jobholder at Universal. Rao used the findings of the job analysis for various other purposes as well. Thus, Universal was benefited by the process of job analysis in more than one way. Therefore, job analysis continued to remain an on-going process at Universal, which had to constantly keep changing with the changes in the external environment. Questions for Discussion: Universal introduced a systematic job analysis process on the advice of Aparna Rao. Briefly describe the various elements and stages involved in the process of job analysis. 2. The results of job analysis were used to determine the selection criteria for candidates, and also to design the compensation plan for employees holding different jobs. Discuss various other ways in which job analysis could be used by Universal. se O nl y 1. U Caselet 38 Fo rI BS Quality Manufacturers is an upcoming producer of consumer goods. Established two years ago by a small group of five people, Quality is now emerging as a market leader in the industry. The HR department at Quality comprised just two people apart from the clerical staff, the newly appointed Vice President HR, Nikhil Verma and the HR Manager, Anupama Desai. As Verma acquainted himself with the organization, he found that it was growing at a tremendous speed and its manpower was increasing by the day. It was becoming difficult for Desai to handle all the routine transactions right from recruiting people to keeping them motivated. As expected, Desai discussed her increasing workload with Verma. She requested that an additional person be appointed in the HR department so that the incumbent could handle at least part of her workload. This would free her from the mundane chores and help her concentrate on priority issues. Verma assured her that the issue would be taken up with the top management. After studying the functions of the company and considering the importance of the participation of HR department in its strategic issues, Verma sketched out a plan of action to deal with the matter. At a meeting with the founders of the company, he suggested that Quality must outsource at least its routine HR transactions so that the HR personnel could contribute to the strategic management of the firm. “The HR 70
  • 72. Part B personnel must concentrate more on the strategic aspects of human resource management like attracting, motivating and retaining the best talent in the industry. HR must therefore, shift its focus from routine chores to strategic human resource management,” said Verma. of 20 1 0 One of the founders of the company, Roopesh Jindal vehemently opposed this idea. He felt that Quality was not such a big organization that require outside support for its routine jobs. “After all, that is what the HR is supposed to do, what else are they here for?” he asked. After a momentary pause, Verma stated, “Now, that is the traditional way of thinking. Over the years, the role of the HR department in organizations has been transformed from that of a cost center to a revenue generator. No longer do the HR personnel confine themselves to back office transactions. They are now having their say in the board rooms, participating actively in the strategic planning of their organizations.” Cl as s Highlighting the benefits that outsourcing might accrue to Quality, Verma continued, “As the company is growing at a fast pace, the HR department might not be able to handle all its transactions effectively. On the other hand, if the routine transactions like payroll management, PF, benefits etc., are handled by an external firm, our HR department can focus on important issues like employee retention, which has become a matter of serious concern for the firm.” To this, Jindal again disagreed saying, “What about the cost involved? Don’t you feel that there needs to be a justification for such a huge investment?” O nl y Verma added with a smile, “Outsourcing is definitely an advantageous proposition for the firm in the long run. Besides, we must not undermine the expertise it brings into the company.” However, this was not convincing enough for Jindal. He was apprehensive about the confidentiality aspect, as he felt that the external agency might leak some confidential information to their competitors. Verma assured him that the assignment would be given to a professional agency, which would maintain confidentiality in all respects. Fo rI BS U se Finally, after discussing the matter with the rest of the members of the top management, it was decided that Quality would outsource a few HR activities like payroll management and benefits management. Desai and her team were able to concentrate on more strategic issues, as they were no longer stifled by mundane activities. This resulted in positive organizational results like the development of a motivated workforce and enhanced employee productivity. Having experienced the benefits of outsourcing, Quality soon decided to outsource even finance-related operations, so it could focus on the strategic management of the company. Some of these finance operations included tax-processing and financial accounting. Thus, Quality recognized that outsourcing operations could improve the efficiency of the organization. Like Quality, many small and medium-sized organizations have recognized that outsourcing has become inevitable, and that the HR must concentrate on the strategic management of their companies rather than focussing on handling routine transactions. This is indeed a drastic change in the role that HR departments play in the modern business environment. Questions for Discussion: 1. Citing the example of Quality, discuss the factors that drive organizations to outsource their HR functions. 2. Cost and confidentiality were two reasons cited by Jindal for going against the concept of outsourcing. Can you discuss various other reasons for organizations to avoid outsourcing? 71
  • 73. Introduction to Human Resource Management Caselet 39 Murli Madhav and Venugopal Sharma are among the hundreds of employees laid-off during the latest effort of e-Solutions to downsize its manpower. However, these laidoff employees are a contented lot and have no complaints against the company. The reason for their content is that they are now placed comfortably in some other firm, and it was e-Solutions itself that helped them find those jobs. Cl as s of 20 1 0 e-Solutions is a government-aided, ten-year-old software development company. Although the organization had done well during its initial years, its level of profitability and productivity had been falling for the past couple of years. The government therefore, appointed a new chairperson to improve the state of affairs at the organization. The newly appointed chairperson, Arundhati Bendre, felt that eSolutions was overstaffed and that it would do well if its manpower was reduced by almost forty percent. “That is a huge number!” exclaimed Vasant Virani, assistant chairperson of e-Solutions, reacting to Bendre’s suggestion. “Retrenching around a thousand employees will cause more harm than good. Such a move will be strongly opposed by the representatives of the employees. They might also go on a strike, which in turn, could make matters worse,” he pointed out. Virani also touched on the effect such a move would have on the morale and motivation levels of employees. “Not only will the retrenchment create a huge number of dejected employees, it will also result in a constant feeling of insecurity among those retained, which in turn, will tell upon their productivity levels,” he said. U se O nl y Bendre, however, insisted that unless the flab was cut, chances of the company’s recovery would be meager. Bendre and Virani, therefore, drafted a plan to minimize the after-effects of retrenchment. Bendre suggested the option of outplacement. “By helping retrenched employees find another job elsewhere, which is more or less similar to their present jobs, we could have a smoother process,” she said. Agreeing with this, Virani added, “This might also help in reducing the anger and ill-feeling among those retrenched, and create a sense of security among those retained.” eSolutions then hired an external outplacement services organization to handle the retrenchment process. With the help of the outplacement services firm, and the contacts that the management of e-Solutions had, the company approached all possible sources for employing those members who were expected to be retrenched. eSolutions also provided counseling services to those retrenched, and these helped them in preparing their resumes so that they could find other jobs. Fo rI BS Six months later, e-Solutions was performing well in terms of its productivity and profitability. Around 900 employees were given the pink slip during the retrenchment process. Out of these, 812 employees were placed at various locations and companies by e-Solutions itself. This helped the firm both in getting rid of extra manpower, thereby reducing costs, and in increasing the efficiency of work, thereby enhancing its profitability. Thus, the outplacement efforts undertaken by e-Solutions helped the company maintain its employee morale despite the major retrenchment effort. Questions for Discussion: 1. 2. 72 Explain how e-Solutions displayed its social responsibility by providing outplacement services to the retrenched employees. e-Solutions hired an external agency to provide outplacement services to employees. Discuss the benefits that might have accrued to the company by employing an external consultant.
  • 74. Part B Caselet 40 of 20 1 0 Harsh Vardhan, chairman of Bharat Associates, and Abhishek Dutta, managing director, were discussing company affairs, over a cup of tea. This discussion later proved to be one that changed the role of the human resource department in their organization, a medium-sized manufacturing company. While discussing the state of affairs in their company 13 years after its inception, they focussed on the functioning of the HR department, which they thought, had undergone the least transformation when compared to the other departments. At this point, they were joined by the HR head, Gautam Kapoor. Cl as s “HR seems to be the only division that has remained the same throughout in our company,” quipped Dutta. Kapoor had nothing to say in defense as he knew that over the years, the HR department had done nothing but assist the management in the general administration of the company. Other activities that the department handled included routine personnel functions like acquiring, training, and appraising employees, and issues relating to compensation and benefits of employees. “It is time that HR involves itself in the strategic planning of the organization. It must have a say in all the strategic decisions made by the board,” said Vardhan. “It is indeed sad to note that the HR is yet to define, understand and carry on its competencies, which hinders it from delivering the HR function effectively,” added Dutta. O nl y Agreeing with these points, Kapoor emphasized that the HR personnel of an organization had to be strategic business partners, mobilizers, change drivers, etc. That he felt, would help the management evaluate the effectiveness of the HR processes. Vardhan suggested, “Perhaps the participation of the HR in all strategic decisions of the board depends on its ability to direct a team towards organizational success, by providing guidelines on how to utilize the available manpower resources towards generating greater revenue and profits for the organization.” The three members discussed the ability of HR to develop management and leadership skills among the members of the organization by being able to define the big picture and influence the behavior of its human resource towards the accomplishment of the end objectives. U se “Perhaps,” suggested Dutta, “the HR can enhance its significance and importance in the organization by gaining a brief knowledge about all the various activities that take place in the organization. For instance, the HR must possess technical knowledge related to employment law, union negotiations, training and development, etc. This might enhance the confidence of the management in the HR personnel.” Fo rI BS Taking the above discussions as a basis, the HR team at Bharat Associates soon began to enhance its competencies and knowledge in all the aspects of HRM which, in turn, increased its significance in the strategic management of the organization. Thus, with the constant support of the top management, the role of the HR personnel was transformed into one of strategic decision makers of the organization. Questions for Discussion: 1. In the light of the above case, briefly elucidate how the strategic role of HR in an organization may be assessed. 2. The role of HRM in organizations in the present business scenario has undergone a sea change in terms of its contribution to the strategic management of the company. Discuss the emerging role of human resource managers in the current business environment and how the HR function can be even more effective. Caselet 41 Star Solutions is an emerging business process outsourcing company, which has an established call center at Gurgaon. Star employed around 550 people, most of who 73
  • 75. Introduction to Human Resource Management were young college graduates, as call center executives. The main reasons for choosing Gurgaon as a location for its operating unit, instead of more popular locations like Delhi, Mumbai, Hyderabad, etc., was the probability of finding equally competent English-speaking people at such upcoming places. The management at Star was of the opinion that the attrition at such areas would be low, when compared to already developed places. The infrastructure and other operating costs were also expected to be lower. O nl y Cl as s of 20 1 0 However, this did not seem to work for Star. It found that its employee turnover rate still hovered around 35-40%. This was a major cause for concern not only for the HR department but the entire top management as well. Meenal Deshpande, the newly appointed HR manager of Star, was puzzled initially, looking at the high attrition rate. This was because Star offered an extremely facilitative work culture that motivated employees to perform well on the job. The compensation, and other benefits that employees of Star enjoyed, were on a par with the best in the industry. Deshpande therefore, decided to study the trend of employee turnover for the past 12 months. She used the exit interviews conducted by the organization to study the reasons for their termination. To her surprise, she found that around 40% of those who had left had felt a ‘mismatch’ between the job and their interests. Further, there were 15% of the employees who were asked to leave the organization, on grounds of inefficiency. These two findings focussed Deshpande’s attention on the effectiveness of the selection procedure. She wondered if the selection procedure for various positions in the organization was effective in recruiting the right personnel for the jobs. A further probe into the issue revealed that the people who were retrenched by the organization for reasons of underperformance, had actually performed very well during the various stages of the selection procedure. It was also found that when the selection tests were administered for the same group of people at two different instances, the results obtained in terms of their performance, varied considerably. According to Deshpande, these were the two main reasons for the high employee turnover at Star. Fo rI BS U se Other reasons were found to be the odd timings of work, the monotonous nature of the job, occupational stress, etc. With the consent of the top management, Deshpande initiated various stress-management techniques, like the introduction of training classes for its employees (to cope with stress), yoga and meditation, and workouts at gymnasiums, tennis courts, etc. Apart from these, Deshpande also modified the selection procedure in a way that was effective in selecting the right candidates for the right jobs. For the purpose of improving the effectiveness of the selection procedure, Deshpande evaluated each of the methods based on different criteria. These criteria helped her in choosing the right selection methodology for recruiting people for the positions of customer service executives. The new selection procedure now comprised an initial screening of resumes/applications and questionnaires which tested the candidates not only on their technical expertise, but also on their interpersonal skills and general aptitude. The selection procedure also included psychometric and situational tests that tested the ability of the candidate to perform under real job conditions. This in turn, helped the management predict future employee behavior. Thus, Deshpande helped the organization improve its hiring process by evaluating the pros and cons of each selection methodology. This in turn, helped Star choose the right selection methodology, which helped it in recruiting the right people for the right job. 74
  • 76. Part B Questions for Discussion: 1. Briefly describe what went wrong with the first selection process that led to a high employee turnover at Star Solutions. 2. Deshpande used some criteria to evaluate the effectiveness of the company’s selection methodology. Discuss a few other criteria for measuring the effectiveness of a selection procedure. of 20 1 0 Caselet 42 Cl as s Neeta Kapoor was an intelligent and enthusiastic student from a premiere business school. Immediately after her graduation, she was offered a position in a leading advertising agency in Mumbai. Her performance was excellent from day one and she gained immediate recognition from her superiors, and wide acceptance from her peers. She was in the creative team and developed a number of advertisements that became instant hit. Her immediate boss, Pratap Singh was very impressed with her performance and gave her a steep pay hike after she had completed one year of service. Neeta also enjoyed working in the department as she liked the open culture and the creative freedom given to employees. On the whole, she felt that she was lucky to be part of such a work culture and have such wonderful peers. se O nl y Neeta enjoyed the first two years of her job immensely. Her problems started when Pratap Singh was transferred to the Delhi branch of the advertising agency. Her new boss, Vivek Sinha who had come from the Bangalore office had a different style of working. He did not give his employees any freedom in the performance of their jobs. Added to his, the micro management strategy was not liked by the employees. He monitored their work every hour, and shouted at them for small lapses. He ridiculed team members in the open for any mistake and showed no appreciation for a good piece of work. Though the targets to be achieved by the staff remained the same as earlier, the new authoritative style of management increased the stress levels of the employees. The employees grew to detest and fear the sight of their boss and wished that he would be replaced. Fo rI BS U To add to the depressing working conditions and lower employee morale further, any employee’s departure from the organization was always forced and not natural. A close colleague of Neeta, Abhay Basu was pulled up in front of the whole department by Vivek Sinha, for a small mistake. The episode forced Abhay to resign. Such incidents served to demotivate Neeta, and she was not able to perform to her maximum potential. Her concentration on work deteriorated, and she started committing mistakes. Sinha only added to her discomfort by contemptuously dismissing most of her advertising ideas calling them dull or stupid. If any of her ads clicked, he was sure to take the credit for it. After the following year’s performance review, Neeta did not receive any hike or promotion. She just managed an average grade in the appraisal. Her boss cited the reasons as her decrease in productivity and lack of interest in her work. Neeta felt that she could no longer work in the place and resigned the next day. Questions for Discussion: 1. What do you think contributed to Neeta’s resignation from the advertising agency? 2. What steps should the organization take to prevent such incidents from taking place in the future? 75
  • 77. Introduction to Human Resource Management Caselet 43 of 20 1 0 Sumedh Fertilizers is a 20-year-old company with a manufacturing unit located in Punjab. The company employed mostly casual laborers for the day-to-day work of packaging and other miscellaneous jobs. The firm that was started in the early eighties with 50 employees now has more than 300 full-time employees apart from the administrative staff and casual employees. With the increasing demand for its products and the expanding markets, the company imported technology-intensive machinery but did not hire any new trainers or workers who had experience in handling such highly mechanized equipment. The workers were initially hesitant to work on the new machinery, as they felt that it required some prior experience or additional training. But the production incharge insisted that their apprehensions were baseless, and that no extra training was necessary as the machinery could be operated at the press of a button. The supervisor gave the workers instructions on how to operate it. nl y Cl as s Three days after the workers started using the new machinery, the general manager, K.N.Singh received a call at his office that a worker had been seriously injured while working on one of the machines. Singh rushed to the spot, and shifted the injured person to the hospital with the help of the production supervisor. The attending doctor said that if primary medical aid had been provided, the case would not have been so serious. Singh was shocked to know that primary aid had not been provided. That was Singh’s first visit to the plant in almost a year’s time. He has been so busy expanding the business and managing the research work that he had found no time to look into the production activities. He believed that everything was fine as long as the production targets were being met. O Singh was a worried man. He was also angry at the way the immediate supervisor had behaved when an employee had been injured. He made up his mind to sack him. He later went to the plant to analyze the causes for the accident, and was shocked to see the way things were working. The following aspects came to light: se The plant was very congested with poor lighting and ventilation. The shop floor was strewn with inventory and wastage, and the workers were following no safety rules. U • The walls of the factory were in a very bad state because of frequent and also because the building was old. This could result in short circuit and could pose a serious threat for the workers. BS • Fo rI • 76 The supervisor had not given any formal training to the employees on using the machinery or providing first aid to help an injured employee. When Singh discussed these issues with a close friend, he commented that it was not only the supervisor’s fault but also Singh’s. Being the general manager, he should have taken personal responsibility for the safety and well-being of the employees. There was a need for frequent inspections of the shop floor so that he could understand and know how the plant was functioning and what changes needed to be made to ensure a safe and comfortable working place. Singh left his friend’s place and pondered over what had happened. He dropped his plans to sack the supervisor. Instead, he immediately made arrangements to revamp the whole shop floor and got the necessary repairs made in the building. He arranged for formal training for all the employees on safety and machinery operation. He also made it a point to make frequent personal visits to the plant and speak to the workers to understand and resolve their problems and provide a safe and healthy work place.
  • 78. Part B Questions for Discussion: 1. What are the various aspects that the case highlights, about the importance of a safe and healthy workplace for the employees? 2. Why do you think Singh dropped his plan to terminate the supervisor? Do you think he took the right decision? 0 Caselet 44 nl y Cl as s of 20 1 At Proton Biotech, an analysis of performance hurdles among employees indicated that the traditional system of discipline was proving to be unsuccessful at modifying employee behavior. The company’s business was such that it had to employ highly skilled personnel. It also faced cut throat competition from both domestic and foreign players in the market. As the company’s business became more sophisticated and technology driven, the company began to increasingly employ well-trained professionals and it expected unrivalled commitment and better performance. This was required to meet the increasing competition at home and abroad. It seemed that the traditional system of discipline was becoming increasingly counter-productive to the changing needs and goals of the organization. The company embarked on a systematic strategy of selectively installing positive discipline not just as a new disciplinary system, but as part of the overall cultural modification that would complement both the business and the evolving human relations movement of the company. It implemented positive discipline on a pilot basis at a small non-unionized manufacturing facility. Till then, the disciplinary procedure followed in the plant was punitive in nature, and was based on strict adherence to rules and regulations. Any small mistake by the employees was punished as per the rules of the disciplinary system. The employees were therefore, afraid of committing mistakes, and this undue fear resulted in more mistakes and lack of initiative. The employees performed mechanically, with no interest in being creative. Fo rI BS U se O The implementation of positive discipline was initially slow as it was necessary to change the mindset and the performance of the employees. The rationale behind starting it in a small unit was to gain some basic understanding of the program, and to study the implications of its implementation. The pilot implementation was successful and the management heaved a sigh of relief. Later on, the company devised a corporate strategy to encourage all its facilities to adopt the new system and make the transition simple and easy. The basic advantage of positive discipline is that the employees are no longer forced to follow the rules and maintain the standards, but they do it out of their own will and commitment. The other advantage of positive discipline is that it helps the employees and the management to develop trust and work cooperatively. Positive discipline reduces the chance of an employee’s services being terminated because the employee is given a chance to change his behavior. Through positive discipline, suspension can be avoided and employees become committed. The implementation of positive discipline generally involves more than a training program. It starts with efforts to resolve specific organizational issues. Positive discipline proved very beneficial for the company. As a result, it was extended to all the manufacturing facilities of the company. The application of the concept was for both unionized and non-unionized facilities with equal success, as the local management in their respective departments was able to customize the programs according to their requirements. Following the implementation, the number of grievances dropped from 31 to 8. Employee complaints too came down drastically. Questions for Discussion: 1. What are the benefits of positive discipline, and how could Proton Biotech benefit from it? 2. What are the various steps that Proton Biotech has to follow to implement an effective disciplinary system in the organization? 77
  • 79. Introduction to Human Resource Management Caselet 45 of 20 1 0 PM Glass Industry employed 600 workers in its three production units across the state of AP. The company had been in the business fifteen years and catered to the needs of the AP market. Though the company claimed to have a great work place, in reality, the working conditions of the employees were pathetic. The ventilation and lighting were very bad. Since the glass industry by its very nature was prone to occupational hazards, employees suffered from various ailments because of excessive exposure to gases like carbon-monoxide and glass dust, which resulted in respiratory diseases and other serious ailments. Cl as s The workers in the factory were mostly illiterate and did not know that the organization was required to provide them with safe and healthy working conditions. The management in the organization was bureaucratic in nature. It was interested only in extracting the maximum work from the workers without taking into consideration their working conditions. Respiratory diseases were so common among the workers that many had to leave their jobs owing to ill health. Krishna, a worker who was in his early 40’s, decided that this was not the right place to work in, as he had developed severe respiratory problems. A doctor, whom he consulted, advised him to change the nature of his work. He said that Krishna’s problems were due to the poor working conditions at his plant. Since Krishna knew that the management at PM Glass would not give him alternate employment, he looked out for other opportunities. Fo rI BS U se O nl y He found a job with a manufacturing unit of Srinivas Asbestos in the neighbouring district. He was offered the job of a helper since he had specified that he could not work with chemicals again. Within a few weeks of getting his new job, Krishna observed noticeable differences in the way PM Glass and Srinivas Asbestos functioned. From his interaction with the workers, he found out that the management followed the Factories Act in providing employees with a safe and healthy working environment that was free from hazards. For the first time, Krishna learnt that there was something called the Factories Act that safeguarded the interests of the workers. The employees at Srinivas Asbestos knew exactly what they had to do when they were working with hazardous chemicals. There was a safety officer who would guide and educate them. Every month, the employees had a training and education program where they could discuss their problems with the personnel manager. The working conditions were safe, and every employee knew what do to in case an accident occurred. Apart from these, the organization had a safety policy and a safety director to ensure that the safety programs were progressing in accordance with the set directions. The safety engineering process included designing of safer products, processes and machines, structuring the layout of plants and equipment, providing safety devices for employees working on hazardous jobs, keeping the workplace clean, well lit and properly ventilated, and maintaining a well designed system for detection, prevention and control of fire, dust fumes, inflammable gases and explosives. Krishna was surprised to learn about the existence of such plans and policies. He realized that PM Glass was not functioning according to the legislation and was not providing the employees what they lawfully deserved. The management was not maintaining even the minimum safety standards. He decided that something had to be done to change the way of functioning at PM Glass to save many more workers from health hazards. Questions for Discussion: 1. 2. 78 What steps can Krishna take to prevent such unethical happenings in the workplace as in PM Glass? What according to the Factories Act are the safety standards that have to be followed by organizations in implementing the safety policy?
  • 80. Part B Caselet 46 of 20 1 0 After spending a week at Panchkula on vacation, Preethi Nair rejoined work at her office, Protech Bangalore. One hour into the morning’s work, she received the news that Rithika Khanna, the PR Manager at the Mumbai office, had put in her papers in her absence. Preeti was shocked at the change of events in a week’s time. She wanted to find out the reasons for Rithika’s resignation. Protech was a leading software company that provided services and solutions. The company had offices located in 20 cities all over the world, with the Indian headquarters at Bangalore. Apart from Bangalore, the company had operations in Chennai, Mumbai and Hyderabad in India. Cl as s Govind Shah was in charge of the operations of the firm in Chennai. He was one of the most talented employees, and a highly rated performer. He was a great manager and everyone held him in high regard. The annual reviews showed that the performance of Mumbai office was deteriorating day by day. The CEO requested Govind to take charge of the Mumbai operations. When Govind assumed office at Mumbai, the PR manager, Rithika Khanna was the happy, as she was a thorough professional and had heard a lot of good things about Govind. She had seen him in action at a couple of meetings and had heard about the marvelous rapport he developed with everyone. She was eager to work with him and develop the Mumbai branch. nl y After six months of Govind’s coming to Mumbai, the head office received Rithika’s resignation. She was asked to visit the Bangalore office to present her resignation in person. Preeti Nair was the quality head at Bangalore and knew that Govind’s attitude towards women was not quite acceptable or healthy. He was known to behave indecently with women and take undue advantage of their courtesy. His power and position only made him more aggressive. se O Rithika disclosed to Preethi that she was having problems with Govind’s behavior and inspite of her warnings, he didn’t change his behavior. She had even approached the internal grievance committee of the company twice. But it was of absolutely no use as Govind held the number three position in the organization, and the organization needed him badly to turnaround the Mumbai division. When the situation became unbearable, Rithika warned him that she would file a suit of sexual harassment. Preethi advised her to go ahead with it, instead of resigning from the organization. Fo rI BS U Actually, taking the step of filing a suit required a lot of courage on Rithika. She realized that it could bring her a lot of publicity and perhaps show her in a bad light. It could disturb her family life, if her family members were not understanding and supportive and she knew she may not be able to give her best performance at work. Her career could get shattered. With so much at stake, it took a while before Rithika took the final step of filing a suit against Govind and the company. However, before taking this step, she resigned from her job. The company, which was proud of its good HR practices, did not want its image to be tarnished in the public. The company was held high in terms of its quality of work life and employee friendly policies. To protect and uphold its image as a clean organization, it asked Govind to put in his papers on his own. It also approached Rithika to persuade her to accept an out-of-court settlement. Since Rithika also wanted to avoid the media publicity, she agreed to the proposal of the company. Questions for Discussion: 1. 2. Inspite of having an effective grievance redressal system in place, Rithika was unable to put forward her grievances as Govind occupied a higher position in the organization. What steps should the firm take to avoid such incidents in the future? Will an open door policy of grievance redressal work for a firm like Protech? 79
  • 81. Introduction to Human Resource Management Caselet 47 0 With net revenues of Rs 7.27 billion and a net profit of Rs 304.6 million for the financial year ending December 31, 1999, FootComfort was India’s largest manufacturer and marketer of footwear products. For years, FootComfort’s reasonably priced, sturdy footwear had made it one of India’s best known brands. FootComfort sold over 60 million pairs of footwear per annum in India, and also exported its products to overseas markets including the US, UK, Europe and Middle East countries. of 20 1 The company provided employment to over 15,000 people in its manufacturing and sales operations throughout India. Despite of all its successes, FootComfort had one problem, and that was its labor. The workers resorted to strikes at the slightest provocation throwing production schedules out of gear. They became a perennial problem for the management. Cl as s On one occasion, the company’s factory at Calcutta remained closed for four and a half months because the union was against the policy of outsourcing. FootComfort had started outsourcing the complete manufacture of the power range of shoes to China. Earlier, the company had been outsourcing only the assembly and sewing line jobs. The company’s production of Hawai chappals at the unit too had come down. These steps, the workers felt, had resulted in lower income for them they also feared that they could lose their jobs in future, if this trend continued. O nl y According to the union leader, workers had always been and would always be concerned about their wages and benefits. Every workman sought a fair compensation that matched the industry standards and his personal worth. Workers believed strongly in the collective power of trade unions to improve and achieve higher levels of wages and benefits. They also expected protection from trade unions, in view of their membership, when unexpected financial needs arose in the form of illness, accidents, injury, etc., and for this reason, they felt that they had every right to strike. Fo rI BS U se For the first time in its history, the company remained dysfunctional for more than five months. The workers threatened the management that they would make their strike intensive and garner support from all other unions. The trade unions also received support from the local political parties, which intensified the pressure on the management. The main demand of the trade union was that either their salaries would have to be increased or the outsourcing of the work to China had to be stopped. The firm negotiated with the trade unions, and increased the wages and later on entered into an agreement with the workers so that there would not be disruption of work in the future. This agreement regarding wages was valid till August 2001. Apprehensive about labor problems spilling over to other units, the company entered into similar long-term agreements with the unions at its manufacturing units at Bangalore and Faridabad. 80 Despite the above agreement, a lockout was declared at FootComfort’s factory in Bangalore on March 8, 2000, following a strike by its employee’s union. The new leadership of the union had refused to abide by the wage agreement, which was to expire in August 2001. Following the failure of its negotiations with the union, the management decided to go in for a lock-out. The management was of the view that though it would have to bear the cost of maintaining an idle plant (Rs. 3 million), the effect of the closure on sales and production would be minimal as the footwear manufactured in the factory could be shifted to the company’s other factories and associate manufacturers. The factory had 300 workers on its rolls and manufactured canvas and PVC footwear.
  • 82. Part B The negotiation process started again and the company got an undertaking from the factory employees that they would resume work. During the negotiation process, the company stated that it planned to phase out welfare schemes so as to cut down costs. 0 However, some of the workers opposed the company’s move to get an undertaking from the factory employees to resume work. The employees demanded revocation of the suspension orders against 20 of their fellow employees. They also demanded that conditions such as maintaining normal production schedule, conforming to standing orders and the settlement in force should not be insisted upon. of 20 1 Questions for Discussion: 1. Maintaining good industrial relations have always been a problem for FootComfort. Why? How do you think FootComfort can maintain sound industrial relations? 2. The FootComfort management in a bid to further cut costs announced phasing out several welfare schemes at its unit. Do you think it right to phase out welfare schemes to cut costs? Give reasons for your answer. Cl as s Caselet 48 nl y FedEx ensured that all its new recruits were imparted proper training so that they could handle the tasks they were expected to. Apart from imparting job-related skills, the training contributed significantly towards the overall development of the employees. Larry McMahan (McMahan), Vice-President of Human Resources at FedEx, said, “One reason people like to work here is that they just don’t come in with a set of skills that stay stagnant. We believe heavily in individual development. We provide extensive training.” O All new employees underwent an orientation program which educated them about FedEx’s philosophy and policies, and the nature of the relationship between superiors and peers at the company. The orientation program was followed by a training program, which varied depending upon the type of job the new recruits were expected to perform. The managers under whom the new recruits would work were also given instructions regarding the way the incumbents should be imparted on-the-job training. U se FedEx viewed its orientation program as a tool for retaining talented employees. FedEx Express, one of FedEx’s subsidiaries, devised a hire orientation kit (in association with a private HR firm) to help the managers as well as the new recruits understand the key components of the orientation process. Fo rI BS FedEx gave considerable emphasis to the training of those employees who interacted directly with customers. These included the customer service representatives (CSRs), the couriers, and the service agents. The CSR trainees received eight weeks of intensive training before they were allowed to handle customer calls. The training program involved educating CSRs about FedEx’s service offerings and putting them in simulated work conditions. The trainees were asked to sit at computers and browse through the screens they would be using in future. They also had to sit at a computer terminal, known as the hot seat, to listen to live calls made by customers, so that they could get a feel of the real-time operating environment. During the training course, four tests were administered on job skills. The trainees had to score a minimum of 85% on these tests. Couriers and service agents received training for four weeks, before being assigned field jobs. At FedEx, training was a continuous process for existing employees so that they could further develop their skills. In order to test employees’ proficiency in their respective jobs, FedEx developed a job knowledge testing program (conducted once in six months). The employees could take the test online from any computer terminal within 81
  • 83. Introduction to Human Resource Management the company. The marks (which were received within 24 hours), scored by the employees were recorded in the employee training record section in PRISM1. of 20 1 0 PRISM also identified the areas in which employees had to improve their skills and provided a list of reference material which would help them enhance their performance. The management made it clear that every employee had to pass the test. Those employees who failed the test in successive attempts were required to pursue further training before they took the test again. If they failed in it even after receiving training, they had to quit the company. The company felt that in order to improve the job knowledge and quality of service that the employees provided to their customers, it was necessary to continuously upgrade the skills of the employees. Cl as s In the mid-1980s, FedEx created a ‘Leadership Development Institute’ (LDI), which developed several training programs for its employees at various management levels. The training courses were conducted in three disciplines – Core Management Principles, Outdoor-based learning, and Electives. The faculty at the LDI, also known as ‘Management Preceptors,’ consisted of managing directors and senior managers. In order to train the company’s new front-line managers, LDI developed an 11-week management development program called ‘Field Applied Management Education’ (FAME). This program imparted training in leadership and field operations. nl y FedEx imparted training in both IT skills and management skills to its Information System (IS) employees. In 1995, the company tied up with the Christian Brothers University (CBU) to offer a 40-week training course specifically designed for IS employees. Through this course, they received training in marketing, accounting and economics as well as training in object programming, transaction management, distributed data management and client-server computing. FedEx paid the entire fee for the course. The program was made an integral part of FedEx’s training module for IS employees. The employees were permitted to take time off from their job to attend classes which were conducted twice a week. Questions for Discussion: 2. How can job rotation be applied for the employees at Fedex as part of continuous training? se U Employees of SVS Pharmaceuticals were a worried lot. With the news that the company was going to merge with Vindhya Pharma, all of them were worried about what would happen to their jobs, and the other benefits as a result of the merger. There were all kinds of rumors regarding layoffs and reduction in pay and benefits. Vindhya Pharma was a leading firm with operations spread across Asia and Europe. SVS Pharmaceuticals had a strong hold in marketing and distribution in India, and so it was considered to be a merger of equals. Amid all the confusion, the employees received a message that the CEO would like to address them regarding the merger. Fo rI BS Caselet 49 At Fedex training was a continuous process. What is the advantage of having a continuous training program? Will it not be an added cost for the organization? O 1. The next day, the tensed staff assembled in the conference room. The CEO, Sharath Kumar started the proceedings by sharing with the employees the reasons for the decision, and the advantages for the firm, if the merger was completed. He felt that as a result of the merger, the firm would be able to explore various areas of research because Vindhya Pharma had the resources to finance such research and developmental activities. Even as Sharath Kumar was speaking, the employees had 1 ‘Personnel Records Information System’ (PRISM), is an online database which formed the human resource information system of FedEx. 82
  • 84. Part B just one question in their mind, what would the impact of this merger be on their jobs and their pay packages. To their relief Sharath made it clear that a benefits team would be formed that would have representatives of both the companies. He requested the employees to be patient as it would take some time to clearly decide and bring in an effective benefit plan. As per Sharath’s statement a benefit team was formed. Questions for Discussion: Cl as s of 20 1 0 Later in the afternoon, a meeting of the benefits team was called where the team headed by the VP-HR of the merged company, Vinod Sharma stated that since it was a merger of equals, they had to develop something that was the best for the new company, even if it were time-consuming. The team felt that the best way to go about it was to merge the best of both companies’ benefit plans or create a new benefit program that reflected the culture that the new company was trying to nurture. Sharma felt that the latter option would take a longer time. He also stated that their aim was not just to design a new benefits plan, but also to make sure that the employees were knowledgeable and comfortable about the changes in the benefits programs. Before concluding the meeting, the VP made it clear to the team that people were of paramount importance to them and if the benefits program did not help in retaining them, then the merger would serve no purpose. The benefits team has to devise a benefit program that would satisfy the employees of both the firms. Can you suggest some steps for the benefits team to function effectively? 2. The head of the benefits team stated that it would take the firm more time to create a new benefits plan than merging the benefits plan of both the companies. Why would creating a new benefit plan take more time? What should be the action plan for the HR team? nl y 1. O Caselet 50 U se Girish Pradhan is one of the many HR managers who have seen the ups and downs of retaining employees with stock options. In December 2000, at the peak of the boom, he joined the human resource department of Visiotech, one of the largest independent chip design firms. When Pradhan joined the firm, it was unlisted, but was on the verge of launching an IPO. The firm expected Visiotech’s stock to soar rapidly after the IPO, as it was one of the leading chip designers. Fo rI BS That gave Pradhan a terrific recruitment tool as the stocks attracted many prospective candidates. People were willing to join the firm at salaries that were 30-40% lower than their existing salaries because Visiotech was offering stock options as part of the total compensation package. But the dream was short-lived. In just a few months, as the stockmarket came crashing down, and the firm’s stock was no longer sought after in the market its options turned worthless. Pradhan realised that the employees were no longer interested in stock options and it was difficult to attract and retain talented employees using the company’s stock options. Even senior management employees in the 45-48 age group people with a greater risktaking capacity were shying away from options. Pradhan planned to analyze the situation and identify the means of attracting and retaining employees. After considering the market situation and the existing trends, he came to the conclusion that the most common demand was for a performance cash bonus. From his analysis, he also found that with higher spending on lifestyle products and a greater need for free cash, employees seem to prefer the cash based pay to ESOPs. Employees also seemed that ESOPS took time to mature, and also that there was some risk involved in the returns. 83
  • 85. Introduction to Human Resource Management But implementing a performance bonus plan based on cash would put Visiotech under enormous strain as the company’s manpower costs were already 40-50% of sales and any further increase would squeeze the margins. As it is, the tech. meltdown had already shaved off a major chunk of the margins. Moving to a fully cash based compensation system would also have a major impact on the profit and loss accounts of the company. of 20 1 0 Another option that Pradhan could consider was the move to a variable pay structure, under which the pay was now linked to company, individual and team level of performance. But when he planned to finally implement variable pay, one of his colleagues suggested that the system of options should not be written off as the market was catching up. Questions for Discussion: What are the reasons for the declining role of stock options in Indian companies? 2. Pradhan seems to be in a confused state as to what kind of compensation packages he has to design to retain and attract employees. Can you suggest any guidelines to Pradhan for using compensation to attract employees? Fo rI BS U se O nl y Cl as s 1. 84
  • 86. nl y Cl as s of 20 1 0 Part B: Caselets (Suggested Answers) Fo rI BS U se O Every caselet will have more than one possible solution. The guidelines are intended to help students develop their abilities to analyze business situations and develop feasible solutions.
  • 87. Part B: Caselets (Suggested Answers) Caselet 1 of 20 1 0 1. Welcome to Aarohan is a program that aims at introducing its incumbents to the company's values and culture, and also their jobs. Socialization is the process by which an organization facilitates its incumbents to acquire the appropriate knowledge and skills that are needed to adapt themselves to the organization and perform an important role in helping the organization achieve its objectives. Cl as s As discussed in the case, Welcome to Aarohan extends a warm welcome to the newcomers and makes them feel at ease. The participation of the HR manager, Srikanth Reddy, emphasizes the importance that Aarohan gives to its new employees. The entire program is aimed at familiarizing its incumbents with the organizational expectations, processes, systems and procedures. This helps the employees understand desirable and undesirable behaviors in the organizational context. This in turn, helps them in adapting themselves to the new culture and environment and also in being accepted by the existing members. O nl y Reddy's introductory session would help the new team obtain greater role clarity, helping each member to understand his duties and responsibilities in the new job. This understanding enhances the employees' commitment towards achieving organizational goals and objectives. It also helps in creating a sense of belonging to the organization. New employees are bound to have differing expectations from the organization. A program like Welcome to Aarohan, would go a long way in clarifying employee queries and in reducing any discrepancy between their expectations of the organization, and the reality that exists. It also benefits the organization through enhanced employee productivity. This is possible because, through such a program, the organization conveys its expectations to each incumbent. And the sooner the incumbent becomes aware of this, the quicker he becomes productive to the firm. U se Besides, an introduction of the incumbents to the existing members and an opportunity to work with them actually enhances the interaction among them. This enables the newcomers to understand the informal group and the values and attitudes they uphold. Such an understanding will help the incumbents adapt to the group easily, and behave in a way that they are accepted by the group. In other words, Welcome to Aarohan helps new employees to conform to the norms of the group. Fo rI BS Thus, Welcome to Aarohan helps newcomers at Aarohan not only in understanding the formal structure, procedures and systems of the organization, but also in being accepted by its informal group. 2. Organizational socialization is the process by which organizations help a newcomer to acquire the attitudes, behavior and knowledge that he or she needs to perform his/her role. In other words, it helps employees adapt to the organizational culture. Therefore, an effective socialization model aims at this cultural adaptation and can be said to be divided into three stages – pre-arrival, encounter and metamorphosis. The pre-arrival stage helps the individual to understand what the organization expects of him, and the desirable and undesirable behavior in the organizational context. At this stage, the employee gets an insight into the various aspects of his new job without actually working on the job. This stage helps him adapt to the organizational culture. The individual then enters the next phase of socialization, called the encounter stage, wherein employees are made to experience the realities of the job. At this stage, the newcomers try to compare their expectations with the realities in the organization. If the expectations and the realities match, then the employees would find it easier to
  • 88. Introduction to Human Resource Management settle down in their organizational roles. In case they do not match, the employees are demotivated, and hence find a cultural disparity between the organization and themselves. In order to tackle this cultural difference, organizations make the incumbents unlearn what they have already learnt and then let them undergo the process of socialization. of 20 1 0 The final stage in the process of socialization is metamorphosis, wherein the incumbent tries to minimize the magnitude of the problems he had encountered in the previous stage. He attempts to do this by reorienting himself and enhancing his level of commitment towards the goals and objectives of the firm. The outcomes of a successful metamorphosis phase are enhanced productivity and commitment towards organizational goals. A successful socialization process is thus a systematic process of cultural adaptation of the newcomers to the organization. Caselet 2 Cl as s 1. Job enrichment is the process of bringing about a positive change in the quality of an employee's job activities that enhance the degree of autonomy and responsibility associated with the job. In other words, job enrichment involves a qualitative increase in the scope and depth of a job activity. An enriched job provides the job-holders and the organization with a number of advantages. Some of them are discussed below: Since job enrichment involves increasing the scope and depth of the job, it provides the job holder with a greater opportunity for personal achievement and recognition. Besides, job enrichment results in an enhanced scope for individual advancement and growth. • The increased responsibility and autonomy resulting from an enriched job, enhances the intrinsic satisfaction of the employee which in turn, gives him greater job satisfaction. • As job enrichment involves increasing the responsibility associated with the job, it proves to be an effective tool for enhancing employee skills and abilities. • This technique of job design helps organizations in meeting the psychological needs of employees in terms of adding more meaning to the job, and increasing the employee's self-control and self-esteem. • Job enrichment is seen to be one of the most popular methods of increasing employee satisfaction and motivation. It is also used as an effective tool for reducing absenteeism among employees. BS U se O nl y • Fo rI Thus, a proper and planned job enrichment process will go a long way in enhancing employee morale and motivation, thereby increasing employee productivity and organizational profitability. 88 • Discuss the variety of ways in which organizations can enrich the jobs of their employees. 2. Organizations might introduce job enrichment process in a number of ways. Incorporating more responsibility in the job, thereby increasing its scope and depth is one commonly practiced method of enriching jobs in organizations. The wider scope, greater sequencing and increased pace of work enhances employee motivation and his effectiveness at the job. Jobs can also be enriched by assigning a natural unit of work, either to an employee or to a group of employees. This increases the sense of belonging among employees, thereby enhancing their commitment towards accomplishment of organizational goals and objectives. One other technique of job enrichment is minimizing controls and providing freedom of work to the employees. This must ensure that employees are made accountable for attaining the defined goals.
  • 89. Part B of 20 1 0 Organizations might also benefit by allowing the employees to set their own standards or targets. This increases their responsibility towards achievement of the set targets and goals. Allowing the employees to monitor their own performance by providing the control information is another way of job enrichment. Some organizations enrich jobs by encouraging employees to participate in planning and innovating new products or procedures involved in the production of the products. Individuals are also motivated if their jobs are enriched by means of introducing new, difficult and creative tasks in their routine activities. Jobs may also be enriched by assigning specific projects to individuals or groups. This in turn, enhances employee expertise. Thus, organizations employ a number of techniques to enrich jobs, thereby enhancing employee productivity and organizational profitability. Caselet 3 Cl as s 1. Esteem went about the process of succession planning by introducing an employee development program called the Leadership Development Program (LDP). The program was headed by members of the top management, who spent considerable time and resources towards achieving the organizational goals and objectives. The team first identified key positions in the organization that had a major influence in the organizational processes and procedures. The LDP aimed at creating personnel as replacements for such key positions, in case of any unforeseen eventuality like the resignation of key personnel. This was done to avoid the potential damage of having a key position vacant, which in turn, would obstruct the flow of processes in the organization. nl y The next step was to establish criteria for the identified key positions in the organization. Depending upon the level of the key position in the organizational structure, the roles and responsibilities attached to it, and the skills required to face the challenges posed by the job, the team establishes the criteria for each position. O Once the criteria for the positions are established, the LDP aims at identifying the potential candidates for those positions. This is done through a series of evaluation programs, which ensure that the candidates possess the skills and abilities demanded by the new job responsibility. U se The next phase is the design of training and mentoring programs to fine tune the identified candidates to suit the job. While the training programs aim at developing the skills and knowledge of the prospective candidates, the mentoring programs support and guide them through out the transformation period. Fo rI BS The final stage involves the constant review and feedback of the candidate who is selected as a probable replacement. This is to check if the candidate is progressing according to developmental plans of the LDP and preparing himself adequately for the new responsibility. Thus, through a series of processes, the LDP, an initiative of Esteem towards effective succession planning, emerged successful in meeting the changing demands of the dynamic business environment. 2. Succession planning is a dynamic process that helps an organization achieve its business objectives through constant availability of efficient and effective human capital. A number of factors determine the success of a succession planning effort initiated by an organization. Some of them are discussed below: • Continuity – Succession planning must be an ongoing process that facilitates continuous succession "thinking.” It must be a regular activity that requires every manager to produce at least one candidate as a potential replacement to his position. 89
  • 90. Introduction to Human Resource Management Long-term perspective – Succession planning must look into the long-term objectives and needs of the organization. Such an effort must therefore ensure a constant pool of talent to provide resources for immediate replacement, within the organization. Development of the employees in general has to match high standards to ensure ready availability of replacement, when the need arises. • Organizational need perspective – The organization should develop a culture where external recruitment for key positions is normal in the absence of internal talent. In case an organization needs some fresh or external talent, its employees should be in a position to accept it as a natural and justified decision. • Turnover management – The succession planning exercise must initiate appropriate action plans to ensure a normal and healthy turnover rate that is characterized by a free flow of manpower across the length and breadth of the organization. • Emphasis on results – Criteria to evaluate the results of succession planning have to be developed. These may include factors like the percentage of key jobs which have at least two ready successors, the percentage of key posts filled externally, the percentage of developmental action plans implemented or the extent to which the process contributes positively to business results. Cl as s of 20 1 0 • Thus, the presence of the above elements in a succession plan helps the organizational effort to achieve its objective. Caselet 4 nl y 1. Various factors determine how good or bad the recruitment policy of any organization is. Some such factors are discussed below: The recruitment policy must comply with the policies, rules and regulations on hiring, framed by the local government. • It must provide optimum employment security and avoid frequent lay-offs or losttime. • A recruitment policy is said to be effective only when it assures the candidates of the management’s interest in their development. • The policy must prevent the formation of cliques (small exclusive groups) which result in employing the members of the same household or community in the organization. U se O • It must reflect social commitment of the organization by employing handicapped people and other underprivileged people of the society whenever there is a possibility of job fit. BS • Fo rI • The recruitment policy of an organization must be in alignment with its objectives and people-policies. • It must be flexible enough to accommodate changes in the organization. • The policy must be designed in such a way that it ensures long-term employment opportunities for its employees. • It must emphasize and reflect the importance of job analysis. • And finally, it must be cost effective for the organization. 2. The success of a recruitment program may be evaluated on the basis of a number of factors like the number of applicants, the number of offers made, the number of successful placements, the cost involved, and the time taken for filling up the position. In other words, the success of a recruitment policy depends on various benefits accrued to the organization by the policy. As the case reveals, Integrated Solutions 90
  • 91. Part B 0 benefited in a number of ways through its recruitment policy. The very fact that the policy succeeded in attracting nearly 10% of the top talent in the industry even during such turbulent business times, projects the success of its recruitment policy. The case also mentions that the hiring cycle was reduced considerably, which in turn helped draw the attention of a large number of passive job-seekers. It reflects the success of the recruitment policy at Integrated Solutions. The employee referral scheme succeeded in bringing into the organization, a large pool of talented individuals. Besides, Integrated Solutions also benefited by a substantial reduction in the costs involved in the recruitment process. of 20 1 All these facts highlight the success of the recruitment policy at Integrated Solutions. Caselet 5 1. A self-managing team consists of members who possess all the necessary skills and adequate authority, needed to direct and manage themselves. Cl as s Since the concept of self-managed teams (SMTs) necessitates the existence of a flat organizational structure, various cultural issues might have cropped up during its implementation. The tall hierarchy and bureaucratic organizational structure that prevailed at Digital could have hindered the success of SMTs. For instance, the autocratic leadership at Digital nurtured leaders and managers who imposed directions and instructions on their subordinates, without expecting any opposition or even suggestions from them. The subordinates too, expected to be given detailed instructions about how to handle their responsibilities. They perhaps did not venture to do their jobs themselves without instructions. se O nl y Introduction of SMTs at Digital, necessitates the managers transforming their role from that of supervisors to that of mentors. In other words, the manager is no longer expected to dole out instructions to his subordinates. Moreover, the employees must make their own decisions about the way they would conduct their job activities, the tasks that each one in the team would do, etc. Thus, the manager is now expected to merely guide his team members, in case they are not able to solve a problem. This transformation of the role of a manager must have been a cultural challenge to Das. Fo rI BS U Besides, it would be difficult to convince the existing managers and supervisors to share their power with their team members. Managers who have been enjoying power all through, would now hesitate to share it with their subordinates. The case also mentions the partial willingness of the top management to implement this concept. The complete support of the top management is essential for the success of SMTs. Das must have also faced resistance from the members of the team who might not be willing to learn form their peers or co-workers. Thus the implementation of SMTs at Digital which was a bureaucratic organization would have raised numerous cultural issues, at least in its initial phase of implementation. 2. A self-managed team is a cohesive group of self-directed employees who work towards accomplishing a common objective. An SMT comprises of members who are empowered with adequate authority to make their own decisions about the work each of the members would do, and the way in which he proposes to finish his task. The success of an SMT depends on a strong commitment from the management and the employees towards a common objective, constant employee skill development and the spirit of team work. Organizations today have realized the various advantages of SMTs and are therefore implementing them. Some of the benefits of SMTs are discussed below: 91
  • 92. Introduction to Human Resource Management Members of the SMTs are given adequate autonomy and authority in their job. This enhances their morale, thereby increasing employee productivity. This also increases their job satisfaction. • Members of the team are given authority to make certain production-related decisions and also the flexibility to plan and schedule their work. This enhances their participation in organizational processes, thereby empowering team members. Thus SMTs can also be used as an empowerment tool. • SMTs nurture team work and increase communication and interdependence among employees. This also fosters a sense of belonging among the team members. • Creation of SMTs reduces organizational costs of management as people are made to manage themselves. This improves the overall effectiveness of the organization. • Effective communication is facilitated as the organizational hierarchy is flattened. • As the number of hierarchical levels in the organization is reduced, decision making becomes faster and more effective. • The competence of the organization is enhanced due to increased employee participation. The organization also tends to become more flexible and adaptive to environmental changes, which is essential for its very survival. Cl as s of 20 1 0 • Thus, effective deployment of self-managed teams benefits the team members as well as the organization. nl y Caselet 6 se O 1. Since its inception, Softpro has been striving to adapt to the changes of the dynamic business environment, thereby meeting the changing needs of the customers. In this attempt, it has been trying to strike a balance between the centralized and decentralized forms of organizational structure. The result was the formation of frontend and back-end divisions that worked in close coordination. Though this solved most of the organizational problems at Softpro, the restructuring plan in the company failed to meet its objectives effectively, due to the magnitude of operations in the firm. U A critical analysis of the restructuring plan at the company reveals the following advantages and disadvantages accrued to the company: BS Advantages: Fo rI 1. Higher Revenues: Softpro can maximize its selling opportunities as the new arrangement allows marketing representatives to sell all its products, not just products from one division. 2. Convenience to Customers: Customers are likely to find Softpro easier to deal with, since they will work with just one marketing representative. 3. Financial Flexibility: Under the new arrangement, one marketing division will handle all corporate sales. This will help the company to measure the total value of a customer, helping marketing representatives to offer discounts on some products and still maximize profits on the overall contract. Disadvantages: • 92 Poor Accountability: Under the new arrangement, the profit and loss responsibility is shared between the front and back-end groups and hence no one person can be held accountable, unlike in the old system where the product chiefs where held responsible for their product units.
  • 93. Part B Low Efficiency: With a very large number of products being made and sold by just four units, Softpro's executives will now be under tremendous work pressure, which might lower their efficiency. • Slow Response to Market Demands: In the old arrangement, since product managers oversaw everything from manufacturing to sales, they were better equipped to respond quickly to market changes. This may not be possible in the new set-up, as the front-end group has to pass on information about market changes, to the back-end group. 0 • of 20 1 2. The nature of an organizational structure depends upon the span of supervision and the number of hierarchical levels in an organization. The span of supervision is the optimum number of subordinates a person can effectively manage. Cl as s Accordingly, there exist two forms of organizational structures - a tall organizational structure and a flat organizational structure. While a tall structure is characterized by more hierarchical levels and narrow spans of control, a flat structure has relatively fewer hierarchical levels and is characterized by wider spans of control. Each type of organization has its own set of advantages and disadvantages in terms of effectiveness in decision-making abilities and communication. O nl y From the above case, it can be concluded that organizations that have reduced levels of organizational hierarchy and that empower employees at lower levels to take decisions, are more likely to succeed in the dynamic business environment. Such organizations respond faster to changes in environment, thereby catering to the needs of their customers. However, not all organizations need to become flat. Various other factors such as organizational goals, administrative requirements, employee capabilities and needs, performance and production demands, size of the firm, competitive forces, economic conditions and history and culture determine the appropriateness of a tall or a flat structure. Thus, an organization that adapts effectively to the external environment is one that is more likely to succeed. se Caselet 7 U 1. The behavior of the employees at APN Bank might be attributed to two factors – an inadequate and improper job description, and the absence of an effective socialization process at the bank. Fo rI BS As cited by the employees at the bank, the basic courtesy and etiquette with which one had to behave with the customers were not mentioned in their respective job descriptions. An effective job description must detail all the duties and responsibilities of the employees at different levels. It must also include the expected behavior of the employees with the customers, co-workers and superiors. Although the job description might not cover all aspects of the job, it must be flexible enough to be changed and modified whenever required. The bank also seemed to lack an efficient socialization process that acquaints a newcomer to the culture, values and norms of the organization to which he/she have to adapt. The socialization process should also be extended to existing members to reinforce those values. In the case of APN Bank, the HR department should have designed an orientation program that introduces the incumbents to the basic etiquette that is expected of them. This would help make such desired behavior a part of their routine jobs. Norms like greeting the customer with a smile, maintaining eye contact with them while conversing, listening to the queries of the customer without interrupting, trying to understand the expressed and the unexpressed needs of the customer and guiding him to the right product available, etc., must be taught during the socialization program. 93
  • 94. Introduction to Human Resource Management Thus, it can be said that behavior of employees at APN Bank was mainly because of a lapse by the HR department, as it failed to design an appropriate job description and an effective socialization program. of 20 1 0 2. Job description refers to the documentation of the various aspects of a job like the tasks involved, the responsibilities of the job, and the deliverables. It also describes the setting and work environment of the job. A good job description must include aspects like the scope and nature of work, including all important relationships, responsibilities and duties of the position, the degree of complexity, the degree of skill required, the extent to which the problems are standardized, the extent of workers’ responsibility for each phase of work, and the degree and type of accountability, etc., Thus, a good job description will help employees to ascertain the extent to which the job description can help in understanding the job and its basic requirements. For instance, a good job description of a teller counter executive would contain the following: Serve as the 'face' of the bank by effectively handling customer queries and transactions. • Strive to attain and go beyond basic customer service by minimizing the customer's wait time, and processing transactions accurately and efficiently. • Identify the customers' stated and unexpressed needs and guide them towards obtaining the right and optimal service or product. • Assist customers in carrying out various transactions like depositing or withdrawing money, generating demand drafts and pay-orders, performing telegraphic transactions, opening accounts and any other needs that a customer needs help in. • Ensure that customers are provided adequate product information through the means of brochures, forms etc. • Greeting customers with a smile and maintaining eye contact with them, while listening to their needs and queries. • Ensuring forms are filled correctly and checking for customer identification. • Documenting and filing all transaction reports, etc. U se O nl y Cl as s • BS Such a comprehensive job description might have helped APN Bank, from such a crisis. Fo rI Caselet 8 1. A number of factors influence the way human resources are managed in a globally operating organization like Cozy Wear. Organizations must consider these issues before going global. Some such issues are discussed below: National culture - A difference in the cultures of different countries creates a difference in requirements and expectations of employees who belong to these countries/cultures. Various attributes of culture like power distance, peopleorientation, future-orientation, power-orientation etc., differ in importance from one country to another. Cozy must therefore; consider such cultural differences between the home country and the host nation before deciding to set up its operating unit there. • 94 • Political forces – The politics of a country has a great impact on its international trade. For example, only those nations, which have a strong and stable political scenario, will attract foreign investment. Therefore, Cozy must invest only in
  • 95. Part B those nations, which have a strong and stable political base. Thus, managing employees and expatriates in a politically dynamic country is a highly challenging task for human resource managers and the success of the global organizations rests on its human resources to a great extent. Economic forces - The economic condition of a country will have an impact on the functioning of an organization operating in that country. For example, not many companies would think of operating in a cash rich nation, where labor is very costly. Cozy must therefore; invest in only those countries where the cost of labor is low. • Changes in technology –Technological changes gain much more significance in an internationally operating firm. HR must therefore cater to the training needs of the employees that arise due to a probable difference in the technology in different countries. • Legal aspects – Before venturing to initiate operations in a different business environment, Cozy must study the legal aspects of the host nation to analyze how open is the market and the competition in that country. It should avoid investing in those nations which impose severe restrictions on foreign trade. • Availability of labor - The availability of talented and skilled labor in a nation can attract a vast number of investors, which can add value to the business environment of the country. Once Cozy establishes itself in a new environment that has adequate talent in human resources, it can benefit by paying the local employees less than expatriates. Cozy may also benefit from the local candidates' knowledge about local markets and culture. Therefore, it should invest only in those nations where there is an abundance of talented workforce. • Corporate culture – Cozy must develop a strong corporate culture. It can then serve at its best competitive advantage as a strong and stable culture can use the remaining factors discussed above, to its own advantage. nl y Cl as s of 20 1 0 • se O Thus, Cozy must consider the above important aspects of human resource management while operating in the international market. Hence, the senior members were right when they raised concern over these issues while deciding to go global. However, Chaturvedi was also right as he could successfully frame strategies to overcome the challenges. BS U 2. The complexity of managing human resources increases in a global or a multinational company, whose operations are spread across different cultures. Therefore, the HR practices that are followed in a local firm will not be effective in managing the human resources in a global corporation. The HR practices in a global firm will be different from those in a local firm, in the following ways: Job-analysis and human resource planning – Job analysis at a global firm must look into the special responsibilities and competencies of an expatriate and a global manager. Human resource planning also assumes greater complexity in case of a global firm, when compared to a local organization due to the existence of the additional dimension of cross-country transfers. The HR policy in a multinational organization must focus on aspects like equal opportunity to all employees in promotions, and other growth opportunities. It must also equip itself to manage reverse flows of deployed talent on completion of expatriate assignment. 2. Recruitment and selection – The process of recruitment and selection gains much more significance in a globally operating firm. The question that generally arises is whether to recruit locally in the host nation or to send expatriates from the home country. This decision depends upon factors like the training that has to be given to expatriates about the culture and mode of operations in the new environment, the workforce diversity issues that arise, etc. Fo rI 1. 95
  • 96. Introduction to Human Resource Management Training and development - Training and development of employees in an international organization is different from that in a localized firm. For example, in a global organization like Cozy, employees need to be trained to learn and understand the elements of different cultures and also develop tolerance towards these cultures. Employees should be equipped to work in cross-cultural teams smoothly and effectively. Managers at Cozy must be trained to manage teams comprising of people from different cultures and backgrounds. Expatriates must be trained, on specific aspects of the host nation like the language, the value systems, their beliefs, etc. 4. Performance management – While planning the appraisal system, global firms like Cozy must take into consideration factors like the targets it sets for its employees, and also the basis of assessing the employees' performance. This is because business and economical conditions of both the home country and the host nation need not be the same. Therefore, the appraisal system at the company needs to be designed and implemented with utmost care. 5. Compensation management - Currencies and their valuation are different for different countries. Global corporations must consider a number of issues while designing the compensation package for its employees. These issues include compensating employees who work in different countries, while abiding by the principle of equity, ensuring that they all derive maximum tax benefits, the changes that are to be introduced in the compensation package when an employee goes to work in another country, the basis of calculating the value of the benefits enjoyed by employees and expatriates, etc. The most important task is to ensure perceived equity and fairness of compensation among all the employees of the company, across the world. 6. Career management and development - Employees in global firms like Cozy are likely to desire more from the company than those in a local firm, in terms of career advancement. They expect better career development opportunities and better prospects worldwide. It is therefore, the responsibility of the HR department in Cozy, to ensure that the career needs and expectations of its employees are satisfied. Career development initiatives and, career and succession planning in the company, can ensure that both the employees and the company enjoy long-term benefits of working together. 7. Unionism and industrial relations - The legal aspects and labor principles are different in different countries. It is the responsibility of the global HR manager to adhere to the laws of each country while operating in that country. At the same time, ensuring good labor-management relations in all countries in which the firm operates, is also an added responsibility for the HR manager in globally operating firms like Cozy. BS U se O nl y Cl as s of 20 1 0 3. Fo rI 8. Managing cross-cultural issues – A global firm like Cozy, has the added responsibility of managing expatriates and their operations in a foreign country. The expatriate must be taught skills that are required to work in a cross-cultural team and to lead a cross-cultural team. It is the responsibility of the HR manager to nurture and develop an organizational culture, which encourages diversity at the work place. Thus, we find a lot of difference between the HR practices of a global and a local organization, in terms of complexity of operations, and management of workforce diversity. Caselet 9 1. Job sharing has numerous benefits to both the organization as well as the employees. However, its successful implementation requires fulfillment of certain prerequisites, which are enumerated as follows 96
  • 97. Part B Job sharing is a tool that is generally used to cater to the varying needs of the organization's diverse workforce. Therefore, only organizations that value workforce diversity can successfully implement the system of job sharing. • Employees should be trained properly in order to coordinate with each other under the new system of work schedule. • Proper communication should be maintained between the employees adopting this type of alternative work arrangement. They should have proper coordination to ensure that every aspect of the job is accomplished effectively, despite two people working on the same job. • Trust and work ethics are two important factors that determine the success of job sharing. People opting for job sharing must have adequate trust and confidence in each other. They must act like a single individual and must value the end result, rather than their personal goals. • Employees who share their jobs with others must keep meeting often so as to ensure effective planning and implementation of their job responsibilities. of 20 1 0 • Cl as s The above measures ensure effective implementation of job sharing in an organization. nl y 2. Job sharing provides a variety of benefits to both the employees and the employers as well. Employees benefit from job sharing by having the flexibility and freedom of doing their jobs at convenient timings. They also find it easy to balance their personal and professional lives. This helps reduce work-related stress. When the job sharer isn't working, he can spend that time for other priorities of his/her life. U se O The employers also reap several advantages by implementing job sharing in their organizations, provided they take the necessary measures to implement the system effectively. Job sharing, of late, has been used as an effective retention technique, implemented to attract and keep talented women and retired workforce. The advantage is paying only for one person, though two different skill sets are utilized. Job sharing also helps maintain workforce diversity as it helps to cater to different sections of people in organizations. It helps motivate people and enhance their morale, thereby leading to enhanced productivity. Thus, job sharing proves advantageous to both employees and the employers. Fo rI BS However, there are a few pitfalls while implementing the job sharing technique, which might lead to serious repercussions in organizations. Lack of communication between employees sharing a particular job might lead to counterproductive organizational outcomes. There have been cases where customers of organizations that have adopted job sharing, felt neglected as there was no single person to solve their problems. Organizations sometimes find difficulty in splitting employee benefits, though the salary would be shared by both, equally. Therefore, job sharing proves to be successful only if these pitfalls are tackled carefully. Caselet 10 1. Abhay Mittal had to face a stress interview. A stress interview is generally conducted when the interviewer wants to find out how the interviewee tackles problems under situations of high pressure and extreme stress. The candidate’s ability to tolerate ambiguity, his multi-tasking abilities, etc., are all put to test in a stress interview. 97
  • 98. Introduction to Human Resource Management The questions posed in such an interview are generally aimed at: Gauging the extent to which a candidate might make an effort to solve a problem. In other words, such questions aim at finding the willingness and ability of the candidate to go that extra mile to accomplish a given task. 2. Establishing how effectively the prospect utilizes the resources available to solve the problem on hand. He is generally given an ill-equipped situational case and asked to find a solution. 3. Assessing how tactfully the candidate resolves a conflict between team members. The interviewers generally suggest a situation wherein there exists a serious conflict among the team members and ask the candidate to resolve the conflict. 4. Checking whether the prospect is able to maintain a balance between his emotional and intellectual faculties. The questions aim at challenging his integrity and ethical strength. He is given situational cases where he is forced to make decisions that are against his beliefs and is observed on how he reacts to such situations. 5. Creating unexpected situations and observing the reaction of the candidate and his ability to cope with such situations. Cl as s of 20 1 0 1. While these tactics create a simulated work environment and gauge the candidates' ability to tackle problems and make decisions, they fail to bring out the real potential of the candidates. They also inhibit the initiative of the candidates. Organizations, therefore, are discouraged from using stress interviews. nl y 2. Organizations use different methods of selection based on the resources available, and on the level and importance of the job in the organization. Some of the most common ones are discussed below se O Formal and structured interview – A formal interview is very rigid in its structure and contents. It is based on a through job analysis, which directs the flow of the interview. The interviewer selects the questions to be asked and plans the interview in advance, to comprehensively cover all areas related to the job and the candidate. The main advantage of a structured interview is that there is no scope for subjectivity. The same questions are asked to all the candidates, which help in an objective evaluation. Fo rI BS U Unstructured interview – An unstructured interview, as the name suggests, has no predetermined framework of questions and takes its own course depending on the responses of the candidate and the interest of the interviewer. The questions are generally open-ended in nature. The main advantage of this kind of interview is that the candidate remains comfortable during the course of the interview because the interaction tends to proceed naturally. The disadvantage, however, is that such interview tend to be more subjective and prone to bias. 98 Group interview – In this method, a group of candidates are interviewed by a panel of interviewers or a single interviewer. This method is used when the number of applicants is high and the time available for interviewing is short. This method is used while recruiting candidates for entry level and junior management positions. One advantage of this method is that the candidates can evaluate their own performance in comparison with the performance of others in the group. Panel interview – In today’s organizations where the functions are interdependent and every job involves cross-functional interactions, it is imperative that people from different departments interview a candidate. More and more organizations are looking at either a panel interview or a series of interviews, where representatives from different departments get to meet and interview a candidate. This also reduces the subjectivity involved in the one-to-one interview. As experts, these interviewers evaluate the candidate's suitability for the position.
  • 99. Part B In-depth interview – In-depth interviews are more suitable for selection of candidates for high-end technology and high-skill jobs. Experts in the relevant area test the candidate’s knowledge and understanding of the subject and assess his expertise. They determine the suitability of the candidate for the job in question, based on these evaluations. Caselet 11 of 20 1 0 1. The layoff at Ideal Solutions might have helped the company to reduce costs, improve efficiency and increase its productivity and profitability. However, this might not have been an easy task as a layoff is generally accompanied with its own implications for the organization as well as its employees. Some of the negative effects of a layoff are given below: In an attempt to downsize its workforce, Ideal runs the risk of losing efficient employees, due to errors in judgement. This could be a serious loss to the company, especially in case of a manpower shortage at a later date. • A layoff might also result in an uneven distribution of employees. Ideal might experience this scenario in case the layoff process leaves one department understaffed and the other overstaffed. • The layoff might increase pressure and stress on the remaining employees. This is because, job activities previously handled by more number of people are now handled by a fewer number. This might demotivate the existing employees, thereby affecting their productivity. This might also give rise to a resistance from employees about handling additional responsibilities. • The continued pressure on the job, and the insecurity of job might demotivate and demoralize employees who are retained in the organization. This in turn, reduces their productivity at work, thereby affecting organizational profitability. • Ideal might have to pay overtime allowances to the existing employees. This might again increase costs to the company. • In case Ideal encounters a shortage of manpower resources after a layoff, it might have to employ temporary staff or staff on a contract basis. This again means additional costs to the company which, in turn, defeats the very purpose of layoffs. U se O nl y Cl as s • The existing employees work under the constant threat of losing their jobs. They will also have to deal with issues relating to their relationships with superiors, uncertainties regarding career advancements, etc. Fo rI BS • Thus, the layoff exercise at Ideal Solutions might have also resulted in various undesirable consequences for both the employees and the management. 2. A layoff might affect employee morale severely, which in turn leads to many related problems for the organization. Ideal might adopt the strategies given below to manage employee morale during layoffs: • Avoid distractions and focus on productivity - During layoffs, the management must essentially focus only on performance-related issues. Ideal must emphasize on setting goals and developing a reward structure that motivates its employees. • Manage rumors – Ideal would benefit by creating open channels of communication between the top management and its lower rung employees to avoid the spread of rumors. The management must interact with its employees directly and strive to clarify their apprehensions immediately. 99
  • 100. Introduction to Human Resource Management Counsel employees – Ideal must ensure that it provides its employees with adequate support and counseling during such critical periods. This might help in relieving stress and tension among its employees. • Cater to employee needs – A sample survey of employees holding key-positions in Ideal must be undertaken to study and cater to their needs. This helps the management in formulating effective motivational strategies for the existing employees. • Keep it short – The layoff process must be a quick process. A well-thought plan must be drafted and the process must take as little time as possible. This helps manage rumors and their negative implications on employee morale and motivation. • Clarify layoff criteria – Ideal must clarify and explicitly state the criteria for layoff, well in advance. This openness reduces feelings of anxiety and insecurity among able employees and their productivity would not be affected. • Build positive relations with the union – Working closely with the union helps the management muster their support at every stage of the layoff process. Involving the union in the process helps reduce opposition from it against the move to layoff employees. Cl as s of 20 1 0 • The above measures help manage employee morale and motivation during the critical phase of a layoff process. Caselet 12 O nl y 1. Behavior-based interviewing is based on the fact that past performance is the best predictor of future behavior. Interviewers, who use this method of selection, believe that knowledge of how a candidate behaved in a particular situation in the past gives relevant cues as to how he would behave in similar job-situations in the future. Behavior-based interviews are highly structured involving a specific set of questions that are posed to every candidate. This provides each candidate with equal opportunities to prove his skills in relevant aspects of the job. Fo rI BS U se In a typical behavior-based interview, the interviewer asks pointed and close ended questions that help him derive detailed responses which in turn help him evaluate the candidate on the desired competencies. Thus, the interviewer is able to rate the candidate on specific competencies like initiative, willingness to learn, selfconfidence, ability to convince people, communication and interpersonal skills, his ability to work in a team, his professionalism at work, his decision-making abilities, etc. By posing questions like "Give me an instance where you made an important decision at your job? What did the decision result in?", the interviewer intends to obtain responses that help him identify objective parameters like the motivational skills, crisis management skills, decision-making skills etc., possessed by the candidate. In other words, the interviewer evaluates the suitability of the candidate for a given job, based on his past experiences. Therefore, unlike other interview techniques in which candidates provide one-word answers that hardly help the interviewer judge his suitability for the job, behaviorbased interviewing technique helps elicit responses that are better predictors of future performance of the candidate on the job. This is the reason why more and more companies using this technique to select people at various levels in the organizational hierarchy. 2. The behavior-based interviewing technique is based on the premise that a person's past performance is the best indicator of his future behavior. This selection methodology provides many advantages to the interviewer. Some of them are as follows: 100
  • 101. Part B The behavior-based interviewing technique provides the maximum number of objective facts to evaluate a candidate's suitability for a job as compared to any other selection methodology. This enhances the interviewer's ability to analyze whether the candidate possesses the competencies required for effective performance on the job. • It has been observed that behavioral interviews ensure that minimum errors are made in selecting candidates. This in turn, brings the benefits of effective performance of the job-holder to his job, thereby increasing his productivity. • Behavioral interviews also help the candidates giving the interview. It builds their confidence and helps them evaluate their suitability for the job. The questions posed during the interview, give the candidate a fair idea about the expectations of the organization from the job-holder. This helps the candidate decide whether or not to accept the offer, in case he is selected. of 20 1 0 • Cl as s While a behavioral interview possesses the above advantages, it also has certain pitfalls that caution interviewers against using this technique without discretion. While past performance certainly helps predict future behavior, there might be instances where there is no real life experiences that would help the interviewer judge the candidate’s worth on a particular competency. Besides, such interviews have become so common that various recruiting agencies train their candidates to 'correctly' answer such questions. Therefore, there is every possibility that the candidate might articulate an imaginative incident that could convince the interviewer about the candidate's competencies. This might result in selecting the wrong candidate for the job. Thus, in such cases, behavioral interviews fail to serve their purpose. nl y Thus, behavior-based technique of selecting people in organizations has both advantages and disadvantages. Caselet 13 se O 1. Every individual crosses four broad stages in his entire career. These stages are based on the various activities that he undertakes. It also depends on factors like the number of years he has spent in his career, his age, technological changes in the environment, his needs, the stage of the industry in its growth cycle etc. U Accordingly, each employee would experience four stages – the exploration, the establishment, the maintenance and the disengagement stages. Fo rI BS During the exploration stage, individuals try to identify their likes and dislikes and try to discover their inclination towards different kinds of work. Then based on their values, interests, and work preferences, they seek information about jobs, careers, and occupations from friends, family members, and colleagues. This stage generally occurs during the mid-teens or early-twenties, wherein individuals analyze their aptitude and attitude and begin pursuing the required education or training. Once the individual joins an organization, he tries to adjust and adapt himself to the values and goals of the organization. FastGrowth would then conduct induction, orientation, and socialization programs that would help in making him comfortable with his new job and his colleagues, and hence contribute to the effective achievement of the organization’s goals. The individual then reaches the stage of establishment wherein he tries to settle down in his chosen field. This is more or less a stable stage, where he looks at more responsibility and growth. At this stage, FastGrowth has to develop policies that support the employee in balancing work and non-work roles. In addition to this, at this stage, the employee also has to involve himself actively in career planning activities. During the maintenance stage, the individual strives to maintain his reputation as a major contributor to the organization. Typically, individuals at this stage have enough 101
  • 102. Introduction to Human Resource Management job experience to have reasonable knowledge and sound understanding of how the organization conducts its business and how it is affected by the economy. He tries to update his knowledge and skills and is involved in the review and development of organizational policies or goals. Through continuous training and development activities, FastGrowth would ensure that the employee’s skills do not become obsolete. The individual at this stage can be a good trainer or mentor for the new employees. of 20 1 0 The final phase in one's career is the disengagement phase, wherein, the individual equips himself for a change and tries to balance work and non-work activities. He normally reaches this stage after spending considerable time and energy in pursuit of his career goals. In this stage, he is preparing to retire and would generally pursue his hobbies, or social work, etc. However, there can be employees who are still interested in the career and continue working as consultants, or part-time workers even after reaching the retirement age. In some cases, financial constraints may propel the employee to continue. However, irrespective of age or their number of years in service, employees can reach the disengagement stage and can choose to change career tracks or occupations. Cl as s Thus, every individual undergoes these four basic stages of career development and organizations like FastGrowth can benefit by catering to the changing needs of employees in different phases of the career development cycle. nl y 2. Organizations in the present business scenario believe that human resources are their primary source of obtaining a competitive advantage. They are therefore, introducing a number of programs to attract and retain the top talent in the industry. One such initiative by FastGrowth is its career management program. The career management program provides the company with a number of advantages, which in turn, give FastGrowth an edge over its competitors. Some of the advantages of the career management program are: The program helps the company attract talented human resources by promising employee career management, which is essential for the professional growth of employees. • It helps prepare the organization for future contingencies. In other words, by developing the human resources of the organization, FastGrowth is in fact, developing future leaders for the company. Since the career management program is aligned with the human resource planning and management strategy of the company, FastGrowth helps in meeting the dual objectives of both the employees and the organization as well. U se O • Since this program helps the employees achieve their personal career goals, it succeeds in developing a workforce with enhanced morale and motivation. This, in turn, enhances employee productivity. Besides, a carefully planned program like this will also help handle employee frustration through counseling sessions. • The employees' progress along their career path with the support and guidance of the career management program helps retain talented workforce. This is possible because the employees are satisfied and motivated to work as long as their personal goals are accomplished. • The career management program will also benefit the individual employees of FastGrowth by helping them assess their own strengths and weaknesses, and what effort needs to be put in to achieve their career objectives. It also helps each employee choose an ideal career based on his aspirations and aptitudes. Fo rI BS • Thus, the benefits offered by the career management program of FastGrowth to both its employees and the company itself, have helped it gain a competitive advantage over its competitors. 102
  • 103. Part B Caselet 14 of 20 1 0 1. In the competitive business environment, it is important to retain employees as they are the main knowledge assets. The consultancy firm enjoyed a good reputation of performing well and also had a good number of clients. When employees of an organization start leaving, it has an effect not only on the performance, but also the image of the organization. Hence it is important to identify the reasons for employee turnover, as early as possible. Here, the main reason was dissatisfaction of the employees with the appraisal system. Performance appraisal plays a very important role in determining employee satisfaction and performance in an organization. The exercise is a cursory and routine one in some companies, and the results are filed away and forgotten. This is when the employees get disenchanted with the exercise and lose interest in their jobs as well. This eventually has a negative impact on organizational performance. Therefore, the management has to ensure that the whole business of appraisal is taken seriously and the results put to effective use. Cl as s The ideal way to ensure maximum utility of a performance appraisal system is to link the performance standards to rewards, and the competency standards to training and development. The gaps in competency levels should be identified and necessary training should be imparted to the employee. At Manage Consultants, the management has failed to receive acceptance and support from their employees for their performance appraisal system. O nl y 2. The above case demonstrates that when an appraisal system in not in accordance with the expectations of the employees, it can lead to poor productivity and eventually, employee turnover. Apart from evaluating the performance of the employees for rewards/punishments and development, a good performance appraisal system has many other uses. Some of these are listed belowTraining and development needs of the employees can be determined – this can be used to fill the competency gaps. • Organizational effectiveness can be improved by improving the individual performances of the employees. U se • The performance appraisal system forms the basis for compensation management in the organization, in addition to other methods like market surveys. • It can be used as a basis for transfers, promotions and other career planning activities of individual employees. • An effective performance appraisal system also helps in succession planning in the organization. • Cross-functional transfers and job enrichment exercises etc. can be taken up, based on inputs from the appraisal system. • Human resources of the firm can be evaluated on the basis of the competency and skill set and potential of the workforce. This provides the base for human resource planning. • An assessment of the value of the human resources helps in organizational planning. • The performance appraisal system also helps in evaluating and auditing existing plans, processes and systems in the organization. Fo rI BS • 103
  • 104. Introduction to Human Resource Management Caselet 15 of 20 1 0 1. The appraisal systems were similar in both the banks as far as the design aspect was concerned. The systems were however drastically different when it came to implementation. The appraisal system at PLN Bank was a monotonous one that just included appraising employees on the basis of their performance and compensating the employee accordingly. It never ventured into identifying employee weaknesses and helping them overcome them through effective training and development. Individual goals and objectives were not predetermined for the appraisal period and the employees had no role in determining the departmental or organizational goals. Cl as s At Paradise Bank, the goals and targets were set in consultation with the employees. The individual employee goals were also determined at the beginning of the appraisal period. Hence the employees performed with enthusiasm. They had high regard for the organization as it took employee perspective into consideration before setting any goals. In Paradise Bank, performance management was a continuous process. The appraisal exercise also helped the employees identify their training needs and fill the competency gaps. This helped in individual development as well. The system at Paradise was more of performance management, whereas it was simple appraisal at PLN. These were the main differences between the performance appraisal systems in both the banks. 2. PLN Bank can consider the following suggestions to make its appraisal system more acceptable to its employees and effective for organizational performance. The organization has to develop a culture wherein the process of appraisal is viewed as a productive and constructive contributor to the growth of the organization as well as individual employees. • Targets should be set at the beginning of the appraisal period itself. This provides direction to the employee and helps him keep track of his performance. • Setting specific, measurable goals at the beginning of the appraisal period helps. The employee knows where he is heading and the appraiser knows what should be evaluated. • Training on how to conduct an appraisal interview would be useful for those employees who are unfamiliar with the process. U se O nl y • The appraisee and the appraiser should both give each other a chance to reflect on and respond to every debatable aspect. BS • Fo rI • There should be a system of continuous and constructive feedback. This would help the employees identify their training needs and develop themselves to pursue their career path. Caselet 16 104 1. Development is future-oriented and prepares managers for a career of valuable contribution to the organization. It is concerned with the learning and development of the employees. It helps in the development of the intellectual, managerial and people management skills of managers. Management development is a key component of an organization’s efforts to prepare its employees to handle new challenges successfully. Management development helps managers to understand new cultures and customs that have become an integral part of the global market. It helps managers equip themselves with the latest technologies, tools and techniques for improved quality and performance.
  • 105. Part B The main objectives of management development programs are: Improving the performance of the managers. • Enabling the senior managers to have an overall perspective about the organization and also equipping them with necessary skills to coordinate with the various units of the organization. • Identifying employees with executive talent and developing them so that they can occupy managerial positions in the future. • Motivating the managers to perform more effectively in accordance with the organizational goals. • Updating managers from time-to-time about the latest changes and developments in their respective fields. • Improving the analytical and logical skills of employees of 20 1 0 • Cl as s 2. One method of development that Ambassador Hotels can undertake is that of job rotation. It not only enriches the job but also provides required motivation. Job rotation plays an important role in developing the skill set of a manager. When a manager is posted to new jobs across various departments in the organization, he develops diversified skills and knowledge. Interactions with colleagues in different departments provide an enriching experience of various day to day problems. Another advantage of job rotation is that it helps in reducing the monotony of work and also improves inter-departmental cooperation. nl y Apart from job rotation, one of the other methods of on-the-job development that can be undertaken is job instruction. In this method of training, the trainee is given instructions by the trainer while performing the job on the site and any doubts of the trainee are cleared immediately. This method is very popular because the trainee can discuss his problems in performing the job immediately with the trainer. Job instruction training follows a systematic sequence of activities. These are: As the first step, the trainee is prepared for the training by being given clear information about the training to be imparted, the job to be performed and the venue and time of training. Any doubts regarding the training should be cleared at this stage. • After the training is imparted to the trainee, in the form of instructions, the trainee is asked to demonstrate the job. This will help in assessing the trainee’s understanding of the instructions and his learning. U se O • After the trainer is satisfied with the performance of the trainee, the trainee is left on his own, with someone designated to be called upon when he requires any assistance or help. Fo rI BS • Normally, a trainer/supervisor/co-worker acts as the instructor. Demonstrations by the trainer and repeated practice by the trainee, help the trainee to master the job. After some time, the trainee gains the skill and confidence to perform the job without the supervision of the trainer. However, the trainer should be available to clear his doubts and help him whenever required. Caselet 17 1. Cross training is important for any firm as it prevents stagnation, offers a learning and professional development opportunity to the employees, rejuvenates all departments, improves understanding of the different departments and the firm as a whole among all its employees, and eventually leads to better coordination and teamwork. Apart from this, it is also helpful in erasing differences, enmity and 105
  • 106. Introduction to Human Resource Management 0 unhealthy competition, increasing knowledge, know-how, skills and work performance, improving overall motivation and understanding and sharing of organizational goals and objectives. Moreover, it helps in better understanding of the operational constraints of other departments and this reduces the friction between various departments in the organization and improves coordination. Cross-training should be carefully planned and presented as a learning opportunity to the employees. It should be incorporated in the firm's annual training plan, covering all positions and departments. It should begin with the supervisory level and filter down to entry-level positions. Cl as s of 20 1 A more sophisticated and planned form of cross-training is job rotation, which usually involves extended periods (from one month to six months). This involves training an employee across different organizational functions by transferring him from one department to another in a planned and phased manner so that he gains knowledge of all the functions by the time his training is completed. In job rotation, the role of the employee is not of a mere trainee with no responsibilities. In fact, the employee is given specific assignments in each of these departments and at the end of each stint; he is expected to show results. This result in active learning, which is in contrast with passive learning that normally, takes place in such training. Both cross-training and job rotation create a team of workers who are more knowledgeable, can easily replace each other when needed, and who gain new confidence regarding their professional expertise. Fo rI BS U se O nl y 2. Job rotation is one of the important methods to enrich the job of the employees. When implementing job rotation, the management should take into consideration frequent and short term job rotations which do not allow for meaningful skill development, and can sometimes even demotivate employees who seek specialization. Though such a development program can result in long-term benefits for the organization, it can also create some short-term difficulties. Inexperienced employees performing new tasks and taking decisions without adequate job knowledge may create some day-to-day problems for the organization. Hence when implementing job rotation, some precautions have to be taken. Apart from job rotation, the management should analyze the performance of the employees at regular intervals and give them effective feedback. In case any employee is performing below the expected standards, then the reasons have to be analyzed and if required, the employees have to be given the required training. In case the jobs get too monotonous, they have to enrich the jobs by analyzing whether the individual goals and the job being performed is in congruence. For all these to take place, there is a need to have congruence between the individual and organizational goals and the management should initiate this at the recruiting stage itself. Apart from employing training methods, the following steps will help in ensuring that the employee is motivated to perform. • Establish the training needs of each employee and monitor the training activities. • Encourage employees to participate in decision-making by delegating work to them. • Provide timely feedback to the employees and give suggestions for improving their performance. Reward good performers and high contributors. • Involve employees in improving their individual areas of work by helping them gain more knowledge and skills. Take interest in the development and growth of individual employees. Provide adequate opportunities for improvement of employee skills. 106
  • 107. Part B Caselet 18 1. Beyond imparting mere skills training, corporate universities can drive corporate change, reinforce corporate values and culture, and themselves contribute to strategic planning in a knowledge-based firm. Some advantages and desirable roles of the corporate university are: responsiveness to the corporation's shifting strategies, personnel policies and business performance targets; • short development cycles and just-in-time delivery of programs or courses; • availability of corporate executives as resource persons especially in critical areas such as corporate values and vision; • being best positioned for addressing follow-up and sustainability requirements; • implementor of knowledge networking via their intranet; • vehicle for change management and • can align engagements of any external business consultants, vendor trainers or business schools to corporate requirements. interventions, e.g. knowledge Cl as s management of 20 1 0 • nl y 2. Senior professionals and executives identified as having high potential and being capable of playing key roles in GE’s businesses or functions attend courses in the executive development sequence. There, they further develop the leadership skills necessary to run a global, competitive business. These courses provide a significant development experience, emphasizing strategic thinking, executive leadership and cross-functional integration. Participants develop executive skills in relation to key businesses, such as developing business strategies, competing globally, managing diversity and globalization, leading teams, managing change and advancing customer satisfaction. U se O Management Development relates to the development and growth of the employees in an organization through a systematic process. This development is future-oriented and prepares managers for a career of valuable contribution to the organization. The corporate university at GE is contributing towards this process by training senior and middle level managers. It is concerned with the learning and development of employees. It helps in the development of the intellectual, managerial and people management skills of managers. It trains managers to understand and analyze different situations, and to arrive at and implement correct solutions. Fo rI BS Caselet 19 1. The management plays a critical role in the industrial relations of an organization. Management policies can help in maintaining high employee morale and in preventing industrial conflicts and disputes. The role of the management in industrial relations has slowly undergone a metamorphosis from an exploitative authoritative style to a more participative style. At SM collieries, Venkat realized that if he wanted to gain the required support from workers, there was a need to involve them in the process of decision making so that they could also understand the various issues involved in running a business. The workers also feel that they are part of the organization and are being valued. When the management values their opinions and accepts their suggestions, workers get the feeling that they are contributing to the organization. This increases their sense of responsibility towards the organization. Consequently, they would not resort to strikes and indulge in disputes as they used to. They aim at increasing the productivity and profitability of the organization, without expecting unreasonable benefits. Hence, a participative style would be more appropriate in today’s business scenario. 107
  • 108. Introduction to Human Resource Management In the participative style of management, employees are considered as stakeholders in the organization. They are treated as partners, and share the power with the management. They not only voice their opinions, but are also heard and respected. They play a major role in all aspects of management, from determining the strategy to identifying the objectives, and from planning the execution to implementing the decisions. The employees of an organization have grown to become its most valuable asset. of 20 1 0 2. Educating the workers enables them not only to understand the finances but also to know what they have to contribute to bring the organization back to profits. Workers’ participation in management ensures that the capabilities of workers are properly utilized and that they are able to make a significant contribution to the effectiveness and economic welfare of the organization. The reasons for workers’ participation are as follows: It bridges the gap between the management and the workers by authorizing the workers to take part in managerial functions. • Workers feel valued and, therefore are more committed to their work. • They feel they have the ability to influence organizational decisions and this makes them more responsible in performing their duties. • Since they are involved in the process of decision-making, any change in the organization can be implemented without resistance from them. Cl as s • nl y Participation improves the progress and prosperity of the enterprise as workers put in their best efforts. Psychologically, it helps in fulfilling the non-monetary needs of the employees and, sociologically, it reduces the number of industrial disputes and creates a positive atmosphere and interest in the work being performed. Caselet 20 U se O 1. The major problem at Pallavi Textiles was that the organization did not have a grievance redressal system where the employees could voice their concerns. The workers had only the supervisor to report their problems to. The supervisor was a biased person who did not pay any attention to the grievances of the employees. Further, he had the confidence that he could do anything and get away with it because he had the backing of the union leaders. Fo rI BS The top management at Pallavi Textiles is also at fault as it left the entire unit to be managed by the supervisor. Decentralization of the authority and responsibility is a good policy, but it is the responsibility of the management to ensure that the unit is functioning smoothly, in accordance with rules of the organization and that the employees have no complaints. It should take the responsibility of coming to shop floor once in a while and inquire about the problems being faced by the workers. If the organization continues to neglect the problems of the employees in the same fashion, then at one stage it could either lose hardworking and loyal employees or face major problems in the form of industrial conflicts and strikes. 108 The management should employ more responsible people in critical positions. It should start taking interest in overseeing the administration of the unit to ensure that there are no problems. It should open up the channels of communication so that the employees can discuss their issues with the management. An effective grievance redressal system would help the management provide a channel for the employee grievances. This would help in preventing any industrial conflicts that may arise. The management can also benefit by nurturing a more open and healthy organizational culture. The employees would willingly contribute towards the organizational goals, for e.g., higher production targets.
  • 109. Part B 2. An effective grievance redressal procedure is always beneficial for any firm. The benefits that Pallavi Textiles can reap by having an effective grievance redressal procedure are: It would enjoy the trust, confidence and respect of all the employees. • It would be able to identify the root cause for employee grievance. This would in turn ensure better management. • It could resolve the issue at the lowest possible level before it turns into a major problem. • It could resolve the issue in an amicable manner, without causing any ill feelings to any party. • It could resolve the issue without any delay. • There would be no violation of organizational rules and policies as the system is designed on the basis of organizational rules and regulations. • It would provide for data and information management of employee grievances. • It would track the redressal procedure to provide the current status of any grievance to the employee and the management. • It would help the management to identify the core issues, which need to be handled immediately and could be avoided in future. • It would provide unbiased and objective redressal of employee grievances without any scope for personal whims and fancies. • It is a short and simple procedure that can be easily understood by all the employees, which is very important. • It considers the legal, social, financial and psychological aspects for an amicable settlement. nl y Cl as s of 20 1 0 • O Caselet 21 Fo rI BS U se 1. The grievance redressal procedure in non-unionized organizations, especially the new economy sector organizations, is quite different from the procedure explained above. An open-door policy and free channels of communication characterize organizations in the new economy sector. Any employee of the organization can walk into the office of his superior to express dissatisfaction or a grievance that he has. The cut-throat competition for human resources makes the management strive to keep its employees satisfied and motivated. This also contributes to the design and implementation of a fast and effective grievance redressal procedure that settles employee grievances without any annoyance or delay. The informal culture and reduced bureaucracy facilitate a smooth grievance redressal procedure in these organizations. For example, Wipro’s procedure, called Ombudsprocess, involves the appointment of ombudsmen in the company’s offices. These ombudsmen are senior officials in the particular business unit of the organization to whom employees can address their grievances. Acting independently, they will then initiate an investigation and submit a report to the compliance committee, which will then take suitable action. The Infosys policy, on the other hand, encourages employees to talk about their problems to either the immediate superior or to the superior’s superior to raise the issue in the organization. While Wipro actively encourages employees to reveal their identity, Infosys has left a door open for those who wish to remain anonymous by allowing emails to be sent to a specific ID that can be used by all the whistle blowers. The company’s grievance redressal cell addresses all complaints thus filed. 109
  • 110. Introduction to Human Resource Management 2. The grievance policy adopted by Pramod Technologies is one of the standardized procedures being adopted by a number of firms. nl y Cl as s of 20 1 0 The National Commission on Labor has suggested a ‘model procedure for grievance redressal’, which is more or less being followed by Pramod technologies to a certain extent. In the initial or the first stage, the employee conveys his grievance verbally to his supervisor (or the designated officer). In case the supervisor fails to respond within the prescribed time limit of 48 hours, the employee approaches the next level in the redressal procedure. At this level, the employee fills up the grievance redressal form of the company and approaches the head of his department with it. The departmental representatives play a role in the redressal procedure, from this stage. The head of the department has 3 days in which to reach a settlement, failing which the grievance reaches the next level. The third level in the redressal procedure is the grievance committee. The committee is given 7 days to discuss the issue with the employee and reach a settlement. In case of a unanimous decision, the management has to implement it. Otherwise, the management is given 3 days to communicate its decision. In case of a failure at this stage, the grievance is taken to the fourth stage. In the fourth stage of employee redressal, the employee and the departmental representatives appeal to the management to review its decision. The management has a week’s time to revise its decision. In case there is no change in the decision, the issue may be referred to the union. In the penultimate stage, the union discusses the issue and tries to reach a settlement between the grievant employee and the management. In case of the union’s failure to do so, the grievance reaches the last stage of the grievance procedure. In the sixth and the last stage, a settlement is reached through voluntary arbitration by a third party, normally a Conciliation Officer from the state labour department. This process should be completed within 7 days. Caselet 22 U se O 1. Organizations design their executive compensation systems to attract and retain their chief executives. Executive compensation needs extensive planning in areas such as salary administration, organizational structure, short term and long term incentive plans, sales compensation, executive prerequisites and retirement benefits. An HR professional has to take care of all these things and the market situation in order to design an executive compensation plan that not only attracts, retains and motivates executives, but is also satisfactory to all the stakeholders of the organization. To design an effective and efficient executive compensation plan, the HR department should adopt the following process. The flaws that have rendered the plan ineffective or inefficient have to identified. The parts of the plan that are good have to be retained while other parts have to be redesigned or completely done away with. BS • Fo rI • A pay system that is linked to the organizational objectives has to be designed. The plan should provide for retaining a competent and successful executive for a longer period of time. • The funding of executive compensation and other factors should be taken care of. The final plan should be prepared with all the various components, their range, the related targets to be achieved and the final compensation. • The executive compensation should be made known to all the stakeholders. Transparency helps in increasing the confidence of the stakeholders in the company and its management. 2. Companies should appoint a truly independent compensation committee. Compensation committees should be small, with just three to five members and each member should be independent of the management. Committee members should be selected by the independent members of the board, not the CEO. The full board 110
  • 111. Part B should ratify the selection of the committee members. Members should not be close friends of the CEO, or have affiliations, business relations, or interlocking relationships with senior management. of 20 1 0 All the independent members of the board should ultimately determine the compensation awards. This was one of the critical failures at the NYSE – compensation committee members claimed that they did not fully understand what Grasso’s pay package entailed. Every independent board member should understand and approve the compensation paid to the five senior most officers. And if the full board changes the recommendations of the compensation committee, the reasons for that change must be articulated precisely. Caselet 23 Cl as s 1. The above case highlights how the management brought the mill back to normalcy after a disastrous fire, with the continued support and commitment of the workers. The case also demonstrates the importance of workers’ participation in management. It shows how the management can play an important role in maintaining industrial harmony and discipline in the organization. Management policies can be of immense help in maintaining high employee morale and in preventing industrial conflicts and disputes. The management chose the right time to assure the workers that their jobs were safe and to tell them that they all needed to work together to revive the company. If the management had not done so, the rumors that were doing the rounds could have been over blown and could have led to unrest among the workers. There are several advantages that organizations gain through such cooperation. It safeguards the interests of labor and the management by preventing one of the players from getting a strong hold over the other. • It helps in developing a secure and mutual understanding and good relations among all the players in the industrial set-up. • It maintains industrial peace and harmony by preventing industrial conflicts. • It increases productivity by minimizing industrial conflicts and maintaining harmonious industrial relations. • It ensures discipline in the organization and in the industry. • It provides a basic framework for the management and the employees to resolve their differences. U se O nl y • Fo rI BS In Pratheeksha Mills, employees were considered as important assets and were given an opportunity to voice their opinions. They were heard and respected. 2. The worker must have made this comment because he wanted to show all these people that despite rumors, the mill had not stopped functioning. He wanted to draw attention to the exemplary way in which, the management had behaved in times of crisis. Instead of blaming each other, the management and the workers had worked in coordination to achieve the goals of the organization. Usually at times of crises, political parties tend to take undue advantage of the situation and try to instigate the workers against the management. However in this case, the workers put their trust in the management and worked towards achieving greater heights, for eg., the ISO standards. They were also ready to take a wage cut till the firm had returned to normal functioning. By visiting such a unit, the legislators, ministers and trade unionists can get to understand how mutual trust and cooperation between the management and the workers can do wonders for any organization’s performance. Being influential people they can quote the example of Pratheeksha to boost the performance of other organizations and industries. They can set standards of performance for firms, which are always prone to industrial conflicts. 111
  • 112. Introduction to Human Resource Management Caselet 24 0 1. Skill-based pay is one of the modern approaches to wage payment. Under this method, employees are compensated for their job-related skill. This is also known as knowledge based pay. Under a typical skill-based system, companies hire employees at below market prices. Once they gain extensive knowledge and new skills, they are promoted and rewarded with an increased pay. This is one of the important methods being adopted by most companies, which have revamped their salary administration systems so as to remain competitive in the market. of 20 1 Another approach is the competency-based pay, where the competencies of the best performing employees are identified and the employee is compensated for the competencies that are brought to the job. The other employees are also compensated based on these qualities. This helps to motivate them and give them the satisfaction that they are being paid for what they bring to their jobs. Another approach that is emerging is broadbanding. By using this technique, managers are given a free hand to fix the wages of individual workers, but within set limits. It helps the organization avoid unnecessary distinctions, based on level or status. nl y Cl as s 2. The Chairman felt that the traditional pay systems did not have the advantage of determining the pay based on performance, i.e., under the traditional methods, the pay was not decided based on the performance of the employees. If the business has to thrive in a competitive world, it is important to pay employees according to their competencies. Job grading becomes cumbersome if the definition of the grades has to cover different jobs with different functions. In the traditional system, the wage plans are based on the time system and piece system. Under the time wage system, given a fixed working schedule, the worker cannot normally earn more than the fixed amount. In the piece wage plan, workers are paid for the work done. It provides a direct incentive to workers and is, therefore, conducive to maximizing production. 1. The traditional basic wage plans are based on the time and piece rate system. Under the time wage plan, employees are paid for the period of time for which they have worked. Under this system, the worker is assured of a fixed amount of wages, irrespective of the output. Under the time wage system, given a fixed working schedule, the worker cannot normally earn more than the fixed amount. Since the worker’s shifts and work schedules are pre-determined, he earns only for the number of hours or work put in as per the schedule. In this case, the management pays the employees irrespective of the targets achieved. It pays them only for the number of man-hours instead of considering the targets achieved. This kind of compensation could demotivate employees. For an organization to motivate the sales personnel, it is important to compensate them according to the targets achieved. The company can adopt a piece wage plan where workers are paid for the work done. This system provides a direct incentive to workers and is therefore, conducive to maximizing sales. Fo rI BS Caselet 25 U se O The narrow wage descriptions and pay scales that worked well in the past are no longer applicable in the work place. Today’s work place requires workers who are flexible and can bring in their creativity to work. When the emphasis is on employee performance and on retaining and motivating good performers, it is important to reward and thereby reinforce their performance. That is precisely the reason why performance, skill and competency-based pay systems are gaining popularity in modern-day organizations. The piece rate plan is also a traditional plan, but it rewards the employees for their contribution. In this method of compensation, the employee is paid for the amount of sales generated during a given period of time. For example, if X generates five units of sale during the month and Y generates eight units of sale during the same period, 112
  • 113. Part B then Y will be given a proportionally higher compensation than X. However, in the time rate plan, both X and Y will be compensated equally for working for a month. The chances are that Y will get demotivated as the fact that his contribution to the organization is greater in terms of more sales, is not being recognized and rewarded. of 20 1 0 2. The organization can consider implementing long term incentive plans for retaining workers. Some of these are annual bonus, profit-sharing, gain-sharing etc. The most common type of incentive plan is the annual incentive plan. Most annual bonus plans are based on the annual performance of the company. The factors that determine bonus are the company profits and the performance of the group or the unit. The other incentive method that the firm can follow is the profit-sharing plan where the employees earn a share of the company’s profit, which is normally calculated as a percentage of the total profit. Cl as s Gain sharing is also a successful method of rewarding groups for their successful performance. In this method of incentive payment, the group is rewarded for its team work, coordination and characteristics that have determined its success. This would be quite suitable for Gautam appliances. The gains accrued by the northern region in terms of higher sales can be shared among all the members of the northern sales team. Or, the management could acknowledge and reward individual performances. It could even adopt a combination of the two. O nl y Employee stock plans are a scheme in which employees are given a part of the ownership at a price lower than the market price, in consideration of their meritorious performance on the job. The basic premise of the employee stock plan is that giving a stake in the company is the best form of rewarding employees and that they also put in their best performance when they have their own stake in the company. In fact, this can be used to enhance employee loyalty and accountability. By using the above incentive schemes, the organization will not only be able to motivate the employees of the northern division but will also help improve the performance of the southern division. Caselet 26 Fo rI BS U se 1. Most of the trade unions in India are affiliated to major political parties. In the above case, the political parties played a destructive role as they took advantage of the situation. They instigated the workers to go against the management. But ultimately when the factory was closed down, the real losers were the workers. These parties and the affiliated unions had nothing to lose. One of the main reasons for the ineffective functioning of the trade unions is the interference of political parties in their affairs. Traditionally, trade unions are expected to play the role of ambassadors of the worker community, where they work in coordination with the management to enhance employee well-being and improve employee productivity. In India, there are a number of central labor organizations like the Indian Trade Union Congress, All India Trade Union Congress and Hind Mazdoor Sabha, to which a large number of organizational level trade unions are affiliated. These organizations represent and protect the interests of their members on all-important issues that affect workers interests. These unions, however, have generally been affiliated to some political party or the other, though of late, some of the unions have announced that they are not affiliated to any political party and they are politics-free. In the process of fighting for workers’ demands, the unions sometimes resort to pressure tactics like threats of strikes, strikes and gheraos. 2. If the workers have realized that they have lost their jobs because of the unwarranted interference of the political parties, they can take the help of a third party that has amicable relations with the management and workers and get back to work. 113
  • 114. Introduction to Human Resource Management Effectively, collective bargaining facilitates an amicable and mutually acceptable solution to the problems between the management and the employees. of 20 1 0 Collective bargaining, through the process of negotiation, facilitates a peaceful settlement of all employee-employer issues and helps in maintaining harmonious industrial relations. There are a number of advantages of collective bargaining. It acts as a technique of long-run social change, leading to restructuring in the power hierarchy of competing groups. It serves as a peace treaty between both the parties in case of continued conflict. It is a rule-making or legislative process, which formulates terms and conditions under which labor and management will compromise and work together for a specific period. Therefore, collective bargaining can serve as an important aspect for maintaining healthy industrial relations and establishing industrial peace and harmony. Caselet 27 Cl as s 1. The Minimum Wages Act of 1948 was intended to prevent the exploitation of workers in the form of unduly low wages. The workers at the power looms were not being paid minimum wages. The Act also regulates working hours and specifies that no employee can be asked to work for more than nine hours a day without being paid additional wages. The main provisions of the Act are: Fixing a minimum time and piece rate according to the occupation and different classes of workers. The minimum wage that is fixed will include a basic rate of wage and special allowance. • The Act requires the appropriate government to review the minimum wage rates so fixed at an interval of not more than five years. • The appropriate governments are empowered to appoint committees to hold enquiries and advise in fixing the rates of minimum wages. nl y • O The objective of the Factories Act is to secure, health, safety, welfare, proper working hours, leave and other benefits for workers employed in factories. The main issues covered under the Act are: Compulsory approval, licensing and registration of factories. • Health, welfare and safety measures for the workers. • Stipulating of working hours. • Conditions for employment of women and young persons. • Annual leave provision. • Prevention of accidents and occupational diseases. • Measures for handling dangerous industrial operations. Fo rI BS U se • 2. The management at the power looms is behaving in an exploitative and authoritative style. Workers are being paid low wages in spite of working for unduly long hours and are ruthlessly exploited. The working conditions are pathetic, with the absence of even basic amenities like water. The managements enforce strict discipline and any breach is severely punished. They are impervious to the needs and demands of the workers. The best available option for the workers at this stage is to come together and unitedly fight for their rights. The workers should, therefore, form unions and have a strong leader who can voice their demands to the management. The leader needs to be an educated and selfless person, who can fight for the workers’ rights. One of the basic causes for exploitation at power looms is the absence of trade unions. These unions can work to safeguard the interests of the workers and improve the bargaining 114
  • 115. Part B capacity of the labor. The trade unions can also report the exploitation by the management to the authorities concerned. It can force the management to pay minimum wages under the Minimum Wage Act and provide the basic amenities and regulate the working hours under the Factories Act. They can also draw the attention of the authorities concerned to the unhealthy working conditions, which have resulted in many employees suffering from diseases. 0 Caselet 28 Cl as s of 20 1 1. Quality circles are small groups of employees doing similar or related work, which meet regularly to identify, analyze, and solve product-quality and production problems, and to improve operation in general. Quality circles also deal with issues like personal training, job enrichment, and leadership development. Participating employees are encouraged to make suggestions, which are put into a box and examined by specialists. If the suggestions are useful, they are put into practice and the initiators of the proposals rewarded. Training is provided to the members of each group to help them in better problem -solving. Group members, through consensus, select problems for consideration by the QC. Employees are given freedom to choose and select work-related problems. This process encourages the members to find a solution and remain within the group. nl y A QC comprises of a leader, coordinator, facilitator, and other members who function together to achieve objectives. The members of the circle identify and solve quality problems and improve processes within their immediate area or work place. All the members of the QC receive training related to problem-solving skills. The members meet at least once a week. The identification of a problem and formulation of a solution allows the members to present their ideas to the management who must then provide the QC with authorization to implement the suggestion. Hence by implementing quality circles, Sharp Motors can achieve high quality results. se O 2. The main problems when implementing quality circles are with the unions. The unions may express some reservations to the management regarding the implementation of QCs and their functioning. Objections may include the use of QCs as a means of eventually eliminating the union; increasing productivity levels to the point where this will produce adverse effects on the workforce, and reducing the size of the workforce. U The implementation of QCs represents a change from the established work methods. Resistance is likely to be directed at the management from superiors and employees. Common concerns are frequently about the increased level of responsibility of workers and reduced supervisory control. Fo rI BS Successful implementation of QCs requires a positive attitude, commitment from all those involved, and a well-defined plan of action. Failure to provide sufficient training to members of the circles will result in incorrectly identifying cause and effect, and formulation of solutions. QC members need managements support from provision of the necessary tools for problem-solving to feedback on suggestions. Setting unrealistic expectations for QCs can be detrimental. It is important to allow them necessary time to develop and grow on their own. Expecting too much too soon will result in a group of frustrated and defeated employees; Caselet 29 1. The management was following the traditional approach of personnel management that lays emphasis on command and control. Personnel administration was earlier characterized by standardization, consistency and conformity. But now the 115
  • 116. Introduction to Human Resource Management management should realize that there is a vast difference between modern HRM and the personnel management that was prevailed decades ago. The human resource approach has gained immense prominence over the years. The company should now adopt the human resources approach, that considers the organizational goals and employee needs as being mutual and compatible, and which can be pursued in unison. The human resource approach is based on a number of principles which are as follows: Individuals differ from each other in terms of their values, attitudes, beliefs and culture. This leads to a complex situation in the organizational context. • The stimulating and motivational factors might not be the same for all the employees. It is important to understand the individual needs of the employees and cater to those needs. • The expectations of employees today are much greater when compared to the employees of the yesteryears. They know they are valuable assets and demand to be treated as such. of 20 1 0 • Cl as s The organization should provide a conducive work environment that nurtures and develops employees and helps them to perform better. 2. The business environment has become very fluid and turbulent in the recent times. Hence, there are a number of challenges that the HR department must face. Praneetha has a very daunting task ahead as she has to attract, mould, develop and retain valuable human resources. The expectations of the workers have also increased. O nl y A major step in this direction is the complete revamp of the organizational culture and structure. Employees need empowerment to perform effectively. They are accountable for their decisions and this makes them more responsible for their work. The line managers can no longer ignore people-related issues. They have to manage people if they have to manage their work in their respective departments. The HR department must act as a facilitator in providing the support required by the line managers on any personnel related issues. U se There are a number of challenges to be faced in terms of the changing attitudes and composition of the workforce, growing emphasis on quality products and services and the quality of worklife, fast paced technological changes, government policies etc. Praneetha has to gear up to meet these demands effectively by being innovative and proactive. The company has to introduce programs to improve the work life of its employees by making it more rewarding, reducing employee anxieties, encouraging employee participation in work and employment-related decisions, and team building. Fo rI BS Caselet 30 1. For an employee like Giridhar, progressive discipline has to be used. It is an approach in which the unsatisfactory behavior of the employee is modified through the support and positive attitude of the management. Here, the employees are made aware of their negative behavior through constructive feedback. They are then helped to overcome their shortcomings with adequate support from the management. This type of disciplinary process is positive and facilitates problem-solving. Here, the employee, a drunkard is not punished or harassed but helped to overcome the problems that lead to such acts of indiscipline. This approach mainly lays emphasis on the belief that if employees are treated fairly and in a humane manner, they will follow the disciplinary process of the organization. The most important step in positive discipline is corrective counseling. For corrective counseling to be effective, the employee’s supervisor must be genuinely interested in helping him overcome his problems. The supervisor must offer support, encouragement and assistance to the employee. Corrective counseling differs from 116
  • 117. Part B traditional techniques in one aspect. In this, the superior avoids telling the subordinate how to solve his problem. Instead, he helps him find the solution himself, thus making the employee responsible for determining the most effective way to overcome the problem. As the employee participates in the process of problem-solving, the chances for long-lasting improvement in his behavior are high. of 20 1 0 2. If Pratima finds that there is no change in Giridhar’s behavior she can discharge him from the company. She can do that with the backing of the top management, who should support her decision in consultation with the trade unions. Before doing this, however, the following conditions have to be satisfied. The nature of the misconduct should warrant discharge or dismissal as an appropriate punishment, and this should be mentioned in the standing orders. • After a charge sheet has been filed against the employee, an enquiry should be conducted regarding the misconduct and prior notice of the time, place and date of enquiry should be given to the employee. • The enquiry should be fair and the employee given a chance to defend himself and to present witnesses in support of his contention or case. • At the end of the enquiry, the enquiry officer should record the findings based on recorded evidence. The findings must be based on the evidence recorded and should not be biased. • The order of dismissal or discharge must be passed in good faith. • The order must be duly communicated to the employee. nl y Cl as s • Caselet 31 se O 1. People skills do not develop in isolation. It is important that employees communicate and interact with one another. This kind of training helps in knowledge sharing and in enabling one employee to understand the type of work being performed by another. In e-learning, development of such skills is not possible as there is no interaction between the trainers and the learners. Fo rI BS U Hence, in IBM, the fourth tier was a classroom training program known as ‘Learning Lab.’ In this tier, the managers had to master the information acquired in the first three tiers and develop a deeper understanding and a broader skills set. There were no lectures in these sessions, and the managers had to learn by doing and by coordinating directly with others in the classroom. Classroom training has its own benefits. One basic advantage is the availability of a tutor to clear any doubts that may arise in the learner’s mind. Though questions can be answered in the on-line training method too, they are limited to a fixed framework. There is no such restriction in the classroom mode. Another advantage of classroom training is that the student gets the benefit of the knowledge and experience of the other students. This results in an enriched learning experience. Training does not stop with just understanding the concepts. In the present-day work environment, employees should understand how these concepts have to be applied and how they can work more effectively by putting them into practice. In order to achieve long-term results through training, an organization must broaden its vision to include people development as part of its planning. 2. The advantages that IBM can achieve as a result of implementing e-learning for its sales force are as follows: 117
  • 118. Introduction to Human Resource Management Since learning takes place online, it eliminates many of the expenses of face-toface training. • Sales forces stay in the field doing what they are supposed to – selling products and services. It will not be possible for all of them to attend classroom training at a specified time. In e-learning they can access the material they need, whenever they need it. • It is possible that some members of the team are experienced in product launch and some at brand management. In e-learning the members have the flexibility to choose their lessons, and do not have to sit through the sessions they have already covered. • E-learning is an extremely adaptable technology that can be used to cover anything from sales fundamentals to specific product launches. Different delivery modes – self-paced, interactive, or "live" learning – can match the varied training needs within a sales force. • No matter what the content or delivery mode, individuals can learn at their convenience, integrating training into their schedule. Individuals are also able to learn at their own pace. • E-learning makes new knowledge and skills available immediately, and reduces the learning time required to master even the most complicated topics. • Advanced e-learning technology provides a high degree of interactivity that ensures results. • Through live virtual classrooms, chats and collaborative exercises, e-learning helps organizations bring decentralized sales groups together during training and on an ongoing basis. • E-learning gives the sales force an advantage over competitors. It enables the sales team to move faster than the competition, maximizing each opportunity. O nl y Cl as s of 20 1 0 • Caselet 32 Fo rI BS U se 1. The first step that SAIL can take up is to set up a cross-functional team headed by the CEO. The team should comprise of senior managers of the company’s manufacturing and marketing functions, and include a representative from corporate finance. It must bring out the objectives of VRS in clear, unambiguous terms. It should state that restructuring is the key to the survival of the business. The statement of objectives should form the basis of a comprehensive communication exercise. The person best suited to lead this exercise is the CEO himself. The statement of objectives should preferably be documented and presented to target groups like workmen, supervisors, administrative staff, trade unions and officers’ associations. The emphasis of the presentation should vary with the target group but the focus should remain uniform: the survival of the business is at stake, and the management has no alternative but to launch a VRS. (The focus should be given to the backdrop and compulsions, and what you want the management to do.) During the meetings with target groups, information on various aspects of the business should be shared. The minutes should be recorded, and copies circulated so that there is no room for misunderstanding at anytime. The presentation should outline current and future business scenarios, highlight trends that would adversely affect the business, and bring to light the unfavorable cost structure of the company’s operations. It should address two vital questions – Where is SAIL today? Where will it be five years later? The presentation should involve detailed number crunching on costs, margins, profitability, and the competitiveness of each product and business unit. Other points of deliberation may be the current 118
  • 119. Part B industry scenario, role of WTO, and its impact like cheap imports and cost of modernization. A well-presented case goes a long way in creating not just the right ambience but also in securing a favorable response from target groups which are vulnerable to irrational fears. of 20 1 0 The second step could be to take initiatives to improve the operational effectiveness of the company. This should be done simultaneously, to convey the message that VRS is only one of the many steps SAIL is taking to enhance its profitability. Some positive measures such as a ban on buying expensive cars for executives, the CEO moving down to the economy class on flights, the withdrawal of entertainment allowances, or switching off lights during recess, can be taken. Sending out the right signals is very important while implementing VRS. Cl as s 2. VRS is only the first step in organizational restructuring. There are a number of soft issues associated with VRS. These involve coping with individual needs, structuring the package, training people for their post-VRS lives, and helping them with investment counsel. It helps to handpick individuals in the division who are respected for their personal and professional qualities and have them act as coaches and facilitators. They could market the benefits of VRS much better. SAIL needs to manage the aftermath of the VRS well, and to convince the retained employees that the company means business. Employees should be retrained so that they can function optimally in their new roles. This would also serve as a signal for these employees, asking them to stay on. Tackling post-VRS issues is critical to the long-term wellbeing of the company. Some of the issues which SAIL must focus on are: Creating the necessary flexibility to reallocate and redeploy the remaining employees • Devising various methods to improve the productivity of employees by exposing them to new technologies, machines, and processes • Outsourcing routine and unskilled jobs • Introducing innovative work practices, incentives, etc. O se Caselet 33 nl y • Fo rI BS U 1. The ideal recruitment source for a position like district supervisor would be an advertisement in the newspapers, and a few leading regional business magazines. However, in this case, internal recruitment would be the best option. Therefore, a search could be conducted among the employees at Tasty. If a capable stores manager is available, the position of district supervisor could be given to him and his place filled with one of the local resources. The internal resource would be preferable because he would be well aware of the organization’s policies and practices and the style of management of the previous supervisor, and will be in a position to replicate his successful style. The policy of developing employees from inside instead of searching for external talent has various advantages. • It helps in maintaining good employee relations. • It boosts the morale of the employees as they feel important and valued. • It encourages competent and ambitious individuals as their performance is rewarded. • There is complete information about the individual’s performance, and his credentials are established. • The cost of recruitment is minimal. • Time and resources are saved on the selection and induction processes. 119
  • 120. Introduction to Human Resource Management • The return on investment on the workforce is increased for the organization. • If carefully planned and well-executed, promoting from within can also act as a training and development device for middle and top level management. 0 Comprehensive selection would be ideal, if Neelam goes for external recruitment. There will be a wider choice of candidates available for selection. A candidate with rich experience, talent, skills and the right attitude could be chosen to fill the responsible position of district supervisor. Cl as s of 20 1 2. The personal characteristics that lead to success in the job, in the absence of a job specification, help in forecasting an individual's performance. Cognitive ability, personality traits, and past performance are the predictors normally used in selection. Cognitive ability is an important indicator of individual performance. It is an individual's ability to store, retrieve, acquire and use information. It also involves the individual's ability to learn, perform and deal with complexities in the job. Other types of cognitive abilities are verbal, numerical and spatial which are used depending on the type of job. Another predictor that has gained popularity in the selection of the jobs is personality. Therefore, the factors that predict success on the job would be knowledge of store management, knowledge of the district, high mobility, quick decision-making, coordinating abilities, knowledge of account maintenance, coordinating skills, commanding power, good communication skills, quick learning skills, and ability to foresee changes in demand and supply of commodities. Caselet 34 1. The factors attributed to the low retention rate are: Hiring only fresh college graduates: The bank is relying heavily on fresh graduates who are generally young, ambitious and undecided about their career. So, they tend to switch from one job to another looking for the one that suits them best. • Training period: Generally young people like things to move fast. But GAB has them in training for two and a half years without any promotion. This aspect might not be appealing to the youngsters. se O nl y • U The changes to be considered by the bank to increase the retention rate are: Reduce the training period to one year or one and a half year. • Introduce a new policy of giving promotions after a year and half based on the performance of the employee. BS • Fo rI • 120 To inculcate a feeling of freedom in the new hires, allow them to choose four out of the six areas that they would like to work in, during the first year and a half. • Try to recruit more candidates with general degrees rather than business administration as they have fewer opportunities than professionals. 2. The process of socialization is not limited to new employees entering the organization; it is equally important for employees moving within the organization as a result of lateral transfers and promotions. However, it is the entry of a new employee into the organization which demands greater attention, time and resources. Employees often feel anxious when they venture into something new. They experience stress in a completely new work environment full of strangers, and tend to feel lonely and isolated. To add to that, the rules, regulations, policies and procedures may all be new. In fact, the work culture itself might be completely different from what he has seen or experienced earlier.
  • 121. Part B of 20 1 0 The employee would need special attention to help reduce his anxiety and put him at ease in the new work environment. He must be provided with all relevant information regarding the organization, its business, rules, policies, etc. This would improve his understanding of the work place, and provide him the basic guidelines of working there. On the positive side, the anxiety experienced by new employees can be used positively to motivate them to learn the values and norms of their new organization as quickly as possible. This will help them to overcome their anxiety and gain acceptance in the organization. The bank’s socialization program is informal; the employees are not separately given a formal introduction to the organization. Caselet 35 Cl as s 1. Organizations lately have realized the magnitude of time and resources that are invested in selecting prospective employees for vacant positions in an organization. The general perception now is that it would be more efficient for firms to utilize these resources for more critical jobs in the organization and outsource recruitment. Therefore, firms like Synergy are employing the services of recruitment agencies which have the expertise in selecting the right candidates for the jobs. The following are a few advantages that Synergy might enjoy by hiring an external recruiting agency: Since there is high possibility of receiving a large number of applications for the vacant positions advertised through the print media, Synergy would have to spend a lot of resources like manpower and time in reviewing all these applications and then short listing candidates for the interviews. Arranging interviews for all the eligible candidates is another mammoth task, especially when there are large numbers involved. By hiring People Consulting, Synergy can be relieved of all the mundane work that is to be done in the case of direct recruitment. • Synergy was planning to open a new unit, for which it wanted to recruit people. As it was a new venture, the company might not have had a complete idea of the skill-set required in the candidates, or it might not have had the technical expertise to select the right candidates. It, however, now has the additional advantage of the expertise from People Consulting. • Synergy might benefit from the support offered by People Consulting, in case it lacks the required resources like HR staff, or technical personnel to recruit candidates. U se O nl y • People Consulting might help Synergy in getting an experienced and talented workforce that is already employed elsewhere, and do not have the time to seek better opportunities. Such candidates generally apply to reputed recruitment agencies seeking better jobs. BS • Fo rI • Most reputed recruitment agencies offer to handle all aspects of the recruitment process, right from the initial inquiries to talking to references, and finally placing the candidates in the jobs. They also involve themselves in the development of the employee, over an extended period. • Good recruitment agencies have expertise in a wide range of effective recruiting techniques like assessment centers, psychometric tests, etc. This reduces the probability of making a wrong hiring decision. Thus, with the above advantages that recruiting firms like People Consulting offer, companies like Synergy can opt to hire them, and use them to their advantage by paying a reasonable price. 2. While companies gain a variety of advantages by hiring external recruiting agencies, they are also liable to a substantial amount of risks. This happens generally when the recruiting agency fails to understand the culture of the organization and the 121
  • 122. Introduction to Human Resource Management of 20 1 0 kind of people it requires. For instance, in the above case, Synergy hired People Consulting to recruit people for its various openings in its new unit. When it wanted to recruit people for middle-level managerial positions, People Consulting failed to bring in the right candidates. This might be due to People Consulting's inability to understand the precise requirements of Synergy, in terms of the job description and job specification. When the recruiting agency fails to understand this, it makes a wrong choice of candidates. This can be overcome by explicitly stating to the recruiting firm, the job requirements in terms of the content of the job and the qualification of prospective candidates. Synergy must also ensure that its work culture is clearly understood by the recruiting agency. Cl as s Other sources of recruitment that can be used by Synergy to fill up vacancies in the managerial cadre could be the existing employees (capable members may be promoted), the company's own database, placing advertisements, taking referrals from employees etc. Each of these sources of recruitment has its own set of advantages and disadvantages. The most effective way to fill these vacancies is by using the company's own database, or by promoting people from its existing unit. This would help Synergy tap the potential candidates who are genuinely interested in working with the company. By promoting existing employees, Synergy might benefit by the enhanced employee morale and motivation, which in turn, increases employee productivity and organizational profitability. Caselet 36 Fair compensation and job security: Many motivational theories conclude that fair and just compensation is a motivating factor for employees to perform better. Organizations should design the compensation to match the increase in the cost of living and the industry standards. Employees must thus be paid on the basis of the work done, responsibilities undertaken, individual skills, performance and accomplishments. Stress-free work environment: The importance of providing employees with a stress-free workplace cannot be undermined. Occupational stress may be due to the basic nature of work, hours of work, work environment, worker’s skills, or lack of resources to accomplish the tasks. Employee productivity is greatly affected due to occupational stress. Therefore, organizations should identify the factors that cause stress and find ways to eliminate them, so as to provide employees with an enhanced quality of work life. Personal and career growth opportunities: An organization should provide employees with opportunities for personal/professional development and growth, and prepare them to accept responsibilities at higher levels. This includes career planning, training, upgrading skills required for promotion, and assigning challenging jobs with greater responsibilities that increase their abilities and knowledge. Such initiatives enhance the quality of work life, motivate employees to perform well, and also enhance productivity. The organization should also ensure that the work assignments given to an employee have a positive impact on the employee’s self-esteem, motivation, involvement, and autonomy. When promoting employees to higher levels, the management should take extra care to encourage performance and talent. To avoid confusion, it should draw up clear promotional policies that match the organizational culture and foster healthy competition. Care should be taken to ensure that promotional activities are executed fairly without any deviations. Deviations at the execution stage can lead to dissatisfaction among the employees and result in low QWL. BS U • se O • nl y 1. An enhanced quality of work life offers organizations the benefit of a motivated workforce, which in turn results in increased employee productivity. Various factors affect the quality of work life in organizations. Some of the initiatives that can be taken by organizations to enhance quality of work life in organizations are discussed below: Fo rI • 122
  • 123. Part B Participative management style and recognition: Flat organizational structures help organizations facilitate employee participation, which in turn, enhances the quality of work life. Workers feel that they have control over their work processes, and they also offer innovative ideas to improve them. Recognition also helps to motivate employees to perform better, thereby improving the quality of work life. • Work - life balance: Organizations should provide employees with relaxation time, and offer tips to balance their personal and professional lives. They should not strain employees’ personal and social lives by forcing on them demanding working hours, overtime work, business travel, untimely transfers, etc. Alternative work schedules may be introduced in some organizations. These programs provide leisure time to employees and give them the opportunity to balance their personal and professional lives. of 20 1 0 • Cl as s 2. Flexible Work Options (FWOs) are quality of work life initiatives, introduced by various modern organizations in an attempt to motivate employees and enhance their productivity at the workplace. FWOs benefit organizations by providing a motivated workforce with enhanced levels of productivity. Employees too are benefited in a number of ways. Some of the benefits of providing such options to employees are as follows: Employees can balance their work life and personal life better. This result in reducing work-related stress among employees, and this enhances their productivity. • QWL programs like flextime reduce employee turnover and work place tardiness. They also improve the physical and psychological health of the employees, thereby bringing down the absenteeism rate. • These programs improve employee morale, job satisfaction, and commitment to organizational goals as their personal work priorities are supported by the management. • These programs also aim at the development and growth of the individuals in their personal and professional lives. se O nl y • BS U Since people are the primary source of competitive advantage, it benefits the organization to have a motivated and committed workforce. It can achieve this by providing some or all of the above FWOs to its employees, depending upon their applicability and suitability to the nature of jobs in the organization. Many organizations are being innovative in implementing new FWOs for their employees to enhance employee satisfaction and productivity. Fo rI Caselet 37 1. Job analysis may be understood as the study of the various responsibilities and duties associated with each job, along with the required skills and abilities of the jobholder to perform effectively on the job. Therefore, the two important elements of job analysis could be the determination of the content of the job and the skills of the jobholder. An effective job analysis might comprise a sequence of procedures which include gathering of relevant information, determination of competencies required for the job, development of job description and job specification. Therefore, the job analysis process conducted by Universal comprised the following phases: • Gathering information – The job analysis process at Universal started with the gathering of information related to various aspects of the job like the position of the job in the organizational structure, the role of the job in relation to other jobs 123
  • 124. Introduction to Human Resource Management in the organization, and a detailed description of the activities and responsibilities associated within the job. This information was collected through observation and study of various jobs in the organization by the team appointed by Aparna Rao. She used this information to determine the selection criteria, and to design the compensation that could be paid to each job holder. Determination of specific competencies – The information gathered in the first phase of job analysis was now used to determine the competencies associated with each job in the organizational hierarchy. • Job description – Job description may be defined as the description of the tasks, responsibilities, duties and functions of the job. The information gathered in the first step helped Rao describe the job in terms of its content. Job description was later used by Rao to evaluate the suitability of a candidate to a particular job activity. • Job specification – This refers to a complete list of competencies and qualifications required to match the job description. of 20 1 0 • Cl as s Thus, Aparna Rao must have followed the above sequence of job analysis which helped Universal conduct an effective selection procedure, and develop a suitable compensation package for each position. 2. Job analysis has implications on various organizational processes and procedures. Universal can therefore, use the results of job analysis for various other purposes which are described below: Organization audit – Job analysis might help Universal in identifying the loopholes, if any, in the organization in terms of jobs, processes, organizational structure, workflow etc. This is possible because of the extensive study it involves about the various job activities, its importance in the organizational structure, the tasks and responsibilities of the job-holder, etc. Hence, it serves the purpose of an audit, and identifies areas for improvement and development at Universal. This, in turn, helps prevent employee dissatisfaction by identifying and rectifying problems and shortcomings associated with a job. • Training and development – The information gathered by job analysis can be used by Universal to identify the training needs of its employees, and to design training programs for them. Based on the data collected by the team regarding the job responsibilities and the employee skill-sets required to perform the job effectively, Universal can develop training programs to enhance the skills of employees. U se O nl y • Performance appraisal – Performance appraisal is normally based on goal-setting or the competencies associated with a job. The tasks and responsibilities of the job form the basis for goal-setting. Since it is the competencies and/or the tasks and responsibilities that form the basis for performance appraisal of an employee, Universal might use job analysis as an effective tool to gain these inputs. • Promotion and transfer – Job analysis provides information about the responsibilities, tasks, and requirements of the job. This can be used by Universal to make decisions on transfers and promotions based on suitability. The suitability of an employee can be determined by evaluating his competencies for transfer/promotion against the results of the job analysis. • Health and safety – As job analysis involves a detailed study of various jobs in the organization, Universal might also procure information about the health and safety aspects of the job. These include hazards or harmful working conditions, and the risk of accidents associated with the job, if any. This helps Universal in taking necessary safety measures. Fo rI BS • 124
  • 125. Part B Induction - Job description, which is an outcome of job analysis, provides information regarding the job that helps an employee understand his tasks and responsibilities. A job analysis process at Universal thus helps its employees adapt quickly to the workplace. Since roles and responsibilities are clearly delineated, they will also be able to develop and maintain more harmonious working relationships with their colleagues. • Career planning - Job specification, also an outcome of job analysis, indicates the competencies that employees must develop to move into higher level positions in the organizational hierarchy. A job analysis at Universal, therefore helps it in planning the careers of individual employees, and preparing them to progress along their career paths. • Succession planning - Succession planning involves identifying and grooming a successor for a vacancy that would arise in the future. The tasks, responsibilities, and specifications of the job help in evaluating the available candidates and selecting the most suitable one. This information is provided by the process of job analysis. of 20 1 0 • Cl as s Thus, a job analysis process at Universal not only helps it in deciding the selection criteria for its employees and the compensation system, but also in providing information that is crucial at each stage of organizational development. Caselet 38 nl y 1. Outsourcing is one of the emerging trends in human resource management, which organizations are increasingly adopting. Outsourcing is no longer confined to large organizations. Many medium and small sized companies are outsourcing routine transactions to external agencies. Outsourcing brings many advantages to organizations. Some of them are discussed below: By outsourcing the basic functions of the organization, key personnel save considerable amount of time. On the other hand, outsourcing facilitates the management to concentrate on strategic issues that help the firm achieve its goals. • Outsourcing helps the management to focus on the company's core competencies that enhance the profitability of the firm. • Lack of talented people to handle back-office transactions also compels companies to outsource their mundane activities. • As the transactions are handled by experts in their respective fields, outsourcing results in process improvement. Besides, outsourcing provides access to the best processes and procedures. Fo rI BS U se O • Due to the above advantages that outsourcing provides, more and more organizations are adopting this concept in an attempt to not only reduce costs, but also to enhance and improve their processes and procedures. 2. Although outsourcing brings a variety of benefits to organizations, the concept is yet to catch on in India. A variety of factors inhibit organizations from adopting this trend. The most important concern of the management in organizations is the cost involved in outsourcing organizational processes. Though outsourcing benefits the organization in the long-run, companies feel that they cannot afford the initial investment, which is substantially higher than the benefits that it promises in the immediate future. Companies are also apprehensive about the confidentiality of key processes in the organization. In other cases, the vendors lack experience and the expertise to perform such operations effectively and efficiently. Subsequently such outsourcing efforts may fail. 125
  • 126. Introduction to Human Resource Management Management in organizations feel that they may lose control over the activities that are being outsourced. They are also concerned about the ethical standards of the vendors and security breeches that might adversely affect the company. Within the organization, employees may oppose outsourcing due to the fear of losing their jobs. Employees also feel that they are deprived of personal contact with the HR department and the management, if the HR activities are outsourced. of 20 1 0 Despite these potential threats that are perceived by organizations, companies are opting to outsource most of their routine transactions in an attempt to achieve efficiency in their various functions and operations. Caselet 39 1. By providing outplacement services to its employees rather than terminating their services, e-Solutions attempted to provide its retrenched employees with an alternative source of employment. By ensuring that its employees did not lose their source of livelihood, e-Solutions fulfilled a social responsibility towards them. Cl as s e-Solutions’ gesture will certainly minimize any ill-feeling among those retrenched and thereby prevent unwarranted propaganda that would tarnish the company's image. It will also create a feeling of job security among those retained. Even otherwise, they will at least feel that the company will help them in their hunt for other jobs if they ever had to leave. Thus, e-Solutions has displayed its responsibility towards its employees. O nl y The company has also displayed its social responsibility towards the society as a whole. If the management had not bothered to outplace these retrenched employees, they would have only added to the ranks of the unemployed in society, increasing the unemployment rate. The management of e-Solutions prevented this from happening by providing alternative employment to all the retrenched employees. U se The employees retained by the company will be committed and loyal to the company and work sincerely as they will be convinced that the management is genuinely concerned about them and will always be there to support them. The management also earned the goodwill of the replaced and existing employees and also the society in the process. Fo rI BS 2. Organizations may initiate the outplacement services by themselves or hire an external agency for the purpose. Hiring an external agency offers many advantages, the most important being that the company can save its image among its stakeholders. Outplacement activities, when conducted by an external agent, reduce the liabilities of the organization in areas of severance, unemployment, insurance and lawsuits. By hiring an external agency, organizations also reduce the risk of earning the ill-will of the retrenched employees. This exercise also reduces the personal trauma of individual employees. 126 Besides, the effectiveness of the outplacement activity is also enhanced when the process is handled by an external agency. It is bound to be fair and objective as the agent is not likely to have a preconceived notion for or against an employee whose services have been terminated. In most cases, the consultant/agent trains managers in handling the task of retrenching an employee. This in turn, smoothens the retrenchment activity. External agencies also offer counseling services to retrenched employees. Thus, e-Solutions might benefit in some or all of the above ways. However, all these services come with a price. The cost involved depends on various factors like the type and duration of the outplacement program.
  • 127. Part B Caselet 40 of 20 1 0 1. A number of factors determine the strategic role of HR in modern organizations. The HR in any organization is said to play an effective strategic role if the department has a director who is a representative in the senior board and committee and if the director has an influence over the CEO or the top person in the organization. The strategic role of HR also depends on the number of committees the director is a member of, the direct contribution of the department in generating revenues for the organization, the knowledge the HR director has of various issues like the performance of the organization during the previous quarter, the number of times the director communicates with his employees, the knowledge the employees about the various challenges that the company might face in the near future, etc. Other factors like an innovative approach towards solving organizational problems and the effort of the department in studying and reviewing the people policies of the company, also affect the strategic role played by the HR department. Thus, the existence of all these factors determines whether the HR in an organization plays a strategic role or not. U se O nl y Cl as s 2. Apart from the common functions of sourcing, recruiting, training, motivating, and remunerating the employees, the HR in modern organizations also plays strategic roles that contribute directly to the company's profitability. Thus the role of the HR manager has changed from that of a facilitator to that of a strategic decision maker. It has now become important to involve the HR department in developing and implementing strategic plans for organizations as human resource has become a key resource. HR plays an important role in developing strategies not only to attract and motivate people but also to retain them. Managing people and their increasing expectations in organizations has become the toughest challenge for the HR professional in today's dynamic market. The HR manager should constantly strive to create stimulating opportunities for employees to prove and hone their abilities, skills, talent, innovativeness, etc. so as to retain them in the organization. It is thus the responsibility of the HR manager to provide employees with an ambience that promotes and encourages creativity and innovation among them. The HR manager is expected to put in place systems that effectively utilize employee potential by creating a challenging work atmosphere and devising an effective rewards and recognition system. The above list of functions gives a broad outline of the various activities performed by the HR executives. However, it may be noted that in a dynamic business situation, the boundaries of any role cannot be clearly or precisely defined. They keep changing with the changing business environment. BS The HR function in any organization can be more effective and earn more accolades if it inculcates and follows the steps discussed below. Understand the markets and the business better; • Have a complete understanding of organizational processes; • Be empathetic to the limitations of the line function; • Building an atmosphere of trust and transparency; • Try to work towards a win-win situation rather than towards gaining an upper hand; • Being open to receiving bouquets as well as brickbats for its actions; • Fo rI • Take an active role in designing the strategy of the organization. Caselet 41 1. A study of the exit interviews conducted by Star Solutions revealed that most employees left the organization due to a ‘mismatch’ between their personal goals and 127
  • 128. Introduction to Human Resource Management of 20 1 0 the organizational objectives. Deshpande also found that most employees who were retrenched by the organization, on grounds of underperformance, had actually performed well during all the phases of the selection procedure. This brought into light the ineffectiveness of the selection procedure in recruiting the right candidates for the various positions in the organization. The ‘validity’ criterion had obviously not been satisfied by the selection procedure. In other words, the selection procedure at Star failed to establish a correlation between the scores obtained during the selection process and the scores obtained through actual performance. Besides, the ‘mismatch’ between the interests of the employees and the organizational goals brought to light the fact that the content of the selection procedure was not a representative of important aspects of job performance. Cl as s Another outcome of the study of the selection procedure at Star was that when the same tests were administered for the same group of people at different times, the results obtained varied significantly. This showed that the selection procedure was unreliable. An effective selection procedure must be a reliable one that gives consistent results whenever it is implemented. However, the reliability criterion was not satisfied in the case of Star’s selection methodology. Thus, the ineffectiveness of the selection methodology at Star was due to its failure to satisfy the reliability and validity criteria. 2. Various criteria can be used to determine the effectiveness of the selection methodologies in organizations. Two of the most important ones are the reliability and the validity of the process, and these have already been discussed. The other factors are generalizability, utility and the legality aspects of the selection process. nl y Generalizability of a selection process refers to the extent to which its validity established in one context may be extended to other ‘primary contexts.’ These primary contexts can be different jobs or organizations, different samples of people, and different time periods. se O Utility is the degree to which the value provided by the selection method enhances the effectiveness of an organization. The more reliable, valid, and generalizable the selection method, the more its utility. There are, however, some external factors like the job market condition, which might affect the utility of a selection method even if the three factors of reliability, validity and generalizability are held constant. BS U Finally, the legality aspect of the selection methodology is a basic standard that determines the effectiveness of the selection procedure. The selection procedure of an organization must comply with the existing laws and legal procedures prevalent in the country. For example, a multinational corporation must understand and conform to the legal requirements of selection in each of the countries in which it operates. Fo rI Caselet 42 1. The culture of an organization plays an important role in motivating the employees to perform. If employees are unable to concentrate on their performance, it could be because of the stress at work or other external factors hampering their progress. Most organizations do not consider this and as a result, end up losing valuable employees. Initially though Neeta considered herself to be lucky to have got a great place to work in, the change in the leadership style later on resulted in immense pressure on her, eventually affecting her performance. Neeta started experiencing job stress, which is caused by conditions in the workplace that negatively affect an individual's performance and/or the overall well-being of his body and mind. Some of the stress-causing conditions which Neeta experienced were an authoritative and demanding boss, insecurity at the workplace and lack of 128
  • 129. Part B appreciation. It is difficult for a person to work effectively and smoothly when the boss is waiting to pounce on her for even minor lapses. If she sees her colleague being treated badly, she is under constant tension of being treated the same way. This further adds to her overall tension. When she sees her colleagues leaving the organization in distress and desperation, it only serves to increase her stress further. Neeta left the advertising agency as she found it difficult to handle the stress. of 20 1 0 Work-related stress can result in frequent absenteeism, lower productivity, conflicts among the employees and high turnover rates. The management should take notice of the problem brewing in the department and take necessary corrective action. Otherwise, it can only lead to many more loyal and talented employees like Neeta leaving the organization. Cl as s 2. There may be several employees like Neeta in her department who experienced similar job stress at the workplace, owing to the attitude and behavior of their boss. On receiving Neeta's resignation, the management should make it a point to identify the reasons for it. The fact that Abhay also resigned recently should trigger the management’s thought process. The management should try and identify the reasons behind the resignation of efficient and hardworking employees like Neeta and Abhay. The management should conduct a proper exit interview to understand the reason behind the resignation of its top performers. What was it that forced them to resign? These interviews would help them to identify the underlying problem. nl y Usually, employees feel disturbed when a co-worker is fired or forced to leave. In such situations, it is important for the supervisor to provide counseling so that the other employees do not feel depressed. For all this to be successful there is a need to have a participatory and not a bureaucratic style of functioning. The management should also develop an open culture wherein employees like Neeta can walk in to discuss their problems openly. Also, having a grievance redressal system that allows employees to air their problems and get issues resolved would be another important step that the management has to take. U se O Effective managerial training and development play an important role in ensuring that middle and senior managers perform with accordance to the culture of the organization. Managerial development ensures that managers are motivated to invest time in self-development as well as in the development of their subordinates. Managers like Sinha need managerial development training to mould them to fit into the organizational culture. These developmental programs are also designed to leverage the strengths and remove the weaknesses of each individual manager. Fo rI BS Caselet 43 1. The case highlights the importance of the role of the management in ensuring a safe and healthy working place. It stresses that it is not only the responsibility of the supervisors alone, but also that of the management to take care of the employees. The management in this case did not show and concern for the safety of the employees. An organization cannot sustain itself for a long time without a safe and healthy working environment. An unsafe and unhealthy working atmosphere results in accidents, causing harm to employees’ health and well being. Organizations that do not educate employees about the usage and maintenance of machinery and chemicals may have to face some serious problems. If the workers are not careful in operating the machinery, it could lead to serious injuries. The workers should also be trained to provide first aid to co-workers in case of an accident. The machinery should be thoroughly inspected regularly to see that it functions safely, without any problems or breakdowns. A safety engineering program should be 129
  • 130. Introduction to Human Resource Management implemented at regular intervals to identify any defects in the machinery. All these steps had not been taken by the management and it failed to implement an effective safety policy despite its having long functioning for the past 20 years. of 20 1 0 2. Singh realized that he was also at fault for not inspecting the progress of the work in the manufacturing unit. After talking to his friend, he realized that he was equally responsible for whatever has happened. Therefore, he felt that there was no point terminating the services of the supervisor. The top management should take the lead and regularly inspect safety at the work place. If it sends out the message that it is not bothered about the working conditions in the shop floor, the supervisors and those incharge will also adopt the same attitude. Cl as s By actively involving himself in the activities at the plant, Singh would personally come to know of the workplace problems and probable loopholes that may lead to accidents. Also, when a new machine is installed, it is management’s responsibility of the management to ensure that the worker operating the machine has the requisite skill and knowledge to operate it. Machines that have become obsolete or unsafe should be replaced from time-to-time. Singh had failed in his duty. Therefore, there was no point in sacking the supervisor. nl y Guiding employees in times of accidents and providing them with adequate tips and tools to deal with, accidents when they occur, can reduce stress among employees and lead to better management of the tense situation. When an employee is injured, adequate recovery time should be provided. Counseling sessions should be conducted to ensure that the mistake is not repeated again. This is the duty of the supervisor, but it is also the responsibility of the management to ensure that the supervisor performs his duty. Caselet 44 Fo rI BS U se O 1. If employees are motivated through rewards, appreciation, constructive support, reinforcement or approved personnel actions to conform to organizational rules and regulations, it is termed positive discipline. The attitude and mindset of the employees is developed to ensure that they willingly conform to the rules and regulations of the organization. Positive discipline requires an efficient leader who can motivate employees and make them work together towards implementing discipline in the organization. The concept of self-discipline and self-control is emphasized through positive discipline, as employees willingly cooperate to ensure discipline in the organization. They develop a mutual respect for each other and the organizational rules and procedures. This happens when they understand and believe that these rules and procedures will contribute to the achievement of the organizational goals as well as their personal goals. So, positive discipline is also known as cooperative discipline or determinative discipline. 130 At Proton Biotech, positive discipline helped in developing a better work environment. The workers grew more creative and innovative and also more productive. When positive actions and performance were reinforced through positive discipline, workers felt encouraged to maintain the performance standards. This increased the productivity of the organization. There were fewer punishments and less resentment among the workers. They had a sense of security and a sense of wellbeing. This in turn, made them more committed to the organizational goals and objectives. They felt more responsible and loyal to the organization too.
  • 131. Part B 2. Proton Biotech has to follow the steps explained below, to implement an effective disciplinary system in the organization. The rules and regulations should be framed with mutual coordination and acceptance of the management and employees. By involving employees in the process, their degree of compliance with the rules can be improved. • All the rules should be evaluated and updated from time to time to ensure their relevance and utility. • Rules should be formulated based on the nature of work and working conditions. Separate rules have to be framed for employees in the office and for those in the field. It should be understood that the working conditions and facilities on a shop floor are quite different from those in an office. • The rules should be so formulated that they ensure an objective and unbiased analysis of the acts of indiscipline. Every employee should be treated the same under the disciplinary procedure. • All the employees should know the penalties for violation of different rules. This answers that they maintain restraint even when they contemplate acting in violation of rules and regulations. • The disciplinary procedure should ensure that an employee does not repeat a similar act of indiscipline in the future. The disciplinary action taken, should deliver a strict message to the employee regarding the consequences of a similar act being repeated. • The disciplinary procedure should provide for analysis of a rule or its violation, if the employees are violating the rule frequently. • The entire procedure including the appeal and review of all the disciplinary actions should be mentioned in the employee’s handbook or in collective agreements. • The procedure should provide for a legal as well as humane approach. O nl y Cl as s of 20 1 0 • se Caselet 45 U 1. Krishna could informally educate the employees about how the organization had not been following safety and health standards in the workplace. With help from the authorities, the workers could force the factory occupier to disclose information about: dangers, health hazards, and measures to protect workers from substances or materials in manufacture, transportation, storage etc., to the workers, the chief factory inspector, and the local authority; BS • Fo rI • safety and policy; • quantity and characteristics and disposal of substances and waste; • emergency plans to workers and the local public; • handling, using, transportation, storage and disposal of hazardous substances to workers and the local public. The Factories Act also binds the employer to maintain up-to-date health records of workers, and to appoint a person experienced in handling hazardous substances to supervise handling, and to provide protective measures and regular medical examinations. For example, in industries that are prone to occupational health hazards, it is important to educate the employees about the harmful effects that chemicals will have on their health and the importance of using protective gear to shield themselves from these 131
  • 132. Introduction to Human Resource Management harmful chemicals. Safety training also makes employees aware of the hazards that they may have to encounter in the course of their work. 0 2. Some industries by their very nature create harmful working conditions for their employees. For example, workers employed in industries like glass, asbestos or chemicals, due to excessive exposure to gases like carbon-monoxide and glass / asbestos dust, get afflicted by respiratory diseases and other serious ailments such as cancer. of 20 1 The Factories Act secures health, safety, welfare, proper working hours, leave and other benefits to workers employed in the factories. In other words, the Act is enacted primarily with the objective of regulating the conditions of work in manufacturing establishments. Chapter III of the Act deals with the ‘health of the workers’ with reference to matters such as cleanliness, disposal of wastes and effluents, ventilation, prevention of dust and fumes, artificial humidification and prevention of overcrowding, providing adequate lighting, drinking water and other necessary conditions for work to progress smoothly. Cl as s Chapter IV of the Act deals with the safety of workers in a factory. It includes matters such as fencing of machinery; working on or near machinery in motion, and employment of adolescents or children on dangerous machines. Thus, the Act lays emphasis on the working and well-being of the employees. Apart from these, the Act also recommends the appointment of a welfare officer to look into the welfare of the employees. The Factories Act requires employers to provide basic safety measures including: securely guarding all parts of dangerous machinery; 2. taking precautions for working on machinery; 3. providing emergency devices for cutting off power; 4. maintaining hoists and lifts; 5. lifting machines, chains, ropes, and other lifting tackle in good condition; 6. testing pressurized vessels regularly; 7. ensuring walking surfaces are of sound construction; 8. providing protective equipment; U se O nl y 1. 9. having measures to remove gas and dust before entering confined places; BS 10. providing measures to prevent fires. Fo rI Caselet 46 132 1. It is not only important to have an effective grievance redressal procedure; employees should also be able to trust the system if they are to air their grievances. The company should have a code of conduct that has clauses on sexual harassment, like companies such as TCS have. Before an employee is inducted into the organization, he should be told that appropriate social conduct is expected at the workplace. An open culture will encourage employees to talk freely regarding any complaint or grievance that they might have. The organization can also have a committee chaired by a senior female employee that would look into matters concerned with any unhealthy or undesirable behavior at the work place. The firm could also take a cue from Coca-Cola India, which has the Coca-Cola India Prevention of Sexual Harassment Policy to prevent such incidents in the company. This policy reaffirms the company’s commitment to maintaining a work environment free of all forms of harassment and discrimination, for all associates.
  • 133. Part B of 20 1 0 The company should ensure that its disciplinary system is objective and unbiased. In this case, the company first tried to ignore Rithika’s complaints, just because Govind was in a good position in the organization and the company required his services. It was only when Rithika stepped out to seek justice from a court of law that the company decided to ask Govind to leave. It took this step finally because it was worried that its image might get tarnished. The company culture was not employee friendly and supportive. If any other employee in the company ever faces a similar situation, she might think that she has only one option – legal action. This might spell doom for the company. To prevent all this, the company has to revamp its whole system and institutionalise a policy for prevention of sexual harassment. It should take steps to instil confidence in its employees and regain their trust. Cl as s 2. An open-door policy and free channels of communication characterize organizations in the new economy sector. Any employee of the organization can walk into the office of his superior to express his dissatisfaction or grievance. The cutthroat competition for human resources makes the management strive to keep its employees satisfied and motivated. This also contributes to the design and implementation of a fast and effective grievance redressal procedure that settles employee grievances without any annoyance or delay. The informal culture and reduced bureaucracy facilitate a smooth grievance redressal procedure in these organizations. Similarly, the McGregor's red hot stove rule should be applied while taking any disciplinary action. According to this rule, any disciplinary action should be immediate, impartial, and consistent with a warning like the results of touching a red-hot stove. se O nl y New economy companies today encourage an open culture under which an employee with a grievance can directly approach any higher-ups in the organization. The employees in this sector are generally well-educated and responsible. If Protech had this policy, Rithika would have felt free to approach the CEO or the COO of the organization with her grievance. This would have averted the problem and the company wouldn’t stand to lose face in public. Another advantage of an open door policy is that the employees develop a more positive attitude towards the organization and their work. They are spared all the frustration that goes into pursuing a case that goes through a long grievance redressal system. Their issues are resolved immediately so that they can concentrate better on their work and be more productive. So, Protech adopt an open door policy of grievance redressal. U Caselet 47 BS 1. FootComfort had not been able to maintain good industrial relations practices for the following reasons: Fo rI • During a substantial part of its history, FootComfort had been witnessing regular conflicts between the labour and management so industrial relations had deteriorated. • Employees were under the impression that the management was not interested in understanding their problems. The intereference of the political parties made things worse. • Employees felt that the management was consistently downsizing its workforce, rendering more workers jobless. In order to maintain good industrial relations practices, FootComfort could: • Make efforts to maintain good industrial relations by introducing a participative style of management. • Strengthen its grievance settlement mechanism (machinery). 133
  • 134. Introduction to Human Resource Management • Maintain good relations with the local government and send signals that while government intervention is all right party intervention is not. • Practise collective bargaining (a process through which employee issues are settled through mutual discussions and negotiations). of 20 1 0 2. Welfare schemes are meant to achieve organizational, employee and societal objectives. The oirganization provides certain welfare schemes to its workers in order to support recruitment and to retain workers in the organization. These schemes are aimed at discouraging labor unrest and reducing the level of employee turnover in an organization. Employees desire the benefits as they are provided at a lower cost and are conveniently available. • Life insurance, health-care, disability and retirement schemes and the like reduce the burden on society and provide security to the employees. • The phasing out of welfare schemes by Footwear was therefore not correct. It could further worsen its relationship with its employees. Rather than phasing out all the welfare schemes, FootComfort could follow the “cafeteria approach” in providing benefits to its employees. This approach lets the employees choose benefits from a variety of benefits made available to them. Each employee can choose the benefits that he or she prefers. Cl as s • O nl y Factors such as an employee’s age, financial and family position, attitudes and lifestyle influence the choice of employee benefits. Younger employees favor benefits like vacations, holidays and flexible working hours while older employees may prefer life insurance and retirement-related benefits. Another step which FootComfort could take would be to link all its welfare schemes with productivity. This would motivate employees to improve productivity and both the organization as well as the employee will reap the benefit. Caselet 48 Fo rI BS U se 1. With the changing business environment, organizations should provide employees with the requisite skills and knowledge so that they can perform effectively. Training is a continuous process and the responsibility of a manager does not cease after a training program is over. He should analyze the performance of employees after the training, and continue to assess the training needs from time to time. This should always be done taking into consideration the organization’s objectives and the desired standards of performance. Any gaps between the desired and actual competency levels of an employee should be bridged through continuous and repeated training. Training should equip the employees of the organization to take up fresh challenges in a dynamic and competitive business environment. Once the training needs are determined, training goals have to be established. Management should clearly identify the results it seeks in the performance of each trained employee in the organization. Training goals should be tangible, verifiable, measurable, and clear to the management as well as the employees. 134 Continuous training does not mean an additional cost but an additional benefit for an organization. Employees need to update their knowledge and refine their skills from time to time to survive and compete in the present day’s business environment. This is the reason why companies like FedEx stress and invest on employee training and development. It is difficult to find a talented resource in these days of competition and therefore the employees have to be trained continuously, to meet the job requirements. Another reason to invest in continuous training is the fast changing technology. Employees need to be trained to adopt and effectively use the latest technology in the
  • 135. Part B industry. If employees are not trained, they tend to become stagnant and fail to compete with their competitors from other organizations. of 20 1 0 2. In a firm like Fedex, job rotation can be of immense help because it is very important for every employee to understand how the work proceeds in other departments. Under job rotation, the trainee is placed on various jobs across different functions in the organization. The trainee gains cross-functional knowledge and is equipped to take up different jobs. The time spent on each of the jobs ranges from one or two days to several weeks. Under job rotation, the trainee moves from one job to another, and gains job knowledge and learns new skills from his trainers/supervisors in each of the different job assignments. This cross-functional knowledge helps the organization in times of acute need for manpower. For example, when the attrition rates in a particular trade/field are high, employees from other trades/fields in the organization can fill the vacancies temporarily. For example, in FedEx, if the packaging department is short of a few employees on a particularly busy day, personnel from delivery or customer service, who know the job, can chip in to see that the work proceeds smoothly and does not get choked in the packing section. Cl as s Job rotation also provides novelty and variety to the employees who have been doing the same job for a long time. For example, handling customer calls day-in and day-out might sometimes get very mechanical. The management can arrange job rotation stints for its employees, wherein some employees handling customer calls can have a short stint in the packaging or courier division. This might provide them with a short break from their routine jobs and give them the opportunity to do something different. Caselet 49 Fo rI BS U se O nl y 1. The new benefits program to be designed and implemented could be used as an opportunity to weed out ineffective programs and introduce benefits in keeping with the changing expectations of the employees. However, care has to be taken to see that the employees do not consider that the management is taking undue advantage of the situation and weeding out employee benefits. One of the best methods would be for the company to finalize the benefits after conducting a survey, but this could take a very long time. The other option is to give the employees as much flexibility as possible, in their choice of benefits. The firm could adopt a cafeteria benefit plan which would give the employees a choice in selecting the most suitable benefits scheme For example, the company could design different plans and then allow the employees to choose the ones that suit them the best, from the whole lot. The value of the benefits package could be pre-determined for each employee and the employee would get the option of choosing from the basket of plans, within his permissible limit. This would ensure that the employees did not feel that they were being sidelined from fixing the benefits plan. Infact they would feel elated that they had the freedom to choose their own benefits. The benefits programs could be customized after evaluating the employee preferences and needs. These customized programs are retained within the broad framework, considering the rules and costs involved. This would be better than thrusting a common benefit, plan on all the employees of the organization, irrespective of their needs and preferences. Though this system might have some teething problems because of the complexity involved, its advantages outweigh its disadvantages. 2. It is easy to create a benefits plan that is simply an integration of the benefits plans of both the companies. But creating an entirely new plan would be a difficult task as it involves identifying and analyzing the interests of both the firms and those of their employees. Care has to be taken to ensure that the employees of neither of the merged firms feel ignored or left out from the process of decision-making. All this would take time and since the VP-HR made it clear that the benefits program should help in 135
  • 136. Introduction to Human Resource Management retaining the employees and not increase attrition rate, the team has to be all the more careful in bringing out the best benefits plan. of 20 1 0 When both the benefits plans are integrated and the best of the lot chosen, there is a basic framework available for the HR team to work on. It makes it easier for the HR team to arrive at the final plan that would be acceptable to the employees of both the merging companies. However, the question whether this merged plan would suit the requirements of the company, still remains. On the other hand, to create a completely new benefits plan for the employees of the merged company based on the organizational culture and requirements would take some time. The merger has to be first completed and the merged company should start functioning normally for the culture to emerge. The best option for the HR team would be to first put in place a merged benefit plan that incorporates the best of both the benefits plans of the merging companies. Once the new company is well established, then the management can think of introducing some changes in the benefits plan to suit the organizational requirements and culture. At the same time, the management should also ensure that it does not ruffle any feathers and satisfies the needs of all the employees. Cl as s Caselet 50 nl y 1. Stock options used to be a great, powerful and credible tool for attracting talent. But the global economic slowdown in general and the tech meltdown in particular, have decreased the demand for stock options. During the 1990s, options were to employees what honey is to bees. That was when tech companies had borrowed and perfected what was essentially a manufacturing sector idea of the 1950s. The term ESOP was a password to a world of instant wealth and riches. Many employees became millionaires after owning stock options. In the above case, Visiotech decided to issue stock options and was also able to attract the best talent through its stock options. But with the fall in stock prices, employees began to prefer cash to shares. se O The returns on stock options depend on various factors including the company performance and the stock market condition. The Indian stock market has been through a series of highs and lows in the past few years. The market might take time to gain the stability to withstand the effects of a Dow Jones or a Harshad Mehta. Therefore, the employees prefer something concrete in hand rather than some option which might or might not fetch the expected returns in the future. BS U Another reason for the stock options losing their sheen as an employee retaining tool is the complete change in the Indian attitude. Indians today are more inclined towards spending than towards saving. The plunging interest rates are further encouraging Indians to spend. So, what is required today is cash in hand. Therefore, the employees desire cash bonus rather than of stock options. 2. The various choices that Pradhan has are: • Adopting the scheme followed by Microsoft that awards shares, which vest over time, for free. An employer gains regardless of the stock market price, at the end of the vesting period (provided it is not zero). But companies have to expense the stock award in the profit and loss account. This is usually taken up by large firms, and companies and they also have to get shareholder approval for it. Waiting and watching for some time as the IT market is expected to pick up pretty soon and the stock market has also been in the limelight for high ratings. • Fo rI Re-pricing the options. In this case, the company should reduce the price at which the employees can buy the options, to reflect the fall in the market prices. • 136 • Offering phantom stock to its employees. The employees need not invest any money as the stock is fictitious, but at the time of valuation, the difference
  • 137. Part B between the stock value on the day of purchase and on the day of encashing is paid in cash to the employees. Offer a cafeteria benefit plan to its employees, wherein they get to choose the benefits that they desire or need, from a whole basket of benefits. Fo rI BS U se O nl y Cl as s of 20 1 0 • 137
  • 138. Cl as s of 20 1 0 Part C: Applied Theory Questions Fo rI BS U se O nl y The applied theory questions in this section are intended to deepen the student’s understanding of theoretical concepts and their practical implications. Students have to apply the theories they’ve learnt to a wide variety of business situations and come up with innovative solutions to the problems posed.
  • 139. 1.Part C: Applied Theory (Questions) The human relations approach was an attempt to focus on the human side of the enterprise, with an emphasis on informal processes, group and individual behavior, mutual trust and a supportive leadership. Discuss the salient features of the human relations approach which distinguishes it from the classical approach to management. 2. Organizations in recent times have been experiencing radical changes both in the composition of their workforce and in the motivational needs of their employees. This has necessitated their evolving new strategies to manage their employees, in order to survive in this dynamic and competitive business environment. Discuss the various factors that led to a change in the outlook of organizations towards managing their human resources. 3. While the functions of a traditional human resource manager were confined to issues relating to making personnel decisions, record keeping, maintenance of employee data, and hiring, training, and retaining employees, the new role of HR managers has been transformed into a more challenging one. Briefly describe the different roles played by HR professionals in the current business scenario. 4. The sudden slump in the IT industry landed many software companies in the soup. One such company was e-Solutions. e-Solutions was badly affected due to unprecedented developments in the industry and suddenly found itself overstaffed. It had to layoff at least fifty percent of its workforce if it had to survive in the business. The layoff resulted in a demoralized and demotivated workforce. Discuss the problem faced by e-Solutions. Also delineate how this problem could have been averted using human resource planning. 5. Horizon Technologies needed to recruit staff for its administration and finance departments. They required candidates for secretarial and accounting positions in the two departments respectively. The new HR manager proposed hiring through some good recruitment agency. The General Manager agreed but, felt that this should be discussed with the heads of other departments as well. What do you think would be the response to the suggestion of the HR manager? What are the factors that might go against his idea? 6. It has been increasingly observed that the focus of Human Resources Management has shifted from employee welfare to finding ways and means of effectively achieving individual and organizational goals. This change in focus has created new challenges for HR professionals in organizations. Discuss the various challenges faced by HR personnel in the wake of this transformation. BS U se O nl y Cl as s of 20 1 0 1. Fo rI 7. "The 100 Best Companies to Work For" -- a survey conducted by Fortune magazine revealed the startling fact that none of the employees in those companies mentioned monetary gains as the reason why they were happy with their jobs. Thus, financial gains no longer seem to be a viable strategy to attract and retain a talented workforce in organizations. This has posed a challenge to the HR professionals of modern organizations as they need to devise innovative ways of attracting, retaining and motivating their workforce. Discuss the ways in which HR personnel are dealing with this challenge. 8. E-recruitment, though still a nascent industry, is experiencing a growth rate of 100 to 150% in the current business scenario. Reports suggest that there are around 2500 job sites with more than two million resumes on file. Around one million job postings were reported to have been done through e-recruiting in the year 1997. These reports indicate the growing importance of the internet as a viable source of recruitment. What could be the reasons behind the increasing relevance of e-recruiting?
  • 140. Introduction to Human Resource Management 9. Shifting or transferring employees from one department to another for a specific period is common at Delight Electricals, a manufacturer of electrical and electronic goods. For example, a person working in the finance department is assigned to work on at least one project that is non-financial for a certain time period. By doing this, Delight has experienced a phenomenal rise in its productivity levels and a decrease in employee turnover. What do you think are the benefits that accrued to Delight as a result of this exercise? of 20 1 0 10. The TNB Bank Ltd. is an established private sector bank in south India. The bank has a few vacancies in top managerial positions due to the retirement of some senior personnel. The HR department has decided to identify suitable personnel from within the organization for promotion, instead of recruiting from outside. Was the HR department right in deciding to recruit people from within the organization? Will they not miss out on talent from outside? Discuss the pros and cons of conducting an internal recruitment drive instead of seeking potential employees from outside. Cl as s 11. ABC Enterprises proposes a major plan to restructure the various job activities at individual and group levels in the organization. It plans to initiate the process of job enrichment to cope with the deteriorating levels of employee satisfaction and organizational productivity. Suggest a few effective techniques to enrich the existing jobs. Also, delineate the various steps involved in the process. nl y 12. Aarohan is a steel manufacturing company which plans to diversify into other related fields. It calls for HR expertise to forecast and manage the manpower requirement that would arise as a result of this diversification attempt. Imagine that you are called to initiate and manage the entire process of manpower planning and procurement for Aarohan. Describe the various aspects to be considered before starting the recruitment drive. O 13. The job of a machine operator at a manufacturing company has to be analyzed, as the company felt a need for a job redesign. Discuss a suitable method of job analysis of a machine operator’s job. Also discuss the advantages and disadvantages of implementing such a method of job analysis. U se 14. The RK Group, a manufacturer of electronic goods, plans to conduct a detailed job analysis for its various positions in the top and middle management levels. The HR manager intends to use the critical incident technique for the purpose. Discuss the appropriateness of the technique by bringing out the advantages and the disadvantages of implementing the critical incident technique. Fo rI BS 15. The new HR manager of Fresh Foods Pvt. Ltd., sought to revise the company's recruitment policy as he felt that the cost of recruitment in the firm was too high. He observed that these costs could be reduced substantially by evaluating each of the factors that determine the effectiveness of the recruitment policy. Discuss the various factors that might help him and the management, determine the effectiveness of the existing recruitment policy. 142 16. Neo Technologies is an up-coming software development firm. As its clients grew in number, Neo had to hire new software programmers for its various projects. It placed an advertisement in one of the dailies announcing its requirement of programmers and analysts in specific domains. The advertisement however, failed to impress people with the right talent. On the other hand, it attracted a large number of unsuitable applications and the management had to spend a lot of time screening them. This made the management conclude that the advertisement placed was ineffective in drawing the attention of the target candidates. Discuss the advantages of placing an advertisement for a job vacancy and also elucidate the important information that has to be furnished in the advertisement to make it effective.
  • 141. Part C 17. On being shortlisted after clearing various tests in the preliminary rounds of the selection procedure at a top steel manufacturing organization in the country, Pratham Jain was called for an interview. Jain was very excited about being called for the final phase of the selection process. He expected a pleasant interaction with the interview panel and was confident of doing well in the interview too. Discuss how the selection panel could make the interview a pleasant and fruitful one. of 20 1 0 18. The economic downturn during the recent past caused serious problems to most organizations, especially in the IT field. Horizon Technologies, a five-year old firm was faced with the most common problem – surplus manpower. The top management called for a meeting to discuss strategies to help the organization survive during those turbulent times. What do you think might be the strategies that will help Horizon deal with surplus manpower? Also bring out the implications and consequences of each of these strategies. Cl as s 19. Verma & Co., a manufacturer of a variety of consumer durables, faced a perennial problem. Whenever it placed an advertisement for any vacant position in the company, it received an overwhelming response from prospective candidates. Not only were fiscal resources inadequate for screening those applications, but also much time was required for effective selection of candidates. The HR department therefore, intended to design a new application form that could be used to screen applicants effectively within a relatively shorter period of time. Discuss the various aspects of the job as well as the applicant that must be covered to use the application form as an effective tool for initial screening. se O nl y 20. As part of its efforts to keep developing its human resources, Elegant Decors, the market leader in furniture industry, has included a comprehensive career development plan for employees belonging to all levels of the organizational structure. While human resource development was the main idea behind its implementation, the company derived various other benefits by implementing this strategy successfully. Discuss the various possible benefits that might accrue to Elegant Decors as a result of the introduction of career planning for its employees. Fo rI BS U 21. A recent study revealed that despite the various benefits offered by the 'flextime' option, not more than 14% of the employers in the US provide this work alternative to their employees. The concept is yet to gain popularity in India as well. Discuss the possible reasons for the lack of interest shown by organizations towards implementing this option. 22. Triumph Electronics, a manufacturer of electronic appliances, decided to conduct a detailed job analysis to collect information about various aspects of the different jobs in the organization that would provide necessary inputs for a number of HR activities like recruitment, selection, job design, training and appraisal. However, problems cropped up when its employees began to view the initiative as a threat to their job security as some organizations use this process for downsizing the workforce. Organizations like Triumph face such problems while implementing the process of job analysis. Discuss the various issues associated with job analysis and suggest ways of tackling them. 23. Having been short listed in the preliminary written tests for the position of a marketing executive at a private firm, Priyanka Sinha was called for a selection interview the following day. While Sinha was aware that the interview would be with the marketing manager who would test her knowledge, skills and talent relevant to the job, she was unsure of the kind of interview she might have to face the next day. This would be her first interview ever for a job. Briefly explain the 143
  • 142. Introduction to Human Resource Management different types of interview that Sinha might have to face. Also bring out the characteristics of each of those interviews. 24. Prosaic Enterprises is a steel manufacturer where jobs are characterized by intense specialization. This gradually led to high levels of dissatisfaction and fatigue among its employees. Discuss a suitable approach to job design that merges the technical needs of Prosaic Enterprises with the social needs of its employees. of 20 1 0 25. Goutam Goyal is fresh out of college after completing a comprehensive two-year course in business management from a premier institute. Goyal is now seeking a challenging job with a good company that would provide him with good growth opportunities to build his career. One of the job consultants he met suggested that he should have a planned self-development model that would guide him through a successful career. Discuss how Goyal must proceed to draw-up an effective plan for self-development which would help him plan and choose his career path. Cl as s 26. Shah & Co. is a family-run, medium-sized toy manufacturing company. To meet the manpower demands that might arise over the next two years when the company plans to diversify its operations, the managing director of the company decided to implement succession planning. He called for a meeting to seek suggestions from other officials for effective succession planning. Identify the various factors that determine the effectiveness of a succession planning effort in a family-run company like Shah & Co. se O nl y 27. Having analyzed the current manpower status and the future requirement for the next few years, Sai Mohan, the human resource manager at Smart Enterprises, concluded that the company would face a serious resource challenge. Around two-thirds of the employees were due for retirement over the next four years and about 25% of them were in the top managerial positions. Smart Enterprises would face a serious manpower crunch as it would be difficult to find experienced personnel for these top positions. In order to deal with such problems, Sai Mohan proposed to immediately initiate a succession planning effort in the organization, to meet the requirements of manpower in the future. Discuss the elements of succession planning that might help Smart Enterprises effectively meet its manpower requirements. Fo rI BS U 28. Ishita Mallik has been with MyHome Decors, as a receptionist and front office administration executive for the past four years. However, she has always been more inclined towards fashion designing and over the years, learnt a lot about it by observing her colleagues at work. Fortunately, MyHome Decors introduced new policies in HR that included the benefit of career counseling for its employees. Mallik decided to attend the counseling session with the ambition of changing her career to fashion-designing. Discuss how the new concept of career counseling could help Mallik realize her dream of becoming a fashion designer. Also, highlight the various aspects that might be covered during Mallik's interaction with the counselor. 144 29. Turnkey Associates (Turnkey), a software development firm, plans to introduce a new human resource development (HRD) policy to ensure continual development of its human resources. Discuss the various aspects of human resources that the company has to consider while drafting its human resource development plan. 30. Mohan Krishna, the managing director of Ecstasy Garments, makes it a point to spend at least half an hour everyday with his staff on the shop floor, over a cup of tea. Ecstasy Garments, a market leader in the industry, is known for the informal organizational culture it promotes and the open channels of communication that exist among the various levels in the organizational structure. This brief interaction with his employees, gives Krishna a valuable insight into the peopleperception of the various organizational systems, procedures and issues. It also
  • 143. Part C helps him feel the pulse of the people with respect to various organizational decisions made by the management. Krishna thus benefits from the informal organizational culture that thrives in spite of the formal structure. Many organizations of late, have realized the potential benefits of the informal organization that co-exists with the formal structure. Discuss how organizations can benefit from the presence of an informal organization within a formal organizational set-up. of 20 1 0 31. The production manager at one of the top manufacturers of plastic products, Raj Kumar, found himself overloaded with responsibilities and stifled by mundane chores. He however had the option of delegating a few of his activities to his subordinate, the assistant production manager. Will Raj Kumar's decision to delegate responsibility to his subordinate pose a threat to his authority and position in the organization? Discuss the factors to be considered by Raj Kumar before he delegates his responsibilities to his subordinate. nl y Cl as s 32. Profound Manufacturers is an established producer of rubber products. However, of late, it has been experiencing problems of decreasing revenues and profits, owing to a drastic fall in the demand for their products with the introduction of products made out of a new fiber that minimizes the disadvantages of products made of rubber. The large number of hierarchical levels in its organizational structure delayed the decision making process, which, in turn, resulted in Profound's failure to cope with the rapid changes in the market place. In order to overcome this crisis, the HR manager proposed to flatten the organizational structure, which he thought was essential to make the organization more responsive to external changes. Is the HR manager right in trying to flatten the organizational structure at Profound Manufacturers? Discuss the various elements of the organization that determine the success of the effort to flatten its structure. Also discuss the benefits that would accrue to Profound if it successfully implements its organizational flattening process. Fo rI BS U se O 33. Lakshmi Priya had just rejoined work after maternity leave. Priya worked as a sales executive for a company that was into providing investment advice to individuals and organizations. The job was highly demanding and she found it difficult to manage both work and her baby who was just a couple of months old. Sandhya Rani, her colleague, also faced problems managing her job as well as her ailing mother. She was in fact planning to quit the job so that she could spend more time with her mother. It was then that the company offered them the option of job-sharing which would help them and also enable the organization to retain them. Priya and Rani were pleasantly surprised when their boss offered this option to them. Now, Priya is able to spend more time with her baby and Rani can take better care of her mother. Organizations today, recognize the benefits of jobsharing and, therefore, include this alternative in their 'flextime' work-options. Discuss some of the benefits of job-sharing. 34. Umesh Mathur, was appointed HR manager of a medium-sized company in the textile industry. After a brief analysis of the HR practices and functions in the organization, Mathur felt that the HR department spent more time on mundane and monotonous jobs instead of concentrating on strategic issues. In order to allow the HR department to focus on core activities, he proposed that a few routine activities like payroll, staffing and training be outsourced to agencies / experts in the respective fields. Was Mathur right in getting the organization's jobs done by an outsider, the outsourcing agency? Discuss the benefits of outsourcing and the possible drawbacks. 35. ABC India Ltd. is a thirty-year-old public sector undertaking, which is now burdened with the problem of excess manpower. Due to the introduction of highly sophisticated technological machines and computers, most of the positions 145
  • 144. Introduction to Human Resource Management of 20 1 0 in the organization had become redundant. ABC found downsizing the only option to survive in the era of globalization and liberalization. After a month-long deliberation by the management and government, it was decided that ABC should introduce a Voluntary Retirement Scheme (VRS) for its employees. Accordingly, people whose jobs were redundant, or who thought that they could not upgrade their skills to suit the technological advancement in the industry, had to take the golden handshake. They would receive monetary compensation for the services rendered and for the services due. The management at ABC was aware that the implementation of VRS would meet with strong resistance from its employees. Besides, such an action would have a negative impact on employee morale and motivation and in turn, affect the productivity of the organization. Briefly discuss how the management of ABC can smoothen the VRS process, thereby achieving the desired results. Cl as s 36. Rakesh Sharma is the newly-appointed HR manager at Steel World, a large organization that manufactures a variety of steel products for both domestic and industrial purposes. After studying the various processes in the organization, Sharma realized that Steel World lacked an efficient human resource planning system, because of which the company periodically faced problems of either excess manpower or inadequate human resources. He, therefore, proposed to conduct a manpower planning exercise to utilize the human resources optimally, and help the organization face any changes that might occur in the external environment. How should Sharma go about conducting the HRP exercise? State the various factors that he needs to consider in the process. se O nl y 37. Softel Technologies, like most growing organizations in the IT industry, faced a common problem. The increasing attrition rate brought its revenues to an all-time low during the last quarter. A probe into the issue revealed that most of the employees who left the organization were women, people close to the age of retirement, or those in specialized job categories like software architects. From the exit interviews of the employees who left, the management realized that employees were dissatisfied with the career growth opportunities and flexibility offered by the firm. They felt that the management made no effort to help them meet their career objectives. This gradually led to abysmal levels of employee morale and motivation. Discuss the career planning problems faced by the employees and employers of companies like Softel Technologies. Fo rI BS U 38. Sputnik Enterprises had advertised in a leading national daily for an able and qualified production manager for its Nagpur branch. In response to the advertisement, the HR department received a number of applications. After a preliminary analysis of the applications, it short listed around sixty applicants, who had to be further tested for their managerial and decision-making abilities. Suggest appropriate selection methodologies that Sputnik can implement to decide on the most suitable candidate for a middle-level managerial position of production manager. 39. Fashion Today, a growing cosmetic company, plans to recruit around twenty people as senior marketing executives to take care of its operations in eastern India. The company, which is quite strong in the southern and western parts of the country, intends to expand its market to this part of the country. In order to choose the best candidates for this challenging job, the HR manager at Fashion Today proposes to use assessment centers. Discuss the possible advantages that Fashion Today may derive from using assessment centers to select the right candidates as senior marketing executives. Also, bring out the probable disadvantages of assessment centers. 40. Recently, an FMCG major in the country was rewarded with a substantial increase in employee productivity after encouraging its employees to attend a course on the art of living. The employees said that they were now aware of 146
  • 145. Part C 0 various techniques to cope with work-related stress. Another software firm of repute experienced an enhanced employee motivation and commitment after introducing yoga and meditation classes for its employees who were affected by extreme stress at the workplace. Many companies are trying out a variety of novel methods to help their employees cope with stress at the workplace. Discuss the importance of stress management in providing employees with a good quality of work life. Also, suggest a few ways in which organizations are attempting to help their employees cope with occupational stress. of 20 1 41. Navjith Gupta is given the task of evaluating the quality of work life at Chrysalis, a growing advertising agency in the city. Suggest a few factors that would help Gupta to assess the quality of work life at the agency. Cl as s 42. Celestial Technologies, a leading IT firm in the country, proposes to set up centers of operation in two IT hubs abroad. This proposed move by the management was appreciated by most of the employees in the firm. The HR department, however, was concerned about issues relating to cultural adaptation by employees of Indian origin, who might be transferred to these new centers. It is quite possible that the culture in these countries would differ significantly from the Indian culture. In an attempt to minimize the problems that might be faced by its people, the HR manager proposes to draft an expatriation policy. Discuss the various factors that the HR manager of Celestial Technologies must consider while drafting the expatriation policy. se O nl y 43. Standard Leathers, an established manufacturer of leather goods in the country, wanted to expand its operating base, and increase its revenues and profits by setting up manufacturing units in some neighboring countries. When the proposal was put forth during a meeting of the board members, a few of them raised an objection to it. The objection was based on the inherent apprehension among the members that since they would be operating in an environment that is alien to them, the possibility of success could not be predetermined. The HR manager however proposed that a detailed study to identify the cultural differences and requirements for adaptation would be conducted, and the details of the success potential of the proposal would be presented at the next meeting. The HR department then began a rigorous study of all the aspects of the business environment in those nations. Briefly describe the various factors that could influence the success of this proposal of Standard Leathers. Fo rI BS U 44. It was a common observation at Newlife Insurance that the productivity of newcomers to the organization was quite low and that it took them a long time to adapt to the organizational culture. When the management probed into the matter, it found that it failed to give the incumbents a formal and effective orientation program that is essential to familiarize them with the procedures and processes of the company. Because of this, the incumbents took substantial time to adapt to the organizational culture. With reference to Newlife Insurance, briefly describe the probable benefits that an organization would derive by conducting a formal and effective orientation program for its newcomers. 45. Rapid developments in the business environment during the later parts of the 20th century have necessitated a change in the HR practices of organizations. Organizations today believe that it is human resources that will give them a competitive edge over their competitors. Several factors have been responsible for this change in organizational perspective. Discuss the various factors that have been responsible for the changing role of human resource management. 46. Perfect Communications is an established firm in the telecom industry, and is known for its effective HR practices and policies. For instance, its socialization process is said to be very effective in familiarizing incumbents with its culture, which, in turn, helps them to adapt to the organizational culture. The HR manager 147
  • 146. Introduction to Human Resource Management 0 himself welcomes every newcomer, and introduces the organizational members to the incumbent. The new member then goes through a variety of training sessions on soft skills, technical abilities, the various activities he might undertake on joining, etc. He is then taken to the place of work and made to observe the processes and procedures. He is also expected to assist the people there. At the end of the process, he is given a complimentary lunch at a good hotel. Is Perfect Communications justified in conducting such an elaborate process for socialization? What will be the impact of this process on its employees? of 20 1 47. ABC Ltd., is a medium-sized local company manufacturing products made of steel. XYZ International Ltd., is an established, large-scale multinational organization that is also into manufacturing of steel products. Briefly delineate the basic differences in the HR practices that will be followed in both the organizations. Cl as s 48. Peoples Bank, a growing private sector bank has just recruited 15 new employees as senior officers to fill vacancies across the country. On the first day at the bank, the new recruits had an informal talk among themselves. All of them had different opinions about the bank and their role in the organization. A lot of ambiguity and uncertainty prevailed among them. They were apprehensive about their acceptance in the organization, the functions they have to perform, their peers, superiors and other co-workers. Discuss how Peoples Bank can reduce the apprehensions among its employees by means of an effective process of socialization. O nl y 49. After an hour-long discussion with the managing director of Digital Solutions, the HR manager decided that Digital would send skilled employees from its home country to its newly set-up operation center in a neighboring country. The HR manager then listed the manpower requirements at the foreign location and posted an internal advertisement calling for qualified and interested candidates. Once he received all the applications for the various openings, he arranged for a selection interview to shortlist the candidates who were to be posted there for varying time periods. Discuss the criteria, on which, the HR manager of Digital can make an effective selection of expatriates to manage the operations of the company overseas. Fo rI BS U se 50. Vishnu Group of Industries is a refrigerator manufacturing and marketing company. In the recent past, the performance of its sales personnel was found to be going down. An analysis revealed that the sales personnel were not happy with their performance appraisal. A survey was conducted, which revealed that the appraisal of the employees did not take into consideration the slump period and the salesmen were expected to maintain the same standards throughout. What do you think would have gone wrong and how can the management win back its employees’ confidence and commitment? 51. Consider the following example: The HR manager of an organization that has five employees: Abhay, Bakshi, Chandran, David and Ramana wanted to appraise the performance of the employees. He compared Abhay’s performance with that of Bakshi on the basis of their present value and contribution to the organization. If the manager felt that Abhay's performance was more valuable than Bakshi's, he put a tally against Abhay's name. Abhay's performance was then compared with each of the other employees. The process was repeated for each employee. What type of performance appraisal does the above example demonstrate? 52. In conducting a performance appraisal, the production manager of a firm gave high ratings to all the employees of his section, irrespective of their performance. The General Manager of the firm did not like the way in which the employees were being appraised because he himself could distinguish between the performers and the non-performers, and he could also see that the non-performers 148
  • 147. Part C had got the same ratings as the performers. What is the pitfall that is evident in the performance appraisal by the production manager and how can it be avoided? Is it an ethically acceptable appraisal? 0 53. Vijay Acharya joined an IT firm as HR manager. He had five years of experience in a public sector enterprise prior to this assignment. The general manager assigned Vijay the task of conducting a performance appraisal in the organization. Will there be any difference in the process of performance appraisal in an IT and a public sector firm? What should Vijay’s approach be? of 20 1 54. Performance appraisal has traditionally been the job of the supervisor. But most of the present day companies are implementing performance appraisal that involves the appraisee’s supervisors, peers, customers, subordinates and the employee himself. What is the reason for adopting this kind of performance appraisal system and what is the contribution of different appraisers to the process of performance appraisal? 55. The management of a firm wanted to implement the method of ‘Management By Objectives’ (MBO) for performance appraisal in the firm. Will it be advantageous for the firm to adopt this method and if so, what are the benefits of this method? Cl as s 56. An organization was operating under differing production schedules. The HR manager found it difficult to conduct training sessions for all the employees at the same time. He suggested the implementation of computer based training (CBT) which can be effective for the employees working under differing production schedules. What steps should the HR manager take to make e-learning effective? nl y 57. An IT firm recruited fresh graduates from the campus. The Chief HR Manager assigned the task of training these employees to the Assistant Manager HR, Vipul Shah. What are the various areas in which these new recruits should be trained? se O 58. HR manager Vandana Sharma was given the task of analyzing the importance of training in the firm she was working for. Based on the analysis, she was asked to suggest a training policy and design the training strategy of the firm. The general manager informed her of the finances that the organization had for its training activities. What steps should Vandana take to make training effective and cost efficient in the organization? U 59. Praveen is a new recruit in a manufacturing firm. His job entails operating and using expensive equipment. Therefore, he needs to first make himself comfortable with the various machines and their working. What is the method that the organization has to adopt to train him? Fo rI BS 60. Companies the world over are realizing the importance of learning for staying ahead in the competitive business environment. Motorola is one such company. There are also Indian firms like Satyam and Infosys that emphasize employee learning and development. What is the importance of learning in organizations and what are the various principles of learning that every organization should emphasize to make training more effective? 61. The marketing head of a major FMCG company wanted to evaluate the performance of the employees of his department. He planned to use the Behaviorally Anchored Rating Scale (BARS) method for this purpose. What steps should the manager take in the process of implementing BARS and appraising the employees? 62. Ashrith Kumar was transferred from a small branch of a nationalized bank to its headquarters. The job involved greater responsibility and required more knowledge as the headquarters of the bank was computerized. What type of training would be suitable for Ashrith? 149
  • 148. Introduction to Human Resource Management 63. A major conglomerate in India identified some employees internally, who had the potential and capability of playing key roles in its business functions in the future. These employees were to attend management development programs organized by the management. What is the process to be followed in conducting management development programs and what are the benefits of these programs? of 20 1 0 64. Vision Biomedical Systems, one of the leading biotech firms in India, conducted management development programs for its employees through coaching. The new General Manager however believed that coaching would not be beneficial for the development of the employees, as the trainee cannot develop beyond the abilities of the coach. In a dynamic business environment, he felt that there was a need for other methods of development. Was the general manager right in stating so? What are the other methods of on–the-job development that the firm can adopt? 65. The training department's role does not end with conducting a training program. Training is a continuous process. Every training program has to be continuously evaluated to check if it has achieved its objectives and whether it can be used in the future. What steps should the HR staff take to evaluate the effectiveness of a training program? nl y Cl as s 66. Vintage Industries is a leading player in the textile industry. It is well known for its exclusive range of textiles. The company plans to enter the readymade segment and cater to the various segments (children, teenagers, adults). It plans to recruit new employees for this purpose. The textile industry is also undergoing major changes and with increasing competition, the CEO, Pradeep Sharma, feels that there is a need to satisfy the employees and pay them according to the industry standards. The HR manager has been called in to design the compensation management system in the organization. What process of job evaluation should the HR manager use? O 67. A manufacturing firm wanted to evaluate the jobs of the line managers at its various branches. The chief HR manager was asked to choose a method to evaluate the jobs of the managers. What quantitative method would be suitable for evaluating the jobs since all of them are of the same cadre? Fo rI BS U se 68. 'Pioneer Industries', a conglomerate that has major operations in textiles and petrochemicals, also started Pioneer Infotech. In its textile and petrochemical business, the company used the traditional compensation management system based on time and piece wage systems. It implemented the same system at the Infotech unit. A survey conducted found that employees in Pioneer Infotech were not satisfied with the pay system. The head of the Infotech unit, Abhinav Thappar suggested that the CEO implement the variable pay system. What are the benefits of implementing such a system of compensation? 69. A firm manufacturing pens decided to calculate the wage payment of its employees on the basis of their output or productivity. What is the wage plan being implemented by the firm? What are the advantages and disadvantages of implementing such a system of wage plan? 70. Venture Biotech, a 20 year old company, is a leading player in the field of biotechnology products. Due to the increasing competition, the company planned to change its organizational structure and become more flexible to empower its employees. In this process, the layers of hierarchy within the firm were reduced. What is the kind of compensation system that would be suitable for the firm? 71. Executive compensation plans have off late become the center of controversy owing to the large pay cheques given to the CEOs. To avoid such a situation, organizations should design an effective and efficient executive compensation plan. What are the steps to be taken to design such a compensation plan? 150
  • 149. Part C 72. Motivating the senior and middle level managers has become a difficult task at Vision Tech, a leading software company. The CEO plans to introduce Employee Stock Option Plans (ESOP's) to motivate the employees. But the Chief HR Manager is of the opinion that ESOPs have lost their charm. Is the HR manager right? of 20 1 0 73. The pay of the sales personnel at Hirani Laboratories was quite high as compared to the industry standards. Though the pay initially attracted the employees to the organization, they did not stick on for more than a year or two. A survey was carried out in which the reasons for employee turnover were identified. The results of the survey showed that the employees were not satisfied with the amount of freedom and responsibility given to them at work. The HR manager felt that the company lacked effective non-monetary incentives. Are nonmonetary incentives so important and if so, what are the various non-monetary incentives that firms can offer to satisfy their employees? Cl as s 74. An HR Manager was given the task of designing and implementing an incentive program that would satisfy the employees of the organization. The incentive program was not well-received by the employees and they were visibly unhappy. What steps should the manager take to design and implement an effective incentive plan? nl y 75. Vibha Ceramics is a 25 year- old company that has created a niche for itself in the ceramics industry. The company has hired new recruits in its tiles division. The average age of the new recruits is around 35 years and retaining these employees is a major task for the firm. What kind of benefits schemes would be suitable to retain the employees? O 76. The CEO of an IT firm wanted his employees to report any malpractices that they came across in the organization, to the management, without having the fear of being reprimanded. How do you think the management can encourage its employees to put forward their complaints or grievances in an open and confident manner? Explain giving examples of Indian firms which have successfully implemented such systems. Fo rI BS U se 77. If employee grievances are not handled at the right time, they can affect the overall productivity of an organization. A manufacturing company wanted to implement a grievance redressal procedure. It planned to redesign its grievance redressal procedure in consultation with the workers’ union. What are the various steps that have to be followed by the firm to make the grievance redressal procedure more effective? 78. The trade unions at Concorde Steels were not satisfied with the compensation that the workers received in case of any injury at the work place. They put their grievances across to the management, but did not get a satisfactory response. The management felt that it paid the employees an adequate compensation. The result was a major industrial conflict which hampered the working of the organization. What steps should be taken by the management to tackle this situation and bring back normalcy? 79. The manager of a pharmaceutical firm observed that Dinesh Kumar, a hard working and committed employee had not been performing well for sometime. An analysis revealed that the changing policies of the firm and additional responsibilities given to him have resulted in pressurizing Dinesh and he has not been able to perform his best. What steps should the organization take to relieve employees of stress at the workplace? 80. Gaurav has been working with a software firm for the past 10 years. Recently he noticed that he had started developing numbness in his hands and had back 151
  • 150. Introduction to Human Resource Management problems when working continuously on a computer. When consulted, the doctor suggested that the ergonomics of his workplace might be bad and that he had to first get to know about the importance of good ergonomics. What are the consequences of poor ergonomics at the workplace? What steps should corporates take to protect employees? of 20 1 0 81. Venkat is an employee at a cement manufacturing firm. His carelessness at work is a threat not only for himself but also for other employees working in the unit. He arrives at work in an inebriated condition almost every day. The fact that he has to operate machinery which involves high risk and complexity adds to every colleague’s tension. What steps should the management take to tackle such employees who not only cause harm to themselves but also to other employees at work and the workplace as a whole? 82. Why is it necessary for organizations to have employee-wellness programs? How does an organization, benefit by implementing such programs? Discuss using examples of some wellness programs. Cl as s 83. Sriram, a technician at a manufacturing unit, has been exhibiting undesirable behavior at the workplace, like consuming alcohol, indulging in conflicts and always being late for work. Inspite of the supervisor giving him several warnings, he did not change his behavior, as he had the support of the unions. The supervisor reported the matter to the manager, who suggested that he use the principles of positive discipline. Will this disciplinary procedure change Sriram’s behavior? nl y 84. A study conducted by the Workplace Research Institute found that the annual cost to American businesses because of workplace violence exceeds $36 bn. The costs of harassment, threats and intimidation are more. Though in India such cases mostly go unnoticed, it is high time that organizations developed a prevention program. What are the steps required to develop a workplace violence/harassment prevention program? U se O 85. The disciplinary procedure at DS Metals demotivated the employees. Whenever any disciplinary action was taken against an erring employee, it made the other employees feel threatened and disturbed. The disciplinary process adopted by the management not only resulted in undue fear among the employees, but also reduced their productivity considerably. Is the disciplinary procedure being implemented by the firm right and if not, what changes do you think have to be made? Fo rI BS 86. Shreya, a chartered accountant, was a new recruit in a consultancy firm. She had a lot of expectations from her work, which did not come true because of the difference in her personal and organizational goals. She even failed to communicate it to the management. As a result, she experienced frustration and demotivation. This frustration led to acts of misconduct like irregular attendance, tardiness at work etc. Where did the organization go wrong in implementing a disciplinary procedure? What do you think the management can do to prevent such situations? 87. The Trade unions have seen a declining membership not only in India, but across many countries worldwide. What are the reasons for this declining membership in India? What are the changes that are taking place in the trade union movement in India? 88. The opening up of the Indian markets has given rise to strong opposition from the trade unions. What are the reasons for their opposition? How can they be convinced that they can also reap the advantages of opening the doors to foreign players and markets? 152
  • 151. Part C 89. The management and the union of Vilas Petrochemicals were at loggerheads with regard to the annual bonus that was to be paid to the workers. The workers felt that the bonus should be increased owing to the increase in profits that year. The management on the other hand felt that the surplus should be diverted to a new project for bringing in the latest technology. There was a deadlock and the issue was not getting resolved. How can the process of collective bargaining be useful in solving such a problem? What are the different steps in collective bargaining? Cl as s of 20 1 0 90. The management of Evergreen Drugs and Pharmaceuticals framed the objectives and strategies for the financial year without taking into consideration the views and opinions of the workers. Targets were determined by the management and imposed on the workers. The year-end results did not match the targets of the management. On analysis, it was found that the workers did not have the basic facilities required to accomplish their tasks. The workers also wanted the management to realize that it could not take decisions independently and implement them, without due consideration being given to workers and their issues. They deliberately reduced their productivity to convey the message. The personnel manager realized that the organization was not proceeding in the right direction and asked the CEO to consider framing strategies in consultation with the workers. Was the personnel manager’s stand correct? Justify. 91. The management of a steel manufacturing unit, was willing to allow employees to participate in decision-making, However, the move failed to evoke a good response from the workers. Most of the workers did not actively participate in the process. What are the reasons for this in a country like India, where workers participation is minimum? O nl y 92. With industrial disputes becoming a common practice at DSR Mills, the personnel manager was a worried man. Despite providing various amenities for the workers and their families the employees had some grievance or the other. But the workers felt that the management did not understand their grievances. The manager decided that understanding and resolving the workers’ grievances before they assumed the complex shape of industrial disputes, would be better than handling strikes and lock-outs. Suggest various grievance redressal machineries that the manager could adopt. Fo rI BS U se 93. The management of Victor Automobiles faced stiff opposition from its trade unions while implementing the concept of quality circles in the organization. The trade unions feared that with the introduction of quality circles, they would lose their power to negotiate and that their importance would be reduced. Were they right in thinking so? How can the management change their view on quality circles? 94. The management of Neelambara Plastics & Synthetics has opted for the Joint Management Council scheme of worker’s participation in the organization. How can this be implemented? How do you think this scheme will help in improving organizational performance? 95. Preeti Sharma recently joined the design team of Perfect Motors. Her initial experience showed that the top management showed no interest at all in the problems being faced by the design engineers but at the same time, insisted on high productivity standards. Her earlier employer had implemented quality circles to resolve work place problems and improve productivity. She therefore inspired her colleagues at Perfect Motors to form quality circles so that the problems could be resolved and productivity improved. Will quality circles serve the purpose? What are the various steps in the development and working of a quality circle? 96. The cafeteria benefit plan is considered to be a suitable method for rewarding employees as it helps employees to choose the benefits depending on individual needs. Discuss the advantages and disadvantages of such a benefit plan that offers such flexibility to employees. 153
  • 152. Introduction to Human Resource Management 97. The employees of Sujay Textiles were not happy with the way the annual performance appraisal was being conducted in the firm. They felt that the management was taking a biased decision in implementing the system of appraisal. They felt that the management was being neither fair nor ethical in implementing an effective appraisal system. What steps should the management take in implementing an effective appraisal system? of 20 1 0 98. The quality circle team at Priya Electricals wanted to improve the customer focus and quality of their products. For this, they needed to identify, analyze and resolve various work-related issues. Ravi Kumar, the marketing manager, who was a part of the quality circle, suggested the use of brainstorming sessions. What are the various steps in brainstorming that can make the program successful? Cl as s 99. The manager of a Hyderabad-based bank was not satisfied with the appraisal system being implemented in the organization. He felt that the traditional system of appraisal failed to link individual goals and objectives to the organizational objectives. He suggested that the appraisal system should have an organizational perspective and measure an individual’s contribution to the organizational goals and objectives. What is the performance appraisal system that would be suitable for the bank? Fo rI BS U se O nl y 100. Pradeep was a bright and hard working candidate from a top management institute. Immediately after his graduation, he was recruited by a leading oil producing company. His performance had been excellent but suddenly, Pradeep’s immediate manager realized that Pradeep’s performance was slowing declining. The manager felt that though Pradeep had no problems at office, the problems in his personal life were hampering his work progress. He decided that it was important to guide Pradeep through this crisis. Did the manager do the right thing by interfering in Pradeep’s personal problems? Is it ethical to do so? 154
  • 153. Cl as s of 20 1 0 Part C: Applied Theory Answers Fo rI BS U se O nl y Each question can be answered in a variety of ways. Students should be able to come up with reasoned answers that reflect their knowledge of theoretical concepts and the current business environment.
  • 154. Part C: Applied Theory (Answers) Answer 1 of 20 1 0 The classical theory (Scientific theory of management) defined an employee as the ‘economic man,’ who would be motivated only by financial gains and monetary incentives. It also professed that there is one best way of doing a job and every one performing the job has to do it that way for best results. The human relations approach on the other hand, focused on informal processes, individual and group behavior, establishing harmonious relations among different groups, satisfying employee needs and providing a supportive leadership. The human relations approach is based on the Hawthorne studies conducted during the 1930s and 1940s, by Elton Mayo and his colleagues. The results of these studies suggested that employee productivity was affected not only by the job design and the economic rewards but also by certain social and psychological factors. Cl as s The study also found that work conditions catering to interpersonal relationships and management support greatly influenced the feelings, emotions and sentiments of employees. These soft rewards in turn affected productivity. It also recommended that treating employees with respect would improve employee satisfaction and help in achieving higher productivity. The salient features of this approach could be listed as follows: The approach was based on the assumption that “a happy worker is a hard worker.” This assumption simplified the concept of human behavior in the organizational context and helped managers influence employee behavior. • The human relations approach challenged the scientific theory of management by stating that employees are affected by social forces as well, and not by monetary benefits alone. Employees gain a sense of identity and belonging to the organization from the various interactions they have with the members of the organization. • The human relations approach asserted that improved interpersonal relations between supervisors and subordinates at the work place increases productivity. It suggested that supervisors act like friends and counselors to workers rather than controllers or dictators. U se O nl y • According to the human relations approach, managers must provide a reasonable degree of autonomy to their subordinates and must avoid interfering in the routine functions of their job. BS • Fo rI • This approach emphasizes the necessity of obtaining feedback from employees in matters regarding the work, supervisors, peers, etc. The feedback helps organizations to identify the various hindrances to effective performance of employees. Appropriate action by the management based on this feedback would help and facilitate employees to perform better at their job. • Active employee participation is one of the important features of this approach. Management is expected to seek suggestions from employees before making any crucial decision. According to this approach, involvement of employees in the decision-making process is important to arrive at effective solutions to those problems and also ensure employee compliance. Therefore, the human relations approach shifted the focus from job design and economic rewards to social and psychological factors that influence employee behavior in the organizational contexts.
  • 155. Introduction to Human Resource Management Answer 2 of 20 1 0 Various recent developments in the business environment have resulted in a complete change in the outlook of organizations towards managing their human resources. The underlying factor for this change in outlook is the realization by organizations that managing human resources is also a line function, and not just a staff function. Therefore, managements feel the need to have capable line managers managing the human resources. Besides, the traditional assumptions that human resources are easily available, replaceable and are less expensive when compared to other critical sources that create a competitive advantage for its people, are being challenged in modern organizations. Organizations have come to believe that it is the human talent that gives them a competitive advantage over the rest rather than the other sources (technology, financial resources, etc.) which can be easily accessed or copied. In other words, managements no longer believe that it is easy to attract, hire and retain talented people. Hence they leave no stone unturned to retain their human capital and make the best out of the association. Cl as s Apart from these, there are other factors that have led to a change in the way managements in organizations deal with human resources. They are as follows: nl y Globalization of trade and economy in most nations has resulted in reducing, and in some countries, removing the barriers to trade across the globe. The move by these nations towards creating a global economy has resulted in a closer integration of the local markets and financial assets with the international economy. This has created numerous economic opportunities for a number of companies, thus making managements shift their focus towards managing a global workforce, in contrast to a previously ethnic workforce. O Increased emphasis on the knowledge economy has resulted in greater focus on the quality of workforce. Organizations hire candidates who are experts in their respective domains, and who are adaptive to changes and are willing to learn and enhance their skills constantly. U se Today’s knowledge worker is very knowledgeable and is in quest of opportunities to prove his abilities. He possesses an inherent urge to upgrade his skills constantly to meet the changing demands of the business environment. He is creative, innovative and risk-taking. Organizations have to provide the right inputs and opportunities to stimulate and motivate him. Fo rI BS Technology has been changing at a rapid pace, and every employee is trying to catch up with it. Organizations conduct regular training and development programs to upgrade employee skills so that they easily adapt to the technological changes. Employees in modern organizations have greater expectations from their work life when compared to those of yesteryears. They seek autonomy in their jobs and are motivated when empowered to do their job independently without any interference from their superiors. Employees no longer desire rewards and incentives in monetary terms alone. Organizations also develop effective rewards and recognition programs to motivate employees so as to unleash their creativity. These programs help organizations as well, by helping them retain their talented resources. These are some of the factors that have induced a change in the outlook of organizations towards managing the workforce. Not only is there a change in the idea of leadership and management, but organizational structures have also been radically modified. These measures are being undertaken to ensure that organizations sustain their competitive advantage in this rapidly changing business environment. 158
  • 156. Part C Answer 3 The dynamic nature of the current business environment requires HR professionals to play a multi-faceted role in organizations. The general functions of HR managers can be broadly classified as follows: Service provider – Traditional HR managers provide information on market statistics of personnel availability, pay rates etc., to the management. They help in efficient management of employees with their strong knowledge of labor legislation. • Facilitator – HR specialists act as facilitators to other line managers by supporting various activities like training and development, performance appraisal, etc. The role of the HR executive is to ensure effective implementation of training programs and appraisal activities. • Consultant – HR professionals act as consultants to managers by providing them appropriate advice on problems relating to motivation of employees, training and development, job misfit, grievances, disputes etc., to ensure smooth functioning of the organization. • Auditor – It is the responsibility of the HR professional to ensure effective performance of all employees within the organization. Cl as s of 20 1 0 • Fo rI BS U se O nl y These have been the common functions of a conventional HR professional. However the changing scenario in the business environment has placed several other demands on HR personnel. Today’s HR professional acts not merely as a facilitator to the line managers but plays a vital role in making strategic decisions in the organization. Thus, the role of the HR manager has got transformed from that of a facilitator to a strategic decision maker. It has now become important to involve the HR department in developing and implementing strategic plans for organizations as human resources has become one of the key resources. It plays an important role in developing strategies which aim at not only attracting and motivating people but also retaining them. Managing people and their increasing expectations in organizations has become the toughest challenge to the HR professional in today’s dynamic market. The HR manager should constantly strive to create stimulating opportunities for employees to prove and hone their abilities, skills, talents, innovativeness etc., in order to retain them in the organization. It is thus the responsibility of the HR manager to provide employees with an ambience that promotes and encourages creativity and innovation among them. The HR manager is expected to put in place, systems that effectively utilize employee potential by creating a challenging work atmosphere and devising an effective rewards and recognition system. The above list of functions gives a broad outline of the various activities performed by the HR executives. However, it may be noted that in a dynamic business situation, the boundaries of any role cannot be defined clearly or precisely. They keep changing with the changing business environment. Answer 4 e-Solutions was faced with the problem faced by many IT firms in India as well as abroad during the recession last year and the year before. Many firms faced the problem of over-staffing when forced to operate in a weak market with very little business. Though the effects of unexpected changes in the market cannot be undermined, the impact of poor human resource planning in organizations cannot be ignored either. Manpower planning or Human Resource Planning (HRP) is the process of ensuring the right number of qualified people, in the right jobs at the right time to deliver organizational results in an effective and efficient manner. HRP plays an important 159
  • 157. Introduction to Human Resource Management role in preparing organizations to meet its manpower demands effectively, in the long run. Unfortunately, e-Solutions failed in planning for its future manpower needs. This software company failed to forecast its manpower needs based on the changes in the industry. e-Solutions could have avoided this loss through effective HRP. An effective HRP involves the following stages of implementation: Analyzing the impact of the organizational strategy and objectives on different units of the organization in terms of the human resource requirements. The effects of the external environment in terms of changing business needs and technological changes also need to be taken into consideration while assessing the human resource requirements. • Forecasting the quantity and quality of human resources required by different departments/divisions. Based on the strategic plans of the organization in terms of technological changes, investments in new projects, diversification into new avenues, plan for expansion etc., the human resource department must forecast the manpower requirements for the organization. This forecast must include the quantity, quality, skills, abilities etc., of employees who are required to meet its strategic plans effectively. Involvement of line managers in determining the human resource needs of their respective departments is essential at this stage. • Matching the current human resources supply in the organization with the numbers required in the future. Based on the current availability of human resources and the future requirements of the organization, organizations need to either retrench people or plan for a recruitment drive to hire talented workforce. • Developing an action plan to meet the future requirements in terms of addition or separation, in a planned and phased manner. HRP is an ongoing process that has to be implemented and reviewed for changes at regular intervals. It is not a onetime exercise that can be completed in one go. The HR department has to keep track of internal and external changes to review the HRP from time to time. O nl y Cl as s of 20 1 0 • U Recruitment agencies hold the largest market share in the head hunting industry. The growing importance of these agencies may be attributed to the fact that organizations now want their HR departments to spend little time on routine and mundane chores. They emphasize that HR must instead concentrate on making strategic decisions for the organizations. This has resulted in the HR departments resorting to hiring the services of recruitment agencies to do all the legwork for them. Fo rI BS Answer 5 se Such an effective HRP could have saved e-Solutions, at least partially from having to face the difficult problems and consequences of large-scale layoffs and retrenchment. HRP thus plays a vital role in ensuring that the right resources are available at the right time for the unhindered growth and development of the organization. The factors in this case that support the proposal of the HR Manager to hire a recruiting agency, are as follows: Hiring recruitment agencies saves valuable time for the HR department in an organization as the agencies take care of the initial selection on the basis of personal and professional requirements specified by the organization. The management can instead concentrate on other activities that add value and bring in revenues for the organization. • 160 • Recruiting agencies have specialized knowledge in their respective domains. This helps effective screening of undesirable candidates, and selection of the right candidates.
  • 158. Part C These agencies are all the more beneficial when there exists a shortage of manpower in specific fields. Organizations may employ these agencies especially when they need to recruit people in the lower rung of the organizational structure. • Employing the services of recruiting agencies saves recruitment costs for the hiring organization as costs of advertising, preliminary screening etc., are absent. • As the organization is offered only the best applicants for the job, the entire selection process becomes more effective and efficient. 0 • of 20 1 While the above factors favor the employment of a good recruitment agency, the agency’s lack of knowledge about the organization’s culture proves to be a factor that stops the organization from employing its services. The agencies lack first-hand information and knowledge about the culture that prevails in the organization, and the kind of people who are required for the attainment of the goals and objectives in the organization. This might result in the selection of candidates who lack the cultural ‘fit’ with the organization and hence prove to be counterproductive for the hiring firm. Cl as s Therefore, it is essential that the HR department does a comprehensive study of the relevance of recruitment agencies in the context of the organizational culture, the level of the job in the organizational hierarchy (for which the agency needs to be hired), and the costs associated with hiring such agencies. Answer 6 O Attracting a talented workforce – The present business environment provides employees with a wide range of employment options to choose from. This has resulted in a shortage of talented workers who can create a competitive advantage for the organization. Therefore, attracting the right people with the right qualifications and the right attitude has become a major challenge for HR professionals. U se • nl y With the integration of traditional personnel management and strategic management in business, the role of HRM has undergone a sea change in modern organizations. A number of other reasons are also responsible for this shift in HRM’s role, like changing motivational factors of employees, organizational and leadership styles, management’s perspective of employees, scarcity of manpower, impact of technology, a gradual shift towards a knowledge economy, etc. This has posed new challenges to HR professionals in organizations in the following forms - Managing the workforce – Today’s employees are knowledge workers who are extremely innovative and highly ambitious. HR personnel must, therefore, offer adequate opportunities for unleashing their potential and capabilities if they want to retain them in the organization. They must provide them with a work environment that values talent, and nurtures their inherent capabilities. BS • Fo rI • Identifying the changing attitudes of the workforce – Transformations in the business environment due to the advent of globalization of the economy have resulted in a changed attitude of today’s workforce. Employees no longer expect lifelong employment with a single organization, nor are they loyal to their employers. Globalization has also led to a sea change in the workforce composition. Organizations today have a greater percentage of female employees in their workforce. Globalization has also increased the diversity of the workforce in organizations. On one hand, the HR professional has to minimize the counterproductive consequences of this diversity and on the other, he has the challenge of developing strategies for the organization to benefit from the synergy created by this diverse workforce. The HR professional is also faced with the challenge of catering to the varying needs of employees, an outcome of this diversity. Telecommuting, part-time jobs, job-sharing, flexible work options, etc., can be employed to meet the changes in employee needs and attitudes. 161
  • 159. Introduction to Human Resource Management Retaining a talented workforce – As discussed above, today’s knowledge workers have great work-related opportunities. It is, therefore, difficult to retain them in an organization for long. Employees prefer workplaces that offer them opportunities to expand their capabilities and experiment with innovative business ideas. They also expect organizations to have an effective reward and recognition program that values employee performance. It is the responsibility of the HR professional to create a work culture that facilitates creativity and innovation, thereby retaining a talented workforce in the organizations. • Balancing work and personal life – HR personnel have the responsibility of helping employees in the organization to balance their personal and professional lives. Modern organizations implement different strategies to enable employees strike this balance, like hiring concierge services (wherein organizations outsource the responsibility for paying the employees’ personal bills, taxes, etc.), and providing them with flexible work options. • Facilitating change – HR professionals are expected to act as change advocates whenever an organizational change for development is planned. They need to possess persuasion and risk-taking skills to facilitate the change. In fact, in recent times, they are assuming the role of not just facilitator, but change initiator too. • Acting as a strategic partner – With the increased role and importance of the human resource department in making strategic decisions for the organization, it has become inevitable that HR professionals possess a thorough knowledge of all aspects of business management, like the market, economy, technology, business, etc. Cl as s of 20 1 0 • O nl y Apart from these, HR professionals face other challenges like creating a conducive work environment and providing a good quality of work life for the employees, restructuring jobs to cater to their changing needs, planning career graphs for them and structuring promotional opportunities. Thus, today’s HR professionals are faced with a number of challenges, and play a more crucial role when compared to yesteryears. se Answer 7 Fo rI BS U It has been increasingly realized that although important, the monetary benefits offered by an organization are not the overriding factor in an employee’s commitment to the organization. Financial rewards and enhanced salaries have a limited impact on employee turnover in organizations. Today, employees demand more than a generous compensation and attractive monetary incentives. The key challenge to HR professionals in organizations is to identify what exactly motivates employees to perform better. They can do this by understanding the varying needs of employees that have an impact on their performance. They must identify what their employees are looking for while working for the organization. HR personnel of various organizations need to implement different strategies to retain a talented workforce, and gain a competitive advantage over their business rivals. Some of the most common strategies which can be implemented to retain employees are as follows: Create a sense of pride among employees – Employees like to work for organizations which are the best in the industry or which offer excellent products and services of repute. They derive a sense of pride merely by being associated with such companies. Therefore, managements must strive to enhance the quality of their products and services, which would, in turn, help them attract and retain a quality workforce. 2. 162 1. Create a sense of importance – Organizations must offer meaningful job responsibilities to employees. They should acknowledge, and value the
  • 160. Part C importance of the contribution of each individual member towards the achievement of organizational goals and objectives. The most important factor here is communication of the same to the respective employees. They must also be provided with necessary support to fulfill their individual job responsibilities. Appreciate – In most cases, a simple but immediate appreciation of a good performance works more wonders than a fat pay check. A simple statement like, “thanks for your great contribution towards the organization’s profit” has a better impact on employee behavior than a delayed holiday at an inappropriate time. The HR professional must be on the lookout for outstanding performers within the organization and appreciate the extra effort taken by them to achieve success. 4. Create learning and growth opportunities – The HR professional must design each job profile in a way that provides ample opportunity for the jobholder to learn and constantly upgrade his skills. HR may also introduce several training and development programs to enable the employees keep abreast of new developments in the external business environment. Employees prefer to work in organizations that offer them responsible positions with opportunities to keep them growing. Therefore, the HR personnel must strive to offer adequate growth opportunities to its employees in order to retain them in the organization. 5. Encourage employee participation – Employees are motivated to work for organizations which offer them a role in the decision-making processes. Involvement of employees while making crucial organizational decisions encourages them and creates a sense of belonging among them, which motivates them to stay loyal to the organization. This also has the additional benefit of ensuring employee compliance with organizational decisions. Employee feedback on various organizational issues is not only an effective means of problemsolving, but enhances employee participation as well. nl y Cl as s of 20 1 0 3. O HR professionals will benefit by understanding what works and what does not, while implementing any of the above specified strategies for retaining human talent in organizations. Answer 8 U se Due to shortage of skilled manpower and globalization of the business economy, organizations now have to look beyond geographical boundaries for a talented workforce. This has enhanced the importance of e-recruitment. However, several other factors have also contributed towards its popularity. These are discussed below: e-recruitment is a sound value proposition, as it not only reduces the time involved in recruitment but also drastically cuts down the cost of the entire process. Use of the internet for placing advertisements of job vacancies is much cheaper than use of the print media. Besides, the time required for the entire process is relatively less when compared to that needed for the traditional sources of recruitment. Fo rI BS • • The increased use of the internet by prospective employees has also contributed to the enhanced significance of e-recruitment. Easy technology and its awareness has increased internet-usage among today’s youth. Employers now find more competent candidates through the internet than from any other source. • Most of the placement agencies and headhunters use the internet more than any other medium to seek prospective employees for their clients. This has further increased the importance of e-recruitment. • Various developments in information technology have also contributed to the growing relevance and usage of e-recruitment. Some of these are online searching facility, feature of short-listing suitable candidates, sending automated 163
  • 161. Introduction to Human Resource Management acknowledgments in receipt of applications, facility to generate customized reports , controlled user access, etc. All these features reduce the work of the HR personnel substantially and the use of IT is, therefore welcomed by recruiters. e-recruitment grew significantly due to the evolution of a globalized market. Since employers seek a talented workforce, and do not want to be restricted by geographical barriers, e-recruitment becomes the obvious choice as it provides extensive reach at a low cost. • The internet provides great flexibility to users as they can access, modify, withdraw or repost job-listings anytime. This feature is not possible with the traditional sources of recruitment. of 20 1 0 • Organizations thus benefit immensely by adopting e-recruitment, which not only reduces the effort and time involved but cuts down the cost of the entire process as well. Answer 9 Cl as s As is evident, Delight implemented the concept of ‘job-rotation.’ Job rotation takes place when an employee is moved laterally into a different domain of work for a certain period. Research has shown evidence of the potential benefits of job rotation. Some of them are discussed below - Job rotation involves periodically assigning employees to alternative jobs. This has benefits for both the organization and the employees. While the employees are relieved from the boredom of a monotonous job, the organization benefits from their multifunctional knowledge. • Job rotation also has the potential to enhance the satisfaction of employees, especially the knowledge workers. This is because job rotation provides opportunities to learn and perform new activities. • Employees are moved across a variety of jobs, spread across various functions. The experience they gain by working with different departments gives them a wider knowledge of the organization and its work processes. • As employees become more generalists than specialists, the organization is not dependent on a handful of individuals in a department. This relieves the organization of reliance on an individual employee. U se O nl y • Employees are carefully shuffled across different departments and are assigned new responsibilities. This learning helps them to grow professionally and move up the ladder. Job rotation is thus an effective tool for career development. BS • Job rotation also helps managers to cope with frequent absenteeism and unexpected turnover of the workforce. Knowledgeable employees can fill in for absent workers, so that work routines are not affected. • As the job activities and the responsibilities of employees are changed at intervals, there would be fewer incidents of work-related stress among the workers. • It is an effective technique of training new and inexperienced employees. This is used as a means for educating new employees during their induction. • Fo rI • Job rotation helps in developing management generalists, by grooming them for responsibilities at higher organizational levels, as it exposes them to different operations. Job rotation is, therefore, used in organizations as a learning mechanism and an effective career development tool. 164
  • 162. Part C Answer 10 Recruiting people from within the organization for vacancies existing at the top management level in the bank has its advantages and disadvantages. If the bank opts for the internal sources of recruitment, it will benefit from the experience of its existing employees. Apart from this, there are many advantages of an internal search for executives, some of which are given below: It helps in maintaining good employee relations. • It boosts the morale of the employees as they feel important and valued. • An internal search helps groom employees to handle higher responsibilities, thereby creating an atmosphere of constant learning within the organization. • It encourages competent and ambitious individuals as their performance is rewarded. • Complete information about the individual’s performance is available, and his credentials are established. • The cost of recruitment is minimal. • Time and resources are saved on the selection, induction and training processes. • The return on investment on the workforce is increased for the organization. • If carefully planned and well-executed, promoting from within can also act as a training and development device for middle and top level management. Cl as s of 20 1 0 • O nl y The disadvantages associated with the process of internal search are that the bank may miss out on the talent that is available in the market. It is also possible that the talent pool within the organization might stagnate without fresh inflows from outside. It is important for any business to have a fresh flow of ideas and opinions from time to time. New employees recruited from outside would be in a position to rejuvenate the organization by providing fresh perspectives, and ideas on systems and processes. The decision to recruit people through external sources also depends on the financial health of the bank. Fo rI BS Answer 11 U se Considering the advantages and disadvantages of recruiting people from within the organization, the bank was right to opt for the rich talent within the organization, while at the same time encouraging its existing employees to be creative and innovative in solving organizational problems. Job enrichment is the most popular technique for enhancing employee motivation and organizational output. Job enrichment is done by redesigning jobs in a way that increases their scope and depth. In other words, job enrichment involves providing employees with greater responsibility and autonomy in their job. Supervision is reduced and self-evaluation is encouraged by this process, thereby motivating employees to perform better. ABC Enterprises may implement the process of job enrichment in any of the following ways: • Incorporating more responsibility in the job. • Providing wider scope, greater sequencing and increased pace of work. • Assigning a natural unit of work either to an employee or to a group of employees. • Minimizing controls and providing freedom of work when the employees are clearly accountable for attaining defined goals. 165
  • 163. Introduction to Human Resource Management • Allowing the employees to set their own standards or targets. • Allowing the employees to monitor their own performance. • Encouraging employees to participate in planning and decision-making. • Encouraging employees to take up new, difficult and creative tasks. • Assigning specific projects to individuals or groups to enhance their expertise. of 20 1 0 The process of job enrichment must be a well-planned strategy. It starts with making a list of changes that could enrich the job. Employee participation might be invited to identify the changes that are required to enrich the job. While enriching the job, emphasis must be on motivational factors of the job, like the responsibility attached to the job, autonomy given to the jobholder, and the sense of achievement that could be derived by the job holder. The job enrichment process also includes providing adequate training, guidance, encouragement, and help to the job holders. Effective implementation of a job-enrichment process has the benefits of improving employee morale and their motivational levels. Cl as s Answer 12 Manpower planning requires careful study and analysis of the present manpower position, the future needs of the organization, and the efforts needed to achieve the organizational objectives. Manpower planning is said to be successful if no scarcity or surplus of human resources exists at any point of time. The various aspects to be considered by Aarohan before initiating the drive for mass recruitment are discussed below: Addition of new-hires who join the organization from outside • Transfers, which might not affect the organizational balance, but would change the employee strength of different units within the organization • Employees going on long leave or coming back after long leave, i.e., maternity leave, study leave quarantine leave, etc., would be covered under this category • Promotions and demotions also have an effect on the human resource plan. The requirement at one level might match the current inventory, but if the employee at that level gets promoted, then it would have a bearing on the plan at both the present and the promoted levels U se O nl y • Separations from the organization due to retirement, resignation, disciplinary action, death or sickness have to be considered while planning • Statistical and probability tools can be used to predict the rates of separation due to various factors. Such tools are more suitable for large organizations; smaller organizations can rely on their past experience for making reasonably good assessments of expected separations • Changing demographics have an effect on the external supply of human resources. For example, the number of MBAs in the Indian job market has increased enormously over the past 7-8 years, due to the mushrooming of management institutes and colleges across the country • The political, social and legal environments also have an influence on the external supply of human resources. Migration into the community, increase in the number of unemployed people, and individuals who are employed but seek other job opportunities, represent additional sources that increase the human resources supply. Fo rI BS • Aarohan might benefit by considering the above factors before beginning to recruit people to support its diversification plans. 166
  • 164. Part C Answer 13 of 20 1 0 The observational method of job analysis is suitable to study the various activities carried out by a machine operator. This method gives firsthand information about the job being analyzed. The observational method is used when the job to be analyzed requires physical movements of the incumbent, and when the job to be performed does not consume much time. In this method, the individuals performing the job are observed and relevant points pertaining to the job are noted down. The notes might include the different tasks and activities that constitute the job and how they were performed. This also helps in identifying the knowledge and skills required for the job. Cl as s By using the observational method of job analysis, errors due to omissions or exaggerations (common when questionnaire or interview methods of job analysis are used) are eliminated, as the information obtained is direct. As the analyst gets to see the actual workplace, the environment, the tools and the equipment used, the various interactions that take place among the workers, etc., he/she would be better informed about the job that is being analyzed. This minimizes misunderstanding and subjectivity during the process of job analysis. The observational method of job analysis helps the organization during legal procedures. Job analysis can support testimony in case a legal procedure is initiated by the incumbent against the company. O nl y The observational method of job analysis also has a few disadvantages. The idea that his/her job is being observed might affect the incumbent whose job is being analyzed. This, in turn, could lead to a change in the behavior of the incumbent, thereby making the analysis distorted or ineffective. This method also proves to be ineffective in case of complicated jobs that involve repetitive or cumbersome activities. This method requires the analyst to be aware of the activities, and their significance in the job that is being analyzed and a knowledge of what are to be considered and what are to be ignored. Otherwise, the entire effort would be redundant. se Thus, the job of a machine operator can be analyzed effectively by using the observational method of job analysis. However, emphasis must also be laid on overcoming the potential disadvantages of the method. U Answer 14 Fo rI BS The critical incident technique (CIT) is based on the assumption that a compilation of all the critical acts or behaviors provides a portrayal of the job, with focus on both the action of the worker, and the context in which the behavior is observed. In other words, CIT involves collection of information on incidents or events occurring over a specific period of time with the objective of solving practical problems. CIT is applicable especially when a large job or activity is to be analyzed during its early stages. Analysis of a job by CIT helps early detection of problem areas and implementation of corrective measures. Although CIT is not applicable to analyze routine jobs or those at lower levels of the organization, it helps in analyzing middle and top management level jobs, as critical incidents can take place at these levels. This technique is also used when the management wants to rely on observations but at the same time does not wish to spend huge resources in the process of information gathering. Information in this method is gathered by using questionnaires or interviews that are to be answered by respondents, based on the critical incidents. A compilation of these incidents or events helps the analyzer to distinguish between the factors of the job that are beneficial and those which are not. Based on these factors, appropriate measures are taken to modify the factors that have a negative influence on the job. 167
  • 165. Introduction to Human Resource Management The features of CIT may be discussed as follows: The observer must essentially be someone who can interpret the behavior of the incumbent in an effective manner. In other words, the observer must be familiar with the various activities of the job that are being analyzed. • The observer or the analyzer is expected to make simple observations and conclusions about the behavior of the incumbents. • The observations made, are analyzed based on a specific statement of purpose that is already agreed upon. This is done to avoid misinterpretations of behavior. 0 • of 20 1 CIT has the advantage of being an inexpensive method that provides valuable information about a job and its various activities. Determination of corrective measures becomes easy as it accurately identifies unusual events which may be ignored by other methods of job analysis. However, CIT has the limitation of obtaining only that information which is remembered by the incumbent. This could pose a problem if crucial information regarding the job activities is omitted. Cl as s Due to the above characteristics, CIT proves to be an effective method of job analysis for the middle and top management levels. Therefore, the HR manager at RK Group is right in wanting to use this method of job analysis. However, CIT also has a couple of disadvantages. One might be that if there are no critical incidents taking place during the observation period, they could be missed out on. Another problem is that the information gathered may be skewed. Answer 15 nl y The ultimate success of any organization depends upon its human resources. It is therefore, essential that the best talent be attracted and retained in the organization. A number of factors determine the effectiveness of the recruitment policy and are discussed as follows: The number of successful placements • The number of hirings • The number of offers made • The number of applicants • The cost involved • The time taken for filling up the position U se O • Fo rI BS The number of successful placements is the most important criterion for determining the success or failure of a recruitment program. This is the bottom-line of the whole program. However, if a recruitment program has not met its objectives in terms of the number of successful placements, other factors like the number of applicants, the number of offers made, and the number of hirings should be taken into consideration to understand the stage at which any discrepancy has occurred. For example, if the number of applicants is less, then there was probably a problem in attracting jobseekers. This might reflect a problem with the advertisement issued by the company, or a problem with the company’s reputation. In case the number of applicants is high, and the offers made low, it could mean that the company failed to attract the right kind of candidates. Similarly, in case the number of successful placements is low, the problem might be that the incumbent’s expectations were not satisfied or he was misled and misinformed about the job or the company. The cost and time implications also have to be analyzed while evaluating a recruitment program. For example, if an organization has been successfully getting the required manpower and making successful placements, but at a high cost, then it may need to revamp its recruitment program. 168
  • 166. Part C Thus, by studying the recruitment policy and the degree of success of each of the above criteria that determine the effectiveness of the policy, the HR manager of Fresh Foods can determine the changes required, so as to make the recruitment policy and process, effective. Answer 16 Cl as s of 20 1 0 Advertisements are the most popular means of recruiting external talent in an organization. With a variety of media for advertising, like classified pages of local and national dailies, television, radio, the internet, and posters, this source of recruitment seems to have the widest reach. Based on the need, the cost involved, and the reach desired, different media of advertising can be used. Each medium of advertising has its own advantages and disadvantages. However, most of the established organizations have their own web-sites for advertising vacancies. This helps in reducing the time spent on filtering unsuitable applications as only those really qualified and interested in the job will apply. Print media is adopted when the organization wants to have a wide choice of candidates. Blind advertisements are used when the organization does not want to reveal its identity due to any reason. Such advertisements are also used when organizations do not want their competitors to know that a critical position in the organization is vacant, and when they want to respond to only those candidates who they think are the most eligible for the job. The kind of information that has to be furnished in an advertisement is as follows Nature of business and size of the organization • The nature of the job • Location or place of work • Tasks and responsibilities attached to the position • Reporting hierarchy and work culture • Emoluments, benefits and other facilities available • Requirements of the job in terms of qualification, knowledge, skills and experience • Last date to respond • Ways to respond – by e-mail, telephone or post U se O nl y • Fo rI BS Although these are the most important aspects and commonly revealed information, different organizations give out different information in their advertisements. Some of the above points might not be mentioned in the advertisement by some organizations. For example most of the public sector organizations have fixed pay scales for various openings and hence they reveal the salary details in the advertisement itself. But other organizations may wish to keep such information confidential. Thus, with a large flexibility of media, and the variety of benefits that advertisements offer, organizations generally use this source of recruitment to fill up vacancies. Answer 17 Organizations of late have come to realize that the success of an interview depends on how best the panel is able to facilitate the interviewee to perform to his fullest potential. They therefore, believe in conducting a pleasant and fruitful interview which broadly follows the guidelines given below 169
  • 167. Introduction to Human Resource Management The interviewer has to demonstrate a basic liking and respect for people. This makes the candidate feel comfortable and perform better. • Open ended questions, that give maximum scope to the candidate to speak, should be asked. However, probing questions can be asked when some specific information has to be obtained from the candidate. • Asking leading questions is a common mistake, which should be avoided by the interviewer. Such questions give the candidate a hint as to what answer is expected. This might lead to the selection and hiring of wrong people in the organization • The questions should not invade the privacy of the candidate; nor should they be hostile. The candidate’s right to privacy has to be respected, and his dignity, valued. Asking very private and hostile questions can put-off a worthy candidate, which would indeed be a loss to the company. • The interviewer should listen to the answers of the candidate attentively. Further questions should be based on the leads provided by the candidate through his answers. In some panel interviews, it is probable that some of the panel members start discussing among themselves, while the candidate is answering another member’s question. This shows the candidate that the panel member is not being respected, and also affects the validity of interview as a selection tool. • The interviewer should take notes and mark relevant points during the conduct of the interview. Relying on memory alone may not suffice as some important points might be missed out. These notes come in handy while evaluating the candidate at the end of the interview and can also be used as a future reference. Cl as s of 20 1 0 • nl y The closing of the interview is as important as its commencement. It should therefore be done in a smooth manner, avoiding any abrupt or awkward gestures and words. An interview which follows the above guidelines helps in selecting the right candidates for the right jobs. O Answer 18 U se Dealing with surplus manpower is a tough job for organizations, as most of the strategies to cope with this problem have serious implications on the morale and motivation of their employees. While it is possible at times, to shift excess manpower to other departments where they are required, it sometimes becomes inevitable for the organization to reduce the employee count drastically by implementing other stringent strategies. BS Organizations like Horizon Technologies could implement one of the following strategies to reduce their manpower so as to sustain themselves in this competitive business environment: Retrenchment - “Retrenchment” is the expression used to describe the termination of an employee due to his or her job becoming redundant. In this case, retrenchment can be resorted to, when Horizon either cannot offer the employee any alternative position, or any alternative position offered by it is not accepted by the employee. Since retrenchment is usually permanent, such an act poses adverse consequences to the organization in terms of reduced employee morale and a feeling of job insecurity. Horizon could however reduce the magnitude of the problem by offering assistance and support to the employee when he or she is retrenched. • Outplacement - Horizon may alternatively provide outplacement services to its surplus employees. This is a gesture of being employee-friendly, wherein organizations could search for other employment opportunities for their displaced employees, and offer them assistance in getting new jobs. This assistance might Fo rI • 170
  • 168. Part C be in terms of preparing the resumes, helping the employees prepare for interviews, etc. This helps not only the employees but also the organization by winning the goodwill of the employees even during hard times. Lay-offs – Organizations resort to layoffs when the demand for their products or services has gone down, and the supply cannot be maintained at the existing levels. This method of reducing manpower affects the morale of the employees and the commitment levels go down. Proper human resource planning can help Horizon minimize such lay-off situations. • Leave of absence without pay – One of the methods of temporary cost cutting, especially during difficult times, is ‘leave of absence without pay.’ While implementing this option, Horizon could provide its employees with the choice of either coming back after the leave period or looking for another job during the leave period. • Work sharing – Work sharing could also be another viable alternative for Horizon, by which, loyal and dedicated workers can be retained in the company even during slack periods. This is more suitable for the employees at the operational levels and lower levels of management. This option involves two workers sharing a single job and the organization has to pay the salary of just one person. This will help cut costs on excess manpower. • Reduced work hours – This is also one of the popular techniques employed by organizations to avoid retrenchment/lay-off during difficult times, and is again suitable for lower levels of management. Horizon can opt for this, if there exists a strong feeling of camaraderie among its employees. It requires workers agreeing to be paid less, and putting in fewer hours of work to avoid their colleagues being retrenched. nl y Cl as s of 20 1 0 • O Thus, Horizon Technologies can opt for the most suitable of the above alternatives as viable strategies to reduce manpower and survive during times of economic downturns. Answer 19 BS U se An application form, also referred to as an application blank, is a formal record of an individual’s appeal or intention for employment. The application form generally marks the beginning of the selection process. These forms are used to gather relevant information about the applicants to a particular job. The items in the application form and its interpretation play important roles in the identification of the right candidates for a job. While some organizations use a brief and short application form, others use a comprehensive and elaborate form. Fo rI Verma & Co. could introduce the following items in its application form that might help it gather all the relevant information about the candidate, to evaluate his/her suitability to the job: • Personal information - Personal information in an application form normally includes name of the candidate, date of birth, gender, marital status, details of his family, occupations of other family members, annual income of the family, address, etc. These details will help Verma & Co. form an idea about the socioeconomic status of the applicant and his family background. This would also help assess his/her suitability in the organization, in the job, and in the team that he would be associated with. • Educational qualifications - This includes the list of schools, colleges, and institutions attended by the job applicant, the period of study, the various courses taken and the subjects studied, the percentage of marks scored and the class or grade secured by him. This part of the application blank provides the company relevant information to assess an applicant’s academic background. 171
  • 169. Introduction to Human Resource Management Work experience – This provides Verma & Co., all the basic information about the applicant’s previous jobs. This includes the list of previous employers, the period of employment with each, tasks, activities and responsibilities of the applicant and the salaries drawn. In some cases, reasons for leaving each of the organizations are also included. This, when studied together, will help Verma & Co. understand and evaluate the candidate’s suitability to the job, his working habits, and his competencies in relation to the job. • Salary – Here, the applicant gives information on the salary drawn in his last job, including benefits. The salary structure is important because different companies have different salary structures. For example, an organization might have a low ‘basic salary’ but a high percentage of other components. Therefore, looking at the basic salary in isolation might not give Verma & Co., a complete picture of the candidate’s total emoluments. In some cases, the applicant is also asked for the expected salary. This helps the company to have an understanding of the candidate’s expectations to make its own assessment. • Personality Items – This requires the applicant to provide information on his strengths and weaknesses, his professional goals - both long term and short term and his hobbies and interests. This ‘extra’ information will help Verma & Co. understand the personality of the applicant, which would later help in motivating him and improving his performance on the job. • Reference checks – The names and addresses of the individuals who can be contacted for a reference check of the applicant are included in this section. This is one of the ways Verma & Co. can check the credibility of the applicant and get information on his past record. nl y Cl as s of 20 1 0 • se O Verma & Co. can thus include the above items in its application forms which will help it gather information about, and analyze the suitability of a prospective candidate for a particular job. The application form could also be slightly modified to suit each job profile. Therefore, while the application form should have minimal items so as to reduce the time spent on its interpretation, care has to be taken to ensure that no important piece of information is left out. U Answer 20 Fo rI BS Organizations today recognize the importance of providing challenging career and growth opportunities to their employees in order to retain their talented manpower. They therefore, endeavor towards developing a well-planned career planning program for each individual within the organization. By the introduction of a comprehensive career development plan, Elegant Decors might benefit in more than one of the following ways: 172 • Availability of resources in future – Elegant Decors can ensure constant availability of human resources by drafting effective career plans for each jobholder. An alignment of career development with human resource planning will help the company meet its changing resource requirements. This can be achieved by aligning individual aspirations with organizational needs. • Enhanced organizational ability to attract and retain talent – In a competitive market environment, it is the talented human resources of an organization that give it a competitive advantage over its competitors. Employees on the other hand, are trying to make the best of their career opportunities. By introducing an effective career plan that provides its employees with opportunities for professional growth, Elegant Decors will not only be able to attract, but also retain the best talent.
  • 170. Part C Ensures growth opportunities for all – A comprehensive planning exercise by Elegant Decors through its career development strategy, helps it to ensure growth opportunities for all its employees. In other words, while ensuring equal growth opportunities for all its employees, Elegant Decors maintains just the right percentage of employees of different categories at each level in the organization. • Handles employee frustration – Today’s workforce is more knowledgeable and has greater expectations when compared to that of yesteryears. They desire more responsibility and greater challenges. With the help of its career development program, Elegant Decors can handle the expectations of its employees, thereby reducing employee frustration and motivating them to perform better. of 20 1 0 • Thus, an effective career development plan might help Elegant Decors to develop its human resources constantly to meet the challenges of the changing business environment. It also helps the company to attract and retain the best talent, which in turn, creates a competitive advantage for it. Cl as s Answer 21 Flextime is a work option that allows employees to choose their working hours, but within the limits specified by the employer. For example, if a firm requires an employee to put in 40 hours of work during a week, he is allowed to do it by varying the number of hours he puts in everyday during the week. The basic requirement is that he should put in the 40 hours of work; it does not matter how these 40 hours are distributed during the week. nl y Flextime has a number of benefits not just for the employees but for the employers as well. However, this option brings along a number of disadvantages too, which makes employers perceive it as being ineffective. Some of these disadvantages are discussed below: The introduction of flextime might result in varying work hours for different employees. In such cases, key personnel may not be available when required. This might have repercussions on the flow of a work process, thereby delaying the process. • Flextime may also result in the absence of members at crucial times, thereby resulting in problems associated with inadequate staff. For example, consider a call center. If some of the employees are unavailable at the peak hours owing to flextime, it might lead to undue pressure on the other employees and might affect organizational performance as well. BS U se O • Fo rI • This option is generally not applicable where every position needs to be occupied in the organization for the work to progress smoothly. This is especially true for most work activities related to production, as such activities are done in a sequence and cannot be performed without the presence of all the required employees in the process. • In some cases, the nature of the business itself does not allow for flextime options. Work activities which involve constant employee interaction and coordination do not facilitate flextime because its implementation becomes difficult if there are many shifts. • Supervision of activities by the respective supervisors or managers becomes difficult if each member of the team has his own work schedule. • The HR department also finds it difficult to monitor and evaluate the performance of employees opting for flextime. 173
  • 171. Introduction to Human Resource Management Therefore, due to the above possible disadvantages associated with the option of flextime, organizations hesitate to offer it to its employees. This is inspite of the various potential advantages it can offer to both employees as well as the employers. Answer 22 of 20 1 0 Regardless of the size of the organization, the status of employee relations, or the abilities of those performing the analysis, the actual job analysis process may be confronted with several problems. The use of job analysis for other purposes like downsizing in the past is the prime reason for this. Earlier, job analysis was used in some organizations as a means to expand jobs, and in turn reduce the total number of employees. It was also used to increase production rates, and therefore decrease employees’ pay. These might have been the reasons for employees of Triumph viewing job analysis as a threat to their current jobs. Cl as s In order to perform job analysis successfully, Triumph must gather reliable and accurate information from employees and supervisors, and this is possible only when their fears are allayed. One suitable way of doing this could be involving its employees in the process of job analysis wherever possible. Employees should be told why it is being taken up; who will be initiating it; how it will affect them; and how critical their contribution is. At times, the management may even have to make a written commitment that the organization will not terminate any employee, reduce the pay or reduce the total number of jobs, after the job analysis is done. But, this is practically not feasible as it might bind the management. Hence the best option for the management might be to be transparent and share all the job analysis related information with the employees. Fo rI BS U se O nl y The second problem associated with job analysis is the need to update the information gathered. Jobs change as the organization changes; certain jobs may be expanded, or work may be reassigned within a department, necessitating a change in the job description. Thus, updating the current information becomes essential. Two methods can be used by Triumph to undertake this exercise of updating. The first is to get its supervisors to make an annual review of the job analysis information, and to allow them to incorporate changes that have occurred during the past year. The second method is to have managers convey the proposed changes in jobs or reclassification. This is particularly important when the reclassification results in a change in pay. In the second method, the management conveys the proposed changes in jobs or their classification, to the employees. Once the changes are made with relation to any job, these may be updated in the job analysis information. All the jobs affected by the changes in the original job need to be reviewed and updated too. 174 In a situation where a job is held by just one or two employees, the analysis often tends to be of the person’s performance and not of the job itself. This is another problem of job analysis. It might benefit Triumph if it looks into what the job should entail rather than considering how well or how poorly an employee is performing the job. Another related problem that might crop up during job analysis is that associated with job description (an important outcome of job analysis). Employees often feel that the job description is a contract describing what they should, and should not do on the job. When employees are asked to perform some extra work or task beyond the job description, they put up a resistance by saying that it is not part of their job. Triumph can tackle this issue by using elastic clauses such as “performs other duties as assigned.” Elastic clauses help the supervisors to assign duties that are different from those that are usually performed by the employees without changing the job description.
  • 172. Part C Answer 23 A selection or core interview is normally the interaction between the job applicant and the line manager (or experts in that field), where the suitability of the applicant in terms of his knowledge, skills, talent etc., is ascertained. Priyanka Sinha might have to face any one of the following types of interviews: Formal and structured interview – A structured interview is very rigid in its structure and contents. It is based on a thorough job analysis, which directs the flow of the interview. The interviewer, in this case the marketing manager, selects the questions to be asked, and plans the interview in advance, to cover all areas related to the job and the candidate, comprehensively. The main advantage of a structured interview is that there is no scope for subjectivity. The same questions are asked to all the candidates, which help in better evaluation. The questions can be so framed that they cover all the pertinent aspects. • Unstructured interview – Priyanka might have to face an unstructured interview, which has no pre-determined framework of questions, and takes its own course, depending on her responses and the interest of the interviewer. There are more open-ended questions in an unstructured interview. The main advantage of this kind of interview is that the candidate remains comfortable during the course of the interview because the interaction tends to proceed naturally. The disadvantage, however, is that such interviews tend to be more subjective. • Stress interview – The marketing manager might decide to conduct a stress interview, whose objective would be to test Priyanka’s ability to perform and deliver under stress. During such interviews, interviewers put the interviewee under stress, by repeatedly interrupting him, criticizing his answers, asking him unrelated questions, or keeping quiet for long periods after the interviewee has finished speaking. Such interviews must be handled carefully. However, stress interviews are becoming less popular these days as many organizations have come to believe that it is not the best way to assess an employee’s performance under stress. • Group interview method – Alternatively, Priyanka might also have to face a group interview wherein, all the candidates or a group of candidates are interviewed by a panel of interviewers or a single interviewer. This method is resorted to, when the number of applicants is high and the time available for interviewing is short. This method is more useful while recruiting candidates for entry level and junior management positions. One advantage of this method is that the candidates can evaluate their own performance in comparison with the performance of others in the group. BS U se O nl y Cl as s of 20 1 0 • Fo rI • Panel interview - In today’s organizations where all functions are interdependent and every job involves cross-functional interactions, it is imperative that people from different functions interview a candidate. Accordingly, Priyanka might be interviewed by a panel or she might have to face a series of interviews, where representatives from different departments meet and interview her. This method reduces the subjectivity involved in a single one-to-one interview. • In-depth interview – Priyanka might have to attend an in-depth interview which is generally suitable for selection of candidates for high-end technology and highskill jobs. During these interviews, experts in the relevant area test the candidate’s knowledge and understanding of the subject and assess his expertise. Based on these evaluations, they determine the suitability of the candidate for the job in question. If Priyanka is mentally prepared to face any of these interviews, then clearing the interview successfully, should not be a problem for her. 175
  • 173. Introduction to Human Resource Management Answer 24 0 Prosaic Enterprises, as mentioned above, designed jobs which are perceived as routine and overly specialized. This resulted in causing dissatisfaction and fatigue among its employees. This in turn will have adverse implications on employee productivity. A better approach to job design that might overcome the disadvantages of extreme specialization is the sociotechnical approach, which emphasizes the social system of the organization as well. The basic characteristics of a job according to the sociotechnical approach to job design are as follows: A little challenging and demanding – A job should offer intellectually challenging and demanding goals to the job holder. In the absence of any challenges, the employee might soon lose interest in a monotonous job, which offers no stimulation to his intellect or personality. • Variety and novelty – The job should offer something new to the employee to avoid monotony and boredom. Job enlargement, job rotation and job enrichment are some of the methods of redesigning a job to offer variety and novelty to the employee. • Social support & recognition – Social support and recognition of his achievements motivate an employee to improve his performance continuously. In the absence of any motivational factors, the employee’s performance tends to deteriorate. • Desirable future – Every job should offer good prospects to the job holder in terms of increased responsibility, pay and status. It should take him a step further towards his career goals and help him in achieving those goals. • Decision-making authority – Responsibility without authority retards the performance of an employee. Decision-making authority in a job gives the incumbent the freedom to act within his locus of control. It also makes him feel more responsible and committed to his job. • Correlation with social lives – An employee’s job should correlate with his family and social life. The members of his family and close social circle should be able to identify with his job and his professional life. A total mismatch between the personal and professional life of an employee would affect his job satisfaction and his performance. U se O nl y Cl as s of 20 1 • BS Therefore, Prosaic might benefit through enhanced employee motivation and increased productivity if it adopts the sociotechnical approach, which emphasizes the social system of the organization along with specialization of jobs. Fo rI Answer 25 Most people experience a career crisis at different stages in their working life. It is therefore, the responsibility of every individual pursuing a career, to manage and develop his/her own career to avoid any disengagement at later stages. This requires the individual to be aware of the market needs and its changing trends. On the personal front, he/she must have a planned strategy, which would lead towards future goals and aspirations. Goutam Goyal too must have a planned self-development strategy to effectively face the challenges that the work environment might pose in the future. The basic steps he should follow while planning his career are discussed below: Self-assessment – Goutam Goyal must first analyze his personality, values, knowledge, skills and interests. He must be critical while evaluating his technical capabilities. This would assist in assessing his competencies and aspirations and help him choose the right career. 176
  • 174. Part C Opportunity analysis – In the second step, Goyal has to discover the wide range of opportunities, select the ones that match his assessment of self, find out the specifics of each job, and analyze the work-related trends. He should have an overview of all the alternatives available and the recent trends in the job market/business to analyze his chances of making a career in each field. of 20 1 0 Decision-making – At this stage, Goyal has to establish objectives for himself in the areas of career, personal life, community service and lifelong learning. Making decisions, setting goals for self, and writing a career action plan are the various steps involved in this stage. During this stage, Goyal must also answer questions like which occupational field to enter, whether to start a small business, whether to change jobs, or whether to change the occupation itself. Leverage network – Goyal now has to try to make the best of the available opportunities. He has to search for the right contacts, to help him/her get the desired job. He must use his network of contacts to gain information and access to the right people, who could help him land the right job. Cl as s Venture – At this stage, Goyal should assess the offers made to him to start his career and venture into the job/area that suits him the best. He has the responsibility of adapting to a new role and a new organization, perhaps even a new occupation. Goyal should be open to new ideas and concepts and should continuously strive to learn from experiences at work. nl y Continuous assessment – Once Goyal decides to take the job and settles down, he has to start assessing the job and the benefits vis-a-vis his aspirations and goals. These benefits can be anything from monetary benefits to a learning experience. He should also continuously assess the changing trends and situations to make the best of the opportunities available. This continuous assessment will help Goyal revamp his career plans, and reorient himself whenever necessary. O Following the above stages of planned self-development might help Goyal effectively plan and manage his career in this dynamic and constantly changing work environment. se Answer 26 Fo rI BS U Succession planning in an organization helps identify specific individuals to fill future vacancies in key positions. It ensures that the organization has a constant supply of talented workforce to fill the vacancies that will arise not only in the short term but in the long-run as well. Mostly employed for key managerial positions in organizations, succession planning involves a detailed study of the organization’s long-term goals and objectives, the training and development needs of employees, and the workforce trends that affect the functioning of the organization. In the case of a family-operated business like Shah & Co., succession planning helps identify the most capable of the family members who can lead the organization successfully. Most family-run businesses are found to fail because of inadequate or inefficient succession planning. A succession planning effort in such family runbusinesses must take the following factors into consideration • The plan must clearly specify the roles to be played by each family member, so that they are aware of their responsibilities and limitations. This is essential for the smooth functioning of the business. • The plan should identify specific roles for the family members to suit their aptitude and skill set. Responsibility should not be thrust upon someone. At the same time, things should not be left to the whims and fancies of the family members. 177
  • 175. Introduction to Human Resource Management The succession plan must provide for unexpected contingencies like a fall in product demand, an economic downturn, sudden death of an important member of the family, etc. • The succession plan must take into account the tax implications of the proposed method of structuring. • The plan should look into various aspects of the monetary benefits and remuneration each member of the family gets to enjoy. It must also provide for meeting the needs of members in case of an emergency. • Transfer of ownership has to be done formally and at an appropriate time. • The plan must provide for training of important members of the family so that they have the necessary skills and adequate knowledge to handle transitional jobs as well. • Participation of employees from within the organization and experts (from outside) must be invited and encouraged, to seek better ways of implementing the succession planning method. • The plan must also look into aspects like shareholder agreements (if any), revision of wills, corporate restructuring, insurance contracts, share transfers etc. Cl as s of 20 1 0 • While the above factors determine the effectiveness of succession planning in a family-run organization, it should be noted that such plans must be reviewed and revised at regular intervals. Constant revision of the plan ensures the flexibility and adaptability of the organization to changing market and workforce trends, and eventually the success of the plan. nl y Answer 27 Continuity – Succession planning should not be an annual event. Smart Enterprises should create an environment to facilitate continuous succession “thinking.” Regular and continuous communication can help the management to reach this stage of organizational development. Every manager should strive to develop at least one candidate as a potential replacement. By providing for interim leadership, Smart Enterprises would be able to ensure smooth operations even in the sudden and unexpected absence of an important employee. BS U • se O Smart Enterprises faced a very common challenge that any organization without proper planning would encounter over a period of time. A manpower crisis, especially in the management cadre, can be effectively tackled by using the strategy of succession planning. Succession planning is a strategy initiated by the top management to ensure a continuing sequential flow of talented and qualified personnel to meet the manpower requirements of an organization. A succession planning effort will be successful if it incorporates the following elements: Fo rI Long-term perspective – Smart Enterprises must plan to meet the requirements of the firm considering the long-term interests of the organization. A ready pool of talent should therefore, be available in the organization to provide resources for immediate replacement. Development of the employees in general has to be of a high standard to ensure ready availability of replacements, when the need arises. In other words, the management has to deal with the situation in a proactive manner rather than in a reactive way. • 178 • Organizational need perspective – Smart Enterprises should develop a culture where external recruitment for key positions is normal in the absence of internal talent. In case it needs some fresh or external talent, the employees of the organization should be in a position to accept it as a natural and justified decision. Smart Enterprises must therefore, prepare its employees for any change in critical positions at any given point in time.
  • 176. Part C • Turnover management - Appropriate action plans to generate adequate turnover have to be developed to avoid positions getting blocked. A normal and healthy turnover rate ensures a free flow of manpower across the length and breadth of the organization. • of 20 1 0 Emphasis on results - Measurements to evaluate succession results have to be developed at the organizational level. The measurements can include factors like the percentage of key jobs which have at least two ready successors, the percentage of key posts filled externally, the percentage of developmental action plans implemented or the extent to which the process contributes positively to business results. Depending on these results, Smart Enterprises has to modify the plan to meet the changing needs of the organization. Effective succession planning will thus help Smart Enterprises cater to succession issues as and when they arise. Answer 28 Cl as s The concept of career counseling has been gaining ground in modern organizations wherein managements aim at providing their employees with a healthy and motivating work environment that provides them with adequate opportunities for professional growth and development. Organizations today emphasize on employee career planning programs which offer effective career guidance through career counseling sessions. These counseling sessions aim at providing answers to various queries related to the professional growth of employees. They help their employees determine their career objective, and encourage them to pursue it as well. O nl y In order to make career counseling effective, organizations encourage employees to participate in such programs and also conduct regular training sessions to constantly enhance their skills in their current or desired domains. In some cases, they also sanction special leaves for the employees to attend specific training programs. Career development issues are also discussed during the performance evaluation of the employees to recognize their development needs. These measures emphasize the organization’s interest in the overall development of its employees, thereby creating a motivated workforce. Fo rI BS U se In this case, My Home Decors is planning to offer career counseling sessions to help employees like Mallik pursue their career objectives. Mallik will have a series of interactions with the counselor who will help her identify the various crucial aspects of her career like, present skills, the possibility of developing them further, or enabling her to learn new skills that would help her become a fashion designer. Other issues related to her training needs, future prospects in the organization and outside if she decides to pursue her new career, opportunities available to her based on her current abilities and skills etc., can also be discussed. The counselor will also help her find answers to questions like whether her existing educational qualities are adequate for the job she is aspiring for, i.e. fashion designer; whether she should undertake any course or training program to be eligible to pursue her objective; how important it is for her to pursue that career; whether she can do without it, etc. Providing answers to such questions, or helping employees like Mallik find the answers, basically constitutes a career counseling program in any organization. Generally, the supervisor of the employee seeking counseling also attends these sessions to the employee and the counselor find better solutions to the problems. Answer 29 Human Resource Development (HRD) is the process of training and developing employees to improve and update their knowledge and skills, so as to help them perform their jobs better. The process also includes changing the attitudes, beliefs and values of the employees to match the organizational needs. 179
  • 177. Introduction to Human Resource Management By initiating the process of human resource development, Turnkey Associates would have the benefit of creating a workforce that is well-equipped to meet the challenges of a dynamic business environment. The HRD process at Turnkey must aim at continuous development of human resources through a variety of training programs, effective performance evaluation, and a positive approach to the career advancement of its employees. In other words, the HRD process at Turnkey must incorporate the following elements Performance appraisal – This is the process of evaluating the performance of an employee on the job and developing a plan for improvement. Performance appraisal at Turnkey must include an assessment of the strengths and weaknesses of the employee, and drawing up a development plan in consultation with him, to prepare him for future tasks and responsibilities in the organization. The performance evaluation system must be designed in such a way that it suits the organizational needs and the culture of Turnkey. The success of the appraisal system depends on how effectively its employees conduct the process. Employees at Turnkey should therefore be adequately trained to conduct the evaluation process properly. The management must also ensure proper maintenance and record of the appraisal process. Turnkey must also elicit feedback from its employees about the effectiveness of the appraisal system. Appropriate modifications and changes in the system must be made accordingly. • Training – Training is the systematic development of the knowledge, skills and attitudes required to perform a given task or job successfully. The HRD at Turnkey must therefore, emphasize on effective training of its employees so that they are ready to adapt to technological changes in the external environment. A well-planned training program involves identification of the training needs of the individuals, keeping in view the organizational needs. The HRD strategy must aim at designing suitable training programs to eliminate the gaps in knowledge, skill or attitude. Turnkey must also seek suggestions from employees to constantly strive for the betterment of the training programs. • Management development – Management development is the concept of developing the employees of an organization to meet future changes and challenges. It includes forecasting the human resource demands of an organization, and gearing up to meet those demands. With the help of management development, Turnkey must look at enabling its employees to develop their overall personality and their capability for continuous improvement. U se O nl y Cl as s of 20 1 0 • Career planning and development – Career planning refers to identifying one’s career goals and formulating plans for reaching them through various means like education, work experience etc. Career development looks at the individual’s goals from the point of view of the organization, whereas career planning looks at the same from the individual’s viewpoint. The HRD process at Turnkey must ensure that career planning and career development reinforce each other, thereby helping the accomplishment of both individual as well as organizational objectives. Fo rI BS • Thus, an effective implementation of the HRD process helps the organization achieve its objectives by constantly enhancing the skills and abilities of its employees. Turnkey must ensure that the HRD process in the organization is continuous and takes into consideration both the present and future organizational needs. Answer 30 Informal organizations are formed by employees within an organizational setup, without any formal goals or objectives. The collection of employees in an informal 180
  • 178. Part C of 20 1 0 organization is ad hoc and random, and follows no structural rule or procedure. The employees get together in an informal environment and share their common interests, ideas and information. Thus, an informal organization constitutes the various interactions and relationships that thrive along with the formal organizational structure. The informal organization constitutes two kinds of relationships – relationships that arise due to job-related interactions and those that are formed among people at different levels of the organization due to informal interactions among them. Whatever be the nature of the relationship that exists within the informal structure, it fosters open channels of communication that create a sense of belonging among its members. Organizations benefit due to the presence of an informal organization. For instance, Mohan Krishna, in the above example, derives many advantages merely by being a part of the informal organization. Some of the advantages of the informal organization are as follows: Informal organizations develop a sense of belonging among their members through the various social and personal interactions that take place among them. These interactions motivate people to perform better, thereby enhancing employee productivity. In this case, when the MD interacts informally with the employees, they feel that they are being valued, and believe that they are so important for the organization, that the MD spends time with them. • The flexibility and ability to produce spontaneous responses to a problem in an informal organization, helps in making quick decisions, which is generally not possible in a rigid formal structure. This, in turn, enhances the effectiveness of the organizational system. In this case, Krishna might get a better insight into employee problems through mingling with them than by sitting in his office. • The workload of managers decreases substantially once they manage to obtain the cooperation of the members of the informal organization. A cooperative approach between the managers and the members of the informal organization reduces the need for frequent supervision and monitoring. As the employees feel they belong to the organization, they are more responsible and responsive, which makes it easy for Krishna to handle any problems. • Informal organizations create a sense of security and stability among the organizational members which, in turn, enhances their job satisfaction. This also contributes to maintaining a low attrition rate in the organization. • Informal organizations provide an effective outlet to employee concerns and apprehensions. The various social interactions among their members effectively reduce anxiety and stress levels among the workforce. In this case, the workers would share their problems more freely with Krishna on the shop floor, than within the four walls of his office. Fo rI BS U se O nl y Cl as s • Thus, managements can take advantage of the informal organization which coexists with the formal structure. This is possible only if the management acknowledges the potential benefits of the informal organization and strives to nurture it rather than stifle its growth. Krishna, in this case, can certainly benefit a lot by spending that halfan-hour informally with the workers on the shop floor. Answer 31 Delegation is defined as the process of authorizing one’s subordinates to handle some of one’s work or to take certain decisions. Delegation of responsibility is essential to 181
  • 179. Introduction to Human Resource Management get things done in an effective and efficient manner as a single individual cannot handle all the work. However, there a few factors to be considered before delegating the responsibility. A serious consideration of all these factors might help Raj Kumar to effectively delegate responsibility to his subordinate. Some of these factors are discussed below - of 20 1 0 Clarity – Delegation of responsibility has to be clear and distinct, and must explicitly specify issues like who is carrying out the responsibility, the division of responsibility between coworkers and between the superior and subordinate. Other related issues like the definition of the task being delegated in terms of the outcomes of the task, the time frame required to accomplish the task, consequences of delegation etc. must also be clearly defined to avoid unwarranted negative effects. Cl as s Authority – Delegation of responsibility has to be essentially accompanied by adequate authority to complete the given task and discharge the responsibility. Unless proper authority is provided to the employee, he would find himself powerless to carry out the task. Therefore, while delegating a particular task, one has to ensure that he provides the subordinate with sufficient authority in terms of financial, technical, political and material resources. Similarly, the limits of authority of the subordinate must also be stated in explicit terms. The employee must be clear about where his responsibility and authority begin and where they end. Independent position – The person accepting the new responsibility must be given an independent position to carry out the task, without any interference from his peers or superiors. His performance however, could be monitored as and when required by the superior. nl y Competence – While delegating responsibility, one has to ensure that the person is competent and capable of handling the new responsibility, apart from his regular chores and work-related activities. In other words, the superior must have confidence in the abilities and skills of the person to whom he is delegating responsibility. O Positive organizational results – Delegation of responsibility must essentially result in improving the organizational systems and processes and must bring about positive results to the organization. se The delegation process must ensure that there is no break in the delegation chain as this would result in an unaccomplished task. BS U Raj Kumar’s effort towards delegation will be effective if he takes the above factors into consideration. By doing so, not only is he training and empowering his subordinate to handle more responsibilities, but is also facilitating himself to assume greater responsibilities. Therefore, Raj Kumar is right in deciding to delegate his responsibility and authority to the assistant production manager, as it would improve his working and also benefit the organization. Fo rI Answer 32 The defined relationship among the elements of an organization, namely the people, tasks, structure, and information and control processes is referred to as the organizational structure. The organizational structure is based on factors like the vertical and horizontal specialization, degree of formalization and standardization of work tasks, and centralization of decision-making. Accordingly, an organization could have a tall or flat organizational structure. A tall organizational structure is characterized by more hierarchical levels, and usually has narrow spans of control. The emphasis in such organizations is on vertical specialization, formal definition of work tasks and centralization of the decisionmaking process. It facilitates close supervision, and provides for continuous interaction between the supervisor and the subordinates. This was the organizational structure that existed at Profound Manufacturers. 182
  • 180. Part C 0 The tall organizational structure at Profound was identified as the reason for its inability to adapt to the changes in the external environment. The number of levels in the organizational hierarchy and centralized decision-making were responsible for the delayed response to the changing environment. Profound’s efforts to bring about the necessary changes in organizational systems and procedures for the organization to survive in the fast-changing business environment were thus delayed. Further, gathering of data and information required for any kind of intervention at operational and process levels would also become difficult in a tall organization. These factors have led to negative organizational results like decreasing revenues and profits. Cl as s of 20 1 The realization that a tall structure is affecting their bottom-line could have prompted Profound to flatten its structure so as to make the decision-making process simpler and quicker. Profound however, has to consider a few factors that determine the success of an effort to flatten the organizational structure. Flattening the structure depends on the organizational culture and the existence of open channels of communication within the firm. A flat organization is generally characterized by teams consisting of employees belonging to different functional groups. Effective communication is, therefore, important to determine the success of the teams which, in turn, determines the effectiveness of flat structures. The open culture facilitates delegation of responsibilities and authority, which is the basic feature of a flat structure. In other words, a flattening exercise at Profound will be fruitful only if there is an open culture in the organization coupled with open channels of communication. nl y Another important element to be considered is the presence of an organizational culture that supports motivational tools other than promotion for the employees. A flat organization will result in fewer levels in the hierarchy, thereby limiting the promotional chances of the employees. Therefore, it is essential that Profound develops and supports other motivational factors in the organization. An effort to flatten the organizational structure would result in the following benefits for Profound: Better customer focus – Since the number of levels in the organizational hierarchy is less in a flat organizational structure, the top management is better equipped to feel the pulse of the customers. This might help them in implementing strategies that are focused on meeting customer requirements. • Faster decision-making – With reduced number of levels in the organizational structure, the decision-making process becomes easier and faster. This, in turn, will help Profound to be more responsive to changes in the external environment. U se O • Access to information – Flat structures facilitate easy access to information as the information has to pass through a limited number of organizational levels. BS • Fo rI • Status issues – With open channels of communication and fewer hierarchical levels in the organizational structure, perceptions of status differences are minimal. • Other positive organizational results – Flat organizations are generally seen to have the benefits of greater employee satisfaction, reduced turnover, enhanced efficiencies and better communication. Thus, Profound’s attempt to flatten its organizational structure will help it to be more responsive to developments in the external environment, thereby enhancing its levels of employee productivity and organizational profitability. Answer 33 Job-sharing is one of the most common flextime options available. In job-sharing, two people share a full-time position in an organization. In other words, two employees divide and share the duties, responsibilities, salaries, incentives and other benefits of a 183
  • 181. Introduction to Human Resource Management single job position. The incidence of job-sharing has been growing in the recent past with many organizations providing this option to their employees. 0 However, not all organizations opt for job-sharing due to a variety of reasons. Jobsharing can achieve its objectives only when both the employees sharing the job have the interest and ability to work with mutual understanding and cooperation. They must be relatively better organized than full-time employees, and should be comfortable handing over their responsibilities to each other. Mutual trust is a prerequisite for effective job-sharing. of 20 1 Job-sharing offers numerous benefits to both the employees and the employers. Employers have the advantages of increased employee retention and higher levels of employee productivity. Flextime job options like job-sharing are viable alternatives for a good proportion of the present-day workforce which needs to balance both work and home. This is especially suitable for women, whose proportional size in the modern workforce is increasing by the day. Most women employees find this a viable option when family chores become more demanding. Organizations also benefit as qualified employees can be retained by providing such job alternatives. Cl as s Organizations offering the job-sharing option to their employees have been enjoying higher rates of employee productivity. As employees are able to spend more time with their families and concentrate on their jobs as well, they are more productive at the workplace. Thus, job-sharing could be used by organizations as an effective tool to increase employee productivity. Further, job-sharing also has the advantage of utilizing the skills and abilities of two individuals while paying for only one position. Organizations, therefore, benefit from the complementary skill sets of the two employees who share the job. nl y A few organizations also use this option to manage surplus manpower. When an organization faces the problem of excess manpower due to unexpected developments in the external environment, it makes employees share their jobs so that it can save on salaries. By doing so, the organization can avoid retrenchment of employees. se Flexibility – Employees opting for job-sharing have the freedom and flexibility to spend more time for their personal lives. Organizations which realize that employees have life after office hours provide their employees with this flexibility. U • O Job-sharing is a boon for a substantial number of employees in various organizations. Some of the common benefits enjoyed by the employees are as follows: Greater job satisfaction – In case of full-time employment, employees, especially those who have commitments in their personal lives, tend to worry about their domestic responsibilities when they are at work. Now that the option of jobsharing gives them more time for their personal chores, employees derive greater satisfaction from their jobs, thereby enhancing their performance as well. Fo rI BS • • Career track – A good proportion of employees in modern organizations are forced to sacrifice their careers because of personal responsibilities. Now, with the option of job-sharing, employees do not have to forgo their career due to demands on the personal front. Instead, they can now pursue their career and handle their personal responsibilities as well. Thus, job-sharing enables both the employers and the employees to work together for the accomplishment of individual goals as well as organizational objectives. Answer 34 Most organizations today outsource at least some of their routine operations so that they have time for more important and core activities. Outsourcing offers a number of advantages to organizations. In this case, Umesh Mathur proposed to outsource 184
  • 182. Part C activities like payroll, staffing and training. The following benefits would accrue to the organization from outsourcing: 0 Increased focus on core activities – Relieving the HR department from mundane activities like payroll and staffing provides it with quality time which can be used for strategic planning for the overall development of the organization. Outsourcing thus enables the organization to concentrate its resources on core business activities. The HR function is thus transformed from one of administrative staff to a strategically important one. It would then be possible for Umesh Mathur and his department to focus on strategic issues concerning the organization and its business. of 20 1 Cost reduction – Outsourcing results in the reduction of operational and overhead costs. This is possible because vendors provide access to improved organizational procedures and systems with the help of initiatives like reengineering, advanced technologies, elimination of process duplication and other such activities. Cl as s Enhanced service quality – As outsourcing relieves the HR department of many mundane and redundant activities, it can now focus on enhancing the quality of service, streamlining the processes and releasing the internal resources (in terms of the time invested by members of the HR department). Thus, outsourcing helps the organization improve its services to its business units, subsidiaries and other users. More profitability – Organizations which outsource certain business processes, experience continuous improvements in their systems and processes. Organizations thus become more profitable which, in turn, helps improve their shareholder value. nl y Outsourcing helps small and medium-sized organizations to compete with large and established organizations in terms of both non-core and core HR processes. Besides, outsourcing as discussed above is a viable and cost-effective proposition. However, there are a few disadvantages as well. These include confidentiality issues that arise as a result of allowing external agents to handle internal activities, ensuring quality standards of performance by the agency, and the organization’s inability to develop in-house expertise, due to over-dependence on external providers. O Therefore, before deciding to outsource any of its activities, organizations should conduct a careful analysis of the effects of outsourcing on organizational results. se Answer 35 Fo rI BS U Organizations offer (VRS) to their employees to allow them to voluntarily retire from their services before their retirement date. This is an effective technique to downsize in an organization and at the same time, it promises a lucrative offer to employees who quit the organization, under the scheme. However, since employees are asked to leave the organization and end their association with it suddenly, VRS, at times, is not acceptable to the employees. Instances of over-acceptance of the scheme, whereby too many employees opt for it, are also common, especially in organizations where performance has been low and the future, uncertain. Various operational problems also arise which make the implementation a difficult task for the management. Management in organizations offering VRS must also be prepared to tackle the post-VRS blues that arise in an aftermath. The management at ABC should therefore, take necessary steps to ensure smooth implementation of the scheme. Firstly, the company must have a justifiable reason to offer VRS. In other words, it should not introduce this option for short-term benefit, or just because other organizations are doing it. If the employees are convinced about the need for the scheme, they will not resist its introduction. Before announcing the decision to offer VRS, ABC must conduct a manpower planning exercise to assess the requirements over the next few years, the skill set required, the training to be provided 185
  • 183. Introduction to Human Resource Management to enable its employees cope with future changes such as automation, technological developments, new working methods and procedures, etc. Depending on the results of the manpower planning, the management should finalize the number of employees to be retrenched. It should plan the scheme according to the number of employees to be given the golden handshake, and their positions in the organization. of 20 1 0 Communication is the key to success of VRS in any organization. The management at ABC should ensure effective communication with all the members of the organization on the need for offering such an exit option. It must also see that the process and benefits of the scheme both to the organization and the members opting for it, are clearly communicated to all the employees. This is done to avoid the spread of rumors that might affect the implementation of VRS. In other words, the need for VRS and the consequences thereof must be known and understood by the employees. The management must not only assure complete support and assistance to all those opting for the scheme, but also ensure that those retained feel secure after the implementation of the scheme. Cl as s ABC should keep all its promises to those who accept the scheme. The people opting for VRS must be given all the monetary and non-monetary benefits that they were promised, in order to avoid any resentment among them. ABC should also focus on the employees who are eventually retained after the process. Those who are retained must be motivated to perform better, and adjust to the changes taking place in the company. This helps maintain the morale of the retained employees so that they have no apprehensions regarding their job-security. nl y It might also benefit ABC if it helps the retrenched employees by placing them in other organizations, providing assistance in finding alternative employment, or by offering career counseling to them. This gives a human touch to the entire process, thereby alleviating ill-feelings against the company. The VRS process must therefore be handled tactfully with the objective of attaining organizational goals, and at the same time, ensuring that the dignity of the employees is maintained. O Answer 36 U se Human Resource Planning (HRP) can be defined as the process of ensuring the right number of qualified people, in the right job, at the right time, to deliver the results in an efficient and effective manner. It is the process of matching the available resources with the demand that the organization expects to have over a period of time. HRP is thus an integral part of every organization, which helps it meet its manpower requirements effectively, despite changes in the external environment. Fo rI BS In the present case, Rakesh Sharma proposes to implement a comprehensive HRP to promote organizational effectiveness by matching the human resource requirements at Steel World. The following are the basic steps to be followed by Sharma for effective human resource planningAnalyzing the impact of the organizational strategy and objectives on different units of the organization in terms of the human resource requirements. • Involving the line managers in determining the human resource needs of their respective departments. • Forecasting the quantity and quality of human resources required by different departments/divisions. • 186 • Matching the current human resources supply in the organization with the numbers required in the future.
  • 184. Part C • Developing an action plan to meet future requirements in terms of addition or separation, in a planned and phased manner. The following are some of the important factors that Sharma must consider while conducting the exercise and planning for the future: The HRP must ensure that at any given point of time, Steel World has optimal manpower resources in terms of the number of employees and their skills, for the smooth and efficient functioning of the organization. • The HRP must be able to forecast the rates of attrition and employee turnover with reasonable accuracy. This would help Steel World to predict the future manpower requirements of the organization. This in turn would help them plan their recruitment / retrenchment policy. • In case of any diversification or expansion plans at Steel World, the HRP must provide for meeting the requirements of additional manpower. Various issues like the number of employees, their skill-sets, the sources of new recruits, etc., must be clearly stated during the process of manpower planning. • The HRP proposed must be able to foresee and predict probable technological changes in the external environment and the consequent requirements of manpower to adapt to such changes. The HRP must aid in providing for the excess demands in manpower. • The HRP must provide for handling situations of sudden shortfall in manpower, thereby helping the organization utilize its human resources effectively and efficiently. • One of the important objectives of an effective HRP is to estimate the value of human resources and their contribution to the organization. nl y Cl as s of 20 1 0 • O Thus, the HRP proposed by Sharma must concentrate on the above areas to ensure that the right resources are available to Steel World for its unhindered growth and development. Answer 37 U se Companies like Softel Technologies face a number of challenges and issues while drafting career plans for their employees. Similarly, the employees themselves encounter problems while climbing the career ladder due to the constantly changing business environment. Some of these issues are discussed below: Fo rI BS Dual career families – With the increasing proportion of women in professional occupations today, a new issue in employee career planning has arisen in organizations like Softel Technologies. As the society is now reorienting itself from the traditional single-career family structure to that of dual-career families, the careers of both the husband and wife have become equally important. Now, the emphasis is on looking at career development of both in unison. Dealing with the implications of dual-career planning has become challenging for HR departments, especially if both the husband and wife are employed in the same organization. For example, in the present case, if both the husband and wife are working in Softel, they are usually posted at the same place. If one of them is transferred to another city, due consideration has to be given to transfer the spouse also to the same place. Low ceiling careers – Softel must ensure that its employees are offered jobs that have adequate opportunities for advancement. Lack of growth opportunities or low-ceiling careers, which provide employees with little chance of promotion despite their career plans, demotivate them and they start seeking options outside. Therefore, creating jobs with constant growth opportunities is the need of the hour for organizations like Softel. 187
  • 185. Introduction to Human Resource Management Declining opportunities – Career opportunities for certain jobs or categories in companies like Softel sometimes decrease due to technological and economic changes. The management at Softel must, therefore, look for a solution to such problems. For instance, it could introduce the concept of career shift so as to minimize the negative consequences of the technological and economic changes in the external environment. of 20 1 0 Career stages – Employees go through different career stages (as discussed in the model of career development) and their career needs change as they move from one stage to another. In such a situation, the career plan of the employee becomes dynamic and alters with his changing personal needs. Both, the employees as well as the management at Softel must accommodate such shifts in career plans. Restructuring – To meet the demands of a fast-changing economy, Softel needs to restructure and reorganize itself from a bureaucratic structure to a flat one. This concept of lean and mean organizations has forced employees to revamp their career plans. Softel has to redo the whole exercise of career planning for its employees in this changed scenario. Cl as s Career plateaus – Employees reach a plateau in their career when they feel that there is nothing left to achieve. Lack of motivation, high levels of stress, personal problems, want of requisite knowledge and skill set, lack of opportunities or a slow moving business can lead to a career plateau. These challenges have to be taken care of by Softel to avoid a plateau and put the career on a growth path. nl y Work-family issues – Elderly parents, school-going kids, or a sick relative, are some of the many family issues that change the career path of an employee. These are the constraints that most employees face in the pursuit of their career objective. These issues, which sometimes lead to plateaued careers of employees, have to be tackled by Softel in order to ensure their constant career growth. O By dealing with the above issues relating to the career plan and growth of employees, Softel may succeed in enhancing employee morale and motivation, thereby increasing their productivity levels and decreasing the attrition rates. se Answer 38 Fo rI BS U Different tests are used for selecting candidates for different positions in organizations. The position to be filled at Sputnik Enterprises is that of production manager, which is a middle-level managerial position in the organization. Situational tests may be used to select the right candidate for the job. These tests are generally employed to test the likely response of the candidates to real-life business situations. In such tests, the candidates are exposed to simulated business situations and their responses to such situations are recorded and evaluated. Group discussions, in-basket exercises and simulated business games are a few examples of situational tests. Considering that there are sixty applicants from whom one is to be selected, a group discussion could be held. A group discussion is generally used when there are a large number of candidates and some filtering is required to make the evaluation process easier and efficient. Therefore, a group discussion, where the candidates are tested for initiative, leadership qualities, negotiating skills, and decision-making abilities can be used by Sputnik as the first step. This may be followed by an interview or other selection procedures to finally decide upon the candidate. Sputnik can also opt for in-basket exercises, which help evaluate the managerial and administrative skills of the candidates. The objective is to assess how effectively the candidate is able to handle multiple tasks, prioritize things, analyze information and delegate tasks. In this case, each candidate may be given a broad overview of the organization, its functions and operations, along with a brief introduction of the job responsibilities of a production manager. Then, he would be given a set of issues and 188
  • 186. Part C activities that are part of a production manager’s job. Each applicant would be asked to assume the role and show how he would handle those activities or resolve those issues. Sputnik might administer these tests via paper-pencil method or through computers. An in-basket exercise could thus help Sputnik to judge how the applicant would handle the general and routine tasks of production manager. Based on this, HR might decide on selecting or rejecting the candidate. of 20 1 0 Sputnik might alternatively opt for simulated business games to select the right candidate for the position of production manager. In these games, the candidates are asked to assume the role of a simulated character (in this case, production manager), and are evaluated within the group. These games are used when the selection team wants to evaluate how effectively the candidate is able to perform his tasks and handle his responsibilities. Simulated business games also help determine the overall business knowledge and competencies of each applicant, along with his interpersonal skills. Sputnik may use any of the above selection tools to identify the most suitable candidate for the position of production manager. Cl as s Answer 39 U se O nl y In an assessment center, a group of assessors examine and evaluate the candidate’s skills, abilities and job-related knowledge. The challenge in an assessment center is that it comprises all the activities involved in a particular job and the problems associated with it. The objective is to assess and rate the candidate’s performance in various job-related activities as he employs his interpersonal skills, communication skills, planning and organizing skills, and his ability to analyze information and make effective decisions. Assessment centers are also used to assess the training needs of the employees in an organization. The exercise starts with identification of the basic job content and its various skill requirements. Assessment centers are generally used to select people for managerial cadres. The assessment process starts with a brief presentation by the candidates, describing themselves. This presentation would be followed by some job-related questions for the candidates. Assessment centers sometimes include simulation tests like in-basket exercises, role-play or written exercises. The use of assessment centers to select senior marketing executives for Fashion Today, would result in the following benefits for the company: Considered to be one of the best selection methodologies, assessment centers would enable Fashion Today to conduct the selection process in a fair and nondiscriminatory way, culminating in choosing the most appropriate candidates. BS • Fo rI • As assessment centers try to predict the most probable employee behavior on the job, they are more reliable in selecting candidates who are likely to succeed. • They gain wider acceptance from the participants as the candidates get to know about their relative performance. Candidates may also benefit from the feedback that can be obtained from the assessors after the entire exercise. Assessment centers may also help in reducing business costs for the company by ensuring that the right candidate is selected for hiring, training or promotion. However, assessment centers also entail some drawbacks. They might prove to be a costly affair for the management. Constraints of labor and time also desist employers from opting for this method. The time taken by this process is sometimes very long when compared to other selection methodologies. Thus, depending on the criticality of the job position in the organization, Fashion Technology could be right in developing an assessment center for the selection of its senior marketing executives. 189
  • 187. Introduction to Human Resource Management Answer 40 of 20 1 0 Organizations today are doing all they can to provide their employees with a stressfree work environment. They have come to realize that their true wealth lies in their employees and that their primary objective must be to provide them with a healthy work environment. This realization is a consequence of the negative effects of occupational stress that has been increasing enormously due to the heat of competition and emphasis on employee productivity. Numerous factors like the basic nature of the job, hours of work, work environment, worker’s skills, or lack of resources to accomplish the tasks, contribute to stressful conditions at the workplace. Some of the outcomes of work-related stress include irritability, unstable behavior, heavy smoking, psychosomatic pains, depression, drug abuse and fatigue. Organizations are, therefore, taking steps to help employees fight occupational stress and to be more productive. Some of the measures which can help enhance the quality of work life, by reducing stress levels among employees, include: Selecting candidates who would be able to cope with the conditions of stress that exist in the organization. Organizations can ensure this by including psychometric tests during the recruitment process that check whether the candidate can handle pressurizing situations and stressful jobs effectively • Using positive reinforcers like appreciation of a well-performed job, and/or reward and recognition programs to motivate employees, which in turn, helps reduce their stress levels • Attempting to enhance interpersonal relationships among members belonging to various departments of the organization by holding informal meetings that improve interaction and foster good relationships • Aligning goals of the individual members with the objectives of the company, thereby ensuring a constant growth of the employees along with achievement of organizational goals • Educating employees about the ill-effects of occupational stress and how to tackle and minimize stress • Providing employees with stress-busting avenues like gymnasiums, tennis courts, golf courses, extended holidays, etc • Offering various alternative work schedules to employees like telecommuting, part-time jobs, job sharing, and other flextime options U se O nl y Cl as s • BS Organizations can thus provide their employees with an enhanced quality of work life by employing some or all the above stress-fighting measures. Fo rI Answer 41 Quality of work life may be defined as the extent to which the work environment of an organization enhances or hinders employee productivity. It refers to the quality of relationship between the employees and the work environment. Various factors contribute to the quality of work life in organizations. Some of the factors that may help Navjith Gupta to evaluate the quality of work life at Chrysalis are discussed below: • 190 Fair compensation and security – Economic factors are the primary drivers of employee productivity in an organization. Research shows that even though the needs of employees keep changing with their experience in the organization, employee satisfaction depends, at least partially, on the compensation offered. Therefore, one of the most important factors that Gupta must consider while evaluating the quality of work life at Chrysalis, is the monetary benefits that the
  • 188. Part C employees enjoy. Gupta must check if the pay is based on the kind of work done, responsibilities undertaken by the job-holder, individual skills, performance of the job-holder and his accomplishments. Job security, as experienced by the employees, also determines the quality of work life in the firm. The more secure the employee feels about his job, the more motivated is he to fulfill his responsibilities, and the greater is his productivity. Health of the environment – While assessing the quality of work life at Chrysalis, Gupta must see if the work place has a healthy work environment. He must also see if the management has taken measures to meet the legal and humanitarian standards required to maintain the physical and psychological health of the employees. Gupta must also identify the stress management initiatives taken by the management to deal with people affected by occupational stress. • Employee growth opportunities – Employees in modern organizations seek constant personal and career growth opportunities. They do not stay with organizations that offer them no scope for learning, personal development or growth within the organizational hierarchy. Therefore, the employees’ growth and development along the organizational hierarchy determines the quality of work life to a great extent. Gupta must therefore, assess the employee growth opportunities at Chrysalis while determining its quality of work life. • Style of management – While evaluating the quality of work life at Chrysalis, Gupta should study the management style at the firm. A flat organizational structure which facilitates employee participation in the organization’s decisionmaking process, empowers people, encourages innovation, recognizes and rewards exceptional performances, etc., enhancing the quality of work life. • Work-life balance – With an increasing proportion of women in today’s workforce, it has become imperative for the management to help employees strike a balance between their personal and professional lives. The various measures taken by Chrysalis in this direction, like flextime options, job-sharing, reduced work-week, working from home and telecommuting must be studied by Gupta to determine the quality of work life in the organization. • Fun at workplace – A brief look at the various activities at Chrysalis that act as stress-busters and help employees take a break from their monotonous jobs, will help Gupta evaluate the quality of work life in the firm. These might include fashion shows, picnics, informal meetings, conducting games, holidays etc. U se O nl y Cl as s of 20 1 0 • BS Navjith Gupta should take above factors into consideration while evaluating the quality of work life at Chrysalis. Fo rI Answer 42 To ensure a successful cultural adaptation, organizations must formulate an effective expatriation policy. The factors that the HR manager at Celestial should consider while drafting the expatriation policy are as follows: • Candidate selection – Although technical expertise is a crucial factor for organizations when they select prospective expatriates, there are also some other important factors that determine the success of a posting abroad. It is important to select candidates who have the flexibility of learning and accepting the values and norms of a new culture. A self-assessment tool, like a questionnaire, may be used to determine if the timing, destination and job profile are ideal for both the employee and his family. The perception of the employee about the new culture and his attitude towards adapting to that culture are also effective criteria for selection. 191
  • 189. Introduction to Human Resource Management Effective training – Organizations like Celestial, which plan to venture into a foreign environment, must provide adequate training to prospective expatriates to help them adjust to the new environment. The expatriate must be trained in the local language of the host nation. This would help him communicate effectively with the nationals there. He should also be made aware of the values, norms, customs and cultural orientations at the new workplace. The family members of the expatriates should also be given an orientation about the new culture. • Domestic support – Celestial must help expatriates relocate themselves and their families by offering assistance in getting jobs for their spouses and making arrangements for the education of their children. • First assignment – The first assignment of the expatriate must essentially be one in his own area of expertise. This would help him gain confidence in the new work environment. • Constant support – The expatriate must be provided with constant support from the home country as this would motivate him to perform better. Generally, a mentor plays a crucial role by offering adequate moral support that would help him perform effectively at the new workplace. • Home leave – When employees are provided with leave so that they can visit their country once in a while, difficulties in readjusting when they are back home will be minimized. Celestial should allot periods of leave based on the tenure of deputation. • Repatriation policy – Celestial must also have an effective repatriation policy which addresses the needs of people coming back to the home country after a specific period. Issues like performance appraisals of the expatriates, effective placements when they are back, assistance in relocation, etc., should be taken care of by this policy. This is done to ensure an easy assimilation of expatriates into the corporate home offices. nl y Cl as s of 20 1 0 • O The above measures will help Celestial’s successful cultural adaptation, which is crucial for the success of any globally operating organization. se Answer 43 U Various factors of the business environment would determine the operations and success of Standard’s proposal to set up manufacturing units in other countries. Some of these factors are discussed below: National culture – The culture of a nation is the set of age-old traditions and beliefs shared by the people of the country. Beliefs are people’s perceptions of how things are done in their countries. Values are people’s aspirations about the way things should be done. A difference in culture therefore, creates a difference in requirements and expectations of employees who belong to different countries/cultures. Various attributes of culture like power distance, peopleorientation, future-orientation, power-orientation etc., differ in importance from one country to another. Standard Leathers must, therefore, consider such cultural differences between the home country and the host nation before deciding to set up an operating unit there. Fo rI BS • 192 • Political forces – The politics of a country have a great impact on its international trade. For example, nations with a strong and stable political scenario will, more often than not, succeed in attracting foreign investment. Therefore, Standard must invest only in nations which have a strong and stable political base. In other words, Standard must not invest in nations which are in political turmoil. This is because managing employees and expatriates in a politically dynamic country is a highly challenging task for human resource managers, and the success of the global organizations rests on its human resources to a great extent.
  • 190. Part C Economic forces – The economic condition of a country will have an impact on the functioning of an organization operating in that country. For example, not many companies would think of opening a shop in a cash rich nation where labor is very costly. Standard must, therefore, invest only in countries where the cost of labor is low. • Changes in technology – Changes in technology have an impact on the human resources function of a firm which operates globally. Technological changes assume much more significance in an internationally operating firm. HR must cater to the training needs of employees that arise due to a probable difference in the technology in different countries. • Legal aspects – Before initiating operations in a different business environment, Standard must study the legal aspects of the host nation to analyze how open its market is and also understand the extent of competition in the country. It should abstain from investing in those nations which impose severe restrictions on foreign trade. • Availability of labor - The availability of talented and skilled labor in a nation can attract a large number of investors, and can add value to the business environment of the country. Once Standard establishes itself in a new environment that has adequate talent, it can benefit by paying the local employees less than the expatriates. Standard may also gain from the local candidates’ knowledge of the markets and culture. Therefore, it should invest only in those nations where there is an abundance of talented workforce. • Corporate culture – Standard must develop a strong and stable corporate culture which can serve as its best competitive advantage. nl y Cl as s of 20 1 0 • O It must be noted that these factors, which influence IHRM, do not operate individually, i.e. one at a time. In other words, more than one factor can influence international businesses like that of Standard at any given point of time. However, when these forces operate together, some of them prove to be stronger than others at varying periods of time. se Answer 44 Fo rI BS U Orientation is the process of introducing a new employee to the organization and his work. This is in addition to the information given to him during recruitment and selection. Orientation helps in reducing the initial anxiety that an individual experiences when he joins a new organization. An effective orientation program thus helps new employees to become familiar with the organization’s history, philosophy, objectives, procedures and rules. The sooner a new employee adapts to the job and the organization, the quicker he would start contributing to the organization. It is, therefore, essential that new entrants receive effective orientation so that they adapt to the organizational culture quickly. Although it is the responsibility of the HR department to reinforce the excitement of a new addition to the corporate family, the colleagues and the supervisor of the newcomer must also exhibit enthusiasm in welcoming him to the work group. The benefits that might accrue to Newlife Insurance if it organizes an effective orientation program are as follows: • An effective orientation program creates a positive perception of the employer to the newcomer in the organization. This is because the supervisor himself welcomes the incumbent on his first day and tries to build a good rapport with him by removing the apprehensions of the incumbent by the end of the day. 193
  • 191. Introduction to Human Resource Management An orientation program reinforces the confidence of the incumbent as it is aimed at creating a sense of satisfaction in him that he has made the right choice by joining the company. • As discussed above, good orientation program enables the newcomer to adapt to the organization and his job quickly. • The orientation program puts the incumbent at ease and makes him feel at home. It also helps the incumbent to build a good rapport with his colleagues. 0 • of 20 1 Thus, by introducing an effective orientation program at Newlife Insurance, the organization would benefit from enhanced levels of productivity of newcomers. This is because, with the help of the orientation program, the newcomers easily understand the culture of the organization, its procedures and processes and also the expectations of the organization and its members, from them. Once they understand these issues, they are able to work towards the achievement of organizational objectives in the way the organization wants it. Answer 45 nl y Cl as s Several factors have led to the new role of human resource management in the 21st century. These factors have necessitated a change in the outlook of organizations towards human resource management. In order to be successful in the present business scenario, organizations have realized that constant development of their human resources is as important as technological developments. Some of the factors that contributed to the changing role of human resource management in organizations are discussed in the following sections. se O The IT revolution has brought about drastic changes in the way goods and services are produced. The development of new sectors like biotechnology, business process outsourcing etc., is also a result of the advances in the field of information technology. These developments have been instrumental in changing the nature of employment at the workplace and new concepts like contract employment, part-time jobs, job-sharing etc., have been introduced. Thus, changes in the market place have resulted in the new way of functioning of HR departments in organizations. Fo rI BS U Organizations are now investing, as never before, in developing their human capital. They spend huge amounts on conducting training and development programs to enhance their employees’ skills and help them prepare for any changes in the external environment. Employees in modern organizations are given adequate autonomy and independence to handle their responsibilities. The psychological contract that existed between the employees and the employers has also changed completely. The recent economic downturn resulted in a lot of turbulence in the business environment, and, in order to survive, companies had to retrench most of their surplus manpower. Even during good times, companies are looking at ‘rightsizing’ to prosper. Employees too, are not willing to stick to the same organization for the lifetime. An average man in the US changes four or five jobs in his entire career. It can in fact be said that loyalty, and the willingness to work hard for meager monetary benefits are all things of the past. Thus, the very perception of the employees towards their employers has changed. The role of HR has also undergone a transformation in the new scenario. The change in the role of human resource management in organizations was also due to various management trends that swept the business environment. For instance, globalization of the economy has resulted in an ever-increasing magnitude of workforce diversity. Organizations are now comprised of people from a variety of 194
  • 192. Part C geographical areas, cultures, educational backgrounds, etc. The HR department has to develop strategies that cater to the different needs of employees belonging to diverse backgrounds. Thus, managing a diverse workforce has now become a formidable challenge for the HR department in organizations. of 20 1 0 Concepts like human resource outsourcing have also had their impact on the functioning of HR departments. Outsourcing helps organizations outsource the not so important jobs to an outside agency which is an expert in that field. This new concept helps organizations to concentrate and work on their core competencies, rather than waste time and resources in unimportant and redundant jobs. This not only reduces costs but also improves quality output. The 21st century has seen the development of a knowledge economy, which emphasizes the all-round development of the knowledge worker. The HR department today, must concentrate on the constant development of its employees through various training programs. It should also introduce innovative strategies to not only attract the right talent but to retain them as well. It must feel the pulse of its knowledge workers and customize its practices to cater to the needs of its diverse workforce. Cl as s Thus, a number of factors in the dynamic business environment have led to a change in the role that HR plays in organizations. Answer 46 nl y An organizational effort aimed at introducing a newcomer to the culture of the organization is called socialization. Unlike orientation or induction, socialization is an on-going effort. In the present case, Perfect Communications conducts a comprehensive and elaborate process for introducing incumbents to the new environment. This effort of Perfect has many advantages for both the organization and the employee. Some of them are as discussed below: Enhanced employee performance – An effective socialization process determines how well an incumbent fits into its organizational culture. Thus, socialization directs an employee’s performance at his job. Perfect would benefit from the enhanced performance of the new employee who can start contributing early. • Organizational stability – The stability of an organization depends on how smoothly its values, assumptions, beliefs, norms etc., are conveyed and transferred to new employees. Socialization helps Perfect maintain its stability by educating the incumbents about its values, procedures and processes, and transferring its culture to them. BS U se O • Fo rI • Effective handling of employee anxiety – The socialization process at Perfect helps it provide the incumbents with the necessary guidance and support to remove any apprehensions and confusion that they might have. Perfect reduces the stress experienced by the incumbents in a totally new culture and environment by providing them with adequate guidelines on how to handle their work and responsibilities at the workplace. • Building rapport with colleagues – As the socialization process includes training by supervisors and other colleagues, it creates a foundation for building effective relationships among the various members in the organization. Thus, socialization helps to break the ice, and familiarize the newcomers not only with the processes but also with the existing members in the firm. Perfect Communications can derive a number of benefits through its comprehensive and elaborate socialization program. Therefore, perfect is indeed doing the right thing by investing substantial amount of time and other resources in socializing its new employees. 195
  • 193. Introduction to Human Resource Management Answer 47 The complexity of managing human resources increases in a global or a multinational company whose operations are spread across different cultures. Therefore, the HR practices that are followed in a local firm like ABC Ltd., will not be effective in managing the human resources in a global corporation like XYZ International Ltd. The basic differences in HR practices in the two companies are discussed below: Job-analysis and human resource planning – The job analysis at XYZ should include the special responsibilities and competencies of an expatriate and a global manager. Human resource planning also assumes greater complexity at XYZ, when compared to ABC Ltd., due to the additional dimension of cross-country transfers. The HR policy at XYZ must focus on aspects like equal opportunity to all employees in promotions and other growth opportunities. It must also equip itself to manage reverse flows of deployed talent on completion of expatriate assignment. • Recruitment and selection – The process of recruitment and selection assumes greater importance and significance in a globally operating firm. The issue that generally arises is whether to recruit locally in the host nation or to send expatriates from the home country. In the case of XYZ, it is better to send expatriates for specified time periods. This is because it is an established firm and sending existing experts from within is more efficient. XYZ, should then focus on educating the expatriates about the culture of the host nation and its important values, so that they would be easily accepted by the locals. On the other hand, ABC may find it easier to manage a group of local employees, with minimal diversity of culture, thoughts and opinions. • Training and development – Training and development of employees in an international organization is different from that in a localized firm. For example, in a global organization like XYZ, employees need to be trained to learn and understand the elements of different cultures and also develop tolerance towards these cultures. Employees should be equipped to work in cross-cultural teams smoothly and effectively. Managers at XYZ must be trained to manage teams comprising people from different cultures and backgrounds. Expatriates must be trained, on specific aspects of the host nation, like the language, value systems, beliefs, etc. • Performance management – While planning the appraisal system, XYZ must take into consideration factors like the targets it sets for its employees, and also the basis of assessing the employees’ performance. This is because the business and economic conditions of both the home country and the host nation may not be the same. Therefore, the appraisal system at XYZ needs to be designed and implemented with utmost care. BS U se O nl y Cl as s of 20 1 0 • Fo rI Compensation management – Currencies and their valuation are different for different countries. Global corporations like XYZ must consider a number of issues while designing the compensation package for its employees. These issues include compensating employees who work in different countries while abiding by the principle of equity, ensuring that they all derive maximum tax benefits, the changes that are to be introduced in the compensation package when an employee goes to work in another country, the basis of calculating the value of the benefits enjoyed by employees and expatriates, etc. The most important task is to ensure perceived equity and fairness of compensation among all the employees of XYZ, across the world. • 196 • Career management and development – In terms of career advancement, employees in XYZ are likely to expect more from the company than those in a local firm like ABC. They would expect better career development opportunities
  • 194. Part C and better prospects worldwide. It is therefore, the responsibility of the HR department in XYZ, to ensure that the career needs and expectations of its employees are satisfied. Career development initiatives and career & succession planning in the company can ensure that both the employees and the company enjoy the long-term benefits of working together. Unionism and industrial relations – The legal and labor principles are different in different countries. It is the responsibility of the global HR manager to adhere to the laws of the respective countries. At the same time, ensuring good labormanagement relations in all countries in which the firm operates is an added responsibility for the HR manager in a globally operating firms like XYZ. • Managing cross-cultural issues – Unlike ABC, XYZ has the added responsibility of managing expatriates and their operations in a foreign country. The expatriate must be taught the skills that are required to work in a cross-cultural team and to also lead a cross-cultural team. It is the responsibility of the HR manager at XYZ to nurture and develop an organizational culture which encourages diversity at the work place. of 20 1 0 • Cl as s Thus, we find a number of differences between the HR practices of ABC and XYZ, in terms of complexity of operations, and management of workforce diversity. Answer 48 O nl y Peoples Bank can use a systematic socialization process to train its 15 new recruits for the position of senior officers. Socialization may be defined as the process of helping the incumbents of an organization to adapt to its organizational culture. Every new employee has his own perceptions about the organization, its values, culture, norms, etc. There might be an incongruence between the value system of the individual and the organization initially. The organization then has to help the individual to adapt to the organizational culture. This is done by a process known as socialization which is described below: U se The socialization process at Peoples Bank might begin with a brief introduction of the bank and the job responsibilities of the incumbents, by the program coordinator. The coordinator then trains them on how to perform the routine job activities, deal with customers, maintain general etiquette, etc. Thus, every individual gets an idea of what the organization expects of him. With this in mind, depending on his own attitude and aptitude, the prospective candidate might make an informed decision about the job offered to him. This stage of socialization is generally termed the “pre-arrival stage.” Fo rI BS After gaining an insight into the various processes of the organization, the employees are now exposed to the realities of the new job. An individual might find it easy to adjust to the culture at Peoples Bank, if his expectations about the bank and his job match the situation. On the other hand, if there is much deviation between his expectations and the reality, adjustment and adaptation to its culture might prove to be difficult. This deviation might also demotivate the employee, and may force him to even quit the job. To avoid such unwarranted incidents, Peoples Bank must ensure that the expectations of the candidates match the realities of the job environment. Alternatively, it might benefit the bank to help such employees unlearn what they have already learnt and continue with the socialization process. This stage is generally called the “encounter stage.” In the next stage, the new employees at the bank must try to analyze and tackle problems that they encountered in the previous stage. Normally termed the “metamorphosis phase,” this phase comprises of the employees trying to reorient themselves and work towards the achievement of organizational goals and objectives. The success of the metamorphosis stage depends on the degree to which the employees accept and conform to the organizational values, norms, policies and procedures. 197
  • 195. Introduction to Human Resource Management The above sequence of stages comprises an effective socialization process that acquaints new employees with the organizational culture, norms and values, and helps them to orient their behavior towards the accomplishment of the goals and objectives of the organization. In other words, the above process of socialization will help Peoples Bank reduce the apprehensions of its new recruits and guide them towards positive organizational results. 0 Answer 49 of 20 1 Now that the HR manager at Digital Solutions has decided to select expatriates instead of local employees from the host nation, he must consider a variety of factors that determine the success of the selection process. Some of the important criteria for effective selection of the right candidates for the overseas assignment are discussed below: Cl as s Technical expertise – The success of the expatriation exercise largely depends on the technical and managerial competence of the expatriate. Most organizations lay emphasis only on the technical skills of the prospective candidate. Since the employee must have worked for a substantial period with the company, Digital may use previous performance records as determinants for the success of the candidate in a new environment. Feedback from the present and the past supervisor must be sought before deciding on the candidate. nl y Cross-cultural suitability – The importance of the culture of the host nation in a globally operating firm like Digital cannot be undermined. Therefore, the expatriate must be able to handle his responsibilities well even in a new environment. Various factors determine the suitability of the candidate for the new assignment. Some of them include cultural empathy, ability to adapt to new situations and business environment, diplomacy, positive attitude, emotional stability and maturity to tolerate any differences that arise. The candidate will be successful as an expatriate only if he has the skills and efficiency to cope with the cultural changes. se O Family concerns – The family of an expatriate plays a crucial role in the success of the expatriation assignment. For example, research shows that the adjustment of an expatriate to the new environment is mostly determined by the acceptance of the spouse. Therefore, Digital might benefit by seeking the opinion of the candidate’s spouse, before making the final decision. U Culture of the host nation – As discussed above, the culture of the host nation determines the success of the overseas assignment. For example, if Digital is operating in some country in middle-east Asia, then it is advisable not to select female candidates. Fo rI BS Requirements of the organization – A lot also depends on the requirements of Digital, in terms of the ideal proportion of expatriates to local employees in its overseas concern. Other organizational factors like the mode of operation of the company (based on the negotiated contracts, Digital might be forced to select only a proportion of candidates from the home country), duration of the assignment (depending upon the commitment levels of the candidate towards their families, Digital might select or reject candidates), amount of knowledge-transfer involved (for example, if Digital plans to impart technical knowledge to its local employees in the host nation, technical skills and interpersonal skills are the criteria of selection), etc. Language – Differences in the medium of communication, in this case, the language, might prove to be serious inhibitors to effective interpersonal and cross-cultural communication. It is, therefore, better if the expatriates have a knowledge of the local language. This also helps in easy acceptance of the expatriate among the local employees. These factors would be the most important determinants of success of the selection procedure at Digital Solutions. 198
  • 196. Part C Answer 50 Cl as s of 20 1 0 A performance appraisal system helps to optimize employee performance and also to identify the areas of development. It is useful in taking administrative decisions relating to payment of incentives, promotions etc. In the case of Vishnu Group of Industries, the management committed a ‘fundamental attribution error,’ which ignored the impact of external factors on employee performance. The performance appraisal system should provide for recognition of employee performance in the face of adverse external influences. In this case, the performance of the sales personnel went down because they felt that the management did not consider the impact of the slack period on sales. The sales of refrigerators are naturally higher during summer than in winter or the monsoon season. Therefore, any performance appraisal should take into consideration the impact of the seasons on sales. However, in this case, the firm failed to give due importance to external factors like the weather. It did not set clear objectives in framing its performance appraisal system and so the performance of the employees did not improve as expected. The other aspect that should have been taken into consideration in this case, during the process of performance appraisal, was the impact of demographic factors and their effect on employee performance. Sales in some areas might be higher than the sales in other areas depending on the spending capacity of the people and the local characteristics of the area in which the sales were taking place. For example, fewer fridges would be sold in a place like Srinagar than in Mumbai. So, when designing a performance appraisal system, all these factors have to be taken into account. When the management takes all the above discussed aspects into consideration before designing an appraisal system, it can earn back the confidence and commitment of the employees. nl y Answer 51 Fo rI BS U se O The method of appraisal demonstrated in the above example is called the paired comparison method. In this method, the appraiser ranks the employees based on paired comparison. Every employee is compared with every other employee in the group. The employee who is rated higher in these comparisons, the maximum number of times is the best employee in the group, while the one rated higher the least number of times, is the least valuable. The employees are thus ranked based on the number of times they emerge the winner in each paired comparison. This technique is quite similar to the alternation method of ranking. While this method is simple, it becomes extremely time consuming and cumbersome when there are a large numbers of employees. So, paired comparison should be used only when there are a few employees to be appraised. By using the method, an organization can analyze the performance of each of its employees in relation to other employees. It is a well-developed method of ranking the attributes or characteristics of a given set of items. The characteristics of the given set of items depend upon the issue at hand. The method simply involves pairing each item with each of the other items in the set. Every response that the individual makes is reduced to a simple choice between two items. The result of these paired choices is a set of items that are rank-ordered in terms of the items chosen more often. However, most of the present day companies do not follow this method as they have a large number of employees. Answer 52 Performance appraisal, if implemented effectively, can bring great benefits for any organization. The above example demonstrates that the ‘leniency effect’ was in play, when the production manager implemented the appraisal system. Performance appraisal systems turn out to be ineffective because of implementation errors, rather 199
  • 197. Introduction to Human Resource Management 0 than design defects. Most errors of performance appraisal committed by the appraisers are ‘intentional’ errors such as leniency. The main reason for leniency could be the appraiser’s desire to maintain a cordial relationship with the appraisee. Subconsciously, he might feel that any low rating or negative feed-back would create unpleasantness, and tries to avoid this. Such leniency is the most common reason for most of the appraisal errors. Unintentional errors can be rectified by appraiser training. However, as far as intentional errors are concerned, more organizational level steps have to be taken. Some of them are: Making the ratings more measurable and quantifiable. • Reducing subjectivity by using multi-rater feedback. • Using instruments/methods which have hidden weights or keys attached to them. • Having the feedback evaluated by a third party like the HR department. • Training appraisers on how to provide negative feedback. of 20 1 • Cl as s The organizational culture has to be open and transparent, and it has to support employees to make them deliver better performance. Care has to be taken in attaching pay and rewards to performance management as it is a very sensitive issue. Therefore, it is better to have ‘potential’ component linked to training and development and the ‘performance’ component linked to pay. If performance is measured through quantifiable targets and goals, unhealthy competition and some of the related problems can be eliminated. nl y In this case, it is evident that the production manager failed to deliver the goods as far as his responsibility of appraising his subordinates is concerned. However, it should be noted that appraisal errors is not an isolated problem and can happen with any employee. Therefore, adequate training and other methods suggested above should be used to eliminate appraisal errors. O Answer 53 Determine the standards of performance based on the organizational objectives and the job description. The standards have to be set in consultation with the project manager who has a good idea about the goals and the objectives of his projects. U • se Any performance appraisal process should facilitate the optimization of employee performance whether it is an IT firm or a public sector undertaking. In conducting a performance appraisal the steps that Vijay has to take are: These standards have to be communicated in a simple and lucid manner to the employees. • Measure employee performance against the pre-determined goals and standards. This helps to determine what components of the performance have to be measured. At this stage, the process of measurement, that is, how the performance components are to be measured has to be determined. • Carry out the actual process of measurement. Here, Vijay should take care to train and educate the appraisers to avoid the common pitfalls of performance appraisal like the leniency and central tendency effects. • Communicate the results of appraisal to the employee concerned. It is the responsibility of the manager to make the employee feel comfortable with the whole process. Continuous feedback and orientation ensure a simple final appraisal discussion, with very few differences of opinion. Once the appraisal is finalized after discussing it with the employee, it has to be put to effective use. The appraised document has to be effectively and immediately put to use to ensure better performance during the next appraisal period. Fo rI BS • 200
  • 198. Part C of 20 1 0 Apart from this, Vijay also has to keep in mind that to ensure maximum utility of the performance appraisal system, it is important to link performance standards to reward systems and the competency standards to training and development. Gaps in the competency level should be identified as early as possible and necessary training given to the employee. To ensure employee’s support and accept the performance appraisal system, Vijay should ensure that they employees are communicated about the performance appraisal system from time-to-time. Employees should also be made to feel confident that the top management is committed and shows an interest in the implementation of the performance appraisal process. If the employees feel that the whole exercise is a routine one where the results will be filed away and forgotten, they will get disenchanted with the exercise and lose interest in the job as well. The management has to ensure that the whole business of appraisal is taken seriously and the results put to effective use. Answer 54 Cl as s Traditionally, appraisal has been the job of the supervisor with the employee himself having no role to play in the process. However, the whole concept has changed today and the appraisee has an important role in the process. He, in coordination with his superior, determines the performance objectives and standards. Again, at the end of the appraisal period, the employee assesses his own performance, with relation to predetermined objectives. The supervisor offers his opinion at the end of the appraisal and together they finalize the appraisal results. The areas of development are identified and future action planned. nl y In more recent concepts like the 360 degree feedback, peers/colleagues of the employee, his suppliers, his customers/clients and even his subordinates play a role in assessing his performance. This gives a more holistic view of the employee’s performance and also helps in easy identification of problem areas. se O Self-Appraisal: Self-appraisal is a common practice today, with the employee being given a role in evaluating his own performance. The employee is considered to be the best equipped to evaluate his own performance because he understands his strengths and weaknesses. He can easily identify problem areas that need training and development. However, he has to be trained to be rational and critical in his appraisal. Pre-determined and measurable objectives can help ensure a more objective appraisal. Fo rI BS U Supervisors: It is the supervisor’s responsibility to ensure that his subordinates carry out their jobs well. So, the authority to evaluate the employee performance has traditionally been with the supervisor. Even today, the supervisor has a very important role to play in the appraisal of his subordinates. Many supervisors dread the exercise, as they do not want to spoil their relationship with the employee. The organization has to develop an open and professional culture where the process of appraisal is held in a healthy and constructive manner. Peers: Peer evaluation is a very sensitive area as it may lead to false and unhealthy appraisals, because of the competition among peers. The organization has to reach an advanced stage of development before it can handle peer appraisal. Peer appraisal has to be used to assess the communication and interpersonal skills of the employee, as these can affect the team performance. Customers: The performance of an employee has a direct and immediate impact on his customers, either internal or external. In service organizations like banks and hotels, customer feedback has become the most important tool in evaluating employee performance. In manufacturing organizations, the internal customer evaluates the performance of the employee. Subordinates: The concept of the subordinate evaluating the performance of his supervisor is yet to gain acceptance in most Indian companies. The Indian culture 201
  • 199. Introduction to Human Resource Management does not encourage the idea of a subordinate-appraisal. However, with more and more MNCs operating in the country today, this concept is likely to gain ground. The 360 degree feedback system, which enables appraisal by subordinates, is being adopted by many Indian organizations, especially the new economy players. However, this needs a high level of organizational as well as employee maturity for its successful and effective implementation. 0 Answer 55 of 20 1 The main features of MBO are clear and well-defined goals, a definitive time span to achieve these goals, an action plan and finally, timely and constructive feedback. Appraisal by objectives, the application of MBO technique to performance appraisal, helps the subordinate gain a clear understanding of the objectives of the superior’s job, his own job, the expected standards of performance and the plan of action to accomplish these objectives. Cl as s For MBO to be successful, an employee should be knowledgeable about the organization’s objectives. The relationship between the superior and the subordinate should be that of trust and cooperation whereby they can achieve the goals of the organization through mutual cooperation. Employees will also be encouraged to contribute to the goals of the organization if they have cordial relations with the management. nl y For an MBO program to achieve the desired results, commitment and dedication are required. If the manager has to communicate his expectations effectively, he should invest adequate time and resources to learn the perceptions, work values, and objectives of his employees. For MBO to be effective there is a need for effective planning methods as well. If the planning is unrealistic, implementation will obviously be unsatisfactory, and the appraisal distorted. The MBO approach can also be used as a standard for fulfilling the management functions of planning, leading, and measuring. Fo rI BS Answer 56 U se O MBO has many advantages as far as performance management is concerned. First, unlike the traditional methods, it redefines the role of a manager as a facilitator rather than a judge. Second, this technique focuses on the results of employee performance. MBO reorients the employees towards being future oriented and performance oriented. The management should not depend entirely on this method to solve the problems at the workplace. It should look at a combination of other management tools and techniques as well for maximum benefits. The HR manager has taken the right step in suggesting the implementation of computer based training. CBT has the flexibility when compared to the different modes of traditional training. It increases both productivity and learning because it is extremely flexible. Classroom training requires a trainer, a room, materials and enough learners to make the training worth the investment. With CBT, each learner can access training exactly when it is needed, at a time and location convenient for that particular learner. This ensures that there are no interruptions in production lines and at the same time, no canceled or postponed training sessions due to production emergencies. CBT also requires less time than to classroom training. Another reason for CBT’s efficiency is that it caters to individual needs, as people have different learning speeds. In a classroom, everyone is forced to proceed at the same speed but with CBT, learners can work at their own pace. Learning retention is typically higher with CBT than it is with classroom training. One reason for the increased retention is that learners don’t feel embarrassed to spend extra 202
  • 200. Part C time on topics that they find difficult. In addition, CBT can provide interactive exercises with which learners can test their knowledge, practice applying the skills acquired and experiment with what they have learnt in a safe, nonjudgmental and selfevaluative environment. Some training programs even offer built-in features that can be adapted to suit different learning styles. For example, some programs give learners the choice of hearing audio, reading text or doing both. Some other programs allow learners to chart their own learning paths or to work through the training sequentially. of 20 1 0 In some cases, by the time the learners get an opportunity to apply what they had learnt in the classroom, their skills might already get rusty. With CBT, learners can immediately apply what they have learnt because they take the training when they are ready to use it, not when the organization is ready to provide it. In addition, because fewer people are needed to conduct CBT, quality engineers and other subject matter experts can spend more time helping learners use what they have learnt to make improvements in performance quality and employee productivity. nl y Cl as s However, despite all its benefits, CBT, like traditional classroom training, will yield only disappointing results, if it is delivered in a vacuum. Also, it is important to link CBT and classroom training to achieve certain specific business objectives. Learners need to be held accountable not only for going through the training, but also for putting into practice what they have learnt, in their jobs. Suitable processes must be put into place to enable people to use what they have learnt and to help them if they have difficulty in applying their newly acquired knowledge or skills. Before implementing a CBT system the HR manager should be clear about whether the training should be conducted individually or in a group, the time frame for the completion of the training program, the feedback regarding the training program, and the ability of the learners to use the training program. O Apart from the above, the manager should also ensure that the training program has been developed in consultation with quality professionals, the capability of the employees to use the product and the capacity of the organization to handle any technical problems if they occur. Employees should be periodically tested on whether they have been successful in adopting computer based learning. U se CBT and WBT (Web-based training) present exciting alternatives to classroom training that can save a company time and money while at the same time, increasing employee enthusiasm for training. Using CBT technology will be most effective when its implementation is well thought out and when the training is carefully selected to ensure it meets the needs of the organization. BS Answer 57 Fo rI Vipul Shah should undertake to train the new employees in the following areas: i. Company Policies and Procedures – When a recruit joins a firm, he should have a clear idea about its policies and procedures. An employee should acquaint himself with the organization’s rules, practices, processes and procedures, apart from the organizational culture, structure, and business. Training in this area helps the employee work with conviction and confidence. This is more important for an employee who is new to the different aspects of the organizational policies and procedures. ii. Skill-based Training: An employee should be provided training to match the skill requirements of his job. Such training helps in improving the employee’s job effectiveness. Skill-based training should also be imparted to enable the employee adapt to technological changes. iii. Human Relations Training – In an organization, an employee interacts with his peers, supervisors, subordinates, suppliers and customers. He might also have to 203
  • 201. Introduction to Human Resource Management interact with other external agents like government agencies or legal bodies. So, it is important for him to know how to manage his professional relationships. Human relations training is essential to improve the employee’s skills in the areas of self-learning, interpersonal skills, group dynamics, perception, leadership styles, motivation, disciplinary procedures, grievance redressal, and so on. v. of 20 1 0 iv. Problem Solving Training – Every employee encounters problems in the course of his work in an organization. These can range from simple operational problems to major decision-making problems. Training in problem-solving skills equips an employee to deal successfully with such problems. Managerial and Supervisory Training – All employees in an organization, at some point of time perform managerial and supervisory functions such as planning, organizing, directing, controlling and decision making, Thus, training in all these areas will enable the new recruit to confidently take up his tasks and perform in accordance to the rules and regulations of the organization. Answer 58 Cl as s To make training effective, it is important to select the best training approach to meet the specific organizational needs of the organization. Organizational training can be an expensive investment with far-reaching effects on the organization’s performance, so training managers must carefully choose the training policies and programs that fulfill their goals, given the limited resources. nl y To analyze the importance of the training program in the firm, Vandana has to first identify the degree of importance of training for the firm. This can be done by analyzing the firm’s past performance. The training strategy should take into consideration The skill set of the employees. • The knowledge level of the employees • The performance of the employees in relation to other players in the industry. O • U se The training program has to be selected based on these factors and by taking into account the training required and the resource constraints. There are three basic methods of training development: Fo rI BS Developing it in-house: A training program can be developed in-house, by working with training staff or consultants to design a program that will solve the organization’s training needs. Since, such training can be costly the organization should be prepared for it. If the training need is a generic one, however, developing one’s own training program is not the most cost-effective solution. It is more suitable to purchase a training program from a vendor for general training needs. The other method is to buy the training program and adapt it to the organization’s needs. This method is advantageous as it takes into consideration both the training vendor’s experience in program development and the purchaser’s familiarity with the organization’s individual needs. The size of the budget and the amount of time available to develop the course are two of the most critical considerations involved in the decision to develop or buy. Some other factors include the availability and expertise of internal training staff, confidentiality issues, and vendor quality. Vandana would have to consider all these issues before designing a training strategy for the firm. 204
  • 202. Part C Answer 59 of 20 1 0 Working on costly equipment requires adequate training because even a small mistake could result in huge losses for the organization. Also, some equipment could be dangerous to handle without adequate training and could even prove fatal to employees operating the equipment. To avoid such situations, Praveen can be provided off-the-job training. Off-the-job training refers to training imparted away from the employee’s immediate work area. The employee is separated from the job situation and his attention is focused exclusively on learning and this can lead to improved job performance. An advantage of off-the-job training is that the employee is free from the distractions of his job requirements and is able to concentrate better on learning the job rather than just performing it. When considering off-the-job training, the organization should take into consideration the various facilities that have to be provided. O nl y Cl as s Simulation exercises are a kind of off-the-job training, where the employee is exposed to an artificial work situation that closely resembles the actual work one. In situations where the organization cannot afford any mistakes by the trainee during on-the-job training, simulation exercises are of great help. Simulation exercises can be in the form of case exercises, experiential exercises, complex computer modeling, vestibule training and role playing. For Praveen, the organization can adopt vestibule training, which is a part of the simulation exercises. It is a training method where the actual work conditions are simulated and equipment similar to what is used on the job is used for training too. In this way, Praveen can gain experience of using the equipment without any pressures of work or cost involved. Though expensive, vestibule training helps employees gain knowledge about the actual job situation and also reduces the problem of transferring the learning to the job, since the trainee uses the same materials and equipment that he will be using on the job. Answer 60 Fo rI BS U se Learning can be described as the process of developing new knowledge, skills, attitudes and values through participation in formally organized learning situations and natural social interaction. Learning is an essential ingredient of any training program and determines its success. It does not stop as soon as one gets into a job. Motorola University is an example of the company’s commitment to training. In Central China, Motorola University offers courses to students studying at the Nanjing Institute of Posts & Telecommunications, which helps the company spot potential employees and educate potential customers. Besides classroom training, Motorola also extensively uses “embedded learning,” or apprenticeship, in which employees learn tasks while being paired with a more experienced worker. As training is a form of education, where employees are expected to learn and apply the skills acquired from training in their job whether it occurs on-the-job or off-thejob. Trainers may benefit by using certain principles of learning and learning styles while developing and implementing training and development programs. Neglect or improper application of the principles of learning on the part of the management or the employees may lead to the failure of the training and development programs. This makes it important for the trainers and the trainees to be familiar with the principles of learning, An organization should build a culture that emphasizes learning. The various steps in building a learning culture are: 205
  • 203. Introduction to Human Resource Management • • • • • 0 • of 20 1 • • The first rule in building a learning culture is to keep things simple. Every employee should know what the organization is involved in and what is expected of him. Clearly define the objectives first. Establish a learning committee that concentrates on the development and implementation of the training policies. Identify each position in the company and then determine the skills and competencies required to effectively complete the responsibilities. Identify the skills and competency gaps. This will ensure that the organization determines what skills and competencies are required to achieve organizational goals. Talk to employees and help them understand what their personal aspirations are and whether they are in congruence with the organizational goals. One of the main reasons for employee indifference towards training is the lack of conviction that the learning can be applied in their work. Training loses its meaning if the learning is not applicable at work. Develop a training plan to help bridge the gap between the competency and knowledge. Learning is a continuous process and hence has to be integrated into daily work activities. Coaching and mentoring are two ways to make the learning process more interesting and an integral part of the company’s strategy. It is also important to get regular feedback regarding the learning process. Cl as s • nl y Answer 61 BARS concentrates on the behavioral traits demonstrated by an employee instead of his actual performance. In implementing BARS the marketing manager has to concentrate on three important steps. se O The marketing head in consultation with the HR manager should first determine the relevant job dimensions of the marketing personnel. He should then identify the behavioral anchors in consultation with the marketing managers, for each job dimension. Finally he has to determine the scale values and then group the scale values based on the consensus. BS U In conducting a BARS appraisal for the marketing department, it is important to take into consideration various factors that influence performance like accuracy of providing market information, market coverage, cooperative relationship, creativity, and the effort displayed in conducting market research. Developing a BARS rating form requires answers to questions like Fo rI • 206 What are the important duties that make up the job? • What does excellent, acceptable and unacceptable behavior in each of these duties mean? • For effective implementation of the BARS system of performance appraisal, managers and job incumbents should work together to answer these questions. The behaviors, known as anchors, are placed on a nominal scale ranging from least favorable behavior to the most favorable. Here, in this case for example, the least favourable behavior could be (1) and the most favorable behavior can be (5). These behaviors are noted by the individuals who observe the performance of the employees. Developing BARS for the sales representatives can provide the marketing manager with information regarding which area a sales personnel needs to develop to effectively carry out the various dimensions of the job. BARS thus helps in developing an effective training program by identifying the performance gaps.
  • 204. Part C Answer 62 0 On-the job training would be suitable for Ashrith as he already has prior experience of working in the bank. Job instruction training can be employed, as one of the methods of on-the-job training. In this method of training, the trainee is given instructions by the trainer while performing the job on the site and any doubts that the trainee might have are cleared up immediately. This method is very popular because the trainee can discuss his problems with the trainer while performing the job. of 20 1 Training programs should concentrate on explaining to the trainee (Ashrith) the operations and activities of the headquarters. Ashrith can be introduced to the daily activities of the organization through observation. Continuous training can also be provided by informal but in-depth discussions in small groups on market-related issues and by formal training in new models and systems being adopted by the banking industry. Job instruction training follows a systematic sequence of activities as laid down below. Cl as s As the first step, the trainee should be prepared for the training by giving him clear information about the venue and the time of the training to be imparted, and the job to be performed. Any doubts regarding the training should be cleared at this stage. After the training is imparted in the form of instructions, the trainee should be asked to perform a practical demonstration. In this case, Ashrith may be asked carry out some bank transactions on the computer. This would help in assessing his understanding of the instructions and the degree of his learning. O nl y After the trainer is satisfied with the performance of the trainee, the trainee is left to operate on his own, with someone designated to be called upon when he requires any assistance or help. Demonstrations by the trainer and repeated practice by the trainee, help the trainee to master the job. After some time, the trainee gains the skill and confidence to perform the job without the supervision of the trainer. However, the trainer should be available to clear his doubts and help him whenever required. Here, a colleague or a supervisor might help Ashrith settle down in his job and gain confidence about managing things on his own. se Answer 63 Fo rI BS U Management development relates to the systematic development and growth of the employees in an organization. This development is future-oriented and prepares employees to make valuable contribution to the organization. Management development ensures the organization, availability of trained and groomed managers, who can don key roles in the future. The first step in the management development process is a review of the organizational objectives, which provide a framework to determine the managerial development needs. The second step involves an evaluation of the organization’s current management resources. On the basis of the information gathered from human resource planning, a managerial/executive inventory is prepared. This inventory, when matched with the future management needs of the organization, helps in identifying the areas for management development. This kind of an analysis reveals the inexperi