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Course module hrm


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Course module hrm

  1. 1. HUMAN RESOURCE MANAGEMENT, MB- 203Course Instructor: Harleen MahajanCourse Book: Gary Dessler Human Resource Management, Ninth, K AswathappaClass Room PoliciesThe following are the policies regarding class behavior required in Human Resource Lect. 1. Attendance will not be marked if the student is late by more than 5 min in the class. 2. 75 % of the attendance is required to appear in the final exams. 3. Late assignments will not be accepted. 4. All the topics of presentation are already in the mail so 100 % attendance is required on presentation day. 5. If you will be absent on the day of test you will have to pre pone it.Course Requirements and Grading 1. Readings and case studies : (3 marks) These will be mentioned with each lecture in the course break up and all the students are required to read them before coming to the class and at the end of semester each student will submit 3 page written format on the analysis of all the readings and 3 page written format on the analysis of all the case studies done in the class. 2. Assignments: (7 marks). The assignments will be mentioned in the course breakup and students are required to submit that assignment after three days. First and second assignment would be a general assignment which would be given individually to each student and it will be of 2.5 marks each. Third assignment would be an e-mail assignment which would be given one day before and will be corrected and evaluated at the same time of the submission and it will be of 2 marks. 3. Hourly Tests: (10 marks). First hourly test would be open book class test which would be of 5 marks. other test would be general would be of 5 marks. 4. Class presentations: (5 marks) 5. Mid-semester Examinations (15 marks)
  2. 2. Assignments: 3 Cases :4Total Lectures: 44 Tests: 2 Presentation:1 Activities:3Lecture Topics Date Assign TestNumber1 Ice breaking session in which the students will be told the success stories of HR managers and they will be asked to pick any of the company, in which they will study the role of HR manager during the whole semester. They will be asked to create login in the site to indulge themselves in HR discussions. Warm up session: Hidden Battleground2 Introduction: Meaning HR is a series of integrated decisions that form the employment relationship, their quality contributes to the ability of the organizations and the employees to achieve their objective. Scope of HRM Nature of HRM, Employee hiring, Remuneration, motivation, maintenance, and industrial relations.3 Objectives Societal, Organizational, Functional, Personal Functions Legal Compliance, Union management relations, HR planning, selection, training, placement , assessment, compensation and appraisal Policies & roles Are the plans of action, Organisations need to have HR policies as it ensures the consistency.4 Importance of Human Resource Management Evolution of HRM and its progress Best employers by Business Today will be discussed.5 HRM & HRD a comparative analysis6 Organizing the Human Resource Management department in the organization. Various Forms of HR structures like Line, Line and Staff
  3. 3. 7 Human Resource Management practices in India. 1 Discussion of Assignment No. I7 Human Resource Planning: Definition HRP is the process of forecasting a firm’s future demand and supply of the right person at the right place. objectives Future personnel needs, Part of strategic planning, are creating talented personnel, International strategies.8 HRP process9 Job analysis, description, specification & job evaluation Job Analysis is the process of studying and collecting information relating to the operations and responsibilities of a specific job.10 Recruitment, selection Recruitment involves attracting and obtaining as many applications as possible from eligible job seekers. Sources Internal and external Sources Recruitment process Recruitment process of British gas will be discussed in detail, attached herewith Selection Is the process of differentiating between applicants in order to identify and hire those with a greater likelihood of success in job. Selection Process Prelim interview, Psychological test, Employee interview, Reference check, selection decision, medical exam, job offer, employment contract.11 Placement and induction process. Induction is the systematic and planned introduction of employees to their jobs, their co workers and the organization. Formal/ Informal, Individual/collective, serial/disjunctive, Investiture/Divestiture.12 Class test 1-11 113 Human Resource Development: Concept. Is improving current or future employee performance by increasing employees ability to perform.
  4. 4. 14 Employee training Is the process of teaching new employees the basic skills they need to perform their jobs. Methods On the job training, Apprenticeship ,Simulated, Electronic,15 Employee development Case study 2:16 Career Planning Making career choices and decisions – the traditional focus of careers interventions. The changed nature of work means that individuals may now have to revisit this process more frequently now and in the future, more than in the past.17 Career development The study of career development looks at: • how individuals manage their careers within and between organizations • and how organizations structure the career progress of their members, it can also be tied into succession planning within some organizations.18 Discussion on Presentation19 Performance management: Is an objective assessment of an individual’s performance against well-defined benchmarks. Process Objectives of performance appraisal, establish job expectations, design a programme, and appraise performance review.20 Methods of Performance appraisal Rating scales, Checklist, Vestibule, Simulations, Field Enquiry, Forced Distribution, Critical incident, Behaviorally anchored rating scales Essay method, Ranking method, Paired comparison.21 Potential appraisal Reading 4: Avoiding 360- Degree Paperwork, page 260, Human Resource Management, Gary Dessler, Ninth edition.22 Job Compensation:
  5. 5. 23 Wage administration Is the administration of the hourly rates of pay, irrespective of the number of hours put in by an employee. Components of good package-Monetary and non-monetary benefits.24 Salary administration Factors affecting employee remuneration like Labour markets, Going rate, Productivity, Cost of living, Labour Unions, Labour Laws, Society.25 Incentive plans Group and Individual Incentive Plans like Taylor’s plan, Rowan’s, Beaudex, Gantt, Merrick, Priestman .26 Fringe benefits Fringes embrace a broad range of benefits and services that employees receive as part of their total compensation package pay or direct compensation. Principles of Fringes27 Promotions Means improvement in pay, prestige, position, and responsibilities of an employee within an organization. Types of promotions: Horizontal, Vertical and Dry Demotions Means decrease in pay, prestige, position, and responsibilities of an employee within an organization.28 Transfers Involves a change in job along with it a change in place without change in pay, position or responsibilities. Types: Production, Replacement Versatility, shift Remedial. Separation Layoffs, resignations and dismissals separate employees from the employer.29 Absenteeism & turnover. Refers to the failure on the part of employees to report to work though they are scheduled to work. Causes of Absenteeism Causes of Absenteeism in India
  6. 6. Turnover Refers to employee leaving the organization and the need to be replaced. Causes of Turnover30 Test 2; Lectures 13-29 231 Quality of work life (QWL): Meaning,- is ensured when the important personal needs of employees are being fulfilled through their experiences in the organization. Origin of QWL Factors contributing towards QWL.32 Development and various approaches to QWL33 Techniques for improving QWL. Reading 7: Family Friendly Benefits, pg 386, Human Resource Management, Gary Dessler, Ninth edition. Benefits and Employee Leasing, pg 390.34 Quality circles: concept – is the group of persons within the same work area in an organization who meet frequently to discuss and analyse quality related problems. Structure, Role of management quality circles in India35 Job satisfaction Job satisfaction has been defined as a pleasurable emotional state resulting from the appraisal of one’s job an affective reaction to one’s job and an attitude towards one’s job. Employee Morale. Affect Theory Dispositional Theory Two-Factor Theory36 Health, Safety & Employee welfare. Refers to all those factors of employers, trade unions, voluntary organizations and govt. agencies which help employee feel better . Employee welfare in India.37 Counseling for effective Human Resource Development.38 Human Relations: definition, objectives & 2 approaches to human relations, Discussion of e- mail assignment 339 Employee grievances Refers to any conflict between the employees and employer
  7. 7. Causes of dispute Settlement of Grievances - Collective Bargaining - Code of Discipline - Grievance procedure - Conciliation40 Participation & empowerment, Employee participation is the process whereby employees are involved in decision making processes, rather than simply acting on orders. Employee participation is part of a process of empowerment in the workplace. Principles of empowerment Demonstrate You Value People Share Goals and Direction Trust People Delegate Authority and Impact Opportunities, Not Just More Work41 Introduction to collective bargaining Is a process by which representatives of employees meet the representatives of management in order to determine wages, salaries and other issues. Process of collective bargaining42 HR Audit. Is a tool which helps in assessing the effectiveness of HR functions in the organization. Approaches to HR Audit - Outside Authority Approach - Statistical Approach - Compliance Approach - MBO43 Introduction to Business Ethics Refers to good and bad, right and wrong, just and unjust actions of the business people. Sources Religion Culture Legal System44 Class Test: 3, Whole syllabus 3WARM UP SESSIONCase 1) The hidden battleground: the case
  8. 8. Acquisition talks are at an advanced stage between two software giants when the HRD head of theacquiring company demands a place at the negotiating table. What impact will her inclusion in theteam have on the deal?Ashish Malhotra, CEO of Gentech Solutions Ltd and Narain Bhattacharya, CEO of HindustanComputer Corporation (HCC) wound up their hour-long quasi-informal discussion on theacquisition their companies were contemplating with a warm handshake. Their faces beamed withsatisfaction as they walked out of the elegant interiors of The Oberois exclusive members-onlyexecutive club overlooking the Arabian Sea."See you tomorrow," said Ashish. "Same place, 11.00 a.m.?" Narain seemed unsure. "Excellent,"answered Ashish, suppressing his impatience as he entered his BMW. "How am I ever going topull them away from their public sector mindset?" wondered Ashish casting a last glance atNarains Maruti heading the other direction. He quickly glanced at his watch. It was already 3.45pm. He had just fifteen minutes before a scheduled appointment with his colleagues, SushilAcharya, Vice President Finance, and Jacob Mathew, Vice President Strategic Initiatives.At Gentech HeadquartersGentech, one of Indias largest software and Services Company is close to signing a deal to acquireHCC, a leading government owned domestic provider of end-to-end IT solutions and services.Gentechs primary motive for this acquisition is to consolidate its market leadership in India. Andthe governments divestment policy is helping Gentech realize this objective. As Ashish brisklywalked into one of Gentechs conference rooms, he was welcomed by two senior Gentechies, as allemployees at Gentech are internally known."Did the talks go well?" Jacob asked excitedly. "Yes, they did," Ashish responded. "Our team willmeet theirs tomorrow to finalize the deal." "Good, perhaps we should now discuss ways to tightenour bargaining position," urged Sushil. "Before that why dont we quickly update ourselves on thecore strategic and financial benefits coming out of this deal?" Ashish looked at the duo for aresponse. "Fine, that would serve as a warm up too," replied Jacob as he poured freshly brewedDarjeeling tea into their cups.Jacob began with the strategic benefits. "HCC has expertise infacilities management and also in handling large turnkey project execution. They have a widerange of service offerings and complementary domain expertise. Gentech can benefit from theirnationwide sales and support network and also from their large domestic client base. Moreover,their reputation with the government will help increase our market share further. The key attractionis their strong domestic market focus and that would very much complement our internationalmarket expertise."Ashish nodded in agreement as he turned to Sushil. "Exactly," Sushil took over. "Nearly 80% oftheir total revenue came from their domestic operations during the last fiscal and this represents4.6% of the total market share. The government and public sector market together accounted fornearly 51% of the total domestic IT market last year. Maintenance and support is an Rs 4.5 billiondomestic market and HCC is the unquestionable leader there with an awesome 70% market share.""And that surely will help us strengthen our position in the domestic market. Its a pity that wehardly have any presence in the Rs 95 billion domestic market for IT services that is growing by45%. Though we grew faster than the global market, the global market grows at just under 15%.Besides, the US slowdown is reducing it further," added Ashish. "We should strengthen ourbargaining position tomorrow by enlightening them on how they could benefit by joining our
  9. 9. family. If we try, we should be able to sail through the deal with a price even lower than thecurrently quoted price," Sushil reiterated his point.Ashish turned to answer the knock on their door. It was Aditi Saxena, Gentechs Vice PresidentHR. "Yes Aditi, whats up?" asked Ashish. "Can I join you for a short while?" she soundeddisturbed. "Sure, any problems?" Ashish was concerned. Aditi is known to have her finger on thepulse of the company. "You are discussing HCC, right?" she asked. "Yes, relax. Would you likesome tea?" Jacob took up his familiar role. "Yes please. Do you have any role for HR intomorrows discussion?" she asked. "Dont worry. Well put you in charge of integration. At leastwait till we clinch the deal," Sushil quipped."Im serious. Well have to discuss this. The correct spelling of acquisition begins with HR," Aditiretorted. Ashish jumped in to save the situation, "Aditi, whats actually bothering you?" "Are yougoing to discuss culture issues tomorrow?" she looked at Sushil. "Why so early?" he asked withsurprise. "I knew that culture simply wouldnt be on your map. Not only incompatible cultures butalso issues like loss of key talent and clash of management styles will pop up one after the other assoon as the deal goes through. Dont underestimate these problems. Its better to talk about themearly on," Aditi wanted to get her point across."I dont want to sound like a typical HR person who lacks business breadth. Im fully aware of thestrategic and financial benefits HCC would bring to Gentech, but I would like you to ponder overpeople issues too. Lack of attention to people issues could ruin the perfect fit between thecompanies. Unlike in a manufacturing company, people are the assets of Gentech and HCC. Thetalk about acquisition is already having its impact on employee morale. Valuable people,especially from HCC are planning to migrate ahead of the deal to rival companies. When weacquire HCC we buy their talent and if HCC loses its people it loses its charm too. At our end,Gentechies are worried about losing their positions to people from HCC." Aditi stopped to sip hertea but continued before anyone could react."As all of us know, they have a very different PSU culture. I still have no clue on how we couldintegrate them into our fold. Our global oriented culture demands greater accountability. We willhave to induce our performance driven culture into them. Moreover, the 3,100 employees at HCCtake pride in the fact that they developed the Rs 6.5 billion company on their own. This wouldsurely lead to inertia against any incoming new culture. We have to talk about what people roleswould be and what the reporting structure would be, early on. We have to talk about issues ofcompensation, benefit shifts and so on, and communicate the decisions to people on both sides.This would go a long way in bringing down anxiety levels and aid in the smooth transition towardsthe post acquisition integration process. What do you think?" Aditi tried to gauge their reactions."Well try to get your views across tomorrow," Sushil broke the short silence. "No, I want a seat atthe table tomorrow. I believe these are important issues which have to be dealt with tactfully.Sushil, you wouldnt want me to discuss financials and bargain on the price tomorrow, wouldyou?" Aditi made her stand clear. The trio anxiously looked at Ashish for a verdict. "Aditi, wellsee you tomorrow at 11.00 am," Ashish put an end to the three hour long session. "Does MrBhattacharya know who would be in from our side?" asked Jacob. "Not anymore," smiled Ashishas he switched off his Sony Vio.… And over at HCC headquarters
  10. 10. Amidst celebrations on a new project completion, CEO Narain Bhattacharya, Rajiv Aggarwal,Vice President Strategic Initiatives, and Akil Trivedi, Vice President Finance, managed to pull insometime together to discuss the merger deal. "Are things looking up?" enquired Akil. "Almost.We are meeting them tomorrow to finalize a few major issues," answered Narain. "We shouldntbudge on the price tomorrow," stressed Akil. "Lets see," was Narains answer. "Do we reallybenefit from this deal? I somehow feel that they are better placed in the deal," remarked Akil. "Iwouldnt say we are in a fantastic position," continued Rajiv sipping his filter coffee, "but wedefinitely stand to gain. We could benefit from the international market expertise of Gentech. Wewould be able to leverage our capabilities in the international market. Gentech posted 31% growthover the last five years. More importantly, well be part of a highly profitable giant," Rajivcommented. Narain nodded approvingly."Where does our independence stand? Not only that, our people are already worried about the pinkslips," that was Pramod Jain, Vice President HR, who overheard Rajivs comments. "Dont worryabout pink slips too much. Our 3,100 employees will easily be assimilated into Gentechs 20,000,"replied Rajiv. "Assimilated? In what positions? People are worried about this and many of our keytalent are already leaving us. Theyve lost the sense of belonging. Gentech or Sipron, it makes nodifference to them," muttered Pramod."I believe we would blend with the Gentechies very well," Rajiv held on to his point. "Forget aboutblending, we would be lost," Pramod insisted. "There wont be any more celebrations like this.They would force their tough culture onto us. Their average revenue per employee is higher by agood 20% than ours though our billing rate is high at $73 per hour. They spend less than 20% ofrevenues on salaries and wages, much below the industry average and certainly less than us.Though they talk of giving us our independence, independence would remain in the periphery."News about their demands is spreading like wildfire. They seem to want top line to grow at30-35%. People already feel they have begun bossing over us and talking of bringing aboutimprovements in margins, enhancing return on capital employed and many others. Our existingsenior management would supposedly continue, but there will be two managers for each postespecially at the top and senior levels, and they are bound to induct key personnel from their side.We would just be puppets in their demanding hands," Pramod continued."Given that we have no choice in the merger, we have several pressing financial and strategicissues to sort out before tomorrows meeting," said Akil, trying to side-step Pramod. "We are beingbought, gentlemen! HR becomes more important for us. We really have to get our views acrossand try to get a better deal for our people," Pramod made his final remark. "I cant think of anybetter buyer than Gentech. People issues will surely be settled once the deal is signed. Stayassured," Narain tried to comfort Pramod and put an end to the argument. Pramod was clearlyunhappy. He felt the pressing need to be present at the meeting the next day, but had no otheroption but to stay back. Perhaps he was not forceful enough.The talks beginThe day began with Ashish and Aditi signing in early. By 11.00 am Sushil and Jacob joined them.It was 11.15 am and the Gentechies were awaiting the arrival of Narain and others from HCC."Sorry, we were caught in a traffic jam," Narain excused his side for being late. "Im SushilAcharya…Im Akil Trivedi." They shook hands one by one. When it came to Aditi, Narainenquired, "Aren’t you a new addition? Im Narain Bhattacharya and its a pleasure to meet you"."Well, Mr Bhattacharya," continued Ashish "We had a new development yesterday and couldnt
  11. 11. find time to inform you. Aditi is our Vice President HR. We decided to bring up some peopleissues as well," smiled Ashish as he turned to Aditi who in turn nodded approvingly. "Isnt it tooearly for that?" Narain was taken aback. "Nothing is too early, Mr Bhattacharya," replied Ashish.Narain seemed surprised as he whispered something to Rajiv.Should Narain have included Pramod in the HCC team sitting at the negotiating table? WasAshish wise to have brought Aditi along for the talks? What impact will the decision toinclude a HR head have on the acquisition talks?Case 2: Employer Branding at McDonalds: Redefining McJobsThis case is about the employer branding strategies adopted by McDonaldsCorporation, one of the largest fast food chains in the world. Since the 1980s, entry-level jobs at McDonalds had come to be associated with low-paying dead end jobs.The term McJobs had become synonymous with low-prestige, low-benefit, no-futurejobs in the service or retail sector particularly at fast food restaurants and retail stores.Though the term was coined to describe jobs at McDonalds, it was later used to referto any low-status job where little training was required and workers activities werestrictly regulatedBecause of its common usage, the term appeared in the online version of the OxfordEnglish Dictionary (OED) in March 2001 and the Merriam-Webster CollegiateDictionary (Merriam-Webster Dictionary) in 2003.The case discusses how McDonalds systemically tried to redefine the term McJobsand improve its employer brand since the early 2000s. According to McDonalds, thisnegative interpretation of McJobs was not only inaccurate but also demeaning to thethousands of people working in the service sector. As employer branding was a criticalmanagement tool for companies to attract the right talent, McDonalds decided to tryand revise the image associated with McJobs. This it did by taking various initiativesthat also included advertising campaigns aimed at showcasing the benefits of workingat McDonalds and bridging the divide between peoples perceptions of the McJob andthe real employment experience of people actually working for the fast-food chain.Experts felt that these were some of the best examples of a company successfullyplanning and implementing an employee branding strategy. However, the case alsohighlights the challenges faced by McDonalds in attracting new talent as derogatorycomments continued to be made about McJobs and this could discourage prospectiveemployees from taking up such jobs.Issues:» Understand the importance of employer branding and its relationship with the abilityof a company to attract talent.
  12. 12. » Understand the issues and challenges in planning and implementing an employerbranding initiative.» Understand the strategic role of Human Resource Department.» Evaluate the initiatives taken by McDonalds to bridge the gap between peoplesperceptions of McJobs and the real employment experiences of people actuallyworking at its restaurants.» Explore strategies that McDonalds could adopt in the future to enhance its employerbrand.What it did brilliantly was make an assessment of the large gap betweenexternal perceptions and the internal reality of work at McDonalds. They thenworked hard to redefine the meaning of McJob by putting forward irrefutableevidence about the quality of jobs they offer."1- Andy Dolby, managing director of Barkers Resourcing2, in November 2008."But bridging the divide between peoples perceptions of the McJob and thepositive employment experience of people actually working for the brand is notgoing to be easy. While our employees tell me that they find the commentsmade about people like them upsetting and demeaning, if we argue our casetoo stridently, we risk the old Shakespearian dilemma of seeming to be"protesting too much". We intend, instead, to acknowledge the McJob and all ithas come to represent, and respectfully offer objective evidence that mightchallenge peoples preconceptions." 3- David Fairhurst, senior vice president people (UK and Northern Europe),McDonalds Corporation, in March 2006.IntroductionIn early 2009, when an outlet of the worlds leading fast food chain, McDonaldsCorporation (McDonalds), in western Ireland put up a "Now Hiring" banner on its site,it received more than 500 applications. These included applications from bankers,architects, and accountants.4 Analysts viewed this as a sign of the troubled times witha recessionary trend setting in. But experts also pointed out that it was an indicationthat the company had been largely successful in bridging the gap between externalperceptions of work at McDonalds and the internal reality through effective employerbranding initiatives.Background NoteHeadquartered in Oak Brook, Illinois, McDonalds is one of the largest fast foodrestaurant chains in the world with about 31,967 restaurants serving more than 58million people in 118 countries as of 2008. The groups principal activity includesoperating and franchising restaurant businesses under the McDonalds brand...Origin of the Term McJobs
  13. 13. In 1977, McDonalds launched an advertising campaign using its icon RonaldMcDonald to create a McLanguage specifically associated with McDonalds.McLanguage involved formulation of words by combining the Mc prefix with a varietyof nouns and adjectives...The McJob IssueMcDonalds complained about the definition of the term McJobs after it was recordedin the OED. The company claimed that the meaning of the term as described in thedictionaries was offensive to McDonalds employees all over the world and that itbrought negative publicity to the brand...Redefining McJobsSince the 1980s, McJobs had become synonymous with low-paying jobs with nogrowth opportunities. Analysts felt that such jobs imparted a few skills to workers thatwould be more or less of no use to them in the future..."My First Job" CampaignIn September 2005, McDonalds launched a television campaign to promote theadvantages of a McJob and to enhance its image as an employer brand. Thecampaign, titled "My First Job" was designed to position McDonalds as a preferredplace of employment and McJobs as stepping stones to a successful career...Mcdonalds People ProjectDuring this time, McDonalds Ireland commissioned Cawley Nea/TBWA launched thePeople Project in Ireland to change the negative perception about McDonalds as anemployer..."Not Bad for a McJob" CampaignIn April 2006, in order to shed its low-paid McJob label, McDonalds UK started anationwide poster campaign highlighting the positive business practices of thecompany and the advantages of working at McDonalds (Refer to Exhibit V foremployment benefits offered to McDonalds employees in the UK)...Change the Definition" Petition CampaignIn March 2007, McDonalds launched a petition campaign to get the dictionarydefinition of a McJob changed. The petition aimed at garnering public opinion aboutthe change in definition was circulated across McDonalds restaurants in 40 Britishcities for signatures from supporters...My McJob CampaignIn April 2008, McDonalds UK redesigned its staff uniforms to give its employees amodern and professional look and to narrow the gap between the perceptions andreality of work at McDonalds...Campaigns in Other Countries
  14. 14. With McDonalds launching campaigns in the UK to address the image of the McJob,its US counterpart too launched advertising campaigns to depict the advantages ofworking at McJobs...ResultsThe sustained campaign of McDonalds forced OED to analyze the situation. In 2007,in order to prove that the interpretation of the term McJob was correct in the dictionary,OED invited the public to submit opinions on the definition of a McJob...The Other ViewBut some observers felt that McDonalds was using the McJobs issue to promote itsbrand. According to a marketing expert, "McDonalds have been clever in a tacticalsense. They have taken the opportunity to win public sympathy and support, and showthey are good employers at the same time."...Looking AheadAccording to analysts, the biggest challenge for McDonalds would be to attract newtalent as derogatory comments that were still being made about McJobs woulddiscourage prospective employees from working in such jobs...After Reading this case , suggest some HR practices…..YOU THINK… that McDonald’s can followCase 3:Philips India - Labor Problems at Salt LakeSelling BluesThe 16th day of March 1999 brought with it a shock for the management of Philips IndiaLimited (PIL). A judgement of the Kolkata1 High Court restrained the company from givingeffect to the resolution it had passed in the extraordinary general meeting (EGM) held inDecember 1998. The resolution was to seek the shareholders permission to sell the colortelevision (CTV) factory to Kitchen Appliances Limited, a subsidiary of Videocon. Thejudgement came after a long drawn, bitter battle between the company and its two unionsPhilips Employees Union (PEU) and the Pieco Workers Union (PWU) over the factoryssale. PEU president Kiron Mehta said, "The companys top management should now seereason. Ours is a good factory and the sale price agreed upon should be reasonable.Further how come some other company is willing to take over and hopes to run thecompany profitably when our own management has thrown its hands up after investingRs.70 crores on the plant."Philips sources on the other hand refused to accept defeat. The company immediatelyrevealed its plans to take further legal action and complete the sale at any cost
  15. 15. Souring TiesPILs operations dates back to 1930, when Philips Electricals Co. (India) Ltd., a subsidiaryof Holland based Philips NV was established. The companys name was changed to PhilipsIndia Pvt. Ltd. in September 1956 and it was converted into a public limited company inOctober 1957. After being initially involved only in trading, PIL set up manufacturingfacilities in several product lines. PIL commenced lamp manufacturing in 1938 in Kolkataand followed it up by establishing a radio manufacturing factory in 1948. An electronicscomponents unit was set up in Loni, near Pune, in 1959. In 1963, the Kalwa factory inMaharashtra began to produce electronics measuring equipment. The companysubsequently started manufacturing telecommunication equipment in Kolkata. Souring Ties Contd...In the wake of the booming consumer goods market in 1992, PIL decided to modernize itsSalt Lake factory located in Kolkata. Following this, the plants output was to increasefrom a mere 40000 to 2.78 lakh CTVs in three years. The company even expected to winthe Philips Worldwide Award for quality and become the source of Philips Exports in Asia.PIL wanted to concentrate its audio and video manufacturing bases of products todifferent geographic regions.In line with this decision, the company relocated its audio product line to Pune. In spite ofthe move that resulted in the displacement of 600 workers, there were no signs of discordlargely due to the unions involvement in the overall process. By 1996, PILs capacityexpansion plans had fallen way behind the targeted level.The unions realized that the management might not be able to complete the task and thattheir jobs might be in danger. PIL on the other hand claimed that it had been forced to goslow because of the slowdown in the CTV market. However, the unconvinced workersraised voices against the management and asked for a hike in wage as well. PIL claimedthat the workers were already overpaid and under productive. The employees retaliatedby saying that said that they continued to work in spite of the irregular hike in wages.These differences resulted in a 20-month long battle over the wage hike issue; the go-slow tactics of the workers and the declining production resulted in huge losses for thecompany.In May 1998, PIL announced its decision to stop operations at Salt Lake and productionwas halted in June 1998. At that point, PWU members agreed to the Rs 1178 wage hikeoffered by the management. This was a climbdown from its earlier stance when the union,along with the PEU demanded a hike of Rs 2000 per worker and other fringe benefits.PEU, however, refused to budge from its position and rejected the offer. After a series ofnegotiations, the unions and the management came to a reasonable agreement on theissue of the wage structure.Selling Troubles
  16. 16. In the mid-1990s, Philips decided to follow Philips NVs worldwide strategy of having acommon manufacturing and integrated technology to reduce costs. The company plannedto set up an integrated consumer electronics facility having common manufacturingtechnology as well as suppliers base. Director Ramachandran stated that the company hadplans to depend on outsourcing rather than having its own manufacturing base in thefuture. The company selected Pune as its manufacturing base and decided to get the SaltLake factory off its handsIn tune with this decision, the employees were appraised and severance packages weredeclared. Out of 750 workers in the Salt Lake division, 391 workers opted for VRS. PILthen appointed Hong Kong and Shanghai Banking Corporation (HSBC) to scout for buyersfor the factory. Videocon was one of the companies approached. Though initially Videoconseemed to be interested, it expressed reservations about buying an over staffed andunder utilized plant.To make it an attractive buy, PIL reduced the workforce andmodernised the unit, spending Rs 7.1 crore in the process. In September 1998, Videoconagreed to buy the factory through its nominee, Kitchen Appliances India Ltd. The totalvalue of the plant was ascertained to be Rs 28 crore and Videocon agreed to pay Rs 9crore in addition to taking up the liability of Rs 21 crore. Videocon agreed to take over theplant along with the employees as a going concern along with the liabilities of VRS,provident fund etc.The factory was to continue as a manufacturing center securing a fair value to itsshareholders and employees. In December 1998, a resolution was passed at PILs annualgeneral meeting (AGM) with a 51% vote in favor of the sale. Most of the favorable votescame from Philips NV who held a major stake in the company. The group of FIshareholders comprising LIC, GIC and UTI initially opposed the offer of sale stating thatthe terms of the deal were not clearly stated to them. They asked for certain amendmentsto the resolutions, which were rejected by PILCommenting on the FIs opposing the resolution, company sources said, "it is only that theinstitutions did not have enough time on their hands to study our proposal in detail, andhence they have not been able to make an informed decision." Defending the companysdecision not to carry out the amendments as demanded by the financial institutions,Ramachandran said that this was not logical as the meeting was convened to take theapproval of the shareholders, and the financial institutions were among the shareholdersof the company. Following this, the FIs demanded a vote on the sale resolution at anEGM.After negotiations and clarifications, they eventually voted in favor of the resolution.The workers were surprised and angry at the decision. Kiron Mehta said, "Themanagements decision to sell the factory is a major volte face considering its efforts atpromoting it and then adding capacity every year." S.N.Roychoudhary of the IndependentEmployees Federation in Calcutta said, "The sale will not profit the company in any way.As a manufacturing unit, the CTV factory is absolutely state-of-the-art with enoughcapacity. It is close to Kolkata port, making shipping of components from Far Easterncountries easier. It consistently gets ISO 9000 certification and has skilled labor. Also,
  17. 17. PILs major market is in the eastern region."The unions challenged PILs plan of selling theCTV unit at such a low price of Rs 9 crore as against a valuation of Rs 30 crore made byDalal Consultants independent valuers. PIL officials said that the sale price was arrived atafter considering the liabilities that Videocon would have along with the 360 workers ofthe plant. This included the gratuity and leave encashment liabilities of workers who wouldbe absorbed under the same service agreements. The management contended that a VRSoffer at the CTV unit would have cost the company Rs 21 crore. Refuting this, seniormembers of the union said, "There is no way that a VRS at the CTV unit can set Philips bymore than Rs 9.2 crore."They explained that PIL officials, by their own admission, have said that around 200 of the360 workers at the CTV unit are less than 40 years of age and a similar number have lessthan 10 years work experience. Theunions also claimed that they wrote to the FIs about their objection. The workers thenapproached the Dhoots of Videocon requesting them to withdraw from the deal as theywere unwilling to have Videocon as their employer. Videocon refused to change itsdecision. The workers then filed a petition in the Kolkata High Court challenging PILsdecision to sell the factory to Videocon. The unions approached the company with an offerof Rs 10 crore in an attempt to outbid Videocon They claimed that they could pay theamount from their provident funds, cooperative savings and personal savings. But PILrejected this offer claiming that it was legally bound to sell to Videocon and if the offer fellthrough, then the unions offer would be considered along with other interested parties.PIL said that it would not let the workers use the Philips brand and that the workers couldnot sell the CTVs without it. Moreover the workers were taking a great risk by using theirsavings to buy out the plant. Countering this, the workers said that they did not trustVideocon to be a good employer and that it might not be able to pay their wages. Theyfollowed it up with proofs of Videocons failure to make payments in time during thecourse of its transactions with Philips. In view of the rejection of its offer by themanagement, the union stated in its letter that one of its objection to the sale was thatthe objects clause in the memorandum of association of Kitchen Appliances did not containany reference to production of CTVs. This makes it incompetent to enter into the deal. Theunion also pointed out that the deal which was signed by Ramachandran should have beensigned by at least two responsible officials of the company. As regards their financialcapability to buy out the firm, the union firmly maintained that it had contacts withreputed and capable businessmen who were willing to help then. In the last week ofDecember 1998, employees of PIL spoke to several domestic and multinational CTVmakers for a joint venture to run the Salt Lake unit. Kiron Mehta said, "We can alwaysenter into an agreement with a third party. It can be a partnership firm or a joint venture.All options are open. We have already started dialogues with a number of domestic andmultinational TV producers." It was added that the union had also talked to several formerPIL directors and employees who they felt could run the plant and were willing to lend ahelping hand. Clarifying the point that the employees did not intend to takeover the plant,
  18. 18. Mehta said, "If Philips India wants to run the unit again, then we will certainly withdrawthe proposal. Do not think that we are intending to take over the plant."In March 1999, the Kolkata High Court passed an order restraining any further deals onthe sale of the factory. Justice S.K.Sinha held that the transfer price was too low and PILhad to view it from a more practical perspective.The unrelenting PIL filed a petition in theDivision bench challenging the trial courts decision. The company further said that thematter was beyond the trial courts jurisdiction and its interference was unwarranted, asthe price had been a negotiated one.The Division bench however did not pass any interimorder and PIL moved to the Supreme Court. PIL and Videocon decided to extend theiragreement by six months to accommodate the court orders and the workers agitation.Judgement DayIn December 2000, the Supreme Court finally passed judgement on the controversialPhilips case. It was in favour of the PIL. The judgement dismissed the review petition filedby the workers as a last ditch effort. The judge said that though the workers can demandfor their rights, they had no say in any of the policy decisions of the company, if theirinterests were not adversely affected. Following the transfer of ownership, theemployment of all workmen of the factory was taken over by Kitchen Appliances withimmediate effect. Accordingly, the services of the workmen were to be treated ascontinuous and not interrupted by the transfer of ownership. The terms and conditions ofemployment too were not changed.Kitchen Appliances started functioning from March2001. This factory had been designated by Videocon as a major centre to meet therequirements of the eastern region market and export to East Asia countries. TheSupreme Court decision seemed to be a typical case of alls well that ends well. AshokNambissan, General Counsel, PIL, said, "The decision taken by the Supreme Courtreiterates the position which Philips has maintained all along that the transaction will be tothe benefit of Philips shareholders." How far the Salt Lake workers agreed with this wouldperhaps remain unansweredCase 4:
  19. 19. IntroductionFor right or wrong reasons, Bata India Limited (Bata) always made the headlines in thefinancial dailies and business magazines during the late 1990s. The company was headed bythe 60 year old managing director William Keith Weston (Weston). He was popularly knownas a turnaround specialist and had successfully turned around many sick companies withinthe Bata Shoe Organization (BSO) group. By the end of financial year 1999, Bata managed toreport rising profits for four consecutive years after incurring its first ever loss of Rs 420million in 1995. However, by the third quarter ended September 30, 2000, Weston was aworried man. Bata was once again on the downward path. The companys nine months netprofits of Rs 105.5 million in 2000 was substantially lower than the Rs 209.8 million recordedin 1999. Its staff costs of Rs 1.29 million (23% of net sales) was also higher as compared to Rs1.18 million incurred in the previous year. In September 2000, Bata was heading towards amajor labour dispute as Bata Mazdoor Union (BMU) had requested West Bengal governmentto intervene in what it considered to be a major downsizing exercise.Background NoteWith net revenues of Rs 7.27 billion and net profit of Rs 304.6 million for the financial yearending December 31, 1999, Bata was Indias largest manufacturer and marketer of footwearproducts. As on February 08, 2001, the company had a market valuation of Rs 3.7 billion. Foryears, Batas reasonably priced, sturdy footwear had made it one of Indias best known brands.Bata sold over 60 million pairs per annum in India and also exported its products in overseasmarkets including the US, the UK, Europe and Middle East countries. The company was animportant operation for its Toronto, Canada based parent, the BSO group run by Thomas Bata,which owned 51% equity stake The company provided employment to over 15,000 people inits manufacturing and sales operations throughout India. Headquartered in Calcutta, thecompany manufactured over 33 million pairs per year in its five plants located in Batanagar(West Bengal), Faridabad (Haryana), Bangalore (Karnataka), Patna (Bihar) and Hosur(Tamil Nadu). The company had a distribution network of over 1,500 retail stores and 27wholesale depots. It outsourced over 23 million pairs per year from various small-scalemanufacturers Throughout its history, Bata was plagued by perennial labor problems withfrequent strikes and lockouts at its manufacturing facilities. The company incurred hugeemployee expenses (22% of net sales in 1999). Competitors like Liberty Shoes were far morecost-effective with salaries of its 5,000 strong workforce comprising just 5% of its turnover.When the company was in the red in 1995 for the first time, BSO restructured the entire boardand sent in a team headed by Weston. Soon after he stepped in several changes were made inthe management. Indians who held key positions in top management, were replaced withexpatriate Weston taking over as managing director. Mike Middleton was appointed as deputymanaging director and R. Senonner headed the marketing division.They made several keychanges, including a complete overhaul of the companys operations and key departments.Within two months of Weston taking over, Bata decided to sell its headquarter building inCalcutta for Rs 195 million, in a bid to stem losses.The company shifted wholesale, planning & distribution, and the commercial department toBatanagar, despite opposition from the trade unions Robin Majumdar, president, co-ordinationcommittee, Bata Trade Union, criticized the move, saying: "Profits may return, but honor isdifficult to regain." The management team implemented a massive revamping exercise inwhich more than 250 managers and their juniors were asked to quit. Bata decided to stopfurther recruitment, and allowed only the redundant staff to fill the gaps created by
  20. 20. superannuation and retirements. The management offered its staff an employment policy thatwas linked to sales-growth performance. In 1996, for the first time in Batas 62-year-oldhistory, the company signed a long-term bipartite agreement. This agreement was signedwithout any disruption of work. Recalls Majumdar: "We showed the management that wecould be as productive as any other union in the country." In the six-year period 1993-99, Batahad considerably brought down the staff strength of its Batanagar factory and Calcutta officesto 6,700. In fiscal 1996, Bata was back in the black with the company reporting net profits ofRs 41.5 million on revenues of Rs 5.9 billion (Rs 5.32 billion in 1995). In fiscal 1997, Batafurther consolidated the gains with the company reporting net profits of Rs 167 million onrevenues of Rs 6.7 billion. A senior HR manager at the company admitted that with anupswing in Batas fortunes, even its traditionally intransigent workers were motivated to dobetter. In 1997, Bata workers achieved 93% of their production targets. The managementrewarded the workers with a 17% bonus, up from the 15% given in 1996. By the end of 1997,Bata still faced problems of a high-cost structure and surplus labour. Infact, the turnaround hadmade the unions more aggressive and demanding. Weston had failed to strike a deal with theAll India Bata Shop Managers Union (AIBSMU) since the third quarter of 1997. The shopmanagers were insisting that Bata honor the 1990 agreement, which stipulated that themanagement would fill up 248 vacancies in its retail outlets. It also opposed the move to sackall the cashiers in outlets with annual sales of less than Rs 5 million, which meant eliminationof 690 jobs. In 1999, the Bata management in a bid to further cut costs announced the phasingout of several welfare measures at its Batanagar Unit. Among the proposals was near totalwithdrawal of management subsidies, canteen facilities, township maintenance, electricity andhealth care schemes for the employees families.Other measures were aimed at increasingproductivity, reorganizing some departments and extending working days for some essentialservices. On January 14, 1999, the BMU submitted their charter of demands to themanagement. The wish list mainly revolved around economic issues. In the list of non-economic issues was the demand for reinstatement of the four dismissed employees 1. TheUnion had also demanded the introduction of a scheme for workers participation inmanagement.On the economic front, the Union had demanded a wage hike of around Rs. 90 per week,additional allowances as provident fund over the statutory limit by the management, increase inplan bonus and introduction of attendance bonus for migrant workers. In July 1999, BMU wasfinally able to strike a deal. It signed a three-year wage agreement that included fiscal benefitssuch as a lumpsum payment of arrears of Rs. 4,000 per employee. The management agreed toinclude 10% of the 400 contract laborers at Batanagar in its staff. Other gains included anaverage increase of Rs. 45.50 in the weekly pay of the 5,600 employees in Batanagar, animproved rate of DA and increase in tiffin allowance. However, canteen rates had beendoubled from Rs. 0.75 for a meal to Rs. 1.50. For the 500 families staying at Batanagar, theelectricity rates had been doubled to Rs. 0.48 per unit. BMU was successful in scuffing themanagements plan of dismantling the public health unit in which 80 people were employed. InSeptember 1999, the West Bengal State labour tribunal in an order justified and upheld Batasaction of suspending and subsequent dismissing of three executive members of the BMU. Thetribunal had provided no relief to the dismissed members who had been found guilty ofassaulting the chief welfare officer at the Batanagar unit on November 26, 1996. Assault CaseMore than half of Batas production came from the Batanagar factory in West Bengal, a statenotorious for its militant trade unions, who derived their strength from the dominant politicalparties, especially the left parties. Notwithstanding the giant conglomerates grip on the shoe
  21. 21. market in India, Batas equally large reputation for corruption within, created the perceptionthat Weston would have a difficult time. When the new management team weeded outirregularities and turned the company around within a couple of years, tackling the politicizedtrade unions proved to be the hardest of all tasks. On July 21, 1998, Weston was severelyassaulted by four workers at the companys factory at Batanagar, while he was attending abusiness meet.The incident occurred after a member of BMU, Arup Dutta, met Weston todiscuss the issue of the suspended employees. Dutta reportedly got into a verbal duel withWeston, upon which the other workers began to shout slogans. When Weston tried to leave theroom the workers turned violent and assaulted him. This was the second attack on an officerafter Weston took charge of the company, the first one being the assault on the chief welfareofficer in 1996. Soon after the incident, the management dismissed the three employees whowere involved in the violence. The employees involved accepted their dismissal letters butsubsequently provoked other workers to go in for a strike to protest the managements move.Workers at Batanagar went on a strike for two days following the incident Commenting on thestrike, Majumdar said: "The issue of Bata was much wider than that of the dismissal of threeemployees on grounds of indiscipline. Stoppage of recruitment and continuous farming out ofjobs had been causing widespread resentment among employees for a long time." Followingthe incident, BSO decided to reconsider its investment plans at Batanagar. Senior vice-president and member of the executive committee, MJZ Mowla, said2: "We had chalked out asignificant investment programme at Batanagar this year which was more than what wasinvested last year. However, that will all be postponed." The incident had opened a can ofworms, said the company insiders. The three men who were charge-sheeted, were members ofthe 41-member committee of BMU, which had strong political connections with the rulingCommunist Party of India (Marxist). The trio it was alleged, had in the past a good rapportwith the senior managers, who were no longer with the organization. These managers hadreportedly farmed out a large chunk of the contract operations to this trio. Company insiderssaid the recent violence was more a political issue rather than an industrial relations problem,since the workers had had very little to do with it. Seeing the seriousness of the issue and thepartys involvement, the union, the state government tried to solve the problem by setting up atripartite meeting among company officials, the labor directorate and the union representatives.The workers feared a closedown as the inquiry proceeded. Industrial RelationsFor Bata, labor had always posed major problems. Strikes seemed to be a perennial problem.Much before the assault case, Batas chronically restive factory at Batanagar had alwaysplagued by labor strife. In 1992, the factory was closed for four and a half months. In 1995,Bata entered into a 3-year bipartite agreement with the workers, represented by the then 10,000strong BMU, which also had the West Bengal government as a signatory.It was in 1998, that the company for the first time signed another long-term bipartite agreementwith the unions without any disruption of work. Apprehensive about labor problems spillingover to other units, the company entered into similar long-term agreements with the unions atits manufacturing units at Bangalore and Faridabad. In February 1999, a lockout was declaredin Batas Faridabad Unit. Middleton commented that the closure of the unit would not havemuch impact on the companys revenues as it was catering to lower-end products such ascanvas and Hawaii chappals. The lock out lasted for eight months. In October 1999, the unitresumed production when Bata signed a three-year wage agreement. On March 8, 2000, alockout was declared at Batas Peenya factory in Bangalore, following a strike by its employeeunion. The new leadership of the union had refused to abide by the wage agreement, which
  22. 22. was to expire in August 2001. Following the failure of its negotiations with the union, themanagement decided to go for a lock out. Bata management was of the view that though itwould have to bear the cost of maintaining an idle plant (Rs. 3 million), the effect of theclosures on sales and production would be minimal as the footwear manufactured in the factorycould be shifted to the companys other factories and associate manufacturers. The factory had300 workers on its rolls and manufactured canvas and PVC footwear. In July 2000, Bata liftedthe lockout at the Peenya factory. However, some of the workers opposed the companys moveto get an undertaking from the factory employees to resume work. The employees demandedrevocation of suspension against 20 of their fellow employees. They also demanded thatconditions such as maintaining normal production schedule, conforming to standing orders andthe settlement in force should not be insisted upon. In September 2000, Bata was again headedfor a labour dispute when the BMU asked the West Bengal government to intervene in what itperceived to be a downsizing exercise being undertaken by the management.BMU justified thismove by alleging that the management has increased outsourcing of products and also due toperceived declining importance of the Batanagar unit. The union said that Bata has startedoutsourcing the Power range of fully manufactured shoes from China, compared to the earlieroutsourcing of only assembly and sewing line job. The companys production of Hawaichappals at the Batanagar unit too had come down by 58% from the weekly capacity of 0.144million pairs. These steps had resulted in lower income for the workers forcing them toapproach the government for saving their interests.PS: Weston resigned on January 30, 2001. This came as a severe setback to the BatamanagementActivity 1:The first stage in the process is to make sure that the job required is made clear. There are two importantdocuments that are likely to be part of this process - the job description and the person specification.Job DescriptionThe job description will have been drawn up based on an analysis of the job itself. This may have beendiscussed beforehand by various members of the department and senior managers. The job descriptionwill contain details of what the job entails. It would normally include the following information: • Job title: for example, Senior lecturer in business studies. • Department: for example, Faculty of Business and Management • Hours of work: for example, 35 hours per week • Responsible to: for example, Moses Kabba, Faculty Manager • Responsible for: for example, two junior members of the faculty • Scope of the post: for example, teaching on the BTEC and AS/A2 business programme and for managing the adult learning facility in the college. • Responsibilities: for example, the post holder will contribute to the teaching of the BTEC Business programme throughout the college and be expected to teach AS/A2 business studies etc.The job description gives the applicant details about what they would be expected to do and helps them todecide whether they have the skills, experience and qualifications to carry out the job. Applicants shouldtherefore be able to demonstrate that they can do most of the tasks specified. The job description also
  23. 23. gives the selection team a clear outline of what the job involves and helps them to match the skills ofapplicants with the job they are expecting them to do.Person SpecificationThe person specification will provide the applicant with details about the sort of person that theorganisation is seeking to fill the post. This will include details about the persons qualifications and skills,their communication skills, the experience they are expected to have and their ability to work as part of ateam or individuality. Many organisations classify these in two groups - essential and desirable. Thetable below gives a brief example.Your first task is to devise a job description and person specification for the post at your college/school.You can either devise this from scratch or use an existing example on which to base the task. You couldask your teacher/lecturer for a copy of their job description and person specification or go to the humanresources department and ask them for help in this. You could also try looking at existing job adverts andgetting a copy of the job description and person specification from this - remember, however, that thesethings cost money to produce, so be careful about obtaining information in this way.Activity 2:( Recruitment Process)A medium sized business was seeking to recruit a product development manager in its researchand development (R&D) section. The new person would be responsible for overseeing theprocess by which the new products the business was developing were prepared for launch ontothe market.The recruitment process involved placing adverts in trade magazines and the national press andthe adverts resulted in over 60 applications. There were 5 people involved in the short listingprocess: the direct line manager; the head of the HR division; the assistant head of thatdivision; and two members of the new product development department - one from R&D andone from the launch team.A short list of 7 candidates was drawn up. However, the assistant head of HR heard that aformer trainee of the firm wanted to apply but could not get the application in by the deadline -she would be a strong candidate and the firm knew of her qualities. The head of HR agreed tolet the application come in three days late and she was duly added to the shortlist.On the day of the selection, each candidate had to do a presentation on the extent to which theymatched the job description and person specification and what they felt they could bring to thejob to further the companys objectives. This was followed by an interview. The candidate whohad put in the late application did not turn up and the head of HR phoned her up. She said thatshe had not received a letter inviting her for interview and was not therefore aware that she waswanted. She agreed to come in and was allowed to miss doing the presentation although wouldbe questioned on it in the same way that other candidates were.At the end of the process, two clear candidates emerged, one of which was the late applicant. Itwas decided that she would be offered the position and after receiving the phone call from theassistant manager of the HR department, she duly accepted. The rest of the selection team took
  24. 24. the responsibility of contacting the other candidates to tell them they were unsuccessful and togive them some feedback about their performance and why they were unsuccessful.Later that evening, the head of HR received a phone call from the successful candidate tellingher that she had gone back to her company where she had been working part time and toldthem of her success. They had responded by offering her a full time position and increasing hersalary and she had decided to stay with them and thus did not want the position.This meant that the candidate who was second had to be contacted and have the positionexplained to him. Fortunately for the firm, he understood and was happy to accept the position.Had he not, it could have involved the business in another round of selection which is anexpensive process.Things to doCritically assess the recruitment and selection procedure of the firm in the light of thisexperience and write a 500 word report to the head of Human Resources on recommendationsfor any changes to the recruitment process for the firm.The following questions are provided to guide you in your thinking and critical analysis. • Is the method of advertising for new positions appropriate? • Is the method of sifting through the applications and shortlisting efficient and effective? • How effective a means of discrimination between candidates is the presentation and interview process? • How far would you say that the firms process meets employment legislation in terms of equal opportunities? •Activity 3(On selection procedure)Part of the recommended assessment procedure for this unit is to take part in role-play activities.Divide the class into four groups: • Group 1 is the recruitment team. Their task is to identify the key questions they are going to ask candidates in an interview for a fictional job. • Group 2 will consist of the candidates - they must write a short letter of application (no more than 100 words) for the post. • Group 3 will identify, construct and assess an in-tray exercise for the candidates. This should not take more than 20 minutes. • Group 4 will be observing the work of the three groups for feedback discussion.Group 1 will interview each of the candidates - in private - but this could be videoed for later discussion.They will then compare notes with Group 3 - then, together, make a decision as to who they would offerthe job to and why. The group should also identify some brief key points of feedback to the rest of the
  25. 25. unsuccessful candidates. Group 4 will offer their judgements on the process in a discussion sessionfollowing the activity. • Group 2: You should make your application on the basis that you have a degree and two years experience in a similar business environment. You are at liberty to sell yourself as much as possible but remember, the interviewers may well ask you searching questions about the claims in your application so ensure you can back up whatever you say!Assignment 1: go to, press registration, do the registration and then the verificationcode will be sent to you on your email id being provided by you.Continue and post a thread for the relevant answer of the query being asked by me on it.Assignment 2:Students are required to bring either a movie clip/ any video depicting the training beingprovided.Assignment 3:Lect 1:((Motivation through HR practices)SAP is the largest producer of business software in the world.Motivating its staff is a big job as it has some 29,000 of them in 50 different countries,and yet it claims to be among the best at doing this.Indeed SAP has won awards for its innovative ways of keeping its staff happy.It starts with the most obvious incentive of all - money.After all, ask most people why they work and theyll answer in order to get paid and makea living and at SAP the staff are very well rewarded indeed."Our average basic salary here is around £45,000," says Adrian Farley, human resourcesdirector at SAP."Its a very good package and our staff enjoy exceptional benefits, as well as a bonusscheme, but were competing for the very best people out there and often they will dictatetheir own terms."FlexibilityUnlike a manufacturer which may see its machinery or equipment as its most valuableasset, SAPs success as a business depends fully on the brainpower of its employees andtheir ability to serve its clients - hence its efforts to keep them happy.SAP has tried to create a flexible working environment and an incentive-based paystructure is designed to improve overall operational performance and productivity. To
  26. 26. motivate and encourage, every employees package includes fixed, flexible and incentive-based portions.The flexible portion of each salary can be used to buy and sell annual leave, for dental ormedical services, for pensions, life assurance and concierge services.Pleasant officesFurthermore, workers are provided with free lunch in the top-class restaurant, and thebuilding is designed to encourage team-work and creativity.Staff and their families are given private dental and health care, and access to otherservices like dry-cleaning. "The coffee lounges and workspaces are nice and brightthroughout the building and this is good for teamwork," says Rachel Cortes, a customerrelations manager."It cheers you up, and weve also got flexible benefits so I can buy holiday time or chooseto contribute more to my pension, and a lot of the benefits are extended to family too."But what if youre not a giant software conglomerate, and still want your staff to enjoyworking for you?Taking prideTake Savoir Beds in west London for instance,Its a much smaller, more traditional manufacturing business, but still has its own uniqueways of motivating its workers.Savoir has been making beds since 1905; each one costs £6,000 and it produces only sixa week, so speed isnt the priority, quality is.Workers here dont get bonuses for making more beds quicker, and the firm could notafford to match the salaries that SAP pays for example."Bonuses dont work here; instead we want the staff to take pride in what they do byworking on the product from start to finish," says Alastair Hughes, managing director ofSavoir.Work of art"Rather than have a production line with workers just operating on one part of the bed weactually encourage them to do the whole thing, and then when its finished we ask themto sign the bed. Customers come in and meet the staff."Customers write thank you letters to the person who made their bed, and everyone in thebusiness has a sense of pride in what they do.Two very different companies, but what they both make is an effort to motivate theirworkforce.Whatever the business, the customers matter - or else!Businesses large and small must look after their employees if they are going to meet theneeds of customers.
  27. 27. The personal approachSAP and Savoir Beds both believe in the personal approach. Staff are human beings whoseneeds differ - so the approach needs to be flexible.SAP has a flexible remuneration package, a mix of fixed, flexible and incentive basedparts.The flexible part allows people to choose from these benefits:T Choice to take pay instead of holiday and visa versa n medical care life assurance.Itallows people to start early, finish late, work part-time for a period, have a sabbatical ortake periods of unpaid leave.The organisation is "flat" so there are few layers of management.Benefits packages are common to all. The best benefits are not reserved for the top levelstaff.The difference comes from salaries and bonuses - which are earned through incentiveschemes.The business has a strong bonus/reward culture so people expect those who do well to bepaid well. There are no "fat cat" secrets. Everyone is on the same terms. They each have acontract - and no more.If senior management fail they wont get a big pay-off when they are pushed out!The staff have asked to see how the system works and SAP is working on makingeverything as transparent as possible.How does the choice of benefits give opportunities to different sorts of people,young and old, married and single, parents and non-parents?How does the mix of incentives to earn greater financial reward and the non-financial rewards stimulate staff to achieve?Presentation TopicsStudents will visit an industry to study the HR procedures being followed in that particularcompany preferably after interviewing the HR manager For Example, Fringe benefits given,leave procedures, bonuses, recruitment and selection procedures, Quality of work life, etc.After this they are going to prepare the project including the HR manager’s interview and theabove mentioned points and will be presenting through presentation.Recruitment process of British Gas British Gas is part of the Centric Group. It is the country’s best recognized energy brand. Centrica is a multinational company, with businesses in many countries. Centrica was formed in 1997 and consists of eight separate energy-related businesses, ranging from the supply of gas and electricity to consumers and organisations in the
  28. 28. UK and Europe, to storage of gas for other providers, and drain and pipe workmaintenance. The UK energy market is highly dynamic. Customers look for the bestdeals and are increasingly prepared to switch suppliers. In 2007, 900,000 customersswitched energy providers. An energy company needs to show it is not just competitiveon price, but that it can also provide the right levels of customer service to attract andretain customers. British Gas Services (BGS) does not supply gas – this is handled byother British Gas divisions.The core BGS product is installation and maintenance services. BGS is the UK’slargest operator in the installation and maintenance of domestic central heating and gasappliances. It provides a maintenance and breakdown service for electrical white goodsand home wiring. Through the Dyno brand, BGS also offers drain clearing services,plumbing and home security services.To deliver these services, BGS needs high caliber staff. It employs more than 9,000trained gas engineers to install and maintain central heating and gas appliances. Thiscase study explores how BGS manages the recruitment and selection of newemployees.The role of human resource managementManaging a successful large business involves acquiring, developing and maintaining awide range of resources. These resources include materials, buildings, land, equipment,technology and, crucially, people. Any organisation needs good employees who havethe right skills to achieve the company’s aims and objectives. Human resourcemanagement (HRM) is the business function that focuses on the people aspects of anorganisation. It ensures the efficient management of people in the business. It isresponsible for ensuring that an organisation has the right people to deliver its overallbusiness plan. Centrica, the parent corporation of BGS, has to deliver long-termprofitability. Its shareholders expect the business to show a return on their investmentby making profits, now and in the future. BGS needs to contribute to these profits. Thismeans consistently meeting the needs of its customers with competitively pricedproducts and services that give good returns to the company. BGS’s core customer baseis residential consumers across the country. These customers expect top-class service atkeen prices. If BGS does not meet this standard, the company may lose business tocompetitors.To ensure customer satisfaction, BGS engineers must have the technical skills toundertake work to the required standard and the people skills to deliver good customerservice. Through its engineer recruitment team, the British Gas Academy musttherefore ensure that the company attracts and retains the best engineers. This involvesseveral complementary tasks. It requires planning to assess the BGS’s future needs forskilled employees. It requires a recruitment and selection programme to bring newpeople into the business. It requires a training operation to equip new recruits andexisting employees with the right skills.Importantly, BGS must also ensure that it retains its best people. It is much more costeffective to retain trained and highly skilled staff than recruit and train up new people.BGS seeks to retain people by offering a mix of financial and non-financial benefits. Aswell as good pay and a pension scheme, the company provides employees with theopportunity to buy shares in Centrica and it offers a great place to work and high-classtraining.As an expanding business, BGS needed to increase its workforce to meet customerdemand. At the end of 2002, BGS established the British Gas Academy. The Academy
  29. 29. has helped to develop and refocus training facilities to handle the extra trainingrequirement in recruiting an additional 5,000 employees into the engineeringworkforce.There are several training routes:• BGS runs an intensive apprenticeship programme. This is delivered in training centersTrainees should expect to qualify within 12 to 14 months. All domestic gas engineersbecome fully acquainted with the latest computer-aided diagnostic technology.• There are also traineeships, which provide a way for new recruits to learn about thegas industry and gain relevant skills and qualifications.• BGS provides technical training for all its engineers throughout their careers. Thisensures that its employees are kept up-to-date with new information and technologies toenable them to provide the best service possible.Training does not simply focus on technical skills and knowledge. Most employeeshave direct contact with customers, so it is important that they have good people skills.Awareness training is provided for employees across British Gas through an onlinelearning package.RecruitmentAs part of its workforce planning, BGS implements a diversity and inclusion strategyusing tailored action plans. This means it actively seeks new recruits from a wide rangeof backgrounds. The need to recruit a diverse engineering workforce is seen as criticalby BGS. It plans recruitment to ensure it has a socially inclusive workforce. This isimportant as it will enable BGS to reflect the diversity of its customer base. Forexample, it is useful to have employees from different nationalities and backgrounds tocommunicate with customers that do not speak English as a first language. Recruitingmore women engineers may help to attract female customers. To dispel the myth thatonly men can be good engineers, BGS runs a Georgina and the Dragon campaign. Thishas had some success. The British Gas Academy has won an award from Women intoScience and Engineering as well as a national award from the Council for RegisteredGas Installers (CORGI) for its efforts to encourage and attract women into theengineering workforce and into plumbing and associated trades. In May 2008 therecruitment team at BGS was recognised by Opportunity Now, winning the prestigiousaward for ‘Inspiring the workforce of the future’.BGS tries to appeal to a varied anddiverse audience when promoting its apprenticeships. Toadvertise opportunities widely,BGS uses specialist Sky channels like Parliamentary Projects TV, which focuses oncareers, and Passion TV, which is aimed at the black community. In print media it useswomen’s magazines; publications targeted at ethnic minorities such as The MuslimWeek as well as other careers directories for the same reason. Other channels includeradio, newspapers, BGS’s website ( and a DVD forschools. Recruiting gas engineers of the right level is important. Candidates for aBritish Gas apprenticeship must be at least 17 years old, have a minimum of fourGCSEs at grade C or above or equivalent (e.g. NVQs) and hold at least a provisionaldriving license. However, they need more than academic qualifications, they must beable to show some aptitude for custom service, such as being able to listen to customersand understand their requirements. BGS uses an online application form. To help BGSdecide an applicant’s suitability, this includes a value-based questionnaire. Thisrequires responses to a series of statements about attitudes to work. There are 90statements in all, and an applicant’s overall responses are rated either green, amber orred. The colour reflects the attitudes the applicant has about work and people. This
  30. 30. helps to show which roles a person is best suited to. BGS does not take applicants with red ratings further as they may not show a ‘fit’ with the company requirements. However after an initial screening, green and amber applicants are invited an interview and assessment centre for the final selection process. Here, candidates must show evidence of qualifications, ID and driving licence. Selection At the BGS assessment centre the emphasis is very much upon ‘core competencies’ and ‘life skills’. Life skills are personal skills that are likely to affect the customer experience when someone is working in the field. British Gas engineers needs to show courtesy and politeness, for example. These are personal qualities that have a direct impact upon customer perception. Core competencies involve team working, interpersonal skills (such as dealing with people), motivation and responding to change. These are crucial skills that can affect the way an individual fits in and works within an organisation. Candidates attend the centre for a half-day assessment. This has three elements: 1) Interview is based questions related to complete online value based questionnaire. 2) Role plays to demonstrate the customer services. 3) Manual test including a wiring exercise, to know whether the candidate is able to handle the delicate components? The total scores from the three-part assessment help BGS to decide who receives a job offer. Candidates are notified of the outcome within 14 days. All candidates can receive feedback. For those candidates offered a job, BGS provides the usual job benefits including a van from the outset and a competitive starting salary. The new recruits then go on to benefit from BGS’ comprehensive programme of training through its Academy. This ensures that they are given the best start in their new careers. It also builds employee motivation and commitment to the Company. Recruiting and selecting staff is an expensive process. By following a robust selection programme in this way, BGS is able to ensure it gets the right people with the right skills. It also means it maximizes the benefit from its investment. ConclusionRecruitment and selection at British Gas Services is driven by the need to maintain thecompetitive position of the company within the energy market. Domestic gas customersdemand the very highest standards of service. They can be assured that BGS engineers havehigh-level skills and expertise through its careful specification of entry qualificationsfollowed by top quality training. BGS also assesses the personal attributes of staff throughrole play and questionnaires as these influence customers’ perceptions of the service and thecompany. Great care is taken in determining the organisation’s future staffing needs. Thisdrives the recruitment and selection process to ensure BGS is seen as offering dynamic andexciting career paths for people of all backgrounds. By developing and nurturing its people,BGS ensures that new recruits have the right qualities to help the business to compete. Questions 1. What is the main purpose of workforce planning in BGS? 2. To what extent is workforce planning important in helping BGS achieve its aims? 3. What benefits do BGS’ application, recruitment and selection processes give to both applicants and the company?
  31. 31. imp for lects