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Ans. Frederick Taylor, who died in 1915, did not live to see the employee motivation studies
that were conducted at Western Electric’s Hawthorne plant, near Chicago, Illinois, from
1927 to 1932. However, the founder of the scientific school of management would have no
doubt been interested in the results. The Hawthorne studies undercut a core pillar of
Taylorism--the notion that workers were motivated purely by economic gain.
Researchers from Western Electric and Harvard University led the Hawthorne studies.
(General Electric originally contributed funding, but they withdrew after the first trial was
completed.) The studies were intended to examine the influence of environmental variables
on a group of production workers. The group of workers was divided into two subgroups: a
test group, which would undergo environmental changes, and a control group. The members
of the control group would work under normal, constant environment conditions.
The researchers began by manipulating the lighting of the test group. When lighting for the
test group was increased, their productivity increased--but the productivity of the control
group increased, as well. This result was somewhat unexpected, since the lighting at the
workstations of the control group had not been altered.
The researchers then decreased the lighting at the test group’s workstations. Surprisingly,
both the test group and the control group continued to improve their productivity. There were
no decreases in productivity until the light was reduced to the point where the workers could
barely see. The researchers concluded that light did not have a significant impact on the
motivation of production workers. This led General Electric, a light bulb manufacturer, to
withdraw their funding.
These results were, of course, a major blow to the position of scientific management, which
held that employees were only motivated by individual economic interest. The Hawthorne
studies drew attention to the social needs as an additional source of motivation. Taylor’s
emphasis on economic incentives was not wholly discredited, but economic incentives were
now viewed as one factor--not the sole factor--to which employees responded.
Q.2 Trace the growth of Trade Union Movement from Factories Act 1881 to Factories
Act 1948.
Ans. The growth of trade unions in India started way back in 1850 when the economic
conditions of labor was poor, The industry was dominated by the Capitalism, and the
industrialists were more concerned about the productivity. Long working hours, Low wedges,
poor living conditions and exploitation by the management was common in the industry.
Slowly in many parts of the country the workforces united and Factories Act 1881 was
incorporated with a ban on Child labor, and conditions in working hours and improved
working conditions.
In next phase many trade unions were incorporated in the country under the leadership of
Mahatma Gandhi in other parts of the country like West Bangal, Ahamdabad, Punjab and
others. All India trade union federation was formed. After independence this took the shape
of Indian Factory Act 1948 with regulation on working conditions, working hours, and other
facilities at workplace.
Ans. The above-discussed methods are used to evaluate employees one at a time. In this
section let us discuss some techniques of evaluating one employee in comparison to
another. Three such frequently used methods in organization are – ranking, paired
comparison and forced distribution.
Ranking method
This is a relatively easy method of performance evaluation. Under this method, the ranking
of an employee in a work group is done against that of another employee. The relative
position of each employee is tested in terms of his numerical rank. It may also be done by
ranking a person on his job performance against another member of the competitive group.
The quintessence of this method is that employees are ranked according to their levels of
performance. While using this method, the evaluator is asked to rate employees from
highest to lowest on some overall criterion. Though it is relatively easier to rank the best and
the worst employees, it is very difficult to rank the average employees. Generally, evaluators
pick the top and bottom employees first and then select the next highest and next lowest and
move towards the average (middle) employees. The longstanding limitations of this method
are:
The ‘whole man’ is compared with another ‘whole man’ in this method. In practice, it
is very difficult to compare individuals possessing varied behavioral traits.
This method speaks only of the position where an employee stands in his group. It
does not tell anything about how much better or how much worse an employee is
when compared to another employee.
When a large number of employees are working
In order to overcome the above limitations a paired comparison technique has been
advanced by organizational scholars.
Paired comparison method
Ranking becomes more reliable and easier under the paired comparison method. Each
worker is compared with all other employees in the group; for every trait the worker is
compared with all other employees. For instance, when there are five employees to be
compared, then A’s performance is compared with that of B’s and decision is arrived at as to
whose is the better or worse. Next, B is also compared with all others. Since A is already
compared with B, this time B is to be compared with only C, D and E. By this method when
there are five employees, fifteen decisions are made (comparisons). The number of
decisions to be made can be determined with the help of the formulae n (n-2). Ranking the
employees by the paired comparison method may be illustrated as shown in the Table 10.7.
For several individual traits, paired comparisons are made, tabulated and then rank is
assigned to each worker. Though this method seems to be logical, it is not applicable when
a group is large. When the group becomes too large, the number of comparisons to be
made may become frighteningly excessive. For instance, when n=100, comparisons to be
made are 100 (100-2) = 100 (98) = 9800.
As compared to A B C D E
A + – + –
B – + – +
C + – + –
D – + – –
E + – + +
Under this system, the rater is asked to appraise the employee according to a
predetermined distribution scale. The rater’s bias is sought to be eliminated here because
workers are not placed at a higher or lower end of the scale. Normally, the two criteria used
here for rating are the job performance and promotability. Further, a five point performance
scale is used without any mention of descriptive statements. Workers are placed between
the two extremes of ‘good’ and ‘bad’ performances. For instance, the workers of outstanding
merit may be placed at the top 10% of the scale. The rest may be placed as – 20% —good,
40% —outstanding, 20% —fair and 10% —fair. To be specific, the forced distribution
method assumes that all top grade workers should go to the highest 10% grade; 20%
employees should go to the next highest grade and so on.
Job performance as the criterion apart, another equally important factor in this method is
promotability. Employees may be classified according to their promotional merits. The scale
for this purpose may consist of three points – namely, quite likely promotional material,
may/may not be promotional material and quite unlikely promotional material.
One strong positive point in favor of the forced distribution method is that by forcing the
distribution according to predetermined percentages, the problem of making use of different
raters with different scales is avoided. Further, this method is appreciated on the ground that
it tends to eliminate rater bias. The limitation of using this method in salary administration
however, is that it may result in low morale, low productivity and high absenteeism.
Employees who feel that they are productive, but find themselves placed in a lower grade
(than expected) feel frustrated and exhibit, over a period of time, reluctance to work.
Group appraisal
HRA is a sophisticated way to measure (in financial terms) the effectiveness of personnel
management activities and the use of people in an organization. It is the process of
accounting for people as an organizational resource. It tries to place a value on
organizational human resources as assets and not as expenses. The HRA process shows
the investment the organization makes in its people and how the value of these people
changes over time. The acquisition cost of employees is compared to the replacement cost
from time to time. The value of employees is increased by investments made by the
company to improve the quality of its human resources such as training, development skills
acquired by employees over a period of time through experience, etc. When qualified,
competent people leave an organization; the value of human assets goes down. In this
method, employee performance is evaluated in terms of costs and contributions of
employees. Human resource costs include expenditure incurred by the company in hiring,
training, compensating and developing people. The contributions of human resources is the
money value of labour productivity. The cost of human resources may be taken as the
standard. Employee performance can be measured in terms of employee contribution to the
organization. Employee performance can be taken as positive when contribution is more
than the cost and performance can be viewed as negative if cost is more than contribution.
Positive performance can be measured in terms of percentage of excess of employee
contribution over the cost of employee. Similarly negative performance can be calculated in
terms of percentage of deficit in employee contribution compared to the cost of employee.
These percentages can be ranked to ‘Zero Level’ as shown in the Table below.
Rank Percentage of surplus/Deficit of
Rating contribution to cost of employee
1. Extremely good performance Over 200
2. Good performance 150 – 200
3. Slightly good performance 100 – 150
4. Neither poor nor good 0 – 100
5. Slightly poor performance 0
6. Poor performance 0 to (— 50)
7. Extremely poor performance (—50) to (—100)
This technique has not developed fully and is still in the transitionary stage.
Assessment centre
This method of appraising was first applied in German Army in 1930. Later business and
industrial houses started using this method. This is not a technique of performance appraisal
by itself. In fact it is a system or organization, where assessment of several individuals is
done by various experts using various techniques. These techniques include the methods
discussed before in addition to in-basket, role playing, case studies, simulation exercises,
structured in sight, transactional analysis, etc.
In this approach individuals from various departments are brought together to spend two or
three days working on an individual or group assignment similar to the ones they would be
handling when promoted. Observers rank the performance of each and every participant in
order of merit. Since assessment centres are basically meant for evaluating the potential of
candidates to be considered for promotion, training or development, they offer an excellent
means for conducting evaluation processes in an objective way. All assessees get an equal
opportunity to show their talents and capabilities and secure promotion based on merit.
Since evaluators know the position requirements intimately and are trained to perform the
evaluation process in an objective manner, the performance ratings may find favor with
majority of the employees. A considerable amount of research evidence is available to
support the contention that people chosen by this method prove better than those chosen by
other methods. The centre enables individuals working in low status departments to
compete with people from well-known departments and enlarge their promotion chances.
Such opportunities, when created on a regular basis, will go a long way in improving the
morale of promising candidates working in less important positions.
Where subjective performance measures are used, there is scope for rater’s biases
influencing the evaluation process. To avoid this, some employees use the field review
method. In this method a trained, skilled representative of the HR department goes into the
‘field’ and assists line supervisors with their ratings of their respective subordinates. The HR
specialist requests from the immediate supervisor specific information about the employees
performance. Based on this information, the expert prepares a report which is sent to the
supervisor for review, changes, approval and discussion with the employee who is being
rated. The ratings are done on standardized forms.
Since an expert is handling the appraisal process, in consultation with the supervisor, the
ratings are more reliable. However, the use of HR experts makes this approach costly and
impractical for many organizations.
Q.5 Write a note on different theories for Managing Compensation [10]
Ans. Managing compensation throughout the different levels of the organization. Workplace
views of compensation are often tied to perceptions of quality of life, security, status,
workplace value, and fairness. Compensation is among the most complex and heated
topics in business settings. It is important, therefore, that students examine methods
by which compensation is managed, or sometimes mismanaged, using workplace
examples. This perspective will be our classroom focus, as it will provide students
with tools and experiences that can be directly applied to the workplace. Managing a
compensation program initially requires an understanding of technical skills used by HR
professionals: Job Analysis, Job Evaluation, assessing pay grades, salary surveys, et
al. These skills will be developed over the term of this course. However, far more than a
quantitative study or a major expense to a bottom line, compensation management
also requires that professionals make difficult strategic-level choices that can have
tremendous impact on the livelihood of employees, a company’s culture or its financial
future.
Professionals who design and implement comprehensive direct and indirect pay programs
are often required to balance conflicting variables. These variables include internal
pressures for cost containment, the financial interests of employees, external competition for
talented employees, executives’ roles in shaping organizational cultures, ethical
considerations, the role of government, and the influence of long-range business plans.
During the term of this course, the effects of these variables on compensation
management will be discussed and debated. While this course provides an overview of
employee benefits programs (indirect compensation), the main focus will be forms of direct
pay.
The variation in payment of salaries depends on the variation of the nature of the job performed by the
employees. The ranking method is simple to understand and practice and it is best suited for a small
organization. Its simplicity, however, works to its disadvantage in big organizations because rankings
are difficult to develop in a large, complex organization. Moreover, this kind of ranking is highly
subjective in nature and may offend many employees. Therefore, a more scientific and fruitful way of
job evaluation is called for.
Classification Method
According to this method, a predetermined number of job groups or job classes are established and
jobs are assigned to these classifications. This method places groups of jobs into job classes or job
grades. Separate classes may include office, clerical, managerial, personnel, etc. Following is a brief
description of such a classification in an office.
(a) Class I - Executives: Further classification under this category may be Office manager, Deputy
office manager, Office superintendent, Departmental supervisor, etc.
(b) Class II - Skilled workers: Under this category may come the Purchasing assistant, Cashier,
Receipts clerk, etc.
(c) Class III - Semiskilled workers: Under this category may come Stenotypists, Machine-operators,
Switchboard operators, etc.
(d) Class IV - Semiskilled workers: This category comprises Daftaris, File clerks, Office boys, etc.
The job classification method is less subjective when compared to the earlier ranking method. The
system is very easy to understand and acceptable to almost all employees without hesitation. One
strong point in favor of the method is that it takes into account all the factors that a job comprises. This
system can be effectively used for a variety of jobs.
The weaknesses of the job classification method are:
* Even when the requirements of different jobs differ, they may be combined into a single category,
depending on the status a job carries.
* It is difficult to write all-inclusive descriptions of a grade.
* The method oversimplifies sharp differences between different jobs and different grades.
* When individual job descriptions and grade descriptions do not match well, the evaluators have the
tendency to classify the job using their subjective judgments.
Factor Comparison Method
A more systematic and scientific method of job evaluation is the factor comparison method. Though it
is the most complex method of all, it is consistent and appreciable. Under this method, instead of
ranking complete jobs, each job is ranked according to a series of factors. These factors include
mental effort, physical effort, skill needed, supervisory responsibility, working conditions and other
relevant factors (for instance, know-how, problem solving abilities, accountability, etc.). Pay will be
assigned in this method by comparing the weights of the factors required for each job, i.e., the present
wages paid for key jobs may be divided among the factors weighed by importance (the most
important factor, for instance, mental effort, receives the highest weight). In other words, wages are
assigned to the job in comparison to its ranking on each job factor.
The steps involved in factor comparison method may be briefly stated thus:
* Select key jobs (say 15 to 20), representing wage/salary levels across the organization. The
selected jobs must represent as many departments as possible.
* Find the factors in terms of which the jobs are evaluated (such as skill, mental effort, responsibility,
physical effort, working conditions, etc.).
* Rank the selected jobs under each factor (by each and every member of the job evaluation
committee) independently.
* Assign money value to each factor and determine the wage rates for each key job.
* The wage rate for a job is apportioned along the identified factors.
* All other jobs are compared with the list of key jobs and wage rates are determined.
An example of how the factor comparison method works is given below:
Table: Merits and Demerits of Factor Comparison Method
Merits
Demerits
* Analytical and objective.
* Reliable and valid as each job is compared with all other jobs in terms of key factors.
* Money values are assigned in a fair way based on an agreed rank order fixed by the job evaluation
committee.
* Flexible as there is no upper limitation on the rating of a factor.
* Difficult to understand, explain and operate.
* Its use of the same criteria to assess all jobs is questionable as jobs differ across and within
organizations.
* Time consuming and costly.
Point method
This method is widely used currently. Here, jobs are expressed in terms of key factors. Points are
assigned to each factor after prioritizing each factor in the order of importance. The points are
summed up to determine the wage rate for the job. Jobs with similar point totals are placed in similar
pay grades. The procedure involved may be explained thus:
(a) Select key jobs. Identify the factors common to all the identified jobs such as skill, effort,
responsibility, etc.
(b) Divide each major factor into a number of sub factors. Each sub factor is defined and expressed
clearly in the order of importance, preferably along a scale.
The most frequent factors employed in point systems are:
I. Skill (key factor): Education and training required, Breadth/depth of experience required, Social
skills required, Problem-solving skills, Degree of discretion/use of judgment, Creative thinking;
II. Responsibility/Accountability: Breadth of responsibility, Specialized responsibility, Complexity of the
work, Degree of freedom to act, Number and nature of subordinate staff, Extent of accountability for
equipment/plant, Extent of accountability for product/materials;
III. Effort: Mental demands of a job, Physical demands of a job, Degree of potential stress.
The educational requirements (sub factor) under the skill (key factor) may be expressed thus in the
order of importance.
Degree Define
1. Able to carry out simple calculations; High School educated
2. Does all the clerical operations; computer literate; graduate
3 Handles mail, develops contacts, takes initiative and does work independently; post graduate
Assign point values to degrees after fixing a relative value for each key factor.
Table: Point Values to Factors along a Scale
Point range Daily wage rate (Rs) Job grades of key bank officials
1. TRANSFERS
The employees are transferred from one department to another according to their efficiency
and experience.
2. PROMOTIONS
The employees are promoted from one department to another with more benefits and
greater responsibility based on efficiency and experience.
4. Retired and Retrenched employees may also be recruited once again in case of shortage
of qualified personnel or increase in load of work. recruitment such people
save time and costs of the organisations as the people are already aware of the
organisational culture and the policies and procedures.
5. The dependents and relatives of Deceased employees and Disabled employees are also
done by many companies so that the members of the family do not become dependent on
the mercy of others.
Some external sources of recruitment are:
1. PRESS ADVERTISEMENTS
Advertisements of the vacancy in newspapers and journals are a widely used source
of recruitment. The main advantage of this method is that it has a wide reach.
2. EDUCATIONAL INSTITUTES
Various management institutes, engineering colleges, medical Colleges etc. are a
good source of recruiting well qualified executives, engineers, medical staff etc. They
provide facilities for campus interviews and placements. This source is known as
Campus Recruitment.
2. PLACEMENT AGENCIES
Several private consultancy firms perform recruitment functions on behalf of client
companies by charging a fee. These
agencies are particularly suitable for recruitment of executives and specialists. It is also
known as RPO (Recruitment Process Outsourcing)
3. EMPLOYMENT EXCHANGES
Government establishes public employment exchanges throughout the country.
These exchanges provide job information to job seekers and help employers in
identifying suitable candidates.
4. LABOUR CONTRACTORS
Manual workers can be recruited through contractors who maintain close contacts with the
sources of such workers. This source is used to recruit labour for construction jobs.
5. UNSOLICITED APPLICANTS
Many job seekers visit the office of well-known companies on their own. Such callers are
considered nuisance to the daily work routine of the enterprise. But can help in creating the
talent pool or the database of the probable candidates for the organisation.
When the aim of an enquiry is to gather information about the opinions of a particular person
(an expert, a representative member of a group) in order to gain qualitative insights into a
problem, guided interviews are used. Guided interviews contain only open-ended questions,
and the questionnaire is only used as a guideline for the interview, the conversation between
interviewer and interviewee does not have to follow it strictly. Guided interviews generate
qualitative data, which is why the number of interviews usually is limited, and quantitative
conclusions cannot be drawn.
2. Training. Is training ever finished? Can you possibly overtrain? NO and NO. For whatever
reasons, too many people feel "My people have already been trained" or "I've got good
people...they only need a little training." But training never ends. Schedule "tune- up" training
sessions. These should be led by you or by a supervisor with help from specific employees
who show a particular strength in the skills taught. I know this takes time, but these types of
training sessions will continually enhance the performance of your people and the
productivity of your business.
3. Good Work Environment. A recent industry study shows just how inaccurate your results
can be. Employers were asked to rank what they thought motivated their people
and then employees were asked to rank what really did motivate them.
Employers felt "working conditions" was a nine (or next to last) in terms of importance. What
did the employees say? Number two! Working conditions are very important to the way
employees feel about where they work.
Cosmetically, does your office look nice? Are there pictures on the walls, plants and fresh
paint among other features that generally make people feel good about their environment?
Does their work space have enough room or are they cramped in a "sardine can?" What
about furniture? Is the desk the right size, chair comfortable? Is there file space and do they
have the miscellaneous office supplies needed for maximum performance? Is the
temperature regulated properly so they don't feel they're in the Amazon jungle one minute
and the North Pole the next?
4. Leadership Roles. Give your people leadership roles to reward their performance and
also to help you identify future promotable people. Most people are stimulated by leadership
roles even in spot appearances. For example, when visitors come to your workplace use this
opportunity to allow an employee to take the role of visitors guide.
A great place to hand out leadership roles is to allow your people to lead brief meetings.
Utilize your employees' strengths and skills by setting up "tune up" training sessions and let
one of your employees lead the training. The best time to do this is when new people start.
Or, assign a meeting leader after someone has attended an outside seminar or workshop.
Have them lead a post show, briefing the other employees regarding seminar content and
highlights.
Have your employees help you lead a project team to improve internal processes.
5. Team Spirit. Have a picture taken on your entire staff (including you!), have it enlarged
and hang it in a visible spot. Most people like to physically see themselves as part of a group
or team.
When running contests in your area, try to create contests and affiliated activity that are
team driven. People driving to reach goals together definitely enhance team spirit solely
because they must lean upon others and be prepared to be leaned on.
One very effective idea for me has been building a collage of creative ideas with the "Team"
theme. All employees are responsible for submitting a phrase referring to TEAM on a weekly
rotation. Each of these ideas (such as TEAM: Total Enthusiasm of All Members or There is
no I in Team) is placed on a wall, creating a collage of Team-oriented phrases. Don't have
one person responsible for this...do it as a team.
6.Social Gatherings. Scheduled offsite events enhance bonding which in turn helps team
spirit, which ultimately impacts your positive work environment. Halloween costume parties,
picnics on July 4th, Memorial Day or Labor Day, and Christmas parties are only some of the
ideas that successfully bring people together for an enjoyable time. Some others that I've
used with equal success are softball games (against other companies or among employees,
depending on staff size), groups going putt-putt golfing or movie madness.
7. Stress Management. There are many articles and books available on the subject. Make
this reference material available to your people. Make sure they know it is available and
encourage them to use it.
Be as flexible as you can with breaks during the course of the day.
Ans. Maintaining quality of work life for its employees is an important concern for the any
organisation. The grievance handling procedure of the organisation can affect the
harmonious environment of the organisation. The grievances of the employees are related to
the contract, work rule or regulation, policy or procedure, health and safety regulation, past
practice, changing the cultural norms unilaterally, individual victimization, wage, bonus, etc.
Here, the attitude on the part of management in their effort to understand the problems of
employees and resolve the issues amicably have better probability to maintain a culture of
high performance. Managers must be educated about the importance of the grievance
process and their role in maintaining favorable relations with the union. Effective grievance
handling is an essential part of cultivating good employee relations and running a fair,
successful, and productive workplace. Positive labor relations are two-way street both sides
must give a little and try to work together. Relationship building is key to successful labor
relations.
The management should take care of following aspects to develop a culture of trust and
confidence upon the employees.
1. Always ensure that the managers involved in the grievance handling procedures have a
quiet place to meet with the complainant.
2. Always ensure that managers have adequate time to be devoted to the complainant.
3. Explain manager's role, the policy and the procedures clearly in the grievance handling
procedure.
4. Fully explaining the situation to the employee to eliminate any misunderstanding and
promote better acceptance of the situation complained of.
6. Do use a positive, friendly ways to resolve the crisis than punitive steps, which disturb the
system.
7. Do remain calm, cool, collected during the course of the meeting.
11. Be aware of the staff member's potential concerns to the possible repercussions of
raising a grievance.
12. Don't become angry, belligerent, or hostile during grievance handling procedure.
13. Do listen for the main point of arguments and any possible avenue to resolve the
grievance.
14. Listen and respond sensitively to any distress exhibited by the employees.
15. Eliminating the source of the irritation or discomfort being complained of.
16. Reassure them that the managers will be acting impartially and that your hope is to
resolve the matter if possible.
17. Don't "horse trade" or swap one grievance for another (where the union wins one,
management wins one). Each case should be decided on its merits.
18. Avoid usage of verbosisms like "it will be taken care of."
19. Ensure effective, sensitive and confidential communication between all involved.
20. Take all possible steps to ensure that no victimization occurs as a result of the grievance
being raised.
21. The investigator or decision maker acts impartially, which means they must exclude
themselves if there is any bias or conflict of interest.
22. All parties are heard and those who have had complaints made against others are given
an opportunity to respond.
23. Try to look upon the problem on different angles for appropriate understanding.
24. Ensuring that there is proper investigation of the facts and figures related the problem
under concern.
26. Ask the staff member their preferred resolution option, although it is important to make it
clear that this may not be a possible outcome.
27. Be aware of the limits of authority of the person who involved in the grievance handling
procedures.
28. If the manager feels that he/she is not the appropriate person (senior manager) to deal
with the issue refer the complainant to the appropriate person as soon as possible.
29. Try to get a better idea of whether the alleged discrimination or harassment happened or
didn't happen.
30. Tell them exactly what they are supposed to have done, to whom and explain, why this
may be seen as discrimination/harassment or as inappropriate.
31. Grievances are preferably to be settled informally at the level of the employee's
immediate supervisor.
32. Try the level best to involve team members to resolve the crisis at unit level itself.
33. Avoid as far as possible the union involvement in conflict resolution situation process.
34. Follow documentation the procedures, of all necessary steps taken to resolve the
problem/complaint.
Conclusion