Drive

Program
Semester
Subject code &
name
Book ID

SUMMER 2015
MBAFLEX/ MBA (SEM 3)
3
MU0012 Employee Relations Management
B1734

Q
1

Employee relations management (ERM) is all about management of

relationship with employees in an organization. Explain the features and
importance of this ERM.

An
s.

Features of ERM
The important feature of ERM are:

Communication: Communication channels among the employees, and

between employees and the management must be open. If the opinions
of the employees are not considered, they become frustrated and this
would lead to low morale. Demoralised employees are less productive
and may even become hostile. Team briefings, performance appraisals
and employee surveys are different means of improving
communication.

Management of the employment contract: The employment

contract specifies the pay, working conditions, safety procedures, rules
to be followed, etc.

Conflict management: Conflicts usually arise among employees or

between the employer and the employee. Traditional methods of
resolving conflicts like formal disciplining and grievance redressal
procedures are now seldom used. Mediation and counselling are
increasingly being used to resolve conflicts. Managers are being trained
to resolve disputes and avoid conflicts in a professional manner.
Employees are advised about the rules, regulations and procedures of
the organisation. They are also briefed about their grievance redressal
procedures and appeal rights.

Employee growth: Employees are encouraged to pursue career

growth opportunities within the company. Career planning is becoming
an important part of every organisation.

Commitment: An organisation will be able to succeed only if its

employees are committed to achieving the objectives of the

organisation. The factors which affect the commitment of the employee
are job satisfaction, nature of the job, rewards, benefit programmes,
communication within the organisation, promotion policies and
organisational culture.

Compliance with Employement Laws: Employement Laws deal with

issues like unfair dismissals, discrimination, minimum wage, working
hours and so on.

Importance of Employee Relations Management (ERM)

A good relationship among the employees, and between the employer and
employee is one in which there is equal contribution from the parties involved
towards making the relationship work.
The relationship between a company and its amployee is complex and
efficient management of this relationship is vital to every organisation. By
managing employees efficiently the organisation can capitalise on their
strengths and improve productivity.
Employee Relations Management is critical due to the following reasons:

It improves overall productivity by improving employee morale,

productivity, adaptability and communication.

It improves job satisfaction and helps in retaining employees. Retaining

existing employees is an easier and more cost-effective task when
compared to recruiting new employees and training them.

It improves the communication system within the organisation.

It enhances employee involvement and commitment, which are every

important to the success of an organisation. Team working and change
management can maintain motivation and commitment.

It assure customer satisfaction.

It increases the synergy between the culture of the organisation and the
expectations of the employees.

It positions the company as an employer of choice and thus attracts

new employees.

It increases employee loyalty. Confidential information can be kept

secure.

Q
2

What are the various types of communication? Explain the importance of

organizational communication. What are the methods to improve
communication?

An
s

Types of communication
Communicaton in an organization can be formal or informal. Formal
communication follow certain rules and guidelines. Informal communication
are unofficial communication and are influnced by the culture of the
organisation. Effective communication has both transmission and feedback
phase. The feedback phase help in clear understanding of the communication.
The different forms of communication in an organization are as follows

Passive communication : This is an ineffective form of

communication. People using this form of communication avoid
confrontation. They do not communicate their wishes or desires. This
style of communication can cause alienation, anger, frustration and
depression.
One-way communication : This communication travels only in one
predetermined direction. This is common in formal organisations and in
military structures. In this form of communication, messages are issued
by organisations and their managers without any regard for whom the
messages are addressed to. The subordinates are not given an
opportunity to communicate their opinions to their superiors. Examples
of one-way communication are edicts, rules and procedures. One-way
communication enhances feelings of alienation.
Two way communication: This form of communication encourages
dialogue between the employees and their superiors. Consistent
communication between employees and their managers help in
building trust and loyalty. Employees are given an opportunity to clarify
their doubts, seek support and express their opinions.
Active communication : In this form of communication, messages

which everyone can understand and respond to are issued. The

employees raise issues and respond to any problem without any fear.
Misunderstandings are clarified easily.
Non-verbal communication : In this form of communication, people
communicate their attitudes without using words. G.W.Porter classifies
non-verbal communication as follows :
1. Physical : This includes facial expressions, gestures, tone of voice,
body motions, touch and so on.
2. Aesthetic : This includes creative expressions like playing
instrumental, instrumental music, dancing, painting and sculpturing.
3. Symbolic : This makes use of religious and organisational symbols.
4. Props and settings : These are used to put others at ease or to put
someone in a position of disadvantage. Not providing a seat to a
person can make a person uncomfortable and feel annoyed.
5. Signs : This is a mechanical means of communication and includes
signaling flags, gun salutes, horns and sirens.

Importance of organizational communication

Communication is essential in an organisation for better co-ordination and for
maintaining good inter-personal relations. Organisations establish good
communication channels for the following reasons:
Good working relations : Effective communication is essential in an
organisation to establish good working relations with peers,
subordinates and superiors. Good working relations ensure a friendly
and conflict-free environment.
Problem Solving : Good communication skills help employees
convey their problems and issues in an effective way. This helps in
preventing problems from escalating. Problems can be resolved
quickly.
Enhance production : Effective communication is necessary to keep
employees informed about the rules, policies and procedures. This
helps employees understand their duties better and perform their
work in a better way. This increases the productivity and accuracy of
the work done.
Engaging employees : Effective communication makes employees
feel that their opinions and suggestions are being considered. This
increases employee involvement and commitment. Loyalty for the
organisation increases and this enhances employeement engagement.

Methods to improve communication

Certain etiquettes and rules are followed while communicating in the
organisation. These help to improve the quality of communication and ensure
effective
communication.
The
following
guidelines
ensure
better
communication:

Be clear and transparent : Communication has to be unambiguous,

clear and transparent. All rules, policies and procedures need to be
communicated clearly so that the employees have a clear
understanding of them.
Be comprehensive : Ensure that the communication includes all the
points to be communicated. Check if additional changes are made to
the matter to be communicated. Ensure that the communication is
accurate.
Be precise and concise : Communication need to be concise and not
elaborate. Simple words are used in order to avoid misunderstandings.
Use short sentences.
Be generic : Ensure that the discussions are genreic. Successes and
failures need to be discussed in a generic manner. This helps in
avoiding conflicts. Use we more than you in discussions.
Be assertive : Communication needs to be assertive and positive. This
helps in making decisions and arriving at conclusions.
Be attentive : Develop listening skills. Verbal communications can only
be clearly understood if the parties involved are attentive.
Encourage two-way communication : Two-way communication helps
improve employee relations as this considers the opinion and views of
both parties involved.

Q3

Human Resource Information System (HRIS) helps organizations to carry out

their HR administrative functions in an effective manner. What are the
important features that makes a good HRIS? Mention some common
applications of HRIS.

An
s

Important features that makes a good HRIS

The important features of a good HRIS are as follows :
Job and pay history : The HRIS document details and salary of past
jobs. The education details of the employee are also recorded. The HR
personnel are able to view salary details including bonuses awarded
and deductions made. They can view job details like positions held and
the period of employment in that position. Salary changes of the
employee are recorded.
Ability to import and export data : The HRIS scans images of
resumes, employee photographs, employee signatures, job applications
and accident reports. The HRIS is able to link to multiple file formats like
PDF, Excel and Word. Exporting data in HTML or XML formats is also
supported. Employee information is exported to programmes like Visio
or OrgPlus and graphical organisation charts are produced.

Ad-hoc report writing : Powerful reporting tools like Crystal Reports

are used. Users select the reporting criterias such as department,
location or position. Customised reports are created and saved using
report generators. Information that needs to be included in reports can
be selected. Lists such as staff directories, list of offices, list of positions
are generated. Such lists can be sorted or filtered. Reports includes
tables and charts. Reports can be formatted as PDFs for printing. Timestamps are also included in reports.
Automated reminders and alerts : Reminders are set for important
dates and deadlines. HR personnel schedule reminders for birthdays,
anniversaries, company events, performance reviews, training,
probation periods and promotions. HR personnel can e-mail important
reminders to employees.
User-defined fields : Users defined organisation structure according
to individual organisations. They can include company policies for
recruiting, salary structure, promotions, increaments, appraisal,
transfers, confirmation and other areas. They specify the business rules
and logic, which are applicable to their company.
Attendance and leave tracking : Employee vacations, leaves and
absences are tracked and documented. Company policies on leave and
vacation are documented. The number of days of leave available is
computed based on the years of service of the employee and the leave
taken.
Employee self-service : Employees are allowed to record and update
their personal details like name, gender, nationality, address, maritial
status, passport number, date of birth, number of dependants,
education, and contact phone numbers. They have the facility to record
notes in a log. They can apply for leave and view their leave detail.
They can also change their bank account details and view their payslips. They manage their inboxes, personal calenders and service
requestes. They can view their work schedules. They are allowed to file
their expense reports, can view and enroll in various benefit plans.
They are permitted to sign up for training and view their training
schedules. They are allowed to create purchase requests and confirm
receipt of goods. For example, my SAP HR has more than 80 ready-touse employee self-services.
Benefits administration : The HR personnel define the benefit plans
for each employee and track details like eligibility, premiums paid and
beneficiaries. Organisations can analyse the impact of their benefits
administration policies and track employee enrolment. For example,
Cisco is providing an online benefits administration package for its UK
and Ireland employees called i-Benefits@Cisco to help them understand
their full rewards package and benifits that they are eligible for. The
staff can view the benifits online and select their perks. This package

includes information about life assurance, group income protection,

holiday and voluntary benefits. Cisco uses National Insurance Savings
to provide health assesments of staffs.
Performance management : The HR personnel or supervisors can
track all employee performance reviews. Details of past reviews are
maintained. Managers can include their comments about each
employee and schedule future reviews. Employee performance in
training also tracked. The performance management system helps set
goals for the employees, evaluate employee performance, improve
employee performance and promote employees to the right position.
HRIS allows managers to set goals for their unitsand assign the goals to
individuals and teams. The people planning module assists managers
to assess and track progress. The performance management feature
streamlines performance appraisals and makes them more transparent.
Management uses reporting and analytics tools to identify top
performers and non-performers.
Payroll : The HRIS system manages all aspects of payroll functions like
payroll processing, reimbursements, salary statements, insurance
payments, income tax and so on. The pay structure can be configured
as per company policy. Employees can choose their benefit plans.
Arrears are calculated and e-mails are sent to employees on arrear
payments. Loan policies and pre-requisites are configured. Employees
are allowed to generate pay-slips, loan statements and tax statements.
They can use the tax calculator to calculate tax. Final settlementsof
employees are also computed.
Security : Access to confidential information is strictly controlled.
Different levels of employees have different access permissions.
Password-protected logins ensure authorised access.The passwords are
regularly changed by the system administrators. Data integrity is
ensured. A log is maintained of user name, date and time of data
access for auditing purposes. Firewalls are created to prevent hacking.
Data is replicated on different servers at different sites to act as
standby. Data is backed up on a regular basis.
Document library : The HRIS includes templates of letters and forms
such as offer letters. Welcome letters to new employees, termination
letters, exit interview forms, employee suveys and so on.

Common Applications of Human Resource Information Systems

An HRIS is an integrated approach to acquiring, storing, analysing and
controlling the flow of information throughout an organisation. A welldeveloped HRIS is useful in many HR applications and can enhance the
efficiency and time-of- response of many HR activities. Some of the common
applications of HRIS are as follows:
Planning: The HR activities implemented by this application are

Q4

An
s

personnel and succession planning, labour-relation planning, target

analysis and organisational charting.
Staffing and employment: This application handles recruitment
activities. It ensures compliance with employment equity.
Training and career development: This application deals with
analysing training needs, training administration, and career planning.
Performance management: This application deals with performance
appraisals, monitoring time and attendance of employees.employee
compensation and benefits
Compensation and benefits: This application deals with employee
compensation and benefits administration.

What are the objectives of organisational discipline? List the types of

disciplinary problems. Explain the steps of disciplinary procedures commonly
followed in many organizations.

Objectives of organisational discipline

The objectives of organisational discipline are to correct, educate and reform
the workforce, Organisational discipline aims to correct wrong behaviours,
discipline offenders, prevent inappropriate actions and maintain standards.
The main objective of organisational discipline are as follows:
To obtain voluntary acceptance of rules, regulations and policies of the
company : Member of the organisation have to voluntarily comply with
the rules, regulation and policies of the company to enable easy
attainment of the organisational goals.
To provide direction and leadership : Discipline guides the workforce in
the right manner so that they act in the right way and achive their
goals.
To promote co-operation and unity : When the workforce is disciplined,
they voluntarily co-operate with each other and work as a united team.
Ideas are shared for attaining common goals. Individual ambitions make
way for team achivements.
To improve employee relations: When employees work in a disciplined
way, they respect one another. Thus the work atmosphere becomes
pleasent and conflict are avoided.
To improve efficiency and productivity : Organisational discipline brings
the best performance out of the employees. Concentration on core
issues improves efficiency of the processes. This maximises productivity
and minimise costs.

Listing the types of disciplinary problems - 2

The main types of disciplinary problems are as follows1. Excessive absenteeism

2. Poor timekeeping
3. Improper personal appearance
4. Substance abuse
5. Defective performance
6. Poor attitudes
7. Violation of health and safety rules
8. Insubordination
9. Workplace violence
10.Harassement
11.Theft and sabotage

Steps of disciplinary procedures - 5

The disciplinary procedure followed in many organisations usually has the
following steps1. Issuing a letter of charge : The manager issues a chargesheet to the
employee committing the misconduct. The charges are precisely and
clearly stated in the chargesheet. The chargesheet also asks the
employee to give an explanation for the misconduct. Sufficient time is
give to the employee to prepare a reply to teh chargesheet.
2. Consideration of the explanation : Once the reply is obtained from
the chargesheeted employee, the explanations are considered. If the
explanation is found to be satisfactory, then no further action is taken.
But if the management does not find the explanation satisfactory, it
decides to issue a show-cause notice.
3. Show-cause notice : This is issued by the management when there is
sufficient evidence of the misconduct of the employee. This gives the
employee another opportunity to provide an explanation for the
charges made. Enquiry can also be initiated by issuing a notice of
enquiry detailing the name of the enquiry officer, the time, date and
place of enquiry.
4. Conducting a full-fledged enquiry : The employee is given an
opportunity for justification. The findings of the enquiry are recorded
and the enquiring officer suggests the disciplinary action to be taken.
5. Making a final order of punishment : The punishment for the
misconduct is decided after considering the nature of the indiscipline,
the past record of the employee, the precedents and the effects of the
disciplinary action on other employees.

6. Appeal : When the employee feels that there has not been a fair
hearing, the employee is given a chance to make an appeal.
7. Follow-up : The consequences and the impact of the disciplinary
action are noted.

Q5

What is trade union and what are its objectives? Describe trade unions in India

Ans

Meaning of trade union - 2

A trade union or labour union is an administration of workforce grouped
together to attain common goals such as enhanced operational
circumstances. The Trade Union Act of India 1926 defines a trade union as an
organisation, whether temporary or permanent, formed primarily for the
purpose of regulating the relations between workmen and employers or
between workmen and workmen, or between employers and employers, or for
imposing restrictive condition on the conduct of any trade or business, and
includes any federation of two or more trade unions.
Trade unions are created with the key goal of protecting the rights of the
labour force. The Indian labour market consists of three sectors:
The rural workers, which comprise 60 percent of the labour force.
Organised sector, which employs percent of the labour force.
The urban informal sector (Including the IT Industry and other
services) which comprises the remaining 32 percent of the workforce.
Trade union bargain with the employers on behalf of union members and
negotiate labour contracts with employers. This includes negotiation of wages,
work rules, complaint procedures, rules governing hiring, firing and promotion
of workers, benifits, workplace safety and policies. Negotiation is a passive
technique adopted by trade unions. The term negotiated by the union leaders
are binding on the rank and file of the union and the employer and in some
cases on the other non-member workers.
Seldom , when trade unions do not attain their goals through passive
methods, they take drastic steps. Trade unions resort to forceful or aggressive
means like strikes and resistance to lock-outs to achive their goals. Many
disagreements in multinational and domestic companies are a direct result of
these aggressive actions of trade unions. The Indian economy, which depends
a lot on the service sector, is affected by such disruptions organised by trade
unions.

Objectives of trade union - 2

The primary objective of any trade union is to protect and promote the
interest of its members. Trade unions are permanent workforce bodies within
an organisation so that workers have constant access to their representative.
Unions achieve their through collective action and group effort. The objectives
of trade unions are the following
To improve the economic condition of employees by securing better
wages for them.
To provide better working environment for the employees.
To secure employee bonuses from the profit of the organisation.
To resist schemes of the management which reduce employment, such
as rationalisation and automation.
To secure social welfare of employees through group schemes which
benefit employees.
To protect the interests of employees by actively participating in the
organisational management.
To provide organisational stability, growth and leadership.

Trade Unions in India 6

Industrial revolution brought about profound changes in the social structure in
the 18th and 19th centuary . While capitialists reaped the fruits of machinebased fast-paced industrial production, the working class bore its brunt. The
social and economic conditions of the working class, which were already
harsh, became worse. The dirty living conditions, the long and strenuous work
hours, and insufficient wages immensely affected the psychology of the
working class. Even though the growth of trade unions in India was slow, the
working class found relief in the form of child labour abolishment and
regulated working hours for all. The trade union movement in India can be
divided roughly into three phases, namely :
Beginning of unions, when they first established in India
Development of organised trade unions
Rise of trade unions post independence.
In 1881, the Indian Factory Act was enacted to regulate the working hours and
other issues of the
Indian textile labourers. Even though, there wereno proper unions to guide
them, workers organised strikes on the following two decades in all Industrial
cities. They started realising the importance of combined actions and that
coordinated and united efforts resulted in bettering their circumstances.
Bombay Mill-Hands Association which is a small association was established
during this period.
In the 1900s, Indian Industry saw the growth of organised trade unions.

Madras Labour Union was the first organised union in India. This was followed
by the creation of a large number of unions in all the industrial hubs during
1918 and 1923. Occupitional unions were formed under the guidance of
Mahatma Gandhi in Ahmedabad. These were later united to form an industrial
union known as the Textile Labour Association in 1920. The All India Trade
Union Congress (AITUC) was also formed in 1920. Many of the leaders in
AITUC were leaders of the Indian freedon fighting movement, mainly in
connection with the countrys ongoing struggle for independence.
The Trade Union Act was formed in 1926. The Act legalised registered
registered trade unions in India which until then was considered illegal bodies.
It also protected unions from civil and criminal cases.
By the time India gained Independence, there were four central trade union
organisations, they were the following :
All India Trade Union Congress
Indian National Trade Union Congress
Hind Mazdoor Sangh
United Trade Union Congress
Post-independent India saw the growth saw the growth of unions. Many trade
unions that have come into existance after 1947 have political affiliation. For
example AITUC is the trade union arm of the Communist Party of India, while
INTUC is affiliated to Congress Party. At present there are twelve central trade
union organisations regognised by the ministry of labour.
All India Trade Union Congress (AITUC)
Bharatiya Mazdoor Sangh (BMS)
Centre of Indian Trade Unions (CITU)
Hind Mazdoor Kisan Panchayat (HMKP)
Hind Mazdoor Sabha (HMS)
India Federation of Free Trade Unions (IFFTU)
Indian National Trade Union Congress (INTUC)
National Front of Indian Trade Unions (NFITU)
National Labour Organisation (NLO)
Trade Unions Co-ordinations Centre (TUCC)
United Trade Union Congress (UTUC) and
United Trade Union Congress Lenin Sarani (UTUC-LS)

Q6

Write short notes on :

(i)
Factories Act, 1948
(ii)
Industrial Disputes Act, 1947

An

Concept and provisions of Factories Act, 1948

-5

s
The Factories Act regulates labour employed in factories. It applies to the
whole of India. This Act applies to all factories which use power and employ 10
or more workers, and applies to factories not using power and employing 20
or more workers, on any day of the preceding 12 months.
According to this Act, every factory has to be registered and needs to obtain a
licence for working, which has to be renewed at periodical intervals. The
plans, designs and specifications of any proposed construction or extensions
to the factory have to receive the prior approval of the state government.
The main provisions of this Act are as follows:
Facilities : It specifies the minimum requirements regarding health
(cleanliness, ventilation and temperature, lighting and control of glare,
etc. ) safety (protection of eyes, handling of explosive and inflammable
materials, etc.), and general welfare of workers (first-aid, canteens,
shelter rooms, creches, urinals, drinking water, etc.).
Safety : Fencing of machinery needs to be done. Adequat fire-fighting
facilities must be provided. Hoist and lifts have to be in good working
condition. Stairs and passages have to be free from obstruction. Safety
appliances to protect the eyes from dangerous dusts, gases, and fumes
have to be provided. Pressure plants have to be regularly checked.
Working hours : The working hours cannot be greater than 48 hours
in a week. Weekly holiday is mandatory. Compensatory holidays have
to be given if the worker works on weekly holidays. A worker cannot be
made to work for more than 9 hours in a day. Half an hour rest is to be
provided after 5 hours of work. Overlapping of shifts is not allowed.
Overtime wages : A worker has to be paid overtime wages at double
the rate of regular wages if teh worker works beyond 9 hours a day or
48 hours a week.
Leave : A worker is permited a leave of one day for every 20 days of
work performed in the previous calander year provided that the worker
had worked for 240 days or more in the previous calander year.
Child employment : Children below the age of 14 cannot be
employed. Children between 14 and 15 years of age can be employed
only for 4.5 hours per day or during the night. Adolescents cannot work
between 7 PM and 6 AM.
Obligation regarding hazardous processes and substances:
Provide information about hazardous substances and processes and the
dangers and health hazards involved. Ensure safety measures and
make emergency plans. Appoint safety committees.

Concept and provisions under Industrial Disputes Act, 1947

-5
Industrial dispute is defined as any dispute or differnece between employers

and employers, or employers and workmen, or workmen and workmen, which

is connected with the employment or non-employment, or the terms of
employment, or with the conditions of labour of any person.
The main aim of this Act is to settle industrial disputes and maintain peace in
the industrial sector. The following provisions are made for settling disputes
under this Act:
Works committee : If the establishment has employed more than 100
workers in the preceding 12 months, then a works committee consisting
of the representatives of the employers and the employees is formed.
The number of employee representatives will not be lesser than that of
the employers.
Conciliation officers : The duty of the conciliation officer is to settle
disputes amicably and fairly. The function of the conciliation officer is
mostly administrative.
Board of conciliation : This is constituted to settle complex and
important disputes. It is usually found if the works committee is unable
to settle the disputes. It has equal representations from the employer
and the employees.
Court of enquiry : This investigates all matters referred to it and
submits its findings to the government within 6 months from the
begining of the enquiry.
Labour court : The adjudicates industrial disputes. The state
governments appoints 1 person who has served as any of the following
to enquire and give a verdict:
o A former judge of the high court
o A judge for 3 years in the district court
o A member of any tribunal for at least 2 years
o A judge in any court of the country for 7 years
o A chairman for any provincial labour court for at least 5 years.
Industrial tribunal : This has only one person nominated in it to
adjudicate industrial disputes. Such a person must have served as any
of the following :
o A judge of a high court
o A district Judge or an additional district judge for at least 3 years.
The government can also appoint 2 persons as assessors to assist the
tribunal.
National Tribunal : This is appointed by the Central government to
settle disputes of national importance or if the industrial establishments
involved function in more than one state of the country. One person
who has served as any of the following is appointed to the tribunal:
o A judge of a high court
o A chairman of the Labour Appellate court for at least 2 years.
Arbitration : Any dispute can be referred to arbitration with the consent
of the parties involved. The consent has to be obtained before the

dispute is referred to a tribunal or a court. The Board of Arbitration

needs to have equal representations from the parties involved and if
the parties decide so, one person can be elected to be the arbitrator to
settle the dispute.
The Industrial Disputes Act prohibits public utility services and other
establishments which are essential for maintaining public service from
indulging in strikes and lockouts. The Industrial Disputes Act also has
provisions which ensure that an employer does not illegally retrench or refuse
to employ workers. It also ensures that workers receive adequate
compensation in case of retrenchment or layoff. Both the employers and the
employees are bound by any agreement reached. Persons who breach the
agreement are punishable by fines or imprisonment.