2015 – Solved Question Paper | Human Resource Management | Final Year – Masters of Commerce (M.Com) | Dibrugarh University

2015 – Solved Question Paper | Human Resource Management | Final Year – Masters of Commerce (M.Com) | Dibrugarh University




PAPER- 204

1(a) Discuss the importance of Human resource management functions in the management of a large manufacturing enterprise. (16)

-> HRM ensures the smooth functioning of an organization. The process starts with formulating the right policies for the job requirements and ends with ensuring a successful business growth of the company. Therefore, HRM is an invisible agent that binds all the aspects of the organization to ensure smooth progress.

In this modern era, organizations have become more people-centric than ever — especially since this approach pays great dividends in terms of enhanced employee performance and lower attrition rates. Human Resource Management or HRM plays a key role in allowing employers and organizations to reach their objective.

The functions of HRM hold great significance in the growth and overall development of the organizations. After all, when the employees grow and develop their skills, the organization will automatically experience growth and expansion. Some of the primary functions of HRM include job design and job analysis, recruitment/ hiring and selection, training and development, compensation and benefits, performance management, managerial relations and labor relations.

Every HR department develops along with the development and growth of the organization. The HRM evolves through 3 distinct stages where it begins as a Business Function, turns into a Business Partner and afterwards a Strategic Partner.

In every one of these cases, the job and responsibilities of the HR division evolve to be more strategic. At more elevated levels of maturity, the HR department can increase the value of the leadership potential, top talent, company goals, employee retention rate and long haul manageability of the association.

At each stage, the credits and worth added by the Human Resources department change and the mediums required for this will change. At any rate, HR in an association should be liable for overseeing employee information, finance, time management, and setting up organization strategies. The HR department handles the effectiveness of human resource strategies and should be incorporated into every decision making process in the organization.

As a business partner, HR’s job is to meet the “current business needs” with the goal that the association can develop at a quantifiable rate. At this stage, HR moves to competency-based recruitment, pay grades, sudden turn of events, correspondence and organization plan.

HR helps in formalizing the organization hierarchy (who does what and reports to whom). That done, it recognizes the skills essential for each work job. Further, it helps in characterizing programs that are essential for building up these abilities, recruitment strategies to assess the expertise levels and benchmarking the abilities against industry norms and contenders etc.

All out salary (finance and advantages) likewise turns into a centre territory where the HR assists the association with drawing in and holding talented employees by turning into a pioneer in paying the employees.

Utilizing the expertise database and the company structure, the HR work develops pay hikes, improves the preparation capacity and makes the recruitment work more receptive to the abilities required by the association.

Organizations that see their HR as a strategic business partner have faith in giving the full maturity of their HR work. Such organizations are centered on accomplishing leadership roles instead of a year-on-year development.

So, let us find out more about each of these seven functions of HRM.

1. Job design and job analysis

One of the foremost functions of HRM is job design and job analysis. Job design involves the process of describing duties, responsibilities and operations of the job. To hire the right employees based on rationality and research, it is imperative to identify the traits of an ideal candidate who would be suitable for the job. This can be accomplished by describing the skills and character traits of your top-performing employee. Doing so will help you determine the kind of candidate you want for the job. You will be able to identify your key minimum requirements in the candidate to qualify for the job.

Job analysis involves describing the job requirements, such as skills, qualification and work experience. The vital day-to-day functions need to be identified and described in detail, as they will decide the future course of action while recruiting.

2. Employee hiring and selection

Recruitment is one of the primary functions of human resource management. HRM aims to obtain and retain qualified and efficient employees to achieve the goals and objectives of the company. All this starts with hiring the right employees out of the list of applicants and favorable candidates.

An HRM helps to source and identify the ideal candidates for interview and selection. The candidates are then subjected to a comprehensive screening process to filter out the most suitable candidates from the pool of applicants. The screened candidates are then taken through different interview rounds to test and analyse their skills, knowledge and work experience required for the job position.

Once the primary functions of HRM in recruitment are completed, and the candidate gets selected after rounds of interviews, they are then provided with the job offer in the respective job positions. This process is important because these selected employees will, after all, help the company realize its goals and objectives.

3. Employee training & development

Imparting proper training and ensuring the right development of the selected candidates is a crucial function of HR. After all, the success of the organization depends on how well the employees are trained for the job and what are their growth and development opportunities within the organization.

The role of HR should be to ensure that the new employees acquire the company-specific knowledge and skills to perform their task efficiently. It boosts the overall efficiency and productivity of the workforce, which ultimately results in better business for the company.

HRM plays a very crucial role in preparing employees for bigger tasks and responsibilities, which leads to the holistic development of employees at work. And an organization which provides ample growth and development opportunities to its employees is considered to be a healthy organization.

4. Compensation and Benefits

Benefits and compensation form the major crux of the total cost expenditure of an organization. It is a must to plug the expenses, and at the same time, it is also necessary to pay the employees well. Therefore, the role of human resource management is to formulate attractive yet efficient benefits and compensation packages to attract more employees into the workplace without disturbing the finances of the company.

The primary objective of the benefits and compensation is to establish equitable and fair remuneration for everyone. Plus, HR can use benefits and compensation as a leverage to boost employee productivity as well as establish a good public image of the business.

Therefore, one of the core HR department functions is to lay down clear policies and guidelines about employee compensation and their available benefits. One of the functions of HR manager is to ensure the effective implementation of these policies and guidelines. This creates equality and builds transparency among the employees and the management within the organization. After all, the level of employee satisfaction at work is directly proportional to the compensation and benefits they receive.

5. Employee performance management

The next activity on HR functions list is effective employee performance management. Effective performance management ensures that the output of the employees meets the goals and objective of the organization. Performance management doesn’t just focus on the performance of the employee. It also focuses on the performance of the team, the department, and the organization as a whole.

The list of HR functions for performance management includes:

· Initiating an appropriate selection process to hire the right candidates for the job positions

· Providing the right training and education needed to enhance the performance of the employees

· Enabling real-time feedback and coaching employees to boost efficiency among them

· Conducting performance reviews monthly or quarterly to discuss the positives and the improvement areas of employees

· Formulating a proper exit interview process to understand why experienced employees choose to leave the company

· Designing a proper appraisal and compensation system that recognises and rewards the workforce for their effort and hard work

6. Managerial relations

Relationships in employment are normally divided into two parts — managerial relations and labor relations. While labor relations are mainly about the relationship between the workforce and the company, managerial relations deals with the relationship between the various processes in an organization.

Managerial relations determine the amount of work that needs to be done in a given day and how to mobilize the workforce to accomplish the objective. It is about giving the appropriate project to the right group of employees to ensure efficient completion of the project. At the same time, it also entails managing the work schedules of employees to ensure continued productivity. It is essential that HR handles such relations effectively to maintain the efficiency and productivity of the company.

7. Labor relations

Cordial labor relations are essential to maintain harmonious relationships between employees at the workplace. At the workplace, many employees work together towards a single objective. However, individually, everyone is different from the other in characteristics. Hence, it is natural to observe a communication gap between two employees. If left unattended, such behaviors can spoil labor relations in the company.

Therefore, it is crucial for an HR to provide proper rules, regulations and policies about labor relations. This way, the employees have a proper framework within which they need to operate. Therefore, every employee will be aware of the policies which will create a cordial and harmonious work environment.

Such a structured and calm work atmosphere also helps with improving performance and aching higher targets.

8. Employee engagement and communication

Employee engagement is a crucial part of every organization. Higher levels of engagement guarantee better productivity and greater employee satisfaction. Efficiently managing employee engagement activities will help in improving the employee retention rates too. HRM is the right agent who can manage the employee engagement seamlessly. Proper communication and engagement will do wonders for the employees as well as the organization. The more engaged the employees are, more committed and motivated they will be.

Human resource teams know the ‘humans’ of the organization better than anyone else. This gives them an upper hand in planning engagement activities. Although such activities might not fall under the direct functions of HRM, they are indeed required for the organizational welfare and employer branding.

9. Health and safety regulations

Every employer should mandatorily follow the health and safety regulations laid out by the authorities. Our labor laws insist every employer to provide whatever training, supplies, PPE, and essential information to ensure the safety and health of the employees. Integrating the health and safety regulations with company procedures or culture is the right way to ensure the safety of the employees. Making these safety regulations part of the company activities is one of the important functions of HRM.

10. Personal support for employees

HRM assists employees when they run into personal problems which may interfere with the workflow. Along with discharging administrative responsibilities, HR departments also help employees in need. Since the pandemic, the need for employee support and assistance has substantially increased. For example, many employees needed extra time off and medical assistance during the peak period of the pandemic. For those who reached out for help, whether it may be in the form of insurance assistance or extra leaves, companies provided help through HR teams.

11. Succession Planning

Succession planning is a core function of HRMs. It aims at planning, monitoring, and managing the growth path of the employees from within the organizations.

What usually happens is that promising and bright employees within the organization who have excelled in their roles are handpicked by their supervisors and HRs, and their growth paths are developed.

This, of course, becomes quintessential as those employees who recognize the fact that the company is investing in their growth and development, and therefore, will stay loyal in the long run. However, while developing such employees towards a higher role, companies must keep in mind several aspects, such as improving employee engagement, assigning challenging tasks and activities.

An employee leaving the organization can prove to be disruptive and expensive. Therefore, succession planning is a savior of some sorts, as it helps identify the next person who is just right to replace the outgoing individual.

12. Industrial Relations

It’s usually the production lines and manufacturing units where this HR function is mostly used. Unions exist in factories and manufacturing units. And their responsibility is towards the goodwill about the workers — in fact, they’re always vocal and upfront about.

Now, for a company, especially into manufacturing and production, the HRs must have ongoing Industrial Relations practices. They must also continuously engage with the Unions in a friendly and positive manner to maintain amicable relations.

The true motive of Industrial Relation touches on a lot of issues within the company. For instance, Industrial Relations may be in place to meet wage standards, reduce instances that call for strikes and protests, improve working and safety conditions for employees, and reduce resource wastage and production time and so on.

Industrial Relations are extremely important because, if handled properly, it can circumvent protests, violence, walkouts, lawsuits, loss of funds and production time. IR is a sensitive yet critical function of the HR department; naturally, it requires personnel with vast experience.

HRM plays a major role in the smooth functioning of the organization. The process starts with formulating the right policies for the job requirements and ends with ensuring a successful business growth of the company. Therefore, HRM works as an invisible agent that binds together all the aspects of the organization to ensure smooth progress.

(b) Why it is important for companies today to make their human resources into a competitive advantage? Explain how HR can contribute to doing this. (10+6=16)

-> HR jobs are often thankless roles in which the HR manager must balance the needs of the organization with the needs of the employees. This hard work often goes unappreciated by both sides.

That said, some employers are beginning to recognize that the HR team is not only an invaluable resource but it can also actually help to create a competitive advantage, allowing the company to outperform the competition.

HR teams have a lot of responsibilities that can directly impact how well a company can compete against others. Let’s take a look at some examples.

HR Can Be Used as a Competitive Advantage:

Here are some of the many ways the HR team can help create and maintain a competitive advantage for the organization:

  • HR can use data to analyze turnover rates and determine where problems may lie, thus allowing the company to more quickly find issues and get them resolved. For example, if the data show that most turnover is from new hires, the team can focus on what problems may be the cause of that. Or if the data show that one group has a higher turnover rate than the rest of the business, focus can be turned there.
  • HR can help managers source the right talent to get the skills the company needs to grow and be competitive. HR expertise can allow the organization to know where to look for specialized talent when needed. (If your organization doesn’t already assess which talent streams are best utilized for different types of candidates, you can start now!)
  • HR can provide insight into the going market rates for talent and what it might take to get high-quality hires on board. HR can review the competitive talent landscape and determine what compensation strategy will be best aligned with company goals.
  • HR can give insights into how other organizations within your industry are structured— there may be information that can be useful in determining which positions the company still needs to create or fill to become or remain competitive.
  • HR can use data to show how the skill sets of the employees are evolving over time, and to show business leaders where skills gaps may exist so those gaps can be addressed proactively.
  • HR can also design employee development pathways that take into account the strategic and long-term needs of the organization, ensuring that key employees get the right training before it must be utilized. This impacts retention and improves the skill sets for the organization as a whole, all while ensuring the organization is addressing big-picture competitive issues proactively.
  • HR can use data to find potential employee issues before they become problematic. By tracking employee engagement scores over time, for example, HR can discover when engagement levels are waning—hopefully before they have a significant impact on morale and turnover—so the organization can take action sooner rather than later.
  • HR can put together succession plans that take into account the organization’s strategic goals. This can allow the organization to remain competitive even when there is turnover in key roles. (This is a critical time when a less organized company may falter.)
  • HR can analyze which employees are high performers and alert the management about who should be fast-tracked for promotions and new projects.
  • HR guidance on legal issues can keep the organization out of costly legal problems. This not only saves the company money but it can also save the company from major setbacks.

2(a) What do you understand by selection process? Discuss the various steps involved in it. (8+8=16)

-> The Selection is a process of picking the right candidate with prerequisite qualifications and capabilities to fill the jobs in the organization.

The selection process is quite lengthy and complex as it involves a series of steps before making the final selection. The procedure of selection may vary from industry to industry, company to company and even from department to department. Every organization designs its selection process, keeping in mind the urgency of hiring people and the prerequisites for the job vacancy.

The purpose of the selection process is to pick up the most suitable candidate who would meet the requirements of the job in an organization best, to find out which job applicant will be successful if hired.

If you want to manage your recruitment well, you’ll need to set your aims, adjust your methods to meet this aim, and regularly review how it’s working.

A good selection process should possess the following features:

· A selection process is an employment of workers through which a contractual relationship between employees and employer is established.

· The selection process should avoid complex procedures and processes that will confuse and alienate potential participants.

· The selection process involves rejecting a large number of under-qualified candidates; hence, it is regarded as a negative process.

· Selection process eliminates unsuitable and misfit candidates and ensures that the most competent and qualified candidates will enter into the organization.

· A selection process is a complex process as all have to pass numbers of selection hurdles.

· Monitor your selection systems on-going for process enhancements, examining pass rates, efficiency, accuracy, and fairness.

Therefore, selection can be defined as a process by which the candidates are screened for choosing the most qualified candidate in order to perform organizational activities.


(i) Proper Assessment:

Tests provide a basis for finding out the suitability of candidates for various jobs.

The mental capability, aptitude, liking and interests of the candidates enable the selectors to find out whether a person is suitable for the job for which he is a candidate.

(ii) Objective Assessment:

Tests provide better objective criteria than any other method. Subjectivity of every type is almost eliminated.

(iii) Uniform Basis:

Tests provide a uniform basis for comparing the performance of applicants. Same tests are given to the candidates and their score will enable selectors to see their performance.

(iv) Selection of Better Persons:

The aptitude, temperament and adjustability of candidates are determined with the help of tests. This enables their placement on the jobs where they will be most suitable. It will also improve their efficiency and job satisfaction.

(v) Labor Turnover Reduced:

Proper selection of persons will also reduce labour turnover. If suitable persons are not selected, they may leave their job sooner or later. Tests are helpful in finding out the suitability of persons for the jobs. Interest tests will help in knowing the liking of applicants for different jobs. When a person gets a job according to his temperament and interest he would not leave it.


The Tests Suffer From The Following Disadvantages:

(i) Unreliable:

The inferences drawn from the tests may not be correct in certain cases. The skill and ability of a candidate may not be properly judged with the help of tests.

(ii) Wrong Use:

The tests may not be properly used by the employees. Those persons who are conducting these tests may be biased towards certain persons. This will falsify the results of tests. Tests may also give unreliable results if used by incompetent persons.

(iii) Fear of Exposure:

Some persons may not submit to the tests for fear of exposure. They may be competent but may not like to be assessed through the tests. The enterprise may be deprived of the services of such personnel who are not willing to appear for the tests but are otherwise suitable for the concern.

Selection Process

The selection procedure comprises of following systematic steps:

selection process-final

1. Preliminary Interview: The preliminary interview is also called as a screening interview wherein those candidates are eliminated from the further selection process who does not meet the minimum eligibility criteria as required by the organization.

Here, the individuals are checked for their academic qualifications, skill sets, family backgrounds and their interest in working with the firm. The preliminary interview is less formal and is basically done to weed out the unsuitable candidates very much before proceeding with a full-fledged selection process.

2. Receiving Applications: Once the individual qualifies the preliminary interview he is required to fill in the application form in the prescribed format. This application contains the candidate data such as age, qualification, experience, etc. This information helps the interviewer to get the fair idea about the candidate and formulate questions to get more information about him.

3. Screening Applications: Once the applications are received, these are screened by the screening committee, who then prepare a list of those applicants whom they find suitable for the interviews. The shortlisting criteria could be the age, sex, qualification, experience of an individual. Once the list is prepared, the qualified candidates are called for the interview either through a registered mail or e-mails.

4. Employment Tests: In order to check the mental ability and skill set of an individual, several tests are conducted. Such as intelligence tests, aptitude tests, interest tests, psychological tests, personality tests, etc. These tests are conducted to judge the suitability of the candidate for the job.

5. Employment Interview: The one on one session with the candidate is conducted to gain more insights about him. Here, the interviewer asks questions from the applicant to discover more about him and to give him the accurate picture of the kind of a job he is required to perform.

Also, the briefing of certain organizational policies is done, which is crucial in the performance of the job. Through an interview, it is easier for the employer to understand the candidate’s expectations from the job and also his communication skills along with the confidence level can be checked at this stage.

6. Checking References: The firms usually ask for the references from the candidate to cross check the authenticity of the information provided by him. These references could be from the education institute from where the candidate has completed his studies or from his previous employment where he was formerly engaged. These references are checked to know the conduct and behavior of an individual and also his potential of learning new jobs.

7. Medical Examination: Here the physical and mental fitness of the candidate are checked to ensure that he is capable of performing the job. In some organizations, the medical examination is done at the very beginning of the selection process while in some cases it is done after the final selection.

Thus, this stage is not rigid and can take place anywhere in the process. The medical examination is an important step in the selection process as it helps in ascertaining the applicant’s physical ability to fulfill the job requirements.

8. Final Selection: Finally, the candidate who qualifies all the rounds of a selection process is given the appointment letter to join the firm.

Thus, the selection is complex and a lengthy process as it involves several stages than an individual has to qualify before getting finally selected for the job.

(b) Give an exact idea of: (8+8=16)

(i) On-the-job management development techniques.

-> This is the most common method of training in which a trainee is placed on a specific job and taught the skills and knowledge necessary to perform it.

The advantages of OJT are as follows:

1. On the job method is a flexible method.

2. It is a less expensive method.

3. The trainee is highly motivated and encouraged to learn.

4. Much arrangement for the training is not required.

These are the methods in which learning of executive’s stakes place at the job place. These are time and cost saving techniques. On the job methods include the following:

i. Coaching:

In this method, superior guides and trains the subordinates or trainees as a coach. The content matter of coaching depends on the goals decided before the starting of coaching. The coach guides the trainees, reviews their performance time to time and suggests the changes required.

This method works well if the coach and trainee are open with each other and there is an effective communication between them. Trainees take interest if they are recognised for improvement and rewarded for that.

ii. Job Rotation:

According to Bennett, “Job rotation is a process of horizontal movement that widens the managers experience horizon beyond limited confines of his own.”

Job rotation is a method in which a person is moved from one job to another on some pre-planned basis. There is a rotation of jobs until the trainee acquires knowledge about all related jobs. The purpose of job rotation is to increase knowledge, skills, understanding of trainees about various jobs. It increases their confines. Job rotation method is usually designed for junior executives and it may take a period of six months to two years for one rotation to complete.

iii. Under Study:

In this method, one person is selected by supervisor and trained like his descendant. He is prepared to assume full time responsibilities of position presently held by supervisor. If the supervisor leaves the job or is on long absence due to illness, retirement, promotion or death, etc., then that trained person becomes available at the place of supervisor. Supervisor gets most of his work done from the trainee, discusses problems with him and involves him in decision making. Trainee is also allowed to attend discussions and meetings as a representative of supervisor.

iv. Multiple Management:

This technique is a contribution of Charles P. McCormick of McCormick Corporation of Baltimore, U.S.A.

In this method, a junior board of executives is made to learn the skills of Board of Directors (BOD). Major problems are analysed by junior board and recommendations given to BOD. This is beneficial to junior board of executives as they learn problem solving techniques and it benefits BOD as they get the valuable opinions of executives. Vacancies of BOD can be filled from junior board of executives.

v. Selected Readings:

In this method, development is through reading. Fluctuations are an integral part of business because business environment keeps changing. New and creative managerial techniques are also innovated in such environment. Managers can get knowledge about the latest developments in management world from selected professional books, journals, magazines, etc.

vi. Committee’s Assignments:

A committee is formed of trainee executives. In committee meetings, all participants participate and discuss. The knowledge is increased by education. They also learn various methods of problem solving. Communication skills also develop.

vii. Project Assignments:

In this method, a group of workers is given a project work related to their functional area. This group of workers is called as project team or task force. Project team studies the work project problems and finds the solution. In this process, trainees learn various procedures. For example, marketing officers may be given the task of checking the accessibility of a market. In this process, they will learn about segmentation, positioning and targeting also. They will learn about the relationship of marketing department with other departments as well.

(ii) Off the job techniques of training and development of managers.

-> On the job training methods have their own limitations, and in order to have the overall development of employee’s off-the-job training can also be imparted. The methods of training which are adopted for the development of employees away from the field of the job are known as off-the-job methods.

The following are some of the off-the-job techniques:

1. Case study method:

Usually case study deals with any problem confronted by a business which can be solved by an employee. The trainee is given an opportunity to analyse the case and come out with all possible solutions. This method can enhance analytic and critical thinking of an employee.

2. Incident method:

Incidents are prepared on the basis of actual situations which happened in different organizations and each employee in the training group is asked to make decisions as if it is a real-life situation. Later on, the entire group discusses the incident and takes decisions related to the incident on the basis of individual and group decisions.

3. Role play:

In this case also a problem situation is simulated asking the employee to assume the role of a particular person in the situation. The participant interacts with other participants assuming different roles. The whole play will be recorded and trainee gets an opportunity to examine their own performance.

4. In-basket method:

The employees are given information about an imaginary company, its activi­ties and products, HR employed and all data related to the firm. The trainee (employee under training) has to make notes, delegate tasks and prepare schedules within a specified time. This can develop situational judgments and quick decision making skills of employees.

5. Business games:

According to this method the trainees are divided into groups and each group has to discuss about various activities and functions of an imaginary organization. They will discuss and decide about various subjects like production, promotion, pricing etc. This gives result in co-operative decision making process.

6. Grid training:

It is a continuous and phased programme lasting for six years. It includes phases of planning development, implementation and evaluation. The grid takes into consideration parameters like concern for people and concern for people.

7. Lectures:

This will be a suitable method when the numbers of trainees are quite large. Lectures can be very much helpful in explaining the concepts and principles very clearly, and face to face interaction is very much possible.

8. Simulation:

Under this method an imaginary situation is created and trainees are asked to act on it. For e.g., assuming the role of a marketing manager solving the marketing problems or creating a new strategy etc.

9. Management education:

At present universities and management institutes gives great emphasis on management education. Many management Institutes provide not only degrees but also hands on experience having collaboration with business concerns.

10. Conferences:

A meeting of several people to discuss any subject is called conference. Each par­ticipant contributes by analyzing and discussing various issues related to the topic. Everyone can express their own view point.

3(a) What do you understand by wage incentives? Which of the two incentive scheme would you recommend for industry? (8+8=16)

-> Wage incentive refers to performance linked compensation paid to improve motivation and productivity. It is the monetary inducements offered to employees to make them perform beyond the acceptance standards.

Objectives of Wage Incentive Schemes:

(i) To use wage incentives as a useful tool for securing a better utilisation of manpower, better productivity scheduling and performance control, and a more effective personnel policy.

(ii) To improve the profit of a firm through a reduction in the unit costs of labour and materials or both.

(iii) To increase a worker’s earning without dragging the firm into a higher wage rate structure regardless of productivity.

(iv) To avoid additional capital investment for the expansions of production capacity.

Principles of a Good Wage and Salary Administration:

a. Simple and easy to understand.

b. Union management agreement.

c. Time standard must be fixed.

d. Reward must be proportional to the effort.

e. Complaints and grievances must be properly attended to.

f. The plans should not change frequently and must be tried out continuously for some length of time.

g. Equity and fairness.

h. Workers must be made to understand the plan.

i. Method study must precede time standard.

j. There must be a min guaranteed payment.

Advantages of Incisive Plans:

Wage incentive plans benefit not only the employees but also the employers.

a. Wage incentive plans provide an opportunity for hardworking and ambitious workers to earn more.

b. It encourages employees to be innovative. They come out with more efficient ways of doing work by overcoming the problems related to productivity and wasteful practice.

c. Incentive plans help to improve discipline and industrial relations. Effective incentive plan helps in minimizing absenteeism, accidents etc.

d. The self motivation on the part of the workers to work hard and improve performance so as to earn monetary rewards will reduce the cost of supervision.

e. The scientific work study undertaken before introducing the incentive plans helps in improving work flow, work methods etc.

f. The employees are encouraged to work as a team with mutual co-operation as their activities is interdepen­dent, and any obstruction on the part of a worker can affect the output and rewards.

g. According to the National Commission on Labour, “wage incentive is the cheapest, quickest and surest means of increasing productivity.”


a. Jealousy and conflicts among workers may arise when some workers earn more than others.

b. Unless strict check and inspections are maintained, quality may come under stake in the enthusiasm among workers to increase productivity.

c. In the absence of a ceiling on incentive earnings, some workers may spoil their health.

d. Strict vigilance becomes necessary to ensure that workers do not disregard safety regulation.

e. The cost and time of clerical work increases in introducing and administrating the incentive plans.

f. Whenever production flow is disrupted due to the fault of management, workers insist on compensation.

Types of Wage Incentive Plans

Wage Incentive Plan: Type 1. Time Based Plan:

(i) Halsey Plan:

This plan was first designed by Halsey in 1890. Under this plan a standard time is fixed for completing a work in advance. A person taking standard or more time is paid for the time taken by him.

A worker completing his task in less than the standard time is paid for some of the time saved. The payments for time saved vary from 33 ⅓% to 66⅔% but generally wages for one half of time saved are paid. The wage of a worker is given by

W = T x R + (S – T/2) R

Where S= Standard time or allowed time to complete the job.

T = Time taken

R = Hourly wage rate


Time allowed for a job Actual Time taken Hourly wage rate Calculate the wage of a worker.

Solution: Given

Standard time S = 18 hours

Time T = 14 hours

Hourly wage rate = Re. 1.0

Using the relation

W = T x R + ((S-T/2) R

= 14 x 1 + (18-14/2) x 1

= 14 + 2 = Rs. 16.

In this equation a worker gets Rs. 2.00 as incentive for saving 4 hours i.e. it is a 50-50 Halsey plan. In this case the total saving of 4 hours amounts to Rs. 4 the 50% saving goes to management and 50% to worker who has saved time.

Advantages of Halsey Plan:

1. It guarantees minimum wages to all workers, whether efficient or inefficient.

2. Efficient workers are induced to show better results by offering them additional wages as incentive.

3. The employer also gains under this system because workers are not paid for full time saved by them and fifty percent goes to management.

4. This method is very simple. Workers can make their calculations very easily.

5. There is no need to over speed because incentive is not for more production but for time saved as is clear from above example.

Limitations of Halsey Plan:

1. The workers are not given full reward to their efforts. Normally they are paid for half of the time saved and not for full time. This may discourage workers.

2. It may be difficult to fix standard time for completing a job.

3. The quality of products suffers because workers try to complete the work in shortest possible time.

(ii) Rowan Plan:

This system is similar to that of Halsey plan. A worker is guaranteed minimum wages for time spent on the job. He gets bonus for completing the job in less than the standard time. The only difference between Halsey and Rowan Plans is the method of calculating bonus is that proportion of the wages of the time taken which he saved bears to the standard time allowed.

Wages are calculated by the following relations:

W = T x R + (S-T/S) x T x R

Example. 1:

Standard Time: 32 hours

Actual Time taken: 26 hours

Hourly Rate: 4


26×4 + (32-26) = 104 + 6/32 x 26 x 4

= 104 + 19.50 = Rs. 123.50

The additional bonus, a worker will get is Rs. 19.50 in this case. However, the total saving of 6 hours amounts to Rs. 24 so Rs. 4.50 goes to management and Rs. 19.50 to worker.

Advantages of Rowan Plan:

1. This method provides minimum wages to workers.

2. The worker is not induced to rush through the work because bonus increases at a decreasing rate at higher levels of efficiency. Thus the quality of goods under this system will not suffer.

3. Labour cost per unit is reduced because time saved is shared by the worker and management both.

4. The increase in production will reduce overhead cost per unit produced.

Disadvantages of Rowan Plan:

1. The calculation of bonus under this system is complicated. In Halsey plan workers know that he will get additional wages for half of the time saved. In this method a certain proportion of time saved is paid as incentive. The calculation involved is difficult for workers to understand.

2. This method is unjust for efficient workers since bonus is paid at decreasing rate.

3. Labour cost is generally higher in this method.

(iii) Emerson Plan:

Emerson, an associate of F.W. Taylor, developed this efficiency plan in 1910. A standard output is fixed for determining the efficiency of workers. A worker reaching up to 66⅔% of efficiency is paid only minimum wages and bonus is paid only when his efficiency crosses this limit. The rate or bonus increases with the increase in efficiency.

Under this plan bonus is 20% of wages earned at 100% efficiency and increases by 1% with every percent increase in efficiency. If efficiency is 110% then bonus will be 30% at this level. Efficiency of workers is well acknowledged in this system.

Benefits of Emerson Plan:

1. It is simple easily understandable by workers.

2. Workers get security because minimum wages are paid if efficiency is upto 66⅔—% .

3. It provides stimulus to workers for increasing their efficiency. The rate of bonus increases progressively so provides encouragement for improving efficiency.

4. It provides incentive even to beginners and less efficient persons.

Limitations of Emerson Plan:

1. Standards may be set fairly high and workers may not be able to achieve them.

2. Workers may not be encouraged to increase their output beyond the standard level because benefits may be nominal after that level.

3. The records of standards will have to be kept separately for different categories of workers. It increases clerical work.

(iv) Bedeaux Plan:

This plan was devised by Charles E. Bedeaux in 1911. It provides comparable standards for all workers. The benefit of time saved goes both to the worker and his supervisor in the ratio of 3/4 and 1/4th respectively. A supervisor also helps a worker in saving his time so he is also given some benefit in this method.

The standard time for each job is determined in terms of minutes which are called Bedeaux points or B’s. Each B represents one minute through time and motion study. A worker is paid time wages up-to standard B’s or 100% performance. Bonus is paid when actual performance exceeds standard performance in tenns of B’s.

Advantages of Bedeaux Plan:

1. It ensures minimum wages to all workers.

2. This method is very simple and is easy to understand.

3. The supervisor is motivated to co-operate with the workers for increasing their efficiency.

Limitations of Bedeaux Plan:

1. Workers are tempted to hurry up with the job and strict supervision will be necessary for maintaining proper quality control.

2. Workers resent sharing of their efforts with supervisors or superior.

3 The standard task may be too difficult to perform within a specified time.

Wage Incentive Plan: Type 2. Production Based Plans:

(i) Taylor’s Differential Piece-Rate Plan:

F.W. Taylor started this method as a part of the scheme of scientific management. The underlying principle of this system is to reward an efficient worker and penalise the inefficient person. In Taylor’s system, inefficient persons have no place in his organization.

The standard time was fixed for completing a task with the help of time and motion study. If a worker completes the task in the standard time he is paid at higher rate and lower rate is paid if more than the standard time is taken.

The main features of this system are:

1. Minimum wages are not guaranteed in this plan.

2. A standard time fixed for taking and completing the task.

3. Different rates are fixed for taking standard time or more.

4. Higher rate is given if work is completed in standard or less time and lower rate is offered if more than standard time is taken.

This method can be explained with the help of an example. A standard output of 200 units is fixed in an 8 hours’ time. A rate of 45P is paid if the output is 200 or more units and 35P, if production is less than 200 units. Worker A has produced 240 units and B produced 180 units. The wages to be paid to worker A will be Rs. 108 i.e. (240 x 0.45) and that to B will be Rs. 63 i.e. (180 x 0.35).


1. This method is simple to understand and wages to be paid to a worker can easily be calculated.

2. It offers good incentives to efficient workers.

3. This method is preferred by employees because it reduces overhead expenses per unit by raising output.


1. This method punishes slow workers very severely by giving them lower rates hence less wages.

2. A seed of disunity is sown among workers. Those producing them will feel jealous of others.

3. Workers are not guaranteed minimum wages and they feel insecure about their earnings.

4. It adversely affects the health of workers because they try to over exert for reaching the standard output.

5. It is difficult to determine labor cost because different rates are paid for production purposes.

(ii) Gantt’s Task and Bonus Plan:

This method is named after H. L. Gantt, a close associate of F.W.T. Taylor. He tried to improve Taylor’s method of wage payment. The workers are guaranteed minimum wages for taking standard time or more. A person taking less than the standard time gets time wages plus bonus.

The characteristics of this scheme are as follows:

1. A standard time is fixed for completing the work, and

2. A worker taking standard or more time gets wages on hourly rate.

3. A bonus ranging from 25% to 50% is paid for completing the task in less than standard time.

An example is given to explain payment under this method. A standard time of 10 hours is allowed to complete a task and hourly rate is Rs. 5. A person completing the task in 10 hours will get Rs. 50 as wages. If the same task is completed in 8 hours then wages will be Rs. 12: Rs. 8 will be for time spent and Rs. 4 for bonus (taking 50% as the rate of bonus).


1. Since workers are paid minimum wages, they may not bother to increase their efficiency.

2. The disparity in wages earned by efficient and inefficient workers will be wide and it will create jealousy among them.

Wage Incentive Plan: Type 3. Group Incentive Plans:

Under individual incentive system workers are paid on the basis of their personal performance. Their wages will be directly linked to their efforts. A worker may improve his remuneration by raising the level of output.

There may be circumstances when individual performance may not be measurable. A number of persons may be associated in completing a task. The work of one person may be influenced by the work of the other. Under such conditions, incentives may be offered for raising group performance.

The industry engaged on assembly type of work as in computers, washing machines and Televisions etc. group incentive plan may be practicable. The performance depends upon the group effort rather than on individual initiative. The incentives are given for raising output beyond a certain level of output. The amount of bonus is divided among all persons associated in completing the task.


Group incentive schemes are suitable under the following situations:

1. When individual performance cannot be measured precisely.

2. The workers comprising a group possess the same type of skill or ability.

3. The completion of the task is linked with the collective efforts of the group.

4. The aim is to provide incentive to indirect workers rather than direct workers.

5. The number of persons constituting a group is not large.

Methods of Distributing Group Bonus:

Many methods are used for distributing bonus some of the commonly used criterion is as follows:

1. If all the persons in the group possess the same type of ability or skill then bonus may be distributed equally among them.

2. When group members are paid wages according to same time scale, bonus may also be divided according to that time scale.

3. If workers earn different amounts of wages then bonus may be distributed in proportion to wages earned by them.

4. Bonus may also be paid on the basis of certain percentage, fixed on the basis of the experience, skill and wages earned by a worker.

Types of Group Incentive Plans:

There may be different schemes for paying group bonus some of these are discussed as follows:

1. Priest-man’s Plan:

A standard production is fixed for the whole enterprise under this plan. If productivity exceeds the standard then bonus is paid in accordance with the increase. In case production does not reach the standard then workers get maximum wages only. For example, a standard production of 200,000 units is fixed for the year.

Actual production during the year is 240,000 units since production has gone up by 20% workers will get 20% higher wages as bonus. The workers get sufficient incentive to raise their performance. A team spirit is visible among the workers because production will increase with the collective efforts of various limbs of the organization.

This method does not offer incentive to individual workers. Inefficient workers share the efforts of efficient workers because increased production benefits all the manpower in the organization.

2. Scalon Plan:

This method is named after Joseph Scalon. There is a payment of one percent participating bonus for every one percent increase in productivity under this plan. The bonus is available to all workers except top management.

The entire amount of bonus is not paid every month. A reserve fund of one-half of first fifteen percent is created for off-setting any change in labour cost. In case, this reserve remains unused at the end of the year then this amount is also distributed among workers in the last month of the year and a fresh reserve is created in the year.

3. Co-Partnership:

The employees are offered shares of the enterprise at reduced rates in this plan. The payment is also collected in installments. The employees share profits of the enterprise as its members.

The underlying idea of this method is to make workers feel as a part of the organization and understand view point of the management. As co-partners they will behave in a responsible manner and will try to make the concern more and more profitable and successful.

4. Profit Sharing:

When shareholders share profits for contributing towards capital then workers should also get a part of profits for contributing their labor. The workers are an integral part of any organization and their contribution to its prosperity should also be rewarded by making them the recipients of profits. This realization that employees/workers contribute significantly to increase profit has encouraged the adoption of this system.

Profit sharing is a method of remuneration under which an employer undertakes to pay his employees a share in the net profits of an enterprise, in addition to regular wages.

Benefits of Group Incentive Plans:

(1) Easy to implement:

It is easy to implement since measurement of group output is easy than the individual’s output.

(2) Low Overhead Cost:

The overhead cost is reduced because of reduced paper work.

In general, individual incentive plans tend to motivate the workers to a larger extent than group incentive plans. With the increased rate of production the unit production cost is reduced.

Limitations of Group Incentive Plans:

(i) Tend to lower the overall productivity.

(ii) Due to uniformity of pay irrespective of individual’s lower or higher contribution in a group effort personnel problem arise.

(b) “Accurate appraisal of performance is very difficult.” In light of this statement discuss the problems in performance appraisal. (16)

-> Performance appraisal is important for organizations and employees. Unfortunately, performance appraisals are not on the top of the list of “favorite things to do” for either managers or employees, and there can be a number of problems with their administration. From managers not being trained to conduct performance appraisals effectively to the failure to tie performance appraisal expectations to desired business results, businesses are often challenged to use this tool effectively.

Performance appraisal systems are subject to many errors.

The major ones are discussed below:

Problem 1. Differences among Raters:

Differences among raters in their evaluations of performance lead to several errors. One is dissimilarity in perception. Two raters observe an employee disagreeing with a supervisor. One perceives this negatively as insubordination. The other perceives it positively as a willingness to stand up for what one believes.

Different value systems can also play a part in how raters can disagree. One rater may feel that honest and ethical behavior is paramount, no matter what the effect on profits. Another may have a bottom-line orientation that says any behavior including the blatantly dishonest is permissible so long as it shows a profit.

Another kind of rater difference error is created if raters observe different aspects of behavior. One rater sees the employee on the job where the individual feels comfortable and functions effectively. Another may see the individual only at the staff meetings where the employee is uncomfortable and does not show to best advantage.

Problem 2. Confusing Performance and Potential:

Many rating systems that are supposed to be evaluating performance fall into the trap of measuring potential as well. This is a serious mistake that can unfairly penalize employees as well as give credit where it is not deserved. Measurement of potential is often an important aspect of any appraisal system, but the organization and the raters and the rates involved need to be absolutely clear on the difference.

Problem 3. Rating Game:

Performance appraisal methods either compare employees against one another, or compare employees against a standard. Within these two types there are numerous methods of appraisal. Some are simple such as straight ranking. Others are more complex, such as behavioral scales attempting to establish a success criterion by defining performance behaviors. Whatever may be the method, the rating procedure may become something like a game or contest.

Again, these methods lay emphasis on alikeness and conformity of human performance and ignore measurement of human values.

Rater Bias:

A number of problems with performance appraisal methods relate to rater bias, and rater concerns which are discussed below:

a. Halo Effect:

The “halo effect” is a tendency to let the assessment of an individual’s one trait influence the evaluation of that person on other specific traits.

Basing the entire appraisal on the basis of one perceived positive quality feature or trait in an individual leads to halo error. For instance, if an employee tends to be more conscientious or dependable, the appraiser may rate him high on many desirable attributes. Thus, the appraiser leaps from the specific to the general without adequate substantiation. He assumes that a man who performs one task well must be able to do anything well.

b. Horns Effect:

This is exactly opposite of halo effect. It refers to basing the evaluation on the basis of one negative quality or feature perceived. It is the tendency to allow one negative trait of the employee to color the entire appraisal these results in an overall lower rating than may be warranted.

c. Leniency or Strictness Tendency or Constant Error:

Depending upon the appraiser’s own value system which acts as standard, employees may be rated leniently or strictly. Such ratings do not carry any reference to actual performance of the employees. The differences obtained are due to differences in appraiser’s standards, not performance some appraisers consistently assign high values to all employees regardless of merit. This is leniency error. In strictness tendency a reverse situation occurs where all individuals are rated too severely and performance is understated.

Such problems arise because of varying performance standards among appraisers and because of different interpretations of observed employee performances and behaviors.

d. Central Tendency:

Central tendency is the most commonly found error which occurs when a rater assigns mostly middle-range scores or values to all individuals being appraised. Extremely high or extremely low evaluations are avoided by assigning “average ratings” to all.

Usually central tendency is caused by lack of information or lack of knowledge about the employee and his behavior the rater wants to avoid commitment or involvement or he may not have sufficient time at his disposal. Such tendency distorts the evaluations and obviates their value.

e. First Impressions:

Raters may identify some specific qualities or features of the rater and quickly form an overall impression about him. The identified qualities or features may not provide adequate base for appraisal.

f. Stereotyping:

Stereotyping is a standard mental picture that an appraiser holds about an individual according to the category whom he represents. For instance (sex, caste, age and other factors) “women”, “politicians”, “old people” “Marwari’s”, “Sardarjees”, “children”, “poets” and so on. Stereotyping results in an oversimplified view of the individual and may blur the rater’s perception and assessment of the individual’s performance on the job.

The most common errors in evaluation are:

(1) Drawing the wrong conclusions about an individual’s capabilities on the basis of his performance and

(2) Overemphasizing one or two attributes.

How these errors occur may become clear through the following examples:

I. Type Casting:

When an individual is found to perform a task well, he is given the same over and over again. When this happens, same individuals may shy away from doing an outstanding job through fear of being stuck with a permanent assignment.

II. Magnifying Merits:

Sometimes superiors have a tendency to magnify a subordinate’s merits, but sometimes the subordinate himself tries to convince his superior of the obstacles he has overcome to complete the task.

III. Regency Error:

In regency error there is a tendency to base ratings on what is most easily remembered, that is, the most recent behavior. Thus, rating is influenced by most recent behavior ignoring the commonly demonstrated behaviors during the entire appraisal period. Recent behavior may well not be characteristic of the total period, especially if employees are aware of the approximate date when they will be evaluated.

IV. Spillover Effect:

This refers to allowing past performance to influence the evaluation of present performance.

V. Proximity:

This refers to appraising similarly those items next to each other on the review form.

VI. Similarity Error:

This error occurs when the appraiser perceives the employee as himself – “He is like me”. Affiliation with those holding similar views makes it difficult for appraisers to be objective.

VII. Personal Bias:

Perhaps the most important error of all arises from the fact that very few people are capable of carrying out objective judgments entirely independent of their values, prejudices and stereotypes. Thus, evaluations can be influenced by factors such as an employee’s racial or ethnic background, physical attractiveness, religion, manner of dress, social standing, etc. which are normally of little significance for the achievement of organizational goals.

Biases of this kind can operate without the rater being aware of what is happening or the biases may be conscious and intentional. Furthermore, an individual rater may permit personal feelings to weigh heavily in evaluations. These may not operate often, but it is important to recognize their existence and the fact that ratings can contain this type of error.

VIII. Desire to be accepted:

The rate is concerned with the desire to be accepted. “If I rate my subordinate’s performance as poor, how am I going to get his cooperation? After all, both of us have to work together for long and I cannot afford to strain the relation”.

IX. Concern with Self-Protection:

The rate is concerned with his own protection. “If I rate him well, he will rate me well and not create any problem for me”.

X. Fear of Playing God:

The rate is reluctant to play God by determining the future of the employees. He will lose his job if I rate him again as a poor performer”. “He may not be considered for promotion if I give him poor ratings”. Such concerns tend to make the raters to be lenient. Some raters feel uneasy criticizing a subordinate’s performance and are anxious lest their adverse appraisal might hold up a salary increase or an unwanted transfer.

Further, an aggrieved employee is invariably left with a feeling that the superior is arbitrary in his judgment. This is a very frustrating experience for an honest and impartial superior.

Blum and Naylor discuss the sources of bias which are beyond rater’s control-

XI. Opportunity Bias:

This results when the amount of output is influenced by factors beyond the control of employees. Some employees have better working conditions, supportive supervisors, more experienced co-workers, and hence their output may be greater than others working on identical tasks.

For instance, one salesman may have better display facilities, a better sales counter, and a more conducive geographic location than the other. In such circumstances, a comparison of the performance of two employees will have limitations.

XII. Group Characteristic Bias:

The characteristics of an individual’s group make a dent in his performance. Cohesive groups with high morale can produce more than less cohesive groups with low morale. Since the individual’s performance is greatly determined by the group’s definition of a fair day’s work, this factor must be kept in mind while evaluating the individual employee’s performance.

XIII. Knowledge of Predictor Bias:

A rater’s knowledge of the performance of an employee on predictors can influence his appraisal ratings. An employee who topped in the selection list might leave the impression that he is the best among the employees, and hence may railroad the rater to better evaluation despite a moderate performance. The rater should never be permitted to have access to the employee’s selection data.

4(a) Is ‘morale’ related to ‘motivation’? What measures would you take as a manger-leader to build the morale of your employees? (16)

-> Motivation and morale both are subject to mental feelings. But they are strongly related to each other. We know that motivation is such a technique which is the process of creating and increasing inspiration or intention to work or job of a worker or employee. On the other side, Morale is the mental strength. Mental strength for a work is called as Morale. If the mental strength is high and strong then it is called high Morale. On the contrary, if the mental strength is low and week then it is called low morale.

But if there is no motivation toward work, it is uncommon to increase such morale toward the work. Motivation increases and creates the inspiration and intention toward a work and gradually by this process, Morale also increases. So, we can tell that Motivation and Morale both are strongly related to each other.

As the discussion goes above, it can be said that nature of morale of employees and workers of an organization depends on the nature of given motivation of that organization. If the basic needs of workers and employees are fulfilled by an organization and the organizational authority behavior become respectful toward them, their morale will be increased. So, the higher motivation will be given, the higher morale may be expected toward work of employees and workers. This is very normal condition. If there is lack of giving proper motivation, an organizational authority should not expect higher morale.

Here are six ways of manger-leader to build the morale of your employees?

1. Encourage ongoing one-on-ones

One of the most powerful ways to improve employee morale is through frequent communication. In 15Five’s recent Workplace Report, we found that 82% of employees with at least weekly one-on-ones say they’re getting the support they need during the pandemic from their managers, compared to 66% of those with less frequent one-on-ones. But regularly keeping up with your teams and ensuring managers are doing the same with their direct reports can feel impossible without the right tools and day-to-day practices.

Giving your people leaders a structure for having better one-on-ones will help them make the most of every meeting. They’ll spend less time catching up and more time at the heart of the conversation, which can lead to higher levels of trust, engagement, and productivity.

2. Give employees the tools to ask for feedback

Traditionally, the process of feedback has been led by managers as a means to help employees course correct and grow. But in reality, the best way to increase the free flow of feedback is by supporting people to seek it themselves.

“Asking for feedback is a surprisingly powerful approach to self-development, especially when it’s part of basic performance management. It can even be considered a deliverable—the last step of a project. Regardless, requested feedback allows teams to demonstrate the care that everyone needs to feel engaged,” according to Gallup .

Helping people ask for feedback in moments when they need it most allows them to take the reins of their development so that they can master new skills and correct certain behaviors in a fraction of the time. And nothing motivates people more than witnessing their own progress.

3. Train your managers to become better coaches

Teaching your managers to seek out the unique talents of their employees will foster an environment that builds on those attributes, which also helps businesses remain agile during challenging times. Managers can put this approach to practice by helping employees create job descriptions that align their passions with the company’s why. This naturally increases employee morale, engagement, and productivity.

Effective managers don’t just push for high performance, they value helping people discover their natural talents and seek out opportunities to utilize those strengths. Not only does this tap into a deeper, more intrinsic type of motivation for employees, but it also allow managers to increase the capability of their teams.

4. Help your people develop–both personally and professionally

Setting your employees up for success in their role starts with giving them all the tools and resources they need to do their job well. This includes professional training. You can practice this from an employee’s first day and beyond by creating a knowledge base of critical information and best practices for new hires as you grow your team.

For remote employees, they may not get the same opportunities to ask one-off questions at your desk, so creating a thorough training plan is especially important for getting them ramped up.

But remember, your employees don’t just exist in a professional capacity to serve your organization. For them to evolve both personally and professionally, employee development must be holistic. Help people lead more fulfilling lives by encouraging them to develop better soft skills, such as empathy, emotional intelligence, and communication. This will also prepare them for future leadership roles.

5. Show employees how much you appreciate them

Studies show that high performing teams are far more supportive and complimentary than low performing ones. And when leaders recognize the strengths and contributions of their people, they’re far more engaged, productive, and creative.

What makes appreciation so powerful is that when it’s shared, it becomes contagious. By sending a quick thank you note or simply noticing someone’s hard work you can help boost employee morale almost instantly. Plus, regular recognition can alleviate some of the day-to-day tension that employees may be experiencing today.

6. Don’t forget to have fun

There are times to be serious and there are times when it just makes more sense to relax, laugh, and connect with your team.

Find ways to bring more of your true self to work and look for ways to get to know your teams on a more personal level. When you bring more of your authentic self to the office, you become more relatable and approachable. And when you let your teams know that you’re a human being, not just a leader, you also communicate that you see them as more than just employees.

(b) Discuss the various factors related to Job-satisfaction. Do you agree that a highly satisfied employee is always highly productive? (8+8=16)

-> Job satisfaction is another important technique used to motivate the employees to work harder. It has often been said that “A happy employee is a productive employee.” A happy employee is, generally, that employee who is satisfied with his job. Job satisfaction is very important because most of the people spend a major portion of their life at their working place.

Moreover, job satisfaction has its impact on the general life of the employees also, because a satisfied employee is a contented and happy human being. A highly satisfied worker has better physical and mental well being. Though it is a debatable point as to which one is the cause and which the effect is, but there are correlated to each other.

There are three important dimensions to job satisfaction:

(i) Job satisfaction cannot be seen, it can only be inferred. It relates to one’s feelings towards one’s job.

(ii) Job satisfaction is often determined by how will outcomes meet the expectations or exceed the expectations. If the employees working in the organisation feel that they are working much harder than others in the department but are receiving lower rewards, they will be dissatisfied and have a negative attitude towards the job, the boss and the co-workers. On the other hand, if they feel that they are being paid equitably and treated well by the organisation, they will be satisfied with their jobs and will have positive attitudes.

(iii) Job satisfaction and job attitudes are typically used inter changeably. Positive attitudes towards the jobs are conceptually equivalent to jobs satisfaction and negative attitudes towards the job indicate job dissatisfaction.

Even though these two terms are used interchangeably, but there are differences between the two. Job satisfaction is a specific subset of attitudes. Attitudes reflect one’s feeling toward individuals organisations and objects. But job satisfaction refers to one’s attitude towards a job. Attitudes refer to predispositions to respond but satisfaction relates to the performance factors. Attitudes are long lasting, but satisfaction is dynamic and it keeps on changing. It can decline even more quickly than it developed. Thus, managers need to pay attention to job satisfaction constantly.

Factors Influencing Job Satisfaction:

There are a number of factors that influence job satisfaction. A number of research studies have been conducted in order to establish some of the causes that result in job satisfaction. These studies have revealed consistent correlation of certain variables with the job satisfaction.

A. Organisational Factors:

Some of the organisational factors which affect job satisfaction are:

1. Salaries and Wages:

Wages and salaries play a significant role in influencing job satisfaction. This is basically because of a few basic reasons. Firstly, money is an important instrument in fulfilling one’s needs. Money also satisfies the first level needs of Maslow’s model of satisfaction. Secondly, employees often see money as a reflection of the management’s concern for them. Thirdly, it is considered a symbol of achievement since higher pay reflects higher degree of contribution towards organizational operations.

Non monetary benefits are also important, but they are not as influential. One reason for that is that most of the employees do not even know how much they are receiving in benefits. Moreover, a few tend to under value there benefits because they do not realize their monetary value. The employees, generally, want a pay system which is simple, fair and in line with their expectations.

2. Promotion Chances:

Promotional chances considerably affect the job satisfaction because of the following reasons:

Firstly, Promotion indicates on employee’s worth to the organization which is highly morale boosing. This is particularly true in case of high level jobs. .

Secondly, Employee takes promotion as the ultimate achievement in his career and when it is realized, he feels extremely satisfied.

Thirdly, Promotion involves positive changes e.g. higher salary, less supervision, more freedom, more challenging work assignments, increased responsibilities, status and like.

3. Company Policies:

Organizational structural and policies also play on important role in affecting the job satisfaction of employees. An autocratic and highly authoritative structure causes resentment among the employees as compared to a structure which is more open and democratic in nature.

Organizational policies also govern the human behavior in the organizations. These policies can generate positive or negative feelings towards the organization. Liberal and fair policies usually result in more job satisfactions. Strict policies will create dissatisfaction among the employees because they feel that they are not being treated fairly and may feel constrained.

Thus, a democratic organizational structure with fair and liberal policies is associated with high job satisfaction.

B. Work Environmental Factors:

The work environmental factors include the following important factors:

1. Supervision:

Supervision is a moderately important source of job satisfaction. There are two dimensions of supervisory styles which affect the job satisfaction:

First is Employee Centeredness:

Whenever the supervisor is friendly and supportive of the workers there is job satisfaction. In this style, the supervisor takes personal interest in employee’s welfare.

Second is Participation:

The superiors, who allow their subordinates to participate in decisions that affect their own jobs, help in creating an environment which is highly conducive to job satisfaction. Thus, the supervisors who establish a supportive personal relationship with subordinates and take personal interest in them contribute to the employees’ satisfaction.

2. Work Group:

The nature of the work group or team will have effect on job satisfaction in the following ways:

(i) A friendly and co-operative group provides opportunities to the group members to interact with each other. It serves as a source of support, comfort, advice and assistance to the individual group members. If on the other hand, the people are difficult to get along with, the work group will have a negative impact on job satisfaction.

(ii) The work group will be even a stronger source of satisfaction when members have similar attitudes and values. In such a group, there will less friction on day to day basis.

(iii) Smaller groups provide greater opportunity for building mutual trust and understanding as compared to larger groups.

Thus, the group size and quality of interpersonal relations within the group play a significant role in worker’s satisfaction.

3. Working Conditions:

Good working conditions are desirable by the employees, as they lead to more physical comfort. People desire that there should be a clean and healthy working environment. Temperature, humidity, ventilation, lighting and noise, hours of work, cleanliness of the work place and adequate tools and equipment are the features which affect job satisfaction. While the desirable working conditions are taken for granted and may not contribute heavily towards job satisfaction. Poor working conditions do become a source of job dissatisfaction.

C. Work Itself:

The content of the work itself plays a major role in determining the level of job satisfaction.

Some of the aspects of the work which affect job satisfaction are:

(i) Job Scope:

It provides the amount of responsibility, work pace and feedback. The higher the level of these factors, higher the job scope and higher the level of satisfaction.

(ii) Variety:

A moderate amount of variety is very effective. Excessive variety produces confusion and stress and a too little variety causes monotony and fatigue which are dis-satisfiers.

(iii) Lack of Autonomy and Freedom:

Lack of autonomy and freedom over work methods and work pace can create helplessness and dissatisfaction. Employees do not like it when their every step and every action are determined by their supervisor.

(iv) Role Ambiguity and Role Conflict:

Role ambiguity and role conflict also lead to confusion and job dissatisfaction because employees do not know exactly what their task is and what is expected of them.

(v) Interesting Work:

A work which is very interesting and challenging and provides status will be providing satisfaction to the employees as compared to work which is boring and monotonous.

D. Personal Factors:

Personal attributes of the individuals also play a very important role as to whether they are satisfied at the job or not. Pessimists and people with negative attitudes will complain about everything including the job. They will always find something wrong in every job to complain about.

Some of the important personal factors are:

1. Age and Seniority:

With age, people become more mature and realistic and less idealistic so that they are willing to accept available resources and rewards and be satisfied about the situation. With the passage of time, people move into more challenging and responsible positions. People who do not move up at all with time are more likely to be dissatisfied with their jobs.

2. Tenure:

Employees will longer tenure is expected to be highly satisfied with their jobs. Tenure assures job security, which is highly satisfactory to employees. They can easily plan for their future without any fear of losing their jobs.

3. Personality:

Some of the personality traits which are directly related to job satisfaction are self assurance, self esteem, and maturity, and decisiveness, sense of autonomy, challenge and responsibility. Higher the person is on Maslow’s needs hierarchy, the higher is the job satisfaction. This type of satisfaction comes from within the person and is a function of his personality. Accordingly, in addition to providing a healthy work environment, management must ensure that the employee is happy with him and has a positive outlook on life.

Happiness is something that we all strive for. It’s not always easy to achieve, especially in the workplace, but research has proven that happy workers are productive workers. And that creating a workforce full of happy people is a worthwhile investment for many other reasons too.

First of all, let’s point out the obvious elephant in the room. You don’t have to be happy to be productive. But while this may be true, it doesn’t mean that working under pressure and stress is the best way to be hitting those deadlines.

In fact, studies have shown that fostering happiness in your workplace not only increases productivity but also means your employees are more engaged, have positive mindsets, and are healthier, can save your business money and provide better customer service.

Happiness is something that we all strive for. It’s not always easy to achieve, especially in the workplace, but research has proven that happy workers are productive workers. And that creating a workforce full of happy people is a worthwhile investment for many other reasons too.

First of all, let’s point out the obvious elephant in the room. You don’t have to be happy to be productive. But while this may be true, it doesn’t mean that working under pressure and stress is the best way to be hitting those deadlines.

In fact, studies have shown that fostering happiness in your workplace not only increases productivity but also means your employees are more engaged, have positive mindsets, and are healthier, can save your business money and provide better customer service.

Happy employees mean happy customers:

It’s been proven many times that in order to achieve a happy, loyal customer base, you need to start with your employees first. Because it goes without saying that it’s easier to give your best to customers when you’re in a great mood.

A happy workplace means higher employee retention rates:

A study of a pharmaceutical company concluded that employee retention increased when employees were happy and engaged .

A happy workplace means higher employee retention rates:

A study of a pharmaceutical company concluded that employee retention increased when employees were happy and engaged .

Happy people are great at teamwork:

One study also stated that optimistic employee behavior leads to organisational accomplishment. And considering all of the things we’ve already talked about, this shouldn’t be too hard to believe. Positivity is infectious, after all!

It’s so much easier to enjoy working if everyone else around you is enjoying it too. And with a happy team, tasks that may seem daunting at first can become a positive challenge to be overcome.

Of course, it can’t always be plain sailing and there’ll always be tough challenges that present themselves, but creating a culture where your employees are supported and rewarded for overcoming these challenges will make it all the more rewarding for your whole workforce when they do succeed.

5. Write in brief any two of the following: (8*2=16)

(a) Scope of Personnel Audit.

-> Personnel audit is a term used for a case study of human resources in the organization. This is a kind of audit; its subject is an objective and independent review and assessment of the condition and suggestion of solutions to increase the effectiveness of individuals, organizational units and whole organization. Personnel audit is a term used for a case study of human resources in the organization. Personnel audit may have different objectives and benefits according to the current needs of the organization’s management . This is a kind of audit, its subject is an objective and independent review and assessment of the condition and suggestion of solutions to increase the effectiveness of individuals, organizational units and whole organization . It is one of the tools to increase the effectiveness and efficiency of the organization which uses both soft and hard techniques (e.g. Assessment Centre , mystery methods, individual interviews) to find needed information. The objective of a comprehensive personnel audit is the answer to three basic questions:

  • How many workers should the organization have to handle the current volume of work?
  • Which worker is the best for the given job?
  • How is the system for managing people set?

Use of the personnel audit in practice : Personnel audit is typically used in situations where it is necessary to evaluate the condition of the people and improve the functioning of the organization. However, personnel audit is often abused by management to reduce the number of workers. The most common reasons for the implementation of personnel audit are as follows:

· Improving the performance of the organization as a whole and the optimization of human resources

· Cost optimization and reduction of the number of workers

· Improving the management system of human resources in an organization, including incentive system

Personnel audit is aimed in particular at:

· Adequacy of the amount of human resources (deficiency or excess) – determining the optimal staffing capacities

Typical outputs from personnel audit are:

· Overview of utilization of selected parts of the organization

· Proposal to reduce unnecessary and contrary proposal to create new jobs where they are needed according to the audit

· Identification of weaknesses (description and warning the deficiency in processes, use of human potential, use of people with the wrong skills, qualities and knowledge, lack of communication, etc.)

· Recommendations and proposals for improvement (final report contains descriptions and statements of the state, and also suggestions for improvement)

· Implementation – support in implementation (includes a proposal of the workers involvement to change, help in conducting interviews with workers, etc.)

  • and more

Personnel audit can be focused on the entire organization or only a selected part of the organization (selected organizational units ). To target people or parts of the organization involved in the audit, process map is used. Personnel audit is usually conducted by a group of experts or external company, which in accordance with the definition of audit uses a reference model or experience with which compares the reality. As part of the audit some of the methods of process analysis are used.

The objectives of personnel audit can be listed in a more orderly manner as follows:

1. To review the whole organizational system of human resource practices, i.e., acquiring, developing, allocating and utilizing human resources in the organization.

2. To evaluate the effectiveness of various personnel policies and practices.

3. To identify shortcomings in the implementation of human resource practices in the organization.

4. To modify the existing human resource practices to meet the challenges of personnel/human resource management.


The scope of personnel audit is very wide. It represents the encompassing approach; that is, it assumes that the management of human resources involves much more than the practice of recruiting, hiring, retaining and firing employees. In other words, personnel audit is interested in all the programmers relating to employees regardless of where they originate.

In this way, the areas personnel audit includes are recruitment, selection, job analysis, training, management development, promotions and transfers, labor relations, morale development, employee benefits, wage and salary administration, collective bargaining, industrial relations and communication. Further, the areas like leadership, grievances, and performance appraisal and employee mobility are also included within the scope of personnel audit.

(b) Procedure of Personnel Research.

-> Personnel research seems to be one of the most important topics under discussion about Human Resource Management. There are some different definitions of the personnel research.

According to Michael J. Jucius,

“Personnel research is the task of searching for and analyzing facts to the end and that personnel problem may be solved or that guideline governing their solutions.”

Its scope is all-inclusive. There are no subjects in personnel about which so much is known that no further research is justified.

On the contrary, our tested knowledge of basic relationship is so meager that it is a wonder that we get along as well as we do work with people. Even in fields in which business has been working for many years, a precise and indisputable basis of action is not available.

So personnel research is an effective mean by which we can able to know all about the personnel. Through the personnel research, we know some very much important information which is essentially needed in providing data for making organizational decision so that the organization can achieve its goals.

Be it an applied or pure research, the following steps must be followed while carrying out personnel research:

1. Statement of Purpose:

In simple words, statement of purpose is a statement to justify the present research. In other words, the researcher has to state what he/she actually proposes to study and why. It also needs to be pointed out that given the problem, the present research is the most parsimonious way of seeking answers to the problem.

2. Statement of Problem:

Research, including personnel research, is carried out to solve problem faced by an organization/individual. Therefore, the foremost step involved in carrying out personnel re­search is to state the problem to be studied clearly and concretely. Better the problem is stated, better will be possibility of realistic research.

Problem can be identified by going through the existing literature, discussion with knowledgeable persons in the subject and getting first-hand information and observation on the matter. The problem so identified should be reduced to manageable size. Once the problem is clearly identified, the next step is to develop the hypoth­eses, also called ‘suggested answers’.

3. Statement of Method:

Method refers to the manner followed to collect data / information for the study. Yes, the method will differ across researches depending upon the nature of research problems and hypotheses set for them. An important aspect of methodology is the identification and selection of study group. In case of large universe, it may be difficult to contact each unit/individual of the universe.

Hence, either random or purposive sample can be selected for the study. What are the dependent and independent variables of the study should be clarified. Dependent variables are the responses, reactions and behavior, whereas independent variables are ones that affect dependent variables. Method of data collection with its justification must also be clearly decided.

4. Statement of Results:

Results, based on information gathered, refer to the relationship between dependent and inde­pendent variables of the study. They may support or reject the hypotheses set in the beginning of the study. The results can be found out by applying statistical tools and, then, can be presented in the form of tables, graphs, charts, bar diagrams, etc.

5. Statement of Analysis and Implications:

No doubt, results of the research can be utilized to solve the specific problem. Besides, the concern of a personnel research is also to visualize the implications of the results and also utilize them for policy formulation and decision-making.

(c) Use of Personnel Record.

-> Personnel Records are records pertaining to employees of an organization. These records are accumulated, factual and comprehensive information related to concern records and detained. All information with effect to human resources in the organization is kept in a systematic order. Such records are helpful to a manager in various decisions -making areas.

Personnel records are maintained for formulating and reviewing personnel policies and procedures. Complete details about all employees are maintained in personnel records, such as, name, date of birth, marital status, academic qualifications, professional qualifications, previous employment details, etc.

According to the critics of personnel records, this system is called as wastage of time and money. According to personnel records, followers of this: Dale Yoder, an economist of Michigan University, USA has justified the significance of personnel records after making an in-depth study.

1. It helps to supply crucial information to managers regarding the employees.

2. To keep an update record of leaves, lockouts, transfers, turnover, etc. of the employees.

3. It helps the managers in framing various training and development programmes on the basis of present scenario.

4. It helps the government organizations to gather data in respect to rate of turnover, rate of absenteeism and other personnel matters.

5. It helps the managers to make salary revisions, allowances and other benefits related to salaries.

6. It also helps the researchers to carry in- depth study with respect to industrial relations and goodwill of the firm in the market.

Therefore, personnel records are really vital for an organization and are not a wasteful exercise.

(d) Essentials of an ideal Personnel policy.

-> A policy is a general statement or a body of understanding which guides thinking and action in decision-making. A policy provides advance information and predictable decisions for situations which are repetitive or which occur widely throughout the organization. A personnel policy is a total commitment of the organization to act in a specified way while dealing with its employees. It gives an assurance that decisions made will be consistent, fair and in line with the objectives of the organization. Personnel policies, generally, deal with personnel selection, compensation, benefits, union relations and public relations.

The main features of a good personnel policy are as follows:

1. The policy should be clear, precise and easily understandable. The objectives should be explicit from a look at the policy.

2. It should be in writing so that it can be properly understood. A written policy will be used for reference purpose also. It also avoids confusion or misunderstanding, if any, from its interpretation.

3. Personnel policy should protect the interests of all parties in the organization i.e. workers, consumers, entrepreneurs, government and the community.

4. It should be supplementary to overall policy of the organization. It should help in achieving organizational goals.

5. A policy should not be rigid. It requires adjustment according to the changing situations from time to time.

6. The policy should be responsive to the prevailing situation and environment. For example, if there is a thinking of taking workers’ representatives into Board of Directors, the policy should not oppose this idea.

7. It must provide two-way communication between management and workers so that the later are kept informed about latest developments in the organization. The reaction of employees to the policy may also be conveyed to top management from time to time.

8. A personnel policy should have the support of all concerned parties. It should have the support of top management and be acceptable to employees also.

9. A policy should be uniform throughout the organization even though some adjustments may be allowed as per the needs of local conditions. Some variations may be allowed in policies relating to staffing, compensation, benefits etc.

10. It should affirm the long range purposes of personnel relations.

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