PROFILE

Indias largest power company, NTPC was set up in 1975 to accelerate power
development in India. NTPC is emerging as a diversiied power ma!or wit" presence
in t"e entire value c"ain o t"e power generation #usiness. $part rom power
generation, w"ic" is t"e mainstay o t"e company, NTPC "as already ventured into
consultancy, power trading, as" utilisation and coal mining. NTPC ran%ed &'1
st
in t"e
()*1*, +or#es ,lo#al )*** ran%ing o t"e -orlds #iggest companies. NTPC #ecame
a .a"aratna company in .ay, )*1*, one o t"e only our companies to #e awarded
t"is status.
T"e total installed capacity o t"e company is &',/5' .- 0including 12s3 wit" 15
coal #ased and 7 gas #ased stations, located across t"e country. In addition under 12s,
5 stations are coal #ased 4 anot"er station uses napt"a56N, as uel. T"e company
"as set a target to "ave an installed power generating capacity o 1,)/,*** .- #y t"e
year )*&). T"e capacity will "ave a diversiied uel mi7 comprising 589 coal, 189
,as, 119 Nuclear and 179 :enewa#le ;nergy <ources0:;<3 including "ydro. =y
)*&), non ossil uel #ased generation capacity s"all ma%e up nearly )/9 o NTPCs
portolio.
NTPC "as #een operating its plants at "ig" eiciency levels. $lt"oug" t"e company
"as 17.759 o t"e total national capacity, it contri#utes )7.'*9 o total power
generation due to its ocus on "ig" eiciency.
$t NTPC, People before Plant Load Factor is t"e mantra t"at guides all >: related
policies. NTPC "as #een awarded No.1, =est -or%place in India among large
1
organisations and t"e #est P<? or t"e year )*1*, #y t"e ,reat Places to -or%
Institute, India C"apter in colla#oration wit" T"e ;conomic Times.
T"e concept o Corporate <ocial :esponsi#ility is deeply ingrained in NTPC@s culture.
T"roug" its e7pansive C<: initiatives, NTPC strives to develop mutual trust wit" t"e
communities t"at surround its power stations.
)
HISTORY
1975 A Incorporation o t"e Company
197/ A Ta%eover o management o t"e =adarpur pro!ect
19/) A Commissioning o t"e irst )**.- unit at <ingrauli Center or education at
Power .anagement Institute, Bel"i esta#lis"ed
+irst direct oreign currency #orrowing. a consortium o oreign #an%s led #y
<tandard C"artered .erc"ant =an% e7tends a loan o ,=P )9/.'1 million or t"e
:i"and pro!ect
19/' A T"e transmission line #ased on >ig" 2oltage Birect Current 0CD>2BCCE3
tec"nology, commissioned or power transmission rom :i"and to Bel"i <ingrauli
pro!ect received -orld =an% loan o ?<F 15* million t"roug" ,oI
19/8 A <ync"roniGed irst 5**.- unit at <ingrauli T"e Company #ecame one o t"e
irst P<?s to issue #onds in t"e de#t mar%et
19/7 A 5,*** .- installed capacity mar% crossed
19// A +irst syndicated 1apanese loan o &* #illion 1PH raised
19/9 A Consultancy division o t"e Company launc"ed +irst unit 0// .-3 o t"e
Company.s irst gas #ased com#ined cycle power plant at $nta, :a!ast"an
commissioned
199* A Total installed capacity o 1*,*** .- reac"ed
199) A +irst acIuisition #y t"e Company o +eroGe ,and"i ?nc"a"ar T"ermal Power
<tation 0)7)1*.-3 rom ?ttar Prades" :a!ya 2idyut ?tpadan Nigam o ?ttar
Prades" T"e transmission systems owned #y t"e Company were transerred to Power
&
,rid Corporation o India 6imited 0P,CI63 pursuant to legislation #y t"e Parliament
o India
199& A I=:B e7tended direct loan o ?<* million to t"e Company under time slice
concept or its pro!ects
199' A 15,*** .- o installed capacity ac"ieved .aiden declaration o dividend o
:s. 85* million 1"anorA,and"ar 0,u!arat3 #ecomes t"e irst t"ermal power station to
"ave commissioned an integrated 6iIuid -aste Treatment Plant
1997 A @Navratna@ status granted #y t"e ,oI1** #illion units generation in one year
ac"ieved $ consortium o oreign #an%s led #y <umitomo =an%, >ong Jong e7tends
oreign currency loan o 5 #illion 1apanese Hen or t"e irst time wit"out ,oI
guarantee
199/ A Commissioned t"e irst Nap"t"a #ased plant at Jayam%ulam wit" a capacity
o &5* .-
1999 A T"e Company.s Badri t"ermal power pro!ect, ?ttar Prades" ad!udged t"e #est
in India wit" a P6+ o 98.1)9 Badri t"ermal power pro!ect, ?ttar Prades" certiied
wit" I<K 1'**1
)**) A T"ree w"olly owned su#sidiaries, viG., NTPC ;lectric <upply Company
6imited, NTPC >ydro 6imited and NTPC 2idyut 2yapar Nigam 6imited
incorporated ;<P L;lectrostatic precipitators3 set up at Talc"er power plant )*,***
.- installed capacity mar% e7ceeded

)**& A T"e Company undertoo% de#t reAstructuring. :aised unds t"roug" #onds
0<eries MIII and MI23 Construction o irst "ydroAelectric power pro!ect o /** .-
capacity in >imac"al Prades" commenced ater t"e investment approval
'
)**' A T"e award o contract or t"e irst <uper Critical T"ermal Power Plant at <ipat
:eac"ed a total installed capacity o )),)'9 .- wit" t"e Talc"er ?nit 2 getting
sync"roniGed on .ay 1&, )**'
T"e Companys +eroGe ,and"i ?nc"a"ar T"ermal station ac"ieves a record P6+ o
/7.'&9 in current year up rom 1/.*)9 in +e#ruary 9) w"en it was ta%en over #y us
6IC e7tends credit acility or :s. 7* #illion. :s. '* #illion is in t"e orm o
unsecured loans and :s. &* #illion is in t"e orm o #onds T"e Company ma%es its
de#ut issue o euro #onds amounting to ?<B )** million in t"e international mar%et
+irst coal mining #loc% allotted 6isting o t"e ;Iuity <"ares on t"e <toc% ;7c"anges
)**5 A T"e Company received t"e International Pro!ect .anagement $ward )**5 or
its <im"adri pro!ect at t"e International Pro!ect .anagement $ssociation -orld
Congress. Kil #loc% allocated under N;6P 2 T"e Company adopted core values
@=CK.IT@ 0=uisness ;t"ics, Customer +ocus, Krganisational Pride, .utual :espect
and Trust, Innovation and <peed and Total Nuality or ;7cellence3 T"e Company
ran%ed as t"e T"ird ,reat Place to wor% or in India or second time in succession #y
a survey conducted #y ,row Talent and =usiness -orld )**5
)**8 A =adarpur T"ermal Power <tation "aving an installed capacity o 7*5 .-
transerred to t"e Company
)**7 A .oC, ,oI granted inAprinciple approval or allocation o a new coal #loc%,
C"attiA=ariatu 0<out"3 to t"e Company su#!ect to t"e conditions stipulated in t"e
approval letter. T"e s"are o reserves is estimated to #e &5' .illion Tonnes
)**/
5
A T"e Company ad!udged as t"e <tar P<? O )**/ =oard e7panded #y appointment o
ive independent Birectors India Power $ward conerred on Centre or Power
;iciency and ;nvironmental Protection
)**9
A .emorandum o understanding entered into wit" t"e Nuclear Power Corporation
o India 6imited 0NPCI63 or development o nuclear power in India &*,*** .-
installed capacity mar% crossed 6ong term uel supply agreement signed wit" Coal
India 6imited or supply o coal to t"e power stations or a period o )* years
T"e Company acIuired ''.89 o presently paidAup capital o Jerala and
Transormers and ;lectricals Jerala 6imited rom ,overnment o Jerala at a total
consideration o :s. &1&.' million, su#!ect to inal price to #e #ased on t"e valuation
o t"e assets o Jerala and Transormers and ;lectricals Jerala 6imited. Jerala and
Transormers and ;lectricals Jerala 6imited is engaged in manuacturing and repair
o "eavy duty transormers International ,old <tar Nuality $ward conerred on
Centre or Power ;iciency and ;nvironmental Protection.
A NTPC enters .K? wit" Nuclear Power Corporation o India 6td. 0NPCI63 to
wor% toget"er or development o Nuclear Power in India and or t"is purpose to
orm a 1oint 2enture Company or setting up Nuclear Power Pro!ects.
A NTPC in%s 12 agreement wit" <$I6, :IN6, Coal India and N.BC.
8
VISION
PTo #e t"e worlds largest and #est power producer, powering Indias growt".Q
MISSION
PBevelop and provide relia#le power, related products and services at competitive
prices, integrating multiple energy sources wit" innovative and ecoAriendly
tec"nologies and contri#ute to society.Q
Core Values BE COMMITTED
B =usiness ;t"ics
E ;nvironmentally 4 ;conomically <ustaina#le
C Customer +ocus
O Krganisational 4 Proessional Pride
M .utual :espect 4 Trust
M .otivating <el 4 ot"ers
7
I Innovation 4 <peed
T Total Nuality or ;7cellence
T Transparent 4 :espected Krganisation
E ;nterprising
D Bevoted
/
HR POLICIES
Recruitment
T"ey #elieve in t"e p"ilosop"y o @,row your own tim#er@. T"eir @;7ecutive Trainee@
sc"eme was introduced in 1977 wit" t"e o#!ective o raising a cadre o "ome grown
proessionals. +irst Bivision ,raduate ;ngineers5 Post graduates are "ired t"roug"
nationAwide open competitive e7aminations and campus recruitments. >iring is
ollowed #y 5) wee%s o ully paid induction training.
T"e company recruits every year t"roug" a "ig"ly competitive ;T test. ;very year
a#out 1.5 6acs students ta%e t"e e7am and 5**O8** candidates are selected ater an
interview.
T"e <tream wise distri#ution is as ollows
.ec"anical ;ngineers O '*9
;lectrical engineers O )59
9
Instrumentation ;ngineers O 1*9
Civil ;ngineersA 1*9
>: and +inance O 159
T"e company oicials also visit t"e prestigious institutions in t"e country li%e $nna
?niversity, =IT .esra,, BT?, =IT<APilani, t"e IITs including IT=>?, I<. B"an#ad
and t"e NITs to recruit ;Ts.It started rom t"e year )**7 to reduce t"e recruitment
cost to company. NTPC won t"e P<? ;7cellence award )*1* in t"e #est inancial
perormance category.
LEVEL ND DESI!NTIONS IN NTPC LIMITED
Le"el Desi#nation
;1 $ssistant Kicer
;) <enior $ssistant Kicer
;)$ ;ngineer5Kicer
;& <enior Kicer5;ngineer
;' Beputy .anager5Beputy <uperintendent
;5 .anager5<uperintendent
;8 <enior .anager5<enior <uperintendent
;7 Beputy ,eneral .anager
;7$ $ssistant ,eneral .anager
;/ ,eneral .anager
<& <upervisor
<' <enior <upervisor
-1 $ttendant
-) <enior $ttendant
-& <enior $ssistant51unior Kperator
-' $ssistant
-5 $ssistant ,radeA&
-8 <enior $ssistant ,radeA)
-7 <teno ,radeA1
-/ <enior $ssistant ,radeA&
-9 <enior $ssistant ,radeA'
1*
11
$o% Title& 'o% S(eci)ications& Role Outline an* Pa+ scales
1o# speciications indicating t"e eligi#ility reIuirements in terms o minimum
educational and5or proessional Iualiications, lengt", nature o Iuality o
e7perience, upper age limit etc. and a general outline o t"e role and
responsi#ilities will #e laid down in respect o eac" !o# title along wit" t"e pay
scale or consolidated daily5mont"ly wage rate in w"ic" t"e posts in t"e category
will #e operated.
Non,E-ecuti"es
?ns%illed ,roup - * levels
<%illed ,roup 4 eIuivalent <ecretarial
and Clerical <ta -& 4 -' levels
Su(er"isor
<upervisory 4 eIuivalent Categories <I 4 -7 levels
E-ecuti"es
;7ecutive ;1 5 ; ) level
Inusion o new #lood to t"e e7ecutive and supervisory cadres will #e t"roug" t"e
;7ecutive Trainee and Biploma Trainee <c"emes under w"ic" training #ased on
speciic reIuirements o t"e Company will #e imparted to t"e res" proessional
graduates and diploma "olders to #e recruited on a regular annual #asis.
1)
PERFORMNCE PPRISL.
Perormance appraisal is a process or #ringing out t"e #est in employees and
developing t"an or acing new c"allenges t"roug" close relations"ip and
understanding #etween t"em, t"e employee and "is supervisor. It also "elps in
understanding t"e employees aspiration, identiying "is developments, needs and
ulilling t"em t"roug" !o# rotation5reAassessment and ot"er measures.
T"e perormance $ppraisal <ystem in NTPC "as #een evolved ater wide ranging
discussions and participation o all concerned at various stages. -it" a view to
meeting t"e individual and organiGational needs. T"e system is an outcome o t"ese
deli#erations on t"e o#!ectives, orms and t"e process o t"e appraisal
O%'ecti"es
Perormance appraisal system "as ollowing o#!ectivesR
/0 E))ecti"e 1or2 s+stem
To set Targets and Perormance norms, monitor wor% progress and plan or improved
perormance
30 Trainin# an* De"elo(ment
To understand t"e gaps in %nowledge, s%ills and attitudes t"at e7ists and see "ow
t"ese can #e illed #y planned guidance and training.
40 Placement
To consider an employees suita#ility o dierent types o assignments and matc"ing
t"e a#ilities and e7pertise o t"e e7isting personnel wit" t"e !o# reIuirements.
1&
50 Promotion
To provide t"e #asis or determination o merit, eiciency and suita#ility or purposes
o promotion.
E"aluation
In perormance appraisal system ollowing is #eing evaluatedR
;valuations o wor% perormance on t"e present !o# i.e. t"e e7tent to w"ic"
perormance norms and targets "ave #een met Iuantitatively and
Iualitatively.
T"e evaluation o #e"avioral attri#utes attitudes and e7ecutive a#ilities.
T"e e7tent o development ac"ieved #y t"e employee during t"e period under
review.
;valuation or potential or assuming "ig"er responsi#ilities.
$lternatives roles5unctions into w"ic" t"e e7ecutives can move.
Kverall assessment o t"e employee.
$ssessment o training needs.
Co"era#e
Per)ormance a((raisal )or e-ecuti"e.
T"e appraisal will cover perormance during t"e inancial year. T"e ormat
and process o appraisal will #e t"e same or all unctions and similar or all
levels o e7ecutives.
1'
T"e appraisals orm is to #e illed #y all e7ecutives w"o "ave served or
period o at least & mont"s in t"e organiGation during t"e inancial year.
Per)ormance a((raisal )or non,e-ecuti"e.
T"ere will #e dierent ormats or assessment as per t"e ollowing #oard categoriesR
<upervisory
<ecretarial 4 Kice Personnel
-or%men
-or%menR ?ns%illed Personnel
1!E 6 SLRY DMINISTRTION.
-age is t"e remuneration paid or t"e service o la#our in production periodically to
an employee5wor%er. P-agesQ usually reers to t"e "ourly rate paid to suc" group as
production and maintenance employees 0=lue collar3.
Kn t"e ot"er "and, P<alaryQ normally reers to t"e wee%ly or mont"ly rates paid to
electrical, administrative or proessional employee 0w"ite collar3.
-age and <alary $dministration reers to implementation o sound policy and
practices o employee compensation. -age and <alary $dministration is concerned
wit" t"e inancial aspects o needs, motivation and rewards. .anagers, t"ereore,
analyse and interpret t"e needs o t"eir employees so t"at reward can #e individually
designed to satisy t"ese needs. It "as #een rig"tly said PPeople do w"at t"ey do to
satisy some need, #eore t"ey do anyt"ing t"ey loo% or a reward or pay
15
SCLES OF PY
Pay Scales of Executives
Scale Co*e


Pa+ Scale 7Rs08

Re(resentati"e Desi#nation


;l 1*75*A1875*

$sstt. ;ngineer5$sst. Kicer
;)

11))5A17)5*

;7ecutive Trainee5<r. $stt. ;ngineer5
<r. $sstt Kicer

;)$

1)***A175**

;ngineer5Kicer

;&

1&75*A1/7**

<enior ;ngineer5<r. Kicer

;'

18***A)*/**

Beputy .anager5$CB;5Beputy <updt.

;5

175**A))&**

.anager5BCB; 5<updt.

;8

1/5**A)&9**

<enior .anager5C"ie .anager5CB;5<r.<updt.

;7

19***A)'75*

Beputy ,eneral .anager

;7$

195**A)58**

$ddl. ,eneral .anager

;/

)*5**A)85**

,eneral .anager

;9

)&75*A)/55*

;7ecutive Birector
Pa+ Scales o) Su(er"isors
18
Scale
Co*e


Pa+ Scale 7Rs08 Re(resentati"e Desi#nation


<I

7&**A1)88*

1r. Controller51r. +oreman5
1r. <upervisor51r. $ccountant

<)

79**A1&7**

$ssistant Controller ,r.II5
+oreman ,r.II5<upervisor ,r. II
$ccountant
,r.II5Private <ecretary ,r II


<& /8**A1'9)* $ssistant Controller ,r.I5
+oreman ,r. I5<upervisor ,r.I5
$ccountant ,r. I5Private <ecretary
,r.I
<' 9&**A1559* <r. $sst. Controller5<r. +oreA
man5<r. <upervisor5<r. $ccounA
tant5<r. Private <ecretary
<, 1****A18*** <election ,radeS 0w.e. )5.1.)**13

Pa+ Scales o) 1or2men 7NON E9EC:TIVES8
Scale
Co*e
Pa+ Scale
7Rs08
Re(resentati"e Desi#nation
17

-* &75*A5'5*

?ns%illed
-1 ''**A/'&* ?ns%illed5,angman5.aGdoor5
$ttendant5<ecurity ,uard
-) '7**A9*1*

<emiAs%illed5Jeyman5<r.$ttenAdant5<r..aGdoor5BresserAcumA+irst
$ider
-& 5***A959* 1r.Kperator51r.Tec"nician5
$rtisan51r. Braug"tsman5
1r. $ssistant5Coo%.
-' 5'**A
1*&5*
Kperator ,r.I25Tec"nician
,r.I25Braug"tsman
$ssistant ,r.I25<tenoATypist.

-5 5/**A
1*79*
Kperator ,r.III5Tec"nician
,r.Ill5Braug"tsman 5
$ssistant ,r. Ill5<tenograp"er.

-8 8)**A
11)**
Kperator ,r.II5Tec"nician
,r.II5Braug"tsman 5
$ssistant ,r.II5<r. <tenograp"er.
-7 87**A
1175*
Kperator,r.I5Tec"nician 5
Braug"tsman ,r.I5$sstt. ,r.I
-/ 7&**A
1)88*
<r. Tec"nician5<r .Braug"tsman
<r.$ssistant.
-9 79**A .aster Tec"nician ,r.II
1/
1&7**
-1* /8**A
1'9)*
.aster Tec"nician ,r.I
-11 9&**A
1559*
<, 1****A
18***
<election ,radeSS0SS t"e selection grade "as come into orce wit"
eect rom )5.1.)**13

T;e !ra*e o) 1// ;as come into o(eration <0e0)0 =050/>?>0
THE RTE OF INCREMENT
Sl0 No0 !ra*e Rate o) Increment
1. -* ).5
). -1A-7 &.*
&. <upervisors5-/A-11 &.5
'. ;7ecutives5<election
,rade
'.*
LLO1NCES.
B;$:N;<< $66K-$NC;R
Periodicity o :evisionR NuarterlyR 1
st
1anuary, 1
st
$pril, 1
st
1uly.
Period to w"ic" <eptem#erANovem#er, Becem#erA+e#ruary,
19
:evision relatesR .arc"A.ay, 1uneA$ugust
T"e percentage NeutraliGation would #e 1**9 or all employees. T"e B.$. would #e
#ased on t"e percentage increase in t"e Iuarterly average o t"e $ICPI or t"e Iuarters
ending, +e#ruary, .ay, $ugust and Novem#er respectively over $ICPI 17*/ 0=asis
198* T 1**3.
)*
HO:SE RENT LLO1NCE.
>ouse :ent $llowance is paya#le to t"e eligi#le employees w"o are not provided
wit" residential accommodation #y t"e company at places w"ere t"e company "as its
pro!ects units 5 oices.
TRNSPORT S:BSIDY.
;mployees not in receipt o mont"ly reim#ursement o conveyance e7penditure are
paid transport su#sidy as underU
Category o ;mployees per .ont"
;7ecutive :s.&**5A
<upervisors :s.)/*5A
-or%men :s.19*5A
SHIFT @ NI!HT SHIFT LLO1NCE.
;7ecutive normally rostered duly in t"ree s"its t"roug"out t"e mont" including Nig"t
<"it and -or%men5 supervisors wor%ing in Nig"t s"its.
78 E9EC:TIVES
i8 ;15;)5;& :s.9**5A per mont"
ii3 ;&5;' :s.1)**5A per mont"
iii3 ;55;8 :s.15**5A per mont"
0=3 <?P;:2I<K:< :s.5)*5A per mont"
0C3 -K:J.;N :s.&)*5A per mont"
)1
1SHIN! LLO1NCE.
;mployees in t"e wor%man, supervisory 4 ;7ecutive Categories w"o are provided
wit" liveries 5 uniorms are entitled to was"ing allowance at t"e ollowing ratesR
-or%men 4 <upervisory sta in
nursing, paramedical or ire service.
:s. 1)/5A p.m.
Kt"er categories o wor%men,
<upervisor 4 ;7ecutives.
:s. 1*/5A p.m.
CSH,CNTEEN,COMPENSTION INCL:DIN! TE S:BSIDIES.
;mployees and trainees 5 apprentices posted at oices 5 esta#lis"ments, w"ere
su#sidiGed canteen acilities are not provided.
+or employees posted in t"e
esta#lis"ment located atR
$mount 0:s. p.m.3 w.e..
1.'.)**1
Pro!ect, stations and in t"e
esta#lis"ments located in (C class
cities.
))5V)** T ')5
))
Career *"ancement 6 O((ortunities
T"ey "ave a well esta#lis"ed talent management system in place, to ensure t"at T"ey
deliver on our promise o meaningul growt" and relevant c"allenges or t"eir
employees. T"eir talent management system comprises P;:+K:.$NC;
.$N$,;.;NT, C$:;;: P$T>< and 6;$B;:<>IP B;2;6KP.;NT.
Re<ar*s 6 Reco#nitions
T"ey "ave, rom inception, created a culture o rewards and recognitions t"roug"
cele#ration o various ac"ievements and events and recognising t"e contri#utions
#e"ind suc" success.
Inno"ate& Create& Com(ete
T"ey "ave introduced numerous initiatives w"ic" see% to en"ance t"e creativity,
innovation, unctional aptitude and teamwor% o our employees. T"ese initiatives
include National Kpen Competition or ;7ecutive Talent 0NKC;T3, Proessional
Circles, Nuality Circles, =usiness .inds and .ed"a Pratiyogita 0a IuiG or our
employees3. $ management !ournal called P>oriGonQ is pu#lis"ed Iuarterly to ena#le
t"e employees to s"are t"eir ideas and e7periences across t"e organisation.
Aualit+ o) 1or2,Li)e
NTPC is proud o its systems or providing a good Iuality o wor%Alie or its
employees. In addition to providing #eautiul and sae wor% places, NTPC encourages
a culture o mutual respect and trust amongst peers, superiors and su#ordinates.
)&
$way rom "ectic city lie, NTPC towns"ips provide an environment o serenity,
natural #eauty and close community living. Numerous welare and recreation
acilities including sc"ools, "ospitals and clu#s are provided at t"e towns"ips to
en"ance Iuality o lie 4 t"e well #eing o employees and t"eir amilies. $n entire
range o #eneits, rom c"ild care leave to post retirement medical #eneits are
e7tended to employees to meet any e7igency t"at may arise in a person@s lie.
Jnowledge .anagement in NTPC
To meet t"e ultimate o#!ective o #ecoming a learning organisation, an integrated
Jnowledge .anagement <ystem "as #een developed, w"ic" acilitates tacit
%nowledge in t"e orm o learning and e7periences o employees to #e captured and
summariGed or uture reerence.
Training 4 Bevelopment
NTPC su#scri#es to t"e #elie t"at eiciency, eectiveness and success o t"e
organisation, depends largely on t"e s%ills, a#ilities and commitment o t"e employees
w"o constitute t"e most important asset o t"e organisation.
T"eir Training Policy envisages a minimum o 7 man days o training per employee
per year. T"ey "ave developed our own compre"ensive training inrastructure.
;ducation ?pAgradation <c"emes
To meet t"e academic aspirations o employees and matc" t"em wit" t"e needs o t"e
organisation, NTPC "as tieAups wit" institutes o repute li%e .BI, ,urgaonU IIT
Bel"iU =IT< Pilani, etc. NTPC sponsors i7ed siGe #atc"es o employees w"o are
)'
inducted into t"ese courses #ased on t"eir perormance rating in t"e company and
t"eir perormance in t"e entrance e7am conducted #y t"e respective institute. ?nli%e
ot"er study leave and sa##aticals, employees undergoing t"ese courses do not orego
t"eir salary or growt" during t"e duration o t"e course.
<ee%ing +eed#ac%
T"ey actively see% and encourage employee eed#ac% to ensure t"at t"eir >:
interventions and practices remain relevant and meaningul. T"ey regularly conduct
;mployee <atisaction and KrganiGational Climate <urveys.
<ar*s
T"ey derive immense satisaction rom t"e awards t"ey receive and t"e resulting
recognition t"ey #estow. T"e awards are %ey indicators and milestones on t"eir >:
!ourney, and reinorce our >: p"ilosop"y and practices. NTPC "as #een awarded
No.1, =est -or%place in India among large organisations or t"e year )**/, #y t"e
,reat Places to -or% Institute, India C"apter in colla#oration wit" T"e ;conomic
Times.
)5
PRT II
-age is a monetary payment made #y t"e employer to "is employee or t"e wor%
done or services rendered. It is a monetary compensation or t"e services rendered. $
wor%er may #e paid :s. 1** per day or :s. '5** per mont". T"is is wage payment.
T"e wor%er gives "is services and ta%es payment called wage payment. Industrial
wor%ers are paid remuneration or t"eir services in terms o money called wage
payment. -ages are usually paid in cas" at t"e end o one day, one mont" or one
wee%. .oney wage is t"e monetary compensation or price paid #y t"e employer to "is
employee or t"e services rendered. <uc" compensation is also called wage or salary
or reward given #y an organisation to a person in return to a wor% done.
,enerally, compensation paya#le to an employee includes t"e ollowing t"ree
componentsR
o =asic compensation or t"e !o# 0wage5salary3
o Incentive compensation or t"e employee on !o#
o <upplementary compensation paid to employees 0ringe #eneit and employee
services3
IMPORTNCE OF 1!E PYMENT.
1. To wor%erR -age payment is important to all categories o wor%ers. -age is
a matter o lie and deat" to wor%ers5employees. T"eir lie, welare and even
social status depend on wage payment. It is only source o income to large
ma!ority o wor%ers. T"ey and t"eir unions always demand "ig"er wages and
)8
ot"er monetary #eneits. .a!ority o la#our pro#lems and disputes are directly
related to wage payment. T"e eiciency o wor%ers and t"eir interest and
involvement in t"e wor% depend on wage payment. ;ven t"eir attitude towards
employer depends on wage payment. In #rie, wage payment is a matter o
greatest importance to wor%ers. -age pro#lem is t"e most pressing and
persistent pro#lem #eore t"e entire la#our orce.
). To employerR -age payment is eIually important to employers as t"eir proit
depend on t"e total wage #ill. $n employer in general is interested in paying
low wages and t"ere#y controls t"e cost o production. >owever, low wages
are not necessarily economical. In act t"ey may prove to #e too costly to t"e
employer in t"e long run. ;.g. In garment manuacturing company i tailors
are not paid properly t"en it is diicult or t"e company to retain t"em. $n
employer "as a moral and social responsi#ility to pay air wages to "is wor%er
as t"ey are eIual partners in t"e production process. >e s"ould give air wages
w"ic" will #eneit to #ot" t"e parties. ;mployees will oer ull coAoperation
to t"e management w"en t"ey are paid attractive wages. Kn t"e ot"er "and,
stri%es and disputes are li%ely to develop w"en wor%ers are paid low wages or
w"en t"ey are dissatisied and angry due to low wage rates. It is possi#le to
earn more proit #y paying attractive wages to wor%ers. ;.g. :eliance, Citi
=an%, .otorola are earned "uge proits #ecause o t"eir "ig"er pay pac%ages.
&. To governmentR ,overnment also give special importance and attention to
wages paid to industrial wor%ers as industrial development, productivity,
industrial peace and cordial la#ourA management relation depend on t"e wage
)7
payment to wor%ers. ,overnment desires to give protection to t"e wor%ing
class and or t"is minimum wages act and ot"er $cts are made. In India,
wages are now lin% wit" t"e cost o living. T"is is or t"e protection o
wor%ers. ,overnment is t"e #iggest employer in India and t"e wage rates o
government servant and employees o pu#lic sector organisations are decided
#y government only. :evision o pay scale o government employees made or
ad!usting t"eir wages as per t"e cost o living. +or t"is, PPay CommissionQ is
appointed and pay scale is ad!usted as per t"e recommendations made. In
India, wage payment is very critical, controversial and delicate issue or all
categories o wor% orce. T"is is due to poverty, rising prices, mass
unemployment and rising population. -age payment indeed a ve7atious
pro#lem and needs to #e tac%led rom economic, social and "umanistic angles.
CONCEPT OF FIR 1!ES.
+air wages is t"e wage w"ic" is a#ove t"e minimum wage #ut #elow t"e living wage.
K#viously t"e lower limit o t"e air wage is t"e minimum wage and t"e upper limit is
set #y t"e a#ility o t"e industry to pay. =etween t"ese two limits, air wages s"ould
depend on t"e actors li%e O
1. Prevailing rates o wages in t"e same occupation
). Prevailing rates o wages in t"e same region or neig"#ouring areas
&. ;mployers a#ility to pay
'. 6evel o national income and its distri#ution
)/
5. Productivity o la#our
8. <tatus en!oyed #y t"e industry in t"e economy
>ence it can #e said t"at air wages are determined on industry cum region #asis.
-"en air wages are paid employees en!oy "ig"er standard o living. It is accepted
act t"at wages must #e air and reasona#le. -ages is air w"en t"e employee is a#le
to meet its essential needs and en!oy reasona#le standard o living. Q;Iual pay or
eIual wor%Q serves as #ase o air wage.
$ccording to ;ncyclopaedia o social science,Q+air wages are eIual to t"ose received
#y t"e wor%ers perorming wor% o eIual s%ill, diiculty or unpleasantness.Q
+actors Inluencing -age $nd <alary <tructure
W T"e organiGations a#ility to payR -age increases s"ould #e given #y t"ose
organiGations w"ic" can aord t"em. Companies t"at "ave good sales and t"ereore
"ig" proits tend to pay "ig"er wages t"an t"ose w"ic" are running at a loss or earning
low proits #ecause o t"e "ig" cost o production or low sales.
W <upply and demand o la#ourR I t"e demand and certain s%ills are "ig" and t"e
supply is low t"e result is rise in t"e price to #e paid or t"ese s%ills. T"e ot"er
alternative is to pay "ig"er wages i t"e la#our supply is scarce and lower wages w"en
it is e7cessive.
W T"e cost o livingR -"en t"e cost o living increases, wor%ers and trade unions
demand ad!usted wages to oset t"e erosion o real wages. >owever w"en living
)9
costs are sta#le or decline t"e management does not resort wit" t"is argument as a
reason or wage reduction.
W T"e living wageR ;mployers eel t"at t"e level o living prescri#ed in wor%ers
#udget is opened to argument since it is #ased on su#!ective opinion.
W 1o# reIuirementsR 1o#s are graded according to t"e relative s%ill responsi#ility and
!o# conditions reIuired.
W Trade unions #argaining powerR Trade unions do aect t"e rate o wages. ,enerally
t"e stronger and more powerul trade union, "ig"er t"e wages.
W ProductivityR Productivity is anot"er criterion and is measured in terms o output
manA"our. It is not due to la#our eorts alone. Tec"nological improvements, greater
ingenuity and s%ill #y t"e la#our are all responsi#le or t"e increase in productivity.
W Prevailing mar%et rateR T"is is also %nown as (compara#le wages or going wage
rate. :eason #e"ind t"is is competition demand t"at competitors ad"ere to t"e same
relative wage level.
W <%ill levels availa#le in t"e mar%etR -it" t"e rapid growt" o industries, #usiness
trade t"ere is s"ortage o s%illed resources. T"e tec"nological development,
automation "as #een aecting t"e s%illed levels at a aster rate.
W Psyc"ological and social actorsR T"is determine in a signiicant measure "ow "ard a
person will wor% or t"e compensation received or w"at pressures "e will e7ert to get
"is compensation increased.
&*
S+stems O) 1a#e Pa+ment
$3 TI.; :$T; <H<T;.
=3 PI;C; :$T; <H<T;.
Time rate systemR It is t"e oldest and simplest met"od o wage payment used
e7tensively in t"e industrial as well as government departments. -ages are paid as
per t"e time spent #y t"e wor%ers in t"e actory. T"e production given #y t"em is not
ta%en into consideration. T"e employer #uys t"e "ours o t"e wor%ers and pays t"em
accordingly. Time rate system is also called as day wage system. In t"e time rate
system, eiciency, sincerity, a#ility is not given attention and all t"e wor%ers are paid
at one and t"e same rate as per t"e period spent in t"e actory.
DVNT!ES OF TIME RTE SYSTEM.
13 ;asy and simpleR Time rate is easy to understand and simple to ollow and
calculate. -age calculations are also easy and Iuic%. ;ac" wor%er %nows "ow
muc" wage payment "e is entitled to at t"e end o t"e mont". T"is gives
convenience to employer and employees.
)3 ,uarantee o minimum wageR It gives t"e guarantee o certain minimum wage
payment to every wor%er irrespective o t"eir wor%ing capacity. -or%ers get a
regular and sta#le income and t"is gives a sense o security to all wor%ers as
regards wage payment.
&3 .aintains Iuality o productionR Nuality o production is maintained "ere as
t"e wor%ers are not in a "urry to complete t"e wor%. T"ey do not rus" t"e !o#
&1
and spoil t"e Iuality #ecause o t"e temptation to earn more. -or%ers tend to
wor% slowly and wit" care. ;ven accidents are less as wor%ers use t"e
mac"ines in a careul manner.
'3 <upport rom trade unionsR -or%ers and trade unions accept and support time
rate system as all wor%ers are placed in one category as regards wage
payment. T"is ensures unity among wor%ers. Trade unions normally preer
time rate system o wage payment.
53 $voids Iuarrels among wor%ersR Time rate avoids "eart #urning and Iuarrels
among t"e wor%ers as uniorm wages are paid to all. >ere eiciency, "onesty
and sincerity o wor%ers are not given any special weig"tage. -age rate is t"e
same or sincere and laGy wor%ers.
83 Convenient in modern actory systemR Time rate payment is convenient in
modern actory system w"ere production process is continuous and integrated.
It is not possi#le to measure t"e wor% completed #y one individual wor%er and
"ence time rate system is convenient.
DISDVNT!ES OF TIME RTE SYSTEM.
13 Not scientiicR Time rate is not scientiic system o wage payment as t"ere is
no direct lin%ing #etween wages and production5productivity. -ages #ill may
increase wit"out corresponding increase in t"e production. T"is will #ring loss
to t"e employer 5 management.
&)
)3 $#sence o positive encouragementR In t"e time rate system, t"ere is no
positive encouragement to wor%ers to improve t"eir eiciency5 perormance
as t"e wage rate is uniorm to all wor%ersU eicient and ineicient.
&3 No distinction #etween wor%ersR In t"e time rate system no distinction is made
#etween eicient and laGy wor%ers, #ot" are paid at one rate w"ic" is unair.
T"is system gives punis"ment to sincere and eicient wor%ers. T"ey are
discouraged as t"ey are paid less t"an w"at t"ey deserve. T"ey may even leave
t"e !o#.
'3 No initiative to wor%ersR Time rate ails to encourage wor%ers to ta%e more
interest and initiative in t"eir wor%. In act, it encourages t"em to ollow Pgo
slowQ policy. T"is is #ecause wage payment is not lin%ed wit" t"e production
given.
53 6a#our cost may increaseR In t"e time rate system, t"ere is a possi#ility o
increase in t"e la#our cost wit"out corresponding increase in t"e production.
-or%ers may wor% wit" slow speed, give less production #ut collect t"e wage
as per time or day i7ed.
83 <trict supervisionR In t"e time rate strict supervision on t"e wor%ers is essential
as payment is or period and not production. T"is raises t"e e7penditure on
supervision.
73 No eect on productivity5 eiciencyR Time rate ails to raise productivity and
eiciency o la#our orce. It is not an incentive system o wage payment.
&&
PIECE RTE SYSTEM.
T"is is anot"er #asic system o wage payment. It is !ust opposite to t"e time rate. It is
also treated as an incentive wage system as it encourages wor%ers to produce more
and also to earn more. In t"e piece rate system, wages are paid as per t"e output or
production given #y t"e wor%er and not as per t"e time spent #y t"e wor%er in t"e
actory. Payment is #y results in terms o output given. -age rate is i7ed per piece o
wor% or or certain Iuantity o production. T"e production given #y a wor%er at t"e
end o t"e day is counted and payment is made accordingly.
MERITS@ DVNT!ES OF PIECE RTE SYSTEM.
13 6in%ing o wages wit" productionR >ere wages are lin%ed wit" production or
productivity. It raises t"e productivity o la#our. -or%ers wor% wit" speed and
use t"eir capacity ully as t"e wage payment is directly related to t"e Iuantity
o production given #y a wor%er.
)3 Bistinction is made #etween eicient and ineicient wor%ersR Bistinction is
made #etween eicient and ineicient wor%er and ull !ustice is done to
eicient wor%er as "e gets payment in proportion to t"e production given.
;icient wor%ers support t"e piece rate system #ut it is not preerred #y
uns%illed and ineicient wor%ers. T"ey get less payment under t"is met"od as
t"eir capacity to produce is less.
&3 ;ncourages wor%ers to ta%e initiative in t"e wor%R Piece rate system
encourages wor%ers to ta%e more interest and initiative in t"e wor% as every
&'
wor%er gets ull reward o "is eorts. T"ere is direct eortsAreward
relations"ip in t"e piece rate system.
'3 +air to employer and employeesR T"is system is air to employers as well as
employees. T"e employees get income in proportion to production given #y
t"em and t"e employer gets production in proportion to t"e wage paid.
53 Incentive systemR T"is system serves as t"e incentive system. -or%ers wor%
eiciently and ta%e interest in t"e wor% due to corresponding #eneit5 reward
in t"e orm o "ig"er wage payment.
83 6imited supervision adeIuateR In t"is system strict supervision on t"e wor%ers
is not necessary as wor%ers wor% sincerely. T"is is #ecause t"eir wage
payment is directly lin%ed wit" t"eir sincerity and a#ility.
73 +reedom o wor% to wor%ersR -or%ers get more reedom o wor% and t"ere is
eective control on t"e cost o production in t"e piece rate system.
/3 =rings cordial relationsR Piece rate #rings cordial la#ourA management
relations and industrial peace.
DEMERITS@LIMITTION OF PIECE RTE SYSTEM
13 No guarantee o minimum wage paymentR T"ere is no guarantee o certain
minimum wage payment to a wor%er. T"is may prove to #e dangerous
particularly to a newly recruited wor%er and wor%ers w"o are #elow average
)3 -or%ers suer even w"en t"ey are not at aultR <ometimes wor%ers suer in
wage payment even w"en t"ey are not ault. Bue to power ailure, etc t"ey
&5
may not #e a#le to give production and naturally t"ey will not #e eligi#le or
wage payment even w"en t"ey remain present in t"e actory or t"e w"ole day.
&3 Complicated systemR Piece rate system is complicated and diicult as it is
diicult to understand #y ordinary wor%ers. .anagement will "ave to %eep
ela#orate records o production given #y eac" wor%er. -or%ers also ma%e
complaints as regards wage payment w"en t"ey eel t"at due payment is not
made to t"em.
'3 Bistur#s unity o wor%ersR Piece rate aects t"e unity among wor%ers as wage
payment will not #e uniorm to all wor%ers. T"is will lead to Iuarrel among
wor%ers. Trade unions oppose piece rate system on t"e ground t"at it will lead
to rivalry among wor%ers and destroy unity among t"em.
53 Not air to traineesR Piece rate system is not air to trainees, as t"eir capacity to
produce is less and naturally t"ey will get less wages.
83 Nuality o production is adversely aectedR It aects t"e Iuality o production
as wor%ers may wor% wit" speed and t"is may #ring down t"e Iuality o
production. In addition t"e wastages and spoiled wor% are li%ely to increase
due to "aste on t"e part o t"e wor%ers to la#our "ard and over strain
t"emselves in order to earn more. T"is aects t"e "ealt" o wor%ers.
&8
TIME RTE V@S PIECE RTE SYSTEMS
.eaningR
-ages are paid as per t"e time spent #y wor%ers.
-ages are paid as per t"e output or production given #y wor%ers.
Kld5new systemR
Kldest and simplest met"od o wage payment.
.odern and incentive system o wage system.
,uarantee o wagesR
,ives guarantee o certain minimum wage payment to every wor%er.
+ails to give guarantee o minimum wage payment to every wor%er.
<upportR
;mployees and trade unions support time rate system.
;mployers and eicient wor%ers preer piece rate system.
?nderstanding o systemR
;asy to understand and simple to administer.
Complicated system as various recorded and registers are reIuired to #e maintained
Bistinction #etween wor%ersR
Bistinction is not made #etween eicient and ineicient wor%ers as all are paid at one
and same rate.
Bistinction is made #etween eicient and ineicient wor%ers. ;icient wor%er is paid
more w"ile an ineicient wor%er is paid less.
&7
E))ect on (ro*uction.
;ncourages wor%ers to ollow goAslow policy and naturally production suers.
;ncourages wor%ers to ta%e more interest in t"e wor% and naturally production
increases.
Aualit+ o) (ro*uction.
Nuality, wor%mans"ip o production are not aected, raw materials, mac"inery are
utilised properly. T"e spoiled wor% is also negligi#le.
Nuality, wor%mans"ip o production may suer. Increase in spoiled wor% and
wastage o raw materials.
Su(er"ision.
<trict supervision is necessary as wor%ers are paid as per t"e period spent.
<trict supervision is not necessary as wor%ers are paid in proportion to t"e production
given.
Suita%ilit+.
<uita#le to manuacturing units, also suita#le w"en individual contri#ution is not
easily measura#le.
<uita#le w"en contri#ution o individual wor%er is measura#le and wor% is
standardised and repitive in c"aracter.
&/
INCENTIVE SYSTEMS OF 1!E PYMENT
T"e wage plan s"ould #e "ig"ly incentive means it s"ould encourage wor%ers to ta%e
more initiative and interest in t"e wor%, produce more and also earn more. T"e wage
plan w"ic" serves all t"ese purposes is called incentive wage plan. <uc" an incentive
plan is #eneicial to #ot" A employers and employees as well as it is useul or t"e
rapid industrial growt".
Incentives include monetary as wet as nonAmonetary #eneits oered. T"ere is
motivation to wor% "ard and to earn more. In every incentive plan, wages are lin%ed
wit" t"e given output. Incentives are not i7ed li%e wages and salaries. T"ey vary
rom individual to individual and rom period to period.
I6K deines incentives as Xpayment #y resultsX. Incentives can also #e descri#ed as
Xincentive systems o paymentX.
$ccording to Bale Hoder, PIncentive wages relate earnings to productivity and may
use premiums, #onuses, or a variety o rates to compensate or superior perormanceQ
Piece rate system is t"e oldest incentive wage plan w"ic" is also useul or attracting
and retaining Iualiied personnel in t"e organisation and or motivating personnel to
"ig"er levels o perormance. In many incentive plans, a com#ination o time rate and
piece rate systems is used. <uc" com#ination creates an ideal incentive plan.
&9
TYPES OF INCENTIVE PLNS.
T"ere are two types o incentive plansR
0a3 Individual incentive plans, and
0#3 ,roup incentive plans.
Individual incentive plan is meant or individual employees. >e "as to wor% "ard i.e.
eiciently, produce more and s"are t"e monetary #eneits or "imsel. T"e #eneit is
directly lin%ed wit" "is a#ility, eiciency and capacity.
In t"e group incentive plan, t"e incentive is not or individual employee #ut or t"e
group o employees wor%ing in one department or section. <uc" group incentive plan
may cover t"e entire la#our orce o a production unit. T"e group will wor%
collectively, give more production and s"are t"e #eneit. Initially t"e #eneit will #e
given to t"e group and t"ereater, it will #e divided among t"e mem#ers o t"e group.
.anagement is interested in group incentive plan w"ile employees are interested in
individual incentive plans. Production activities are now conducted in an integrated
manner and naturally incentives s"ould #e oered to t"e employees. ,roup incentive
plans are #etter as t"ey encourage team spirit and develop cooperation and
understanding among t"e employees. T"is avoids wastages and promotes
productivity.
'*
FET:RES@REA:ISITES OF !OOD INCENTIVE PLN.
<implicityR
$ good incentive plan is one w"ic" is easy to understand and simple to operate. $n
average wor%er must #e a#le to %now t"e incentive oered and w"at "e is e7pected to
do. T"e monetary as well as nonAmonetary #eneits oered must #e made clear to all
wor%ers.
;ncourage initiativeR
$ good incentive plan s"ould create initiative among wor%ers to wor% more and to
earn more. It must oer more income to wor%ers and more proit5production to t"e
irm or company.
Beiniteness and le7i#ilityR
$ good incentive plan s"ould #e deinite. T"is means reIuent c"anges s"ould not #e
made as regard rates, etc. as suc" c"anges create conusion and dou#ts in t"e minds o
wor%ers. <uc" plan must give clear #eneits to wor%ers
In addition, an ideal incentive plan s"ould #e le7i#le. It s"ould ta%e care o
tec"nological and ot"er c"anges ta%ing place rom timeAtoAtime. T"ere s"ould #e
suita#le provision or suc" ad!ustment. +le7i#ility ma%es incentive plan adapta#le.
1i*e co"era#e an* eBuita%le.
$ good incentive plan s"ould not #e or employees in certain departments only. It
s"ould "ave a wide coverage and almost all employees s"ould #e covered in suc"
'1
plan. <uc" wide coverage ma%es t"e plan popular at all levels and among all
categories o wor%ers.
$n incentive plan s"ould #e eIuita#le. T"is means it s"ould provide eIual opportunity
to all employees to s"ow eiciency and earn more. T"is avoids dissatisaction among
employees and ma%es t"e plan !ust and air to all employees.
,uarantee o minimum wage paymentR
$n incentive wage plan s"ould include certain minimum wage payment to every
wor%er per mont". T"is s"ould #e irrespective o t"e production "e gives. <uc"
provision o guarantee payments creates a sense o security and conidence among
wor%ers.
<cientiic i7ation o standard wor%loadR
?nder t"e incentive plan, e7tra payment is given or t"e e7tra wor% i.e. wor% w"ic" is
over and a#ove certain Iuality. <uc" standard wor%Aload must #e clear, speciic and
i7ed wit" scientiic time studies so t"at ma!ority o employees will #e a#le to give
e7tra production or e7tra payment.
1ustice to employer and employeesR
$ good incentive plan s"ould do !ustice to #ot" parties. T"e employer must get
additional production along wit" e7tra proit and t"e wor%ers must get e7tra payment
or e7tra production.
')
PROFIT,SHRIN!
ProitAs"aring is regarded as a steppingstone to industrial democracy. Pro. <eager
o#servesR XProitAs"aring is an agreement #y w"ic" employees receive a s"are, i7ed
in advance o t"e proits.X
ProitAs"aring usually involves t"e determination o an organisation@s proit at t"e end
o t"e iscal year and t"e distri#ution o a percentage o t"e proits to t"e wor%ers
Iualiied to s"are in t"e earnings. T"e percentage to #e s"ared #y t"e wor%ers is oten
predetermined at t"e #eginning o t"e wor% period and I< oten communicated to t"e
wor%ers so t"at t"ey "ave some %nowledge o t"eir potential gains. To ena#le t"e
wor%ers to participate in proitAs"aring, t"ey are reIuired to wor% or certain num#er
o years and develop some seniority. T"e t"eory #e"ind proitAs"aring is t"at
management eels its wor%ers will ulill t"eir responsi#ilities more diligently i t"ey
realise t"at t"eir eorts may result in "ig"er proits, w"ic" will #e returned to t"e
wor%ers t"roug" proitAs"aring.
FET:RES OF PROFIT,SHRIN!.
T"e main eatures o t"e proitAs"aring sc"emes areR
0a3 T"e agreement is voluntary and #ased on !oint consultation made
reely #etween t"e employers and t"e employees.
0#3 T"e payment may #e in orm o cas", stoc% o uture credits o
some amount over and a#ove t"e normal remuneration t"at would
ot"erwise #e paid to employees in a given situation.
'&
0c3 T"e employees s"ould "ave some minimum Iualiications, suc"
as tenure or satisy some ot"er conditions o t"e service w"ic" may
#e determined #y t"e management.
0d3 T"e amount to #e distri#uted among t"e participants is computed
on t"e #asis o some agreed ormula, w"ic" is to #e applied in all
circumstances.
0e3 T"e amount to #e distri#uted depends on t"e price earned #y t"e
enterprise.
03 T"e proportion o t"e proits distri#uted among t"e employees is
determined in advance.
O%'ecti"es o) Pro)it,s;arin#.
13 To supplement t"e regular earning o t"e wor%ers,
)3 To create a sense o partners"ip among t"e wor%ers and t"e management,
&3 To ena#le t"e wor%ers to participate in t"e prosperity o t"eir company,
'3 To develop cordial la#ourAmanagement relations and to improve employee morale.
53 To introduce incentive wage plan
83 To raise productive eiciency #y reducing costs and increasing output
73 To reduce la#our turnover and to improve pu#lic relations.
/3 To provide or employee security in t"e event o deat", retirement or disa#ility
''
DVNT!ES OF PROFIT,SHRIN!.
13 ;7tra income to wor%ersR -or%ers get e7tra cas" payment due to proitA
s"aring arrangement. T"is money is useul or raising t"eir welare. -or%ers
can purc"ase costly consumer dura#les out o t"is money availa#le at one
time. T"us, proitAs"aring provides #etter lie and welare to wor%ers. It
creates contended la#our orce wit" "ig"er standard o living. ProitAs"aring
plan acts as a good supplement to regular wages paid to employees. In act,
proitAs"aring is aptly descri#ed as a orm o added remuneration.
)3 -or%ers ta%e more initiative and interest in t"e wor%R Bue to proitAs"aring
arrangement, wor%ers5 employees ta%e more interest in t"e wor%. T"is
develops team spirit among t"e employees #ecause t"eir s"are in t"e proit
depends on t"eir collective initiative, eorts and "ard wor%. In t"is sense,
proitAs"aring is useul or motivating employees. It encourages employees to
#e regular, sta#le and eicient as t"e #eneits o t"ese elements are oered to
t"em t"roug" proitAs"aring. >ere, eorts and reward are directly and
proportionately lin%ed. T"is encourages employees to ta%e %een interest in t"e
wor% and develops team spirit.
&3 ProitAs"aring acts not only as supplement to regular wages 0i.e. as an
incentive wage plan3 #ut also as a motivating actor to all employees. It creates
common o#!ective #eore employer and employees and diverts t"eir energies
or ac"ieving one common o#!ective.
'3 Increase in production and productivityR ProitA s"aring acts as a driving orce
or more production and productivity. It motivates wor%ers or raising
'5
production as t"ey get direct and immediate #eneit o additional eorts on
t"eir part. T"e #eneits o increase in production are availa#le to employer and
employees.
53 +air to employer and employeesR ProitAs"aring gives mere remuneration to
wor%ers along wit" more proit to employer. ;mployer pays a part o proit to
wor%ers #ut "e is not adversely aected as proit is paid only w"en it e7ceeds
a particular limit agreed #y #ot" t"e parties. T"is arrangement is, certainly air
to #ot" parties. T"ere is an element o social !ustice in it.
83 ;nsures cordial industrial relationsR ProitAs"aring creates cordial la#ourA
management relations. It. reduces industrial disputes, stri%es and loc%Aouts.
T"is is #ecause #ot" "ave common o#!ective and #ot" are li%ely to suer due
to industrial disputes, stri%es and loc%Aouts. T"us, proitAs"aring reduces
industrial disputes and leads to riendly relations #etween employer and
employees. It certainly acts as a tool or reducing industrial disputes and also
or creating industrial peace. T"us, proitAs"aring agreement encourages
wor%ers to wor% eiciently and also avoid dispute and Iuarrels wit" t"e
employer. It acts as a natural and selAimposed c"ec% on industrial disputes.
ProitAs"aring creates team spirit in t"e "ig"er cadres o management as well
as in t"e ran% and ile o wor%ers.
73 6ess supervision reIuiredR ProitAs"aring reduces t"e e7penditure on
supervision o wor%ers as t"ey ta%e interest in t"e wor% on t"eir own.
.oreover, wastage o@ materials, volume o spoiled wor%, etc. are also
reduced.
'8
/3 <ta#ility to la#our orceR ProitAs"aring #rings sta#ility to la#our orce as t"e
#eneit o proitAs"aring is usually given only to t"ose w"o wor% in t"e
company or t"e w"ole year. T"us, proitAs"aring #rings down t"e rate o
la#our turnover and t"is gives #eneit to t"e employer5 management.
93 Promotes social !usticeR ProitAs"aring is a met"od o social !ustice. It is a
met"od #y w"ic" wor%ers are given t"e reward o t"eir "ard wor% and also
allowed to participate in t"e progress and prosperity o t"eir company. ProitA
s"aring introduces industrial democracy as wor%ers are treated not only as
wage earners #ut also as partners or s"aring t"e proits o t"e company.
DISDVNT!ES OF PROFIT,SHRIN!.
13 ?ncertaintyR T"ere is "ig" degree o uncertainty in t"e proitAs"aring
sc"eme5plan. ProitAs"aring is uncertain #ecause it will #e paid only w"en t"e
proit e7ceeds a particular limit. T"e proit may not cross a particular limit due
to mar%et orces and t"e wor%ers will suer. T"us, proitAs"aring does not give
ull guarantee o e7tra payment to wor%ers. It acts li%e a air weat"er plan.
)3 ?nair to eicient wor%ersR ProitAs"aring is a group incentive plan. It gives
eIual #eneit to all wor%ers. Bistinction is not made #etween good and #ad
wor%ers. $s a result sincere and eicient wor%ers get less t"an w"at t"ey
deserve w"ile insincere and ineicient get more t"an w"at t"ey deserve.
&3 Kpposition rom trade unionsR Trade unions and wor%ers eel t"at #onus
payment is #etter t"an proitRAs"aring. T"ey generally oppose to proitAs"aring
'7
and demand #onus rom t"e employer as it is a c"eap alternative to proitA
s"aring.
'3 Bisputes on calculation o net proitR In proitAs"aring, t"e net proit is to #e
calculated at t"e end o t"e inancial year. T"ere is a possi#ility o diiculties
as regards t"e calculation o t"e net proit. T"e employer may li%e to
manipulate t"e accounts and s"ow less proit w"ile wor%ers may calculate it as
"ig". <uc" Iuarrel aects #ot" t"e parties as it leads to dispute and delay in
payment. In #rie, ascertaining net proits is one sensitive pro#lem in proitA
s"aring.
53 $dverse eects on la#ourAmanagement relationsR <ometimes, relations
#etween la#our and management are adversely aected on t"e point o proitA
s"aring agreement. T"is deeats t"e very purpose o proitAs"aring. Bisputes
are possi#le as regards t"e proitAs"aring agreement itsel.
83 Not useul during depressionR ProitAs"aring as a met"od o e7tra remuneration
to wor%ers can #e used during t"e period o prosperity w"en proits are "ig". It
cannot #e used during t"e years o depression. ;ven newly esta#lis"ed
companies are not in a position to introduce proitAs"aring sc"eme or t"eir
employees.
73 Kpposition rom conservative employersR T"e concept o proitAs"aring is not
ully accepta#le to conservative employers. T"ey eel t"at proit is t"e reward
or t"e ris%s and uncertainties. T"ey also argue t"at wor%ers must #e prepared
to s"are proit as well as loss in t"e #usiness.
'/
$OB EVL:TION
$ccording to ;dwin #. +lippo, P1o# evaluation is a systematic and orderly process
o determining t"e wort" o !o# in relation to ot"er !o#sQ.
1o# evaluation means determining t"e relative wort" o a !o# in an organiGation #y
comparing it wit" ot"er !o#s wit"in an organiGation and wit" !o# mar%et outside
!o#s are evaluated on t"e #asis o t"eir content and are placed in t"e order o t"eir
importance. In t"is way, !o# evaluation "elps in esta#lis"ing !o# "ierarc"y. It is a
process #y w"ic" !o#s in an organiGation are appraised. It suggests comparative
importance o dierent !o#s. $ wage structure "ierarc"y is #ased on suc" !o#
evaluation.
In !o# evaluation t"e !o#s are ran%ed on t"e #asis o t"eir relative importance and
not t"e !o# "olders. T"ey are rated t"roug" perormance appraisal. 1o# evaluation
is t"e output provided t"roug" !o# analysis.
+eaturesR
1. It determines t"e relative wort" o !o#s in an organiGation. 1o#s are evaluated as
per t"eir content and place in t"e order o t"eir importance.
). It is #ased on t"e analysis o t"e acts a#out t"e !o# collected t"roug" !o#
analysis.
&. It "elps to #ring a #alanced wage structure in an organiGation. T"is is possi#le
as !o# "ierarc"y is esta#lis"ed. T"e purpose is i7ation o satisactory wage
dierentials among various !o#s.
'9
O%'ecti"es.
1. To esta#lis" #y impartial !udgement t"e logical and accurate relations"ip o eac"
!o# to ot"er !o#s wit"in t"e irm.
). To esta#lis" satisactory wage and salary dierentials.
&. To select employees more accurately and train, promote or transer t"em wit"in t"e
irm o#!ectively and impartially.
'. To provide t"em inormation or wor% organiGation, employees selection,
placement and ot"er similar pro#lems.
5. To promote employee goodwill, strengt"en and maintain morale and loyalty and
provide an incentive or eiciency.
8. To determine t"e rate o pay or eac" !o# t"at is air and eIuita#le in relation to
ot"er !o#s in t"e plant.
*"anta#es @ Im(ortance.
1. 1o# evaluation clearly indicates t"e relative wort" o dierent !o#s in t"e
organiGation.
). It esta#lis"es a "ierarc"y o !o#s and evolves a graduated wage scale or employees.
&. It is useul or introducing a satisactory, rational and #alanced wage structure in an
organiGation. It is also useul or simpliying wage administration.
'. It promotes employees goodwill, strengt"ens and maintains "ig" morale and loyalty
o wor%ers and also provides incentives or raising eiciency.
5. It provides a scientiic #ase or promotions and transers o wor%ers in an
organiGation.
8. It avoids in!ustice to wor%ers as regards wage payment, promotions and transers.
7. It simpliies wage administration and acilitates merit rating and training
programmes or employees.
/. It removes grievances and disputes among employees over relative wages and
ma%es t"e wage system accepta#le to all employees.
5*
'o%,e"aluation (ro#ram in"ol"es ans<erin# se"eral Buestions
The major ones are:
/0 1;ic; 'o%s are to %e e"aluate*C
30 1;o s;oul* e"aluate t;e 'o%sC
40 1;at trainin# *oes t;e e"aluation nee*C
50 Ho< muc; time is in"ol"e*C
D0 1;at s;oul* %e t;e criteria )or e"aluationC
E0 1;at met;o*s o) e"aluation are to %e em(lo+e*C
-"ic" !o#s are to #e evaluated in any e7ercise, w"ere t"ere are more t"an &* or '*
!o#s to #e evaluated, it is necessary to identiy and select a sample o #enc"mar% !o#s,
w"ic" can #e used or comparisons inside and outside t"e organisation. T"e
#enc"mar% !o#s s"ould #e so selected to ac"ieve representative sample o eac" o t"e
main levels o !o#s in eac" o t"e principal occupations.
T"e siGe o t"e sample depends on t"e num#er o dierent !o#s to #e covered. It is
li%ely to #e less t"an a#out ive percent o t"e total num#er o employees in t"e
organiGation and it would #e diicult to produce a #alanced sample unless at least )5
percent o t"e distinct !o#s at eac" level o t"e organiGation were included.
51
Princi(les o) $o% E"aluation
Clearly deined and identiia#le !o#s must e7ist. T"ese !o#s will #e
accurately descri#ed in an agreed !o# description.
$ll !o#s in an organisation will #e evaluated using an agreed !o#
evaluation sc"eme.
1o# evaluators will need to gain a t"oroug" understanding o t"e !o#
1o# evaluation is concerned wit" !o#s, not people. It is not t"e person
t"at is #eing evaluated.
T"e !o# is assessed as i it were #eing carried out in a ully
competent and accepta#le manner.
1o# evaluation is #ased on !udgement and is not scientiic. >owever
i applied correctly it can ena#le o#!ective !udgements to #e made.
It is possi#le to ma%e a !udgement a#out a !o#@s contri#ution relative
to ot"er !o#s in an organisation.
T"e real test o t"e evaluation results is t"eir accepta#ility to all
participants.
1o# evaluation can aid organisational pro#lem solving as it "ig"lig"ts
duplication o tas%s and gaps #etween !o#s and unctions.
5)
O%'ecti"e o) $o% E"aluation
13 To gat"er data and inormation relating to !o# description, !o# speciication
and employee speciications or various !o#s in an organiGation.
)3 To compare t"e duties, responsi#ilities and demands o a !o# wit" t"at o
ot"er !o#s.
&3 To determine t"e "ierarc"y and place o various !o#s in an organiGation.
'3 To determine t"e ran%s or grades o various !o#s.
53 To ensure air and eIuita#le wages on t"e #asis o relative wort" or value o
!o#s. In ot"er words eIual wages are i7ed to t"e !o#s o eIual wort" or value.
83 To minimiGe wage discrimination #ased on se7, age, caste, region, religion
etc.
5&
1o# ;valuation Process
T;e 'o%,e"aluation (rocess starts *e)inin# o%'ecti"es o) e"aluation an*
en*s <it; esta%lis;in# <a#e an* salar+ *i))erentials0
T"e main o#!ective o !o# evaluation, as was stated earlier, is to esta#lis"
satisactory wage and salary dierentials. 1o# analysis s"ould precede t"e
actual program o evaluation. 1o# analysis, as was discussed earlier, provides
!o#Arelated data, w"ic" would #e useul in drating !o# description and !o#
speciication.
5'
Met;o*s o) $o% E"aluation
1o#Aevaluation met"ods are o two categoriesA$nalytical and Non $nalytical
/0 THE RNFIN! OR !RDIN! METHOD.
T"is met"od is considered to #e t"e simplest and t"e last ormal o all t"e !o#
evaluation met"ods. >ere t"e aim is to !udge t"e !o# as a w"ole and determine its
relative value #y ran%ing one w"ole !o# as against anot"er w"ole !o#. ?nder t"is
met"od, t"e !o#s are arranged in order to t"eir importance wit" t"e most important
!o# at t"e "ig"est end and t"e least important !o# at t"e lowest end. T"e remaining
!o#s are arranged as per t"eir relative importance t"roug" suita#le evaluation
tec"niIues. T"e ran%ing is conducted t"roug" a committee o e7perts !o# raters.
T"e committee is supplied wit" t"e necessary inormation 0!o# description and !o#
speciication3 or t"e ran%ing o availa#le !o#s. T"e ran%ing is done at t"e
departmental level and or every department, t"e !o#s are ran%ed I order o
55
importance. T"is creates a "ierarc"y o !o#s wit"in t"e department. In t"is met"od
w"ic" is non analytical, t"e ran%ing o !o#s is #ased on t"e nature and importance
o t"e !o#, responsi#ilities involved, Iualities and Iualiications reIuired and t"e
wor%ing conditions connected wit" t"e !o#.
*"anta#es.
1. <implicity A it is easily understood to all t"e concerned and also to operate5
administer.
). It is ine7pensive.
'. It can #e used conveniently in small esta#lis"ments.
Disa*"anta#es.
1. It does not indicate t"e degree o dierence #etween t"e !o#s. It merely s"ows
t"at one !o# is more or less important t"an ot"er !o#.
). In most cases, t"e ran%ings are not #ased on !o# description #ut on t"e raters
general %nowledge o t"e !o#s.
&. It is comple7 or a large irm wit" a comple7 organiGation structure.
30 THE FCTOR COMPRISON OR 1EI!HT IN MONEY METHOD.
It is an analytical met"od. T"e rating process consists o delineation o common
%ey actors o dierent !o#s and assessment o monetary values t"ereto wit" a
view to assessing t"eir relative wort" on t"e #asis o sum total o t"e monetary
values. 1o# description provides t"e data reIuired or indicating t"e ma!or !o#
elements or actors ound in greater or lesser degree in t"e activities o t"e entire
58
enterprise.
It is a Iualitative met"od o !o# rating involving complicated procedure. $s a
result, t"e services o e7perts are reIuired or actual !o# rating.
T"is met"od #egins #y selecting t"e crucial or critical components or elements
c"aracteriGing t"e #usiness operations o t"e irm. In ot"er words, a sc"edule o
!o# actors is drawn up #y careul analysis o t"e operations.
T"e actors under t"is met"od areR
1. .ental reIuirements
). <%ill reIuirements
&. P"ysical reIuirements
'. :esponsi#ility range
5. -or%ing conditions.
$ter t"e %ey elements are selected or analyGing t"e !o#s, t"e weig"ts are applied tot
!o# elements. $ssessment o weig"ts is done #y an e7pert committee. $s per suc"
weig"ts, t"e !o#s are ran%ed. $ monetary value is assigned to eac" actor o all !o#s.
$ll t"ese values o individual !o#s are weig"ted and t"en t"e total value o eac" !o# is
arrived at or is readily availa#le.
$dvantagesR
1. It is more accurate and systematic t"an t"e simple ran%ing met"od. T"e dissimilar
!o#s can #e rated on t"e #asis o common actors.
57
). T"e services o e7perts are used and t"is ma%es t"e system realistic and accurate.
BisadvantagesR
1. It is complicated, e7pensive, la#orious and not easily e7plaina#le to employees.
). $pplication o weig"tages and monetary values may involve t"e #ias o e7perts.
&. T"is met"od is diicult to install and is not used e7tensively.
40 THE POINT RTIN! METHOD.
T"is met"od is one popular and e7tensively used met"od o !o# evaluation. In t"is
met"od, eac" !o# is evaluated separately, appraising eac" o t"e actors suc" as s%ill,
eort, responsi#ility and wor%ing conditions and com#ining t"e separate evaluations
into a single point score or eac" !o#.
In t"is met"od a series o rating scales is constructed one or eac" o t"e actors w"ic"
"ave #een selected as important in t"e wor% o t"e position. $ certain num#er o
points are allowed or eac" scale. In t"is way, dierences among !o#s are relected in
t"e dierent values w"ic" are assigned to t"e actors. =y t"e use o point rating
met"od, eac" !o# is reduced to a numerical value so t"at similarity and dierences in
wor% and diiculty are discovered.
*"anta#es.
1. T"is met"od is analytical in its approac".
). It gives a Iuantitative value or eac" !o#. T"is ma%es it easy to e7plain to a wor%er
w"o "as some dou#t in "is mind a#out t"e a#solute and relative wages i7ed or "is
!o#.
5/
&. T"e outstanding eature o t"is met"od is t"e use o a manual. =asis and guidelines
o valuation are standardiGed #y e7perts and are codiied in t"is manual.
Limitations.
1. T"is met"od may suer rom ineIuities i listing and weig"ting o points are
deective due to indierence on t"e part o rater.
). T"e manual used or ran%ing t"e !o#s needs periodical revision. I not revised it
may #ecome outmoded and evaluation #ased t"ereon would #e out o tune wit" t"e
c"anged trends.
&. It is diicult or application and may prove to #e unintelligi#le to t"e wor%ers.
Points Ratin# is t"e most commonly used met"od. T"e %ey elements o eac" !o#,
w"ic" are %nown as @actors@, are identiied #y t"e organisation and t"en #ro%en down
into components. ;ac" actor is assessed separately and points allocated according to
t"e level needed or t"e !o#. T"e more demanding t"e !o#, t"e "ig"er t"e points value.
+actors usually assessed includeR
59
NLYSIS OF NTPC
HRM POLICY !OLS
1. Strategic integration
T"ere "ave #een steps ta%en to integrate >:. strategy in t"e dierent unctions o
t"e organisation.
2. Commitment
People are eicient and committed to t"eir wor%.
3.Flexibility and Adaptability
NTPC is a #ureaucratic organisation and "as a mec"anistic structure w"ere t"e power
still lies wit" t"e top management.
4. !ality
T"ere are stringent met"ods o Iuality c"ec% up and no compromises are made
regarding t"e Iuality, w"ic" gives NTPC a competitive advantage over its competitors
li%e =<;< etc. NTPC strives to provide a good wor% environment to its employees.
8*
CRITICL NLYSIS OF NTPC :SIN! RELEVNT CONCEPT:L
FRME1ORF
Or#anisation Pro)ile
NTPC, t"e largest t"ermal power utility in t"e country "as realised t"e need o t"e
"our and is e7panding its capacity. NTPC is a "ig"ly successul company, w"ic" is
among t"e largest power utilities in t"e world. =ut t"e company is acing sti
competition rom =<;< and is li%ely to ace muc" more sti competition rom t"e
glo#al players in t"e uture as t"ey are investing in Indian power sector 0PrivatiGation
o power sector3 and soon will #e in t"e scene.
To compete wit" t"e glo#al players and to #ecome a ma!or glo#al player in t"e power
industry worldAwide, NTPC *ela+ere* itsel) in />>=& a ma'or restructurin#
initiati"e ta2en %+ t;e or#anisation 7on t;e %asis o) t;e committee consistin# o)
IIM ;me*a%a* consultants an* some retire* NTPC Hi#;er ran2e* o))icials8& so
as to %e more )le-i%le an* res(onsi"e to t;e en"ironment w"ic" "as #roug"t in
many c"anges to t"e company in terms o its unctions and ma!orly in its "uman
resource unction.
In order to critically analyse t"e company, t"e model developed #y Tei"y, +orum and
Bevanna, 019/73 o strategy management and environmental pressures can #e a
"elpul tool.
81
8)
Political forces
Economic
forces
Mission
& strategy
Organisationstr
ucture
Human
resource
management
Cultural forces
Firm
MISSION ND STRTE!Y
$ter t"e restructuring o t"e company t"e corporate mission o NTPC is to ma%e
availa#le relia#le and Iuality power in increasingly large Iuantities. To ac"ieve t"is,
t"e company is accelerating development o t"e power sector #y planning and
e7peditiously implementing power pro!ects and operating power stations
economically and eiciently. $long wit" t"is, t"e company is also see%ing
opportunities or augmenting power generation t"roug" tieAups wit" ot"er
organisation in t"e area o conventional energy sources.
Or#anisation Structure
NTPC a)ter t;e *ela+erin# ;as a*o(te* a t;ree tier structure, w"ic" provides
decentralisation o line responsi#ility w"ile retaining centralised systems in areas
suc" as engineering, contracting o "ig" value pac%ages, coAordination wit"
inancing agencies.
T"ere is tall "ierarc"y or controlling 4 directing.
$s ar as t"e structure o NTPC is concerned, it is still a =ureaucratic
Krganisation 5 .ec"anistic <tructure 0=urns and <tal%er3 in its unctioning.
Human Resource Mana#ement
$ter t"e restructuring also, NTPC still unctions on t"e lines o #ureaucracy, i.e.
wor%s on set and speciied rules, t"us, t"e s"ortest o procedures ta%es longest o time,
as it is processed t"roug" a long ormal c"annel. T"is wastes a lot o time and money
o t"e organisation, w"ic" results into an overall loss or t"e company.
8&
$ter t"e restructuring NTPC now "as plans to grow at a rapid speed, #ut t"e
perormance appraisal and reward system o t"e company are not upto t"e mar% and
needs enric"ment so as to increase t"e eiciency o its employees.
NTPC #elieves t"at an ;mployee is motivated to e7ert a "ig" level o eort, w"en "e
or s"e #elieves eort will lead to a good perormance appraisal, a good appraisal will
lead to organisational reward 0Promotion in NTPC@s case3 and t"e reward will satisy
employees personal goals.
Hence NTPC )ocuses on.
E))ort (er)ormance relations;i(G T"e pro#a#ility perceived #y individual
t"at e7erting agiven amount o eort would lead to perormance.
Per)ormance re<ar* relations;i(. T"e degree to w"ic" t"e individual
#elieves t"at perorming at a particular level will lead to t"e attainment o a
desired outcome.
Re<ar*s (ersonal #oals relations;i(G T"e degree to w"ic" organiGational
rewards satisy as individual@s personal goals or needs and t"e attractiveness o
t"ose potential rewards or t"e individual.
Conclusion.
$ter t"e restructuring t"e company #ecame uturistic, #ut t"e organisation was not
a#le to manage t"e c"ange to its ullest in t"e organisation. T"us, t"e new mission o
NTPC does not matc" wit" its organisation structure. T"e structure o NTPC does not
seem to support t"e organisation in t"e uture #ecause o tur#ulence and uncertainties
in t"e environment. T"us t"e "uman resource needs to #e eiciently managed.
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;ssentials or t"e success o a 1o# ;valuation Programme
Follo<in# are t;e essential )or t;e success o) $o% E"aluationR
1. Compensa#le actors s"ould represent all o t"e ma!or aspects o !o# content.
Com(ensa%le )actors selecte* s;oul*R
W $void e7cessive overlapping or duplication,
W =e deina#le and measura#le,
W =e easily understood #y employees and administrators,
W Not cause e7cessive installation or admin cost and
W =e selected wit" legal considerations in mind.
). Kperating managers s"ould #e convinced a#out t"e tec"niIues and programme
o evaluation. T"ey s"ould also #e trained in i7ing and revising t"e wages
#ased on !o# evaluation
&. $ll t"e employees s"ould #e provided wit" complete inormation a#out !o#
;valuation tec"niIues and programme.
'. $ll groups and grades o employees s"ould #e covered #y t"e !o# evaluation
D0 T;e results o) 'o% e"aluation must %e )air an* rational an* un%iase* to
t;e in*i"i*uals %ein# a))ects0
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>ow To Improve 1o# ;valuation
Follo<in# measures an* ste(s )or im(ro"in# t;e <or2 o) e"aluation
(ro#rammesU
W $ !o# evaluation sc"eme s"ould #e c"osen cautiously. It s"ould #e devised and
administered on t"e #asis o employment mar%et, demand or la#our, #argaining
power o t"e parties 4 !o# conditions.
W T"e details o t"e sc"eme s"ould #e drawn up in suc" a way t"at t"ey do not
conlict wit" ot"er provision o a collective agreement.
W T"e sc"eme s"ould #e sold to all concerned and suggestions soug"t.
W ,ive ma!or importance t"at t"e num#er o !o# titles and classiication #e %ept to
a minimum.
W $ny anticipated c"anges in met"ods s"ould #e carried out #eore a sc"eme is
installed and all modiications in it s"ould #e resisted until it #ecomes ully
esta#lis"ed.
W In preparing !o# descriptions it is a sound practice to emp"asis in t"em t"e t"ings
w"ic" ma%es one !o# dierent rom anot"er rat"er t"an to ind a compre"ensive
statement o all t"e duties o t"e !o#.
W T"e #etter t"e state o industrial relations t"e easier it is to introduce a !o#
evaluation sc"eme.
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1o# ;valuation O 1o# <atisaction
T"e dierences in t"e rates paid or dierent !o#s and s%ills aect t"e a#ility
o managers to ac"ieve t"eir #usiness o#!ectives.
Bierences in pay matter. T"ey matter to employees, #ecause t"eir
willingness to ta%e on more responsi#ility and training, to ocus on adding
value or customers and improving Iuality o products, and to #e le7i#le
enoug" to adapt to c"ange all depend at least in part on "ow pay is structured
or dierent levels o wor%.
Bierences in t"e rates paid or dierent !o#s and s%ills also inluences "ow
airly employees #elieve t"ey are #eing treated. ?nair treatment is ultimately
counterproductive.
No matter "ow !o# evaluation is designed, its ultimate use is to "elp design
and manage wor% related, #usinessAocused, and agreedAupon pay structure.
1o# ;valuation A T"e +uture
$s organisations constantly evolve and new organisations emerge t"ere will #e
c"allenges to e7isting principles o !o# evaluation. -"et"er e7isting !o# evaluation
tec"niIues and accompanying sc"emes remain relevant in a aster moving and
constantly c"anging world, w"ere new !o#s and roles are invented on a regular #asis,
remains to #e seen. T"e ormal points systems, used #y so many organisations are
oten already seen to #e inle7i#le. <tic%ing rigidly to an e7isting sc"eme may impose
#arriers to c"ange. Constantly updating and writing new !o#s toget"er wit" t"e time
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t"at "as to #e spent administering t"e !o# evaluation sc"emes may #ecome too
cum#ersome and time consuming or t"e #eneits t"at are derived.
Boes t"is mean t"at we will see e7isting sc"emes a#andoned or let to all into
disreputeY -ill providers o !o# evaluation sc"emes e7amine and, w"ere necessary,
modiy t"em to ensure t"ey are up to date and relevantY <imply stic%ing rigidly to
w"at is already in place may not #e enoug" to ensure t"eir survival.
8/
BIBLIO!RPHY
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0eaviour,Pg#!+&('1!%
BecenGo 4 :o##ins Personnel 2 Human Resource Management%
<tep"en P. :o##ins
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?dai Paree%, T.2. :ao, B...
Peston!ee
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