Personnel Administration 1

III Semester Assignment

PERSONNEL ADMINISTRATION
INDEX
Part A:
Question 1:.....................................................................................................................................2
What is meant by Quality of Work Life (QWL)? What does the human resources
manager play in contributing to the QWL of employees?...............................................................2
Question 2:.....................................................................................................................................3
What is the difference between Job Design and Job Analysis? Which requires greater skill to do
effectively?.....................................................................................................................................3
Question 3:.....................................................................................................................................5
Describe some common rating errors in performance appraisal. How does the personal bias of the
appraiser affect performance appraisal?..........................................................................................5
Question 4:.....................................................................................................................................7
What is management by objectives? What are its advantages and disadvantages?.........................7
Question 5:.....................................................................................................................................8
How does long-term career development of employees help an organisation? ..............................8
What are the different phases in the career of an employee?..........................................................8
Question 6:...................................................................................................................................11
What are the components of an effective compensation system? How is an underpaid employee
likely to behave?...........................................................................................................................11
Question 7:...................................................................................................................................13
Why is orientation so essential for a new employee? How would you ensure that a training
program is well designed?............................................................................................................13
Question 1:...................................................................................................................................16
How can conflict be avoided in an organisation? What is the difference between arbitration and
Mediation?....................................................................................................................................16
Question 2:...................................................................................................................................20
What are the key elements in the disciplinary process?................................................................20
Question 3:...................................................................................................................................23
Describe briefly the various laws pertaining to employee’s compensation and benefits...............23

Part – A

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Question 1:
What is meant by Quality of Work Life (QWL)? What does the human resources
manager play in contributing to the QWL of employees?
The best way of approaching quality of Work life measurement is to measure the extent to which
people’s ‘happiness requirements’ are met – i.e. those requirements which are a necessary
(although not sufficient) condition of anyone’s happiness - those ‘without which no member of
the human race can be happy.’
Definition of quality of Work life is: The degree to which a person enjoys the important
possibilities of his/her life. Possibilities result from the opportunities and limitations each person
has in his/her life and reflect the interaction of personal and environmental factors. Enjoyment
has two components: the experience of satisfaction and the possession or achievement of some
characteristic, as illustrated by the expression: “She enjoys good health.” Three major life
domains are identified: Being, Belonging, and Becoming. The conceptualization of Being,
Belonging, and Becoming as the domains of quality of life were developed from the insights of
various writers.

The Being domain includes the
basic aspects of “who one is” and
has three sub-domains. Physical
Being includes aspects of
physical health, personal
hygiene, nutrition, exercise,
grooming, clothing, and physical
appearance. Psychological Being
includes the person’s
psychological health and
adjustment, cognitions, feelings,
and evaluations concerning the
self, and self-control. Spiritual
Being reflects personal values,
personal standards of conduct,
and spiritual beliefs which may
or may not be associated with
organized religions.
Belonging includes the person’s fit
with his/her environments and also
has three sub-domains. Physical
Belonging is defined as the
connections the person has with
his/her physical environments such
as home, workplace, neighbourhood,
school and community. Social
Belonging includes links with social
environments and includes the sense
of acceptance by intimate others,
family, friends, co-workers, and
neighbourhood and community.
Community Belonging represents
access to resources normally
available to community members,
such as adequate income, health and
social services, employment,
educational and recreational
programs, and community activities.
Becoming refers to the
purposeful activities carried out
to achieve personal goals,
hopes, and wishes. Practical
Becoming describes day-to-day
actions such as domestic
activities, paid work, school or
volunteer activities, and seeing
to health or social needs.
Leisure Becoming includes
activities that promote
relaxation and stress reduction.
These include card games,
neighbourhood walks, and
family visits, or longer duration
activities such as vacations or
holidays. Growth Becoming
activities promote the
improvement or maintenance of
knowledge and skills.

One of the most common methods used to create Quality of Work Life is employee involvement.
Employee involvement consists of a variety of systematic methods that empower employees to
participate in decisions that affect them and their relationship with the organisation.
Role of human resource manager in contributing to the QWL of the employees.
 Organisational Democracy
 Create an organisation culture that treats people as though they are experts at their jobs
empower them to use their expertise.

Quality Circles:
Quality circles are small groups which meet regularly with their leader to identify ad solve work
related problems.
Ergonomics:

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Ergonomics is the study of the biotechnical relationship between the physical attributes of
workers and physical demands of the job. The objective is to reduce physical and mental strain in
order to increase productivity and QWL.
Socio-technical Systems:
Socio-technical systems are interventions in the work situation that restructure work, work groups
and relationships between workers and technologies adopted to perform their jobs. More than
enlarging or enriching a job these approaches may result in more radical changes in the work
environment. These changes reduce boredom on the job by rotating employee around the jobs and
providing opportunities for socializing by working in teams.
Quality in work is important for individuals, but also for growth, employment and a sustainable
and competitive economy.
Quality in work is important for individuals, but also for growth, employment and a sustainable
and competitive economy.
Diversity is above all about respect for fundamental human rights. The competence of all persons
must be used, regardless of sex, age, ethnicity, disability or sexual orientation. This is important
also from a growth perspective.
 We must have a working life that is sustainable in the long run and that creates more and
better jobs. Everybody must also have the possibility to remain in work for a longer time
than today. Working conditions must permit this, and this involves paying attention not
only to the work environment, but also to competence development/life-long learning,
equality, and influence.
 Flexibility must be combined with security, influence, mobility, safety and learning at
work. The employees must be able to influence their own work and working time, work
organisation and work content.
 Psychosocial work environment problems, like stress and burn-out, are growing, while
many traditional work environment problems remain. Prevention must be better. The cost
of ill health is enormous in the European Union, and the bill is paid by society,
enterprises and individuals.
In the future it will be necessary to motivate enterprises to take more responsibility concerning
quality in work. The problem for the employers is not always lack of resources or will, but
finding the right tools and methods. Quality in work must be seen as profitable for all in the long
run.
Question 2:
What is the difference between Job Design and Job Analysis? Which requires greater skill
to do effectively?
Job analysis:
Job analysis provides information on:
 Educational qualifications, training, experience, skills, traits, attitudes
required to perform the job:
Through the process of job analysis all activities required to perform a job are identified. This list
of activities provides guidelines for the kind of educational qualifications, experience and training
required to perform the job.
 Structure and design of job to make it meaningful and enhance job holders
performance :
This is to ensure that the job is a meaningful whole, all tasks required for its performance need to
be grouped together. Job analysis provides this information which helps in designing the job
logically.
 Plans for future resources requirements and career planning:
Job analysis indicates the skills of the human resources in the organisation processes.
When the organisation plans for expansion, growth or diversification skill
requirements would change. Job analysis also provides information on future jobs.
With this it would be

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 Placement of the right person on the right job to utilize skills optimally:
Since the job analysis indicates the skills required for a job, it facilitates identification
of the right people within the organisation to perform the job. Hence it is possible to
match available skills with the job requirements and utilize human resource
optimally.
 Setting up performance standards:
Job analysis indicates the activities required to perform a job and achieve its
objectives. These activities when performed enable accomplishment of measurable
goals and targets.
Job Design
Once the job analysis has been conducted, the organisation has clearly defined the job description
and job specifications. The organisation uses this information to design or re-design jobs. Similar
duties and tasks are grouped together to design meaningful jobs. This result in achievement of
optimal performance and satisfaction, it is also necessary to align the competencies of the job
holder with the requirements of the job. Jobs are assessed and the skills required to perform them
are determined. The skill deficiency provides the basis for training and redeployment. These are
the three other elements that have an impact on the design of the job: Organisational,
Environmental and Behavioral.
Organisational Element: This is concerned with efficiency. Efficiency designed jobs allow
motivated and capable workers to achieve maximum output.
Environmental Elements: This must be considered in designing a job. These are the ability of
existing employees, requirements of potential employees and their social expectations. Jobs
should be designed in such a way that they fully utilise the abilities of the workforce. If the design
of the job does not offer the Quality of Work Life that an employee aspires for, the job would
create dissatisfaction and low motivation.
Behavioral Elements: While designing jobs with elements that aid efficiency, the human needs
of the persons performing the job have also to be taken into consideration. People with a strong
desire to satisfy higher order needs perform best when jobs are high on dimensions of:
Autonomy : Responsibility for work.
Variety : Use of different skills and abilities.
Task Identity : Responsibility for the whole piece of work
Feedback : Information on performance.
Task Significance : Significance of task to people within and outside the organisation.

Steps in job analysis:

Determination of how each job fits into the total organisation through organisation
structure and process charts:
Before any job analysis process it is necessary to understand the organisation structure, like
placement of the people within the organisation and reporting relationships. Also various
processes like manufacturing, marketing and finance and other relationships should be
understood.
Determination of how the job analysis information will be used:
Job analysis data may be used for a variety of purposes. Job analysis may be necessary if:
 Jobs are not clearly defined.
 Jobs are not logically grouped together.
 Reporting relationships are not clear.
 There is an overlap in responsibilities.
 Jobs with the same or similar responsibility are not placed the same grade and hence
salary scale.

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Select jobs to be analysed since analyzing all jobs is time consuming and expensive.
Not all jobs are equally critical; some may not be appropriately graded and scaled. Only those
jobs which are critical to the functioning and those requiring correction need be taken up for
study and analysis.
Prepare questionnaire and gather data on the job including characteristics of the job and
abilities and behaviour required of the person performing the job.
It is necessary to discuss the job content with the job holder and his immediate supervisor. This
will provide data on the job as the jobholder is performing it at present as well as the supervisor’s
expectations from the jobholder. Based on the type of activities the job holder has to perform the
skills, Training, Aptitude and Behavioural requirements can be defined. Hence a standardised
questionnaire can be prepared to collect data on all aspects of the job and its requirements.
Prepare job descriptions and job specifications:
The data collected from the employees holding the jobs that need to be analysed should be
discussed with department heads and one or two other senior managers so that the job, as it
should be ideally performed, can be defined. The job content can then be suitably modified and
job descriptions and job specifications prepared.

Application of job analysis:

Job descriptions preparation
Job specification preparation
Development of key result areas (KRA’s)
Design of training programmes.
Development of compensation structure
Strategic planning.

Conclusion:
Comparing the above two elements – Job analysis and Job design, we can conclude that Job
design requires greater skill to do effectively. To perform the job design effectively, certain
techniques are required to be adhered to. They are:-

Techniques in job design:

Depending on the skills and abilities of employees available to perform a task, jobs may require
redesign. Some jobs are highly specialized whereas others are routine and repetitive.
Routine jobs: If a job is very specialized, experts like industrial engineers need to simplify the
work in a manner that the job becomes simple to perform. The advantage of under-specialisation
is that it can be done by employees with limited skills; the disadvantage is that boredom sets in
resulting in errors or even resignation.
Over specialisation: Such jobs do not provide opportunities for accomplishment, recognition or
psychological growth. To improve the quality of work-life for persons working on such jobs the
following is used:
 Job rotation:
 Job enlargement
 Job enrichment

Question 3:
Describe some common rating errors in performance appraisal. How does the personal bias
of the appraiser affect performance appraisal?

Rating errors in the appraisal system:

Performance appraisal is a formal, structured system that compares employee performance to
established standards. Assessment of job performance is shared with employees being appraised

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through one of several primary methods of performance appraisals. Elements in performance
appraisal methods are tailored to the organization's employees, jobs, and structure. They include
objective criteria for measuring employee performance and ratings that summarize how well the
employee is doing. Successful appraisal methods have clearly defined and explicitly
communicated standards or expectations of employee performance on the job.

Most performance appraisal systems are based upon an assessment of the past. While it is
much easier to assess the past than the future, viewing the performance appraisal as a control and
maintenance system does little to realise future performance improvement. A consideration of
future potential, opportunities and development needs is an essential planning aid for both
organisations and individuals in the context of rapid change and the need for a high degree of
flexibility. Future performance improvement needs organisational investment in development but
this, together with succession planning, is often very poorly managed if at all.

There are advantages and disadvantages of all appraisal systems. Sometimes the problem is not
with the technique but with how it is used and by whom. The problem with subjective methods is
the bias of the rater. Some common biases:
Halo Effect: This occurs when the rater’s personal opinion of the employee affects his
assessment. Halo error can either be positive or negative, meaning that the initial impression of
the employee towards the employer (Higher official) could cause the rating to be either too high
or low.
Leniency or Strictness effect: When raters tend to be easy in their evaluation, it is called leniency
effect. On the other hand there are some raters who see all performers as poor. This is called as
strictness effect.
Central Tendency Effect: Some raters prefer to avoid high or low ratings ad assign average
ratings to all the subordinates. This fails to discriminate between the people in the same
department and is therefore of little use for decisions.
Recency Effect: Raters often tend to forget past behaviours but remember the actions of recent
occurrence. Some appraisees use this tendency among their appraisers to be more visible nearer
the time of assessment, particularly if the date of assessment is known.
Contrast Error: At times appraisers let one person’s appraisal affect that of the next person. This
happens particularly in situations where an average performer is evaluated immediately after an
outstanding performer in which case average performer may get rated as a poor one.
Personal Prejudice: Personal biases occur due to prejudice against a group or class of people.
Sometimes appraisers give higher rating to persons who have qualities or characteristics similar
to their own or liked by them. Sometimes such appraisers rate the persons they like most the
higher and the one they do not appreciate much the least.
Perceptual Set: There is at times a tendency among the raters to see what they want to see or
expect to see and their assessment is affected by this attitude.

Personal bias of the appraiser affects the Performance appraisal:

“Personal biases occur due to prejudice against a group or class of people. Sometimes appraisers
give higher rating to persons who have qualities or characteristics similar to their own or liked by
them. Sometimes such appraisers rate the persons they like most the higher and the one they do
not appreciate much the least”

The above information was discussed above in brief. Now an elaborate explanation to such an
action in Appraisal System.

Example:
Consider 10 employees supervised by an official “O”. Same level of task is rendered to each
subordinate. But among the 10 subordinates, an employee could be an above average performer,

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who has the capability of finishing a task in a shorter time than the rest, and takes over more
responsibilities. While another subordinate may be a below average performer, who has the
ability to just manage his responsibilities, also taking longer time to live up those responsibility.
Given such a situation there are two possibilities of a Biased Appraisal by the superior:
(a) The Rater himself could be an average performer; hence he may consider the average
performer as ideal and may perceive the above average performer as the one who does
his tasks to out-prove than the rest. This may cause the rating of the better performer to
drop down. This kind of bias is profitable to an average performer.
(b) The Rater may be a Good performer; hence he may appreciate the above average
performer as ideal and of great asset, while he may perceive the low performing
employee not as an asset to the organisation. This kind of Bias will be unprofitable to the
poor performer.

Also sometimes there occurs a case where certain persons are liked by the superior for various
reasons such as common likes, similar background or college, similar caste or creed or religion.
Such discrimination in the thought of the appraiser also leads to Personal Bias.

Also there are cases where in the appraisee has complained against his superior sometime in the
past. This history could affect the appraisee since the appraiser may have biased opinions about
him/her and despite good performance the appraisee may result in poor rating.

Such Situations are often seen in large organisation where the number of subordinates under a
single man is many (10 or more). In such cases there may be a tendency by the superiors to form
an opinion and also likes and dislikes among people. This sometimes acts a bonus for the future
growth of an individual under this superiors’ guidance and for some it turns out to be their BAD
LUCK.

Often noticed in a BPO or an IT firm where the number of subordinates under a superior is many.
A performer though being able to show better competency fails in his overall rating to “Personal
Prejudice”. On the other hand a poor performer may attain higher rating due to him being liked
by his superior.

Hence The Ideal Appraisal System opted by an organisation should be chosen in such a way that
it accommodates all the various factors and avoid the common rating errors that can take place.
Such Systems can create an Employee friendly Environment and also reduce the rate of
employee-employer misconceptions and improve the relationship in their work environment. This
also enables the Fruitful growth of a person within the organisation and reduces the risk of
attrition to the organisation.

Question 4:
What is management by objectives? What are its advantages and disadvantages?
It is all too easy for managers to fail to outline, and agree with their employees, what it is that
everyone is trying to achieve. MBO substitutes for good intentions a process that requires rather
precise written description of objectives (for the period ahead) and time-lines for their monitoring
and achievement. The process requires that the manager and the employee agree to what the
employee will attempt to achieve in the period ahead, and (very important) that the employee
accept and buy into the objectives (otherwise commitment will be lacking).
For example, whatever else a manager and employee may discuss and agree in their regular
discussions, let us suppose that they feel that it will be sensible to introduce a key performance
indicator to show the development of sales revenue in a part of the firm. Then the manager and
the employee need to discuss what is being planned, what the time-schedule is and what the

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indicator might or might not be. Thereafter the two of them should liaise to ensure that the
objective is being attended to and will be delivered on time.
Organisations have scarce resources and so it is incumbent on the managers to consider the level
of resourcing but also to consider whether the objectives that are jointly agreed within the firm
are the right ones and represent the best allocation of effort.
In the traditional performance appraisal methods the appraiser has to rely entirely on his
judgment to assess the employee. Since a number of decisions are taken based on appraisal, it is
essential to make the system as objective as possible. The management by objectives approach
involves establishing performance goals jointly by the superior and subordinate. For this program
to be effective, both the superior and subordinate must e actively involved in the objective
formulation and agrees upon the methods to be used to assess performance.
MBO Principles
 Cascading of organizational goals and objectives.
 Specific objectives for each member.
 Participative decision making.
 Explicit time period.
 Performance evaluation and feedback.
The MBO program involves:
(i) Defining key tasks for the subordinate and setting a limited number of objectives.
(ii) Establishing criteria for evaluation of objectives.
(iii) Determining the dates for review of progress and making modification in the original
objective during the review, if necessary.
(iv) Having a final evaluation session for counseling and encouragement.
(v) Setting objectives for the next cycle.

Problems faced by the MBO program are:

 Too much paper work
 Setting too many objectives may create prioritization problems
 Difficult to establish measurable objectives for certain jobs.
 Too much emphasis on short term performance and losing sight of long-term objectives.
 May be used by some supervisors as a control devise that intimidates rather than
motivates subordinates.

Question 5:
How does long-term career development of employees help an organisation?
What are the different phases in the career of an employee?

Career planning:
An organisation’s success depends upon the availability of competent human resource. Without
an effective promotion and succession system the organisation will not be able to achieve its
strategic objectives.
Career planning involves matching an individual’s career aspirations with the opportunities
available in the organisation. Career development can be used as a focus on assuring an
alignment of individual career planning and organisational career management process in order to
achieve an optimal match of individual and organisational needs. At the heart of successful
human resource development -plans is the matching of the business strategies of the organisation
and the individual development needs.
The concept of Learning Organisation includes the same ideas of integration between business
development and human resource development, placing perhaps more emphasis on learning
within the organisation. The individual must identify his aspirations and abilities and understand
what training and development is required for a particular career path. The organisation must

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recognize its own needs and opportunities and through human resource planning provide career
information and training to its employees.
Career planning is a viable way to meet the organisation’s internal staffing requirements. When
the employers encourage the career planning, employees are also motivated to pursue further
education, training and other long term career development activities. They are:
Career Equity: Employees want to perceive equity in the organisation’s performance appraisal
and promotion system with respect to career advancement opportunities.
Supervisory concern: Employees expect their supervisors to play an active role in career
development and provide timely performance feedback.
Awareness of the career: Employees wish to know what career advancement and opportunities
are available within the organisation.
Career Development:
Career development provides a supply of talents and abilities. Individuals must be committed to
and accept responsibility for their career development. A number of actions prove useful in
career development. These are:
Job performance: Career progression depends largely on job performance, the better the
performance the higher the chances of going up the corporate ladder.
Resignations: When an individual sees career opportunities elsewhere which are not available in
the existing organisation, resignation may be the only alternative. When used to sparingly, It
results in promotion, salary increase and new learning experience.
Mentors: Mentors can aid career development by sharing their knowledge and insights and
wisdom to help junior managers.
Growth Opportunities: Individual can expand their abilities by enrolling for training programs
acquiring an additional degree, seeking new work assignments. When an opportunity arises in the
organisation, employees with the required skills would be placed in that position.
Advantages of career planning:
 Helps create and develop an internal pool of promotable employees.
 Reduces the turnover because the organisation’s interest in and concern for employees
results in higher employee loyalty.
 Taps employee potential by providing them with specific career goals.
 Motivates employees to grow and develop.
 Satisfies employees’ needs for recognition and accomplishment.
A CAREER PLANING PROCESS.

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Personal Individual
Individual
Counseling & Development
Needs
assessment Efforts.

Placement on
Matching Matching Career Path

Organisation Formal Trng.

Personnel Mktg.
needs and & Dev.
& Career Info.
opportunities Programs

Different phases in the career of an employee:

Most working people go through career stages and it has been found that individual’s needs and
expectations change as the individual moves through these stages.

Establishment Stage:
The first five stages of a career are termed as establishment stage where safety needs are the
highest. This is the beginning stage in the career of any person’s work-life. Here the focus is on
earning well to acquire assets a person believes are essential like Car, House, Furniture and
others.
Advancement Stage:
The advancement stage lasts from the age of 30-45. During this period the person’s safety needs
would have been largely satisfied. Hence there is considerably less concern for hygiene factors
like House, Car, etc, and the focus shifts to achievement, esteem and autonomy on the job.
Maintenance Stage:
During this period the gains of the past are consolidated. Since the individual has satisfied
psychological and financial needs, this phase is period pf creativity. The employee wishes to
satisfy his esteem and self-actualisation needs. However many people experience mid-career
crisis during this period. They do not achieve satisfaction from their work and may even
experience psychological discomfort.
Retirement Stage:
During this phase the individual completes one career and moves to another. The individual now
has the freedom to take on activities that he may have been interested in like gardening, social
work, teaching which were difficult to pursue while working.

Conclusion:
Employee career development cannot take place without support from the top management.
Commitment of top management is crucial. Employees also need to be given feedback about their
career development efforts. It is difficult for an employee to sustain years of preparation to reach

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career goals unless they receive feedback. Career development does not guarantee success but
without it employees would not be ready for a job when the opportunity arises.
Question 6:
What are the components of an effective compensation system? How is an underpaid
employee likely to behave?
Compensation is the reward an employee receives in exchange for performing the organisational
tasks. Compensation is Direct and Indirect.
 Direct compensations are Wages, Salaries, Bonuses or Commission.

 Indirect Compensation is Paid Leave, Insurance, Medical Benefits, Housing Allowance,

etc that are not a part of the direct compensation.

Components of effective compensation system:

Organisations have to have effective compensation policy to:
Acquire qualified personnel:
Compensation should be on par, if not better than prevailing industry rates in order to attract
qualified persons.
Retain present employees:
Employees quit if compensation levels are not competitive.
Ensure equity:
Compensation should ensure internal equity, i.e. compensation should be related to relative worth
of jobs. External equity should be maintained by paying wages similar to those paid to persons
performing similar tasks in other companies. Internal equity should be maintained by paying the
employees with similar responsibilities, qualifications and experience similar salaries.
Reward desired behavior:
Compensation should reinforce desired behavior through increments and rewards and act as an
incentive for the behavior to occur again. Similarly withholding increments for poor performance
will ensure that the employee puts in more efforts.
For example: Many organisations appreciate the employee effort though Thank you cards for the
effort they have put in for the month. This invokes a sense of healthy competition among
employees and a positive work spirit. Also the methods of “Star of the month” which rate the
productivity and efficiency enable measuring the employee efficiency.
Control Costs:
A rational compensation plan helps attract and retain employees at a reasonable cost. Without
proper structure the organisation may overpay or underpay the employees.

A compensation policy is effective if salaries and perquisites are:

Adequate: In line with what is paid in similar companies in the same geographical area.
Balanced: A reasonable combination of direct and indirect benefits
Cost effective: What the organisation can afford to pay.
Equitable: Commensurate with the effort put in and the ability used.
Incentive: Sufficient incentives are needed to motivate the employees to work effectively.
Secure: Sufficient to satisfy the employee’s basic need and make him feel secure
Factors affecting Compensation:
Supply and Demand:
The availability of people and the demand determine the “Going-Wage-Rate”. When the demand
is high and the availability low, salaries are high. When the availability exceeds the demand,
salaries are low.

Ability to pay:
If a company is doing well and has the ability to pay, the tendency is to raise the compensation
level. However if a company is highly successful, there is little need to pay far more than the

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competitive rates to obtain good personnel. The company may choose to pay above competitive
rate to attract the best availability in the industry.

Cost of living:
The cost of living index does not determine the base compensation. It indicates what the rate of
increase in salary should be to keep up with the inflation so that employees’ real wages do not
reduce.

Benefits:
Indirect benefits are employer provided rewards and services other than wages and salaries. These
benefits are provided for various reasons:
1. Keep wages and salaries low and hence obtain tax benefits
2. Make the salary package competitive to recruit and retain talent.
3. Act as motivators
4. Ensure long – term employment as some benefits are linked to time spent in an
organisation.
Some other indirect benefits that companies offer are:
Insurance: employees are insured by the company for accident, disability/death.
Medical benefits: medical benefits are provided to the employees by the company through
insurance.
Retirement benefits: retirement benefits like provident fund, gratuity, pension are provided for
retiring employees who have served for a long term.
Paid leave: Employees are given certain special leave like casual leave, privileged leave, medical
leave during which they receive their salary and full benefits. Certain number of days in a year
only is allotted for such benefits. Reimbursement for travel is also allotted in certain companies.
Other benefits: Benefits like assistance for housing, children education, marriage loans at low
interest are also provided. Other perks’ like telephone reimbursement etc are also some of the
benefits that certain organisation avails to the employees.

How is an underpaid employee likely to behave?

Compensation package is the biggest criteria for any employee to choose an organisation. If this
main factor is looked down, then there are many chances of losing a good employee.
Organisations must ensure that employees with certain qualifications and experience must be
given certain level of salaries, failing which; its repercussions will be noticed in his work. Certain
dominating behaviors of such employees are:
Poor performance: If correct level of compensation is not ensured, the first impact goes on the job
performed by the employee. The level of delivery reduces his interest in the job gets distracted.
Resignations: Underpaid employees start seeking job opportunities outside the organisation. If a
profitable offer is found then he resorts to resign from the current job and jumps to a better
organisation with better payment packages.
Other behaviors noticed in a unsatisfied/underpaid employee:
Dissentful attitude: The employee starts to dissent the work he performs and starts to withdraw
from all responsibilities.
Complaining: This is a very common behavior in such employees. The underpaid employee starts
complaining to his fellow colleagues and superiors about his dissatisfaction levels in pay scales.
Group influencing: The underpaid employee may start to form his set of groups and influence
them against effective production and affect the growth in the organisation.
Productivity: The highest affecting factor to the organisations will be the productivity which
would drop. This in-turn would affect organisations goals to be delivered per person.
Concentration: The employee loses his concentration in his job, becomes distracted and loses the
responsibility given to him and also the seriousness of is job.
Unprofessional: Common attitude noted in such employees are an unprofessional attitude. They
start fights within the organisation, create misunderstandings and very disturbed environment.
Conclusion:

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Thus an organisation whose outlook is an employee friendly environment, then the above factors
must be taken into account while deciding a compensation and benefit system and avoid the
attrition in the organisation.
Factors to ensure better compensation system:
1. Better wage Scale
2. Good appraisal system
3. Regularised promotion system
4. Good Bonus and Perquisites.
5. Better Direct and Indirect compensation packages.

Question 7:
Why is orientation so essential for a new employee? How would you ensure that a training
program is well designed?
Orientation (Induction):
The objective of orientation is to familiarize with the rules and regularizations of the
organisations and also the various heads and departments of the organisation. Its objective is also
to provide new recruit with information about organisation “Vision and Mission”.
This is the process of familiarisation with the organisation and settling into the job. It is easy to
forget that the selection process is only the beginning of the employment relationship, and the
future of that relationship depends to a considerable extent on how the new employee is settled
into the job. Most labour turnover is among new employees, and work efficiency is reached only
after a period of learning and adjusting to the new environment.

By planning an orientation programme, in consultation with trade union or other employee

representatives if available, the organisation can quickly build on the positive attitude of the
successful candidate. However keen new recruits may be, they may have anxieties about how
well they will:
• get on with their co-workers
• understand the standards and rules (written and unwritten) of the organisation
• make a good impression on their new manager or supervisor
• be able to do the job.

A good induction programme makes business sense, whatever the size of the organisation, and
whatever the job. It introduces the newcomer not only to their immediate colleagues, but to other
workers with whom they may have less day-to-day contact, including trade union representatives
(if they are recognised in the organisation) or employee representatives on any staff committee or
council.
Induction often begins before the person has actually started, in that the organisation will supply
material as part of an initial 'information pack', or with the invitation to interview, or with the
letter of job offer. This may be particularly important in jobs of a technical nature, where it is
helpful for the new starter to be as well informed as possible about that side of the work. Clearly,
learning the particular projects and initiatives will have to be done in the workplace but much
'mental preparedness' can be undertaken in advance. The Company Handbook, and the Written
Statement of Employment Particulars, can also provide essential information about the
organisation and the job.

A good reception, with the line or personnel manager spending time with the new employee, is
important on the first day. There may be further documentation to complete, perhaps a
preliminary discussion about training either immediately or in the future, an explanation of the
development opportunities that are available, and of course enough information to give the new
starter a good grasp of the working practices of the organisation. Any particular health and safety
requirements should be made known, together with details of whom to go to for help and advice

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during the course of their employment. Many companies use a 'buddy' system, where an
experienced worker is nominated to assist the new recruit in all the day-to-day questions that may
arise.

It is useful to have a written checklist of the items that need to be covered in the induction
programme; Not only does this give some structure to the induction but it also ensures that both
the new starter and the manager know what has or has not been covered at any given time. Such a
checklist is normally drawn up by the personnel section in consultation with other involved staff,
such as safety officers, line manager/supervisors, employee representatives (if appropriate), and
training officers.

The induction programme may be spread over several days or weeks, and may incorporate
specific job training, but the following points should be borne in mind:
• All employees need to be able to work in a safe and healthy manner. Recruitment and placement
procedures should ensure that employees (including managers) have the necessary physical and
mental abilities to do their jobs, or can acquire them through training and experience. Employers
should have systems in place to identify health and safety training needs arising from recruitment
• People can take in only so much information at any given time, and should not be overloaded. It
is important that health and safety is introduced in a structured way
• If there are special health and safety requirements, make sure the new starter fully understands
their importance - otherwise there is the risk of being exposed to unnecessary danger or
endangering their co-workers. All employees must know what to do in the event of a fire or other
emergency
• Setting out the plan of induction at the beginning avoids the problems that can arise in trying to
arrange time in the future, when the employee is established in the job
• Not to forget induction needs for shift workers or night workers. They may need some time on
days, or modified shifts, to cover the induction period
• Even if the induction period covers job training, try to let new starters do some practical work,
as this will assist their learning and enable them to relate what they are being taught to what they
will be doing.

The outcome of all this is that the new starter should have a good feel for the organisation, and
should continue to feel that they made the right decision in joining the firm.
Training:
In organisations dedicated to creating a learning environment, Training is accorded high priority.
In these days where technology requirements are changing so rapidly, acquiring new knowledge
in all fields has become mandatory. Any employee persevering to attain great heights in an
organisation must ensure that his level of knowledge is kept at par, or else he may lose in the race
of competition.
Advantages of Training:
• Exposed to new ideas.
• Expand their knowledge.
• Begin to look at their jobs critically and think differently
• May alter their behavior in desired ways.
Various types of Training:
• On the job training
• Job rotation
• Case method
• Role playing
• Management games
Assessment of Training needs:

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Training needs are assessed by analyzing the organisation’s need, the knowledge, skills and
ability required to perform a job and the jobholder’s skills and capabilities. The employees’ skills
and abilities are available in the skills inventory. Their training needs may be assessed by
identifying the gap between skills possessed by the employee and those required for the job.
Another source of information is employee’s supervisor. Performance appraisal also provides
data on the skills needed to be imparted to the employee.
PROCEDURE FOR TRAINING

Identify Training Needs

Specify Training Objectives

Determine Training Contents

E
Evaluation Design Training methods and appropriate
Media E
Of
Performance D
Program Input

Implementation of training Program

B

Program Output
C

Ensuring training has been well designed:

K
Evaluation of training:
Training and development programs are transformation process. Training may be evaluated by
comparing the results with the objectives set for the training programme. There are three criteria
to evaluate a training programme.
Internal: This is directly associated with the content of the training programme. The programme
is said to be successful if the participants have learnt the contents of the programme and acquired
skills and knowledge. This is known as Training Validity.
External: External criteria are related to the ultimate purpose of programme (Improve
effectiveness of the employee). If the knowledge, skills and abilities acquired through the training
programme result in better performance on the job, then it is known as Transfer Validity.

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Participant Reaction: If the participant liked the programme, assimilated the knowledge and skills
offered by the programme and were motivated to transfer their learning to the work situation,
then the programme may be assumed to be effective.
Conclusion:
Thus training can be ensured to be designed as per requirement and though various methods of
examination and evaluation, the method can be assessed effective or not. Each organisation
chooses various training strategy depending on their skill requirement and also assess the results
in various manner. Training needs to be evaluated, otherwise the net results will be of no use,
since the training would just remain a certificate in the hands of the trainee and no practical
purpose served.
Part-B
Question 1:
How can conflict be avoided in an organisation? What is the difference between arbitration
and Mediation?
Disagreements and conflicts are a part of the natural order of things. When various people
function together as a team, each person might possess his/her own ideas. Hence chances of idea
conflict and misunderstandings etc occur. In an organisation, employees and management have
divergent interests in how scarce resources may be allocated and this leads to grievances.
The HR department or the Personnel Department handles such issues and sorts out the
discrepancies and conflicts. While each supervisor deals with only problems occurring in his
department, the personnel executive has a company wide perspective of complaints and can
identify the types and causes of the problems. With this information the personnel department can
create formal procedures for problem solving.

Conflict Resolution:
The first step in conflict resolution is their discovery ad Exposure. For this, organisations set up
an upward channel of communication through which the voice of the employee may be heard.
Direct Observation:
Not all problems are expressed, but a good supervisor knows the customary behavior of his
subordinate. When a significant change occurs in his behaviour or work it may be assumed that
the employee has a problem.
Open Door Policy:
A formal open door procedure allows employees to discuss their problem with the supervisor and
then up the hierarchy to the highest level, if necessary. The policy sounds democratic, but
generally is defective since access to senior managers is not that easy and the subordinates will
not be comfortable.
Personnel Counselors:
At times an employee may not wish to go the superior with a problem. The company appoints
trained psychologists who act as counselors. Employees may discuss their problems with these
experts who would protect their identity.
Suggestion Boxes:
Companies can set up a suggestion boxes in which employees may write down their problems
and submit anonymously. Often employees are afraid to voice their concern because of fear of
retaliation by management, although this is not well-founded.
Exit Interview:
If the conflict or disagreement is so great that the employee resigns, the exit interview provides
one last opportunity to discover the nature of dissatisfaction. Most of the time the employees
voice their dissatisfaction at this time since they are no more bound to the rules or limits of the
organisation.
Ombudsman Approach:

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The personnel department provides a place where the employee can submit a complaint, have the
Ombudsman investigate it and try formulating solution which is acceptable to the employee and
the management. The Ombudsman serves as a investigator or Mediator.
Internal Tribunal:
A review board or panel is constituted by the management to solve problem. The panel hears the
testimony or reviews written information submitted by the employee and then takes a decision.
Generally the panel’s decision is final but, at times, if the employee is not satisfied an appeal is
allowed.

Problem- Solving for Unionised Employees:

In case of Unionised employees problem solving is marginally different because the union
represents the employees in submitting their case. Once a grievance is submitted, the personnel
department should make every effort to resolve it fairly and quickly. Failure to do so may be
perceived as disregard for the employees’ needs and union’s status and may result in low
motivation, morale, productivity, loyalty and even go-slows or strikes.
When solving the problems the personnel department should ensure that:
• Complaints are investigated and decided on facts not emotional whims.
• Causes of grievance are genuine and not due to personal conflicts.
• Proper grievance procedure is followed involving both the union and the management.
Arbitration:
The grievance – handling procedure des not always provide satisfactory solutions. When a
deadlock occurs Arbitration may be required. The arbitrator acts as a judge, hears both sides of
the dispute and after weighing the facts, and renders a binding decision.
Mediation:
Mediation is different from arbitration in that the mediator is a third party who enters the dispute
but has no power of decision. He can only suggest, coax, recommend or keep the two parties
talking with each other.
Union management cooperation:
Satisfactory resolution of disputes may avert ill will and strikes or other non- cooperative actions
by the union. However these after-the- fact measures. A proactive effort should be made to build
cooperation between the union and management so that grievances, disagreements and conflicts
do not occur. There are several proactive and cooperative methods:

• Prior consultation: If the management holds consultations with the union leaders and explains
its plan of action before implementation, unions and employees tend to be appreciative of
management’s intensions and hence become cooperative.
• Sincere Concern: Management can show sincere concern for employee problems and welfare
when there are no obvious and serious problems and management is not obligated to do so.
• Joint study committees: For complex problems confronting management and unions, joint
committees may be formed to discuss, analyse and solve the problem. This would ensure
involvement and commitment.

Conclusion:
There is never single best method to build cooperation or solve Disputes. The method used
depends on the situation. However if the personnel department build cooperation
with their unions or employees the management gains higher productivity and morale.

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Manifestations of Conflict

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Manifestation of organised group Manifestation of individual and

conflict (Union management Conflict) unorganized conflict

Manifestation Manifestation
Workers Management
of unions of mgmt.

Non co-operation
Unwillingness to Unorganised Autocratic
negotiate with holding Supervision
of efforts
Arguments

Over Strict
Termination International Discipline
Hostility Waste and
inefficiency
Demotion
Penalties
Stresses Labour Turnover
Lay-Off
Unnecessary
Unwillingness to Absenteeism Firing
negotiate Lockouts Complaints

Demotion
Resentment Instances of
breaking rules

Layoffs
Absenteeism

Work to rule Lock Outs

Demonstration

Loss of Prod.

Strike

Difference between arbitration and Mediation:

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Arbitration
Arbitration is an extra-judicial mechanism
through which conflicts can be solved. It is an
adversarial process, which is governed by the
principle of party autonomy. This means
that it is the parties to a conflict who determine
whether they want their dispute to be solved
through arbitration. Thus the arbitrators derive
their authority solely from the parties. Parties
are free to choose the place (seat) of arbitration,
and often do so through a contractual clause
before a dispute emerges. Arbitration processes
are convened on an ad hoc basis, and the
parties influence the composition of the
arbitration panel and/or the selection of a
specific arbitrator. The parties determine the
"rules of the game," either by designing the
process themselves or by choosing the seat of
arbitration. In the latter case the parties agree to
make use of existing institutions, which
provide facilities and a set of adopted rules that
govern the process.
Arbitration proceedings are confidential. The
details of the arbitration will usually remain
confidential but quite often the actual result as
embodied in the Arbitration Award will be well
known in the market. Second, that arbitration
proceeding are cheaper than Court proceedings.
Reinsurance arbitration proceedings can be
horrendously expensive: from service of the
arbitration notice to issuance of the final
arbitration award can be a matter of years as
opposed to months: time is money. You also
pay for the arbitrators and an arbitration venue,
which are both free in Commercial Court
proceedings.
20
Mediation
Mediation requires the disputing parties to
work together to find a mutually agreeable
solution. The mediator has no authority to
render a binding decision. The parties to the
dispute make the decision, and only they can
make it final through entering into a written
agreement, enforceable as a legally binding
contract.
Mediation is thus a non-adversarial process,
typically described as a "win/win" for all
parties
Mediation is a nonbinding process that employs
a neutral person — the mediator — to facilitate
negotiations between disputing parties.
Mediation redefines the ways the parties look
at a dispute.
Unlike arbitration, a mediator often can get the
parties to look beyond their legal rights, to an
examination of their underlying interests. This
process often leads to creative, business-driven
solutions.
Mediation works because the parties control the
process and outcome, there is more effective
communication, there is greater flexibility and
efficiency, and the process is confidential.
Studies also show that when mediation fails to
produce a settlement, it is often because the
participants lack understanding of the process,
not because of a failure in the process.

Question 2:
What are the key elements in the disciplinary process?
Discipline is the action taken by management to encourage compliance with the organisation
standards. It is a process to correct and mould employees for better performance. There are two
types of discipline:
1. Preventive Discipline: This action is taken to encourage employees to follow standards
and rules so that indiscipline is prevented. The personnel Department plays a major role
in preventive discipline. They communicate the rules to the employees, conduct trainings
and even counsel employees if necessary.
2. Corrective Discipline: This action is taken when there is non-compliance with the rules.
Typically corrective discipline is a penalty like warning or suspension.
Discipline is one of the most challenging areas in the Personnel management function. In
dealing with difficult employees, operating managers must diagnose both internal and

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external environmental factors contributing to the indiscipline, prescribe and implement
appropriate remedial actions and evaluate the effectiveness of their decisions.

Disciplinary Alternatives
When deciding what disciplinary action to take, we need to keep in mind that discipline is
supposed to be constructive. The goal is to guide the employee to improve performance or correct
inappropriate behavior, not to punish the employee. As a general rule, the action should be just
enough to get the employee's attention. However, it maybe needs to have to take progressively
more serious actions if there is no improvement or if repeat occurrences follow. We need not take
each of these actions, but you will normally take more than one of them. The alternatives are:
Oral Warning:
• Set a time and place to ensure privacy.
• Make notes about what you want to say in advance.
• Remember that the employee may have a right to representation.
• State clearly that you are issuing an oral warning.
• Be specific in describing the unacceptable performance or behavior.
• Remind the employee of the acceptable standards or rules. If they are available in writing,
provide them to the employee.
• State the consequences of failure to demonstrate immediate and sustained improvement:
Further disciplinary action may be the result.
• Note the oral warning on your calendar and key elements of discussion
Written Warning:
If you gave an oral warning and the problem performance or behavior persists, a written warning
may be effective. You may decide to use this disciplinary action more than once, to get the
employee's attention. Be careful, however, not to get stuck issuing repetitive letters of warning
that fail to influence the employee's behavior or performance. .
• State clearly at the outset of the letter that it is a written warning, and cite the appropriate
personnel policy or contract provision.
• Describe the performance problem(s) or work rule violation(s) in very specific detail and
attach documents which support your conclusions.
• Outline previous steps taken to acquaint the employee with the issue (coaching sessions,
performance appraisals, and previous disciplinary actions) and attach copies of the
documents.
• Describe the impact of the problem (safety issues, need to reassign work).
• Note the employee's explanation (as revealed during your investigation) or that the
employee declined to offer one. If it was unacceptable, explain why.
• Reiterate your expectations regarding behavior and/or performance.
• Note that if the employee doesn't demonstrate immediate and sustained improvement, the
consequence will be further disciplinary action, up to and including dismissal.
• Refer the employee to the appropriate policy or contract provision for appeal rights.
• Deliver the warning letter to the employee and place it in the employee's departmental
personnel file using appropriate delivery procedures such as "Proof of Service."
Suspension without Pay:
This is normally the next stage in progressive discipline after written warning(s).Suspension
typically prevents work for a number of working days, as specified in the letter, and pay is
docked accordingly.
Length of a suspension without pay will be influenced by policy or contract requirements.
The letter states that it is a suspension without pay, the appropriate policy or contract provision,
and the number of days the employee will be suspended. It also (as with a letter of warning)
describes the problem, previous corrective measures, impact of the problem, your expectations,
consequences of failure to improve, and the employee's appeal rights.

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Depending upon the personnel program the employee belongs to, you may be required to issue a
letter of intent to suspend, which provides the employee with the right to appeal your intended
action to the next higher management level before the action is implemented.
Reduction of Pay within a Class:
This alternative is normally used when you do not wish to remove the employee from the work
site, but serious discipline is appropriate. It is most appropriately used in lieu of suspension
without pay, in cases of chronic absenteeism or tardiness.
The reduction of pay is for a specific period of time, related to the seriousness of the performance
discrepancy or work rule violation, and noted in the letter.
The disciplinary letter will incorporate the same elements included in a suspension
Demotion to a Lower Classification:
This action involves movement of an employee to a lower level position, and may be temporary
or permanent.
Demotion is most often appropriate in cases of inadequate performance of responsibilities at a
particular level, rather than violation of work rules. It should be based upon a reasonable
expectation that the employee will perform successfully in the lower classified position. For
example, did the employee previously hold a similar position, and did they perform satisfactorily?
Dismissal:
This alternative is normally selected after performance counseling and progressive discipline
have failed to get the employee's attention to the problem.
In extreme cases, such as job abandonment, theft, or an act that endangers others, the offense may
be so grave that we forgo progressive discipline.
In carrying out disciplinary action be sure to:
• Maintain a professional manner by keeping the disciplinary process confidential between
you and the employee
• Make a careful diagnosis of the problem to determine whether disciplinary action is
appropriate
• Provide specific examples of performance discrepancies or work rule violations so the
employee fully understands what needs correction
• Allow the employee ample opportunity to explain so that you have all the facts
• Make sure discipline is the appropriate tool. Would coaching or performance appraisal be
sufficient to get the employee's attention?
• When you take disciplinary action, make sure the punishment fits the crime
• Help the employee improve performance by providing specific recommendations and
requirements
• Communicate clearly so the employee understands the consequences if performance or
conduct does not improve
Approaches to Discipline:
Hot Stove Rule: In this approach to discipline, the reaction to the disciplinary action has the same
effect as to how a person reacts when he touches a hot stove. The consequences are:

(a) Warning: Before any behavior has taken place the consequences of the undesirable
behaviour are communicated to the employee.
(b) Immediate Burn: If any disciplinary action has to be taken, then it has to be taken
immediately after the undesirable act has taken place. The employee must be able to see
the link between the act and the punishment.
(c) Consistency: The same action is taken against any person performing the undesirable act
– no discrimination.
(d) Impersonality: The disciplinary action is not directed towards a person, its meant to
eliminate the undesirable behaviour.
Progressive Discipline

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The progressive discipline approach is administered to give an employee a chance to take
corrective action before more serious penalties are imposed. Therefore the severity of penalty is
increased every time the offense is repeated. The objective is to create and maintain a productive
responsive workforce.
Positive Discipline:
The disadvantages of Hot-stove and Progressive discipline are that they focus on past behaviour.
Some employees who are disciplined in a punitive way may not remain committed to their job or
feel good about the company. Positive discipline is future oriented and is included by working
with employees to solve problems so that indiscipline does not occur in the first place.

Question 3:
Describe briefly the various laws pertaining to employee’s compensation and benefits
There are number of laws pertaining to the industrial workmen. Some of them are listed below:
Laws pertaining to employee compensation and benefits are:
1. The Employees ’ Provident Fund and Miscellaneous provisions act, 1952
The Employees’ Provident Funds and Miscellaneous Provisions Act, provides for compulsory
contributory fund for the future of an employee after his retirement or for his dependents in case
of his early death.
The objective of this act is to make available benefits of statutory schemes of the provident fund,
family pension and deposit linked insurance funds to employees in the factories and other
establishments. This act provides for wider terminal benefits to industrial workers in
contingencies such as retrenchment, closure and retirement on reaching the age of
superannuation, voluntary retirement and retirement due to incapacity to work.
Applicability:
 Every factory engaged in any industry specified in Schedule 1 in which 20 or more persons
are employed;
 Every other establishment employing 20 or more persons or class of such establishments
which the Central Govt. may notify;
 Any other establishment so notified by the Central Government even if employing less than
20 persons
Not Applicable:
 Any factory or establishment registered under any central or stare law relating to cooperative
societies employing less than 50 persons and working without the aid of power.
 Any establishment belonging to the central govt. or state govt. and having a scheme of
contributory provident fund or old age pension.
Additional Benefits:
 Employee’s pension Scheme-!971: Comes under this act. The purpose of this scheme is to
provide family pension and life insurance benefits to widows and children of PF members of
the establishments covered by the Employee Provident Fund Act-1952.
 Employees’ Deposit Linked Insurance Scheme-1976: This act also comes under the EPF Act-
1952. The purpose of this scheme is to provide life insurance benefits to the employees of the
establishment covered by EPF and MP Act-1952.
2. The Employees’ State Insurance Act – 1948
The Employees’ State Insurance Act, provides for certain benefits to employees in case of
sickness, maternity and employment injury.
Applicability
The Act extends to the whole of India. It applies to all factories (including Government factories
but excluding seasonal factories) employing ten or more persons and carrying on a manufacturing
process with the aid of power or employing 20 or more persons and carrying on a manufacturing
process without the aid of power and such other establishments as the Government may specify.

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A factory or other establishment to which this Act applies, shall continue to be governed by its
provisions even if the number of workers employed therein falls below the specified limit or the
manufacturing process therein ceases to be carried on with the aid of power, subsequently
Every employee employed in or in connection with the work of a factory or establishment
covered by the act and drawing wages up to Rs.3,000/- per month is required to be insured under
this act.
Not applicable:
 Factories working with the aid of power wherein less than 10 persons are employed;
 Factories working without the aid of power wherein less than 20 persons are employed;
 Seasonal factories engaged exclusively in any of the following activities viz. Cotton
ginning, cotton or jute pressing, decortications of groundnuts, the manufacture of coffee,
indigo, lac, rubber, sugar or tea or any manufacturing process incidental to or connected
with any of the aforesaid activities, and including factories engaged for a period not
exceeding seven months in a year in blending, packing or repackaging of tea or coffee, or
in such other process as may be specified by the Central Government;
 A factory which was exempted from the provisions of the Act as being a ‘seasonal
factory’ will not lose the benefit of the exemption on account of the amendment of the
definition of ‘seasonal factory’;
 Mines subject to the Mines Act, 1952;
 Railway running sheds;
 Government factories or establishments, whose employees are in receipt of benefits
similar or superior to the benefits provided under the Act and Indian naval, military or air
forces.

Benefits
There are 6 kinds of benefits provided under the act:
 Sickness benefit
 Maternity benefit
 Disablement benefit
 Dependants benefit
 Medical benefit
 Funeral expenses.

3. The factories Act – 1948

The act is applicable to Factories which means
(a) Any premises where 10 or more people are employed and n any part of which
manufacturing process is carried out with the aid of power.
(b) Any premises where 20 or more people are employed and in any part of which a
manufacturing process is carried out without the aid of power.
Provisions of the Act.
 Keep the premises clean.
 Dispose of waste and effluents.
 Maintain adequate ventilation and temperature.
 Prevent accumulation of dust and fumes.
 Avoid over crowding
 Provide sufficient lighting, drinking water.
 Toilets, washrooms and spittoons.

For safety of the workers every factory must:

 Fence certain machinery.

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 Protect workers repairing machinery in motion.
 Protect young persons working on dangerous machines.
 Maintain lifts ad hoists in good condition.
 Protect workers from injury to the eyes.
 Protect workers from dangerous fumes, gases, vapours and dust.

For the welfare of the workers every factory must:

 Provide facilities for washing.
 For sitting while workers are at work.
 Storing clothes not worn during work hours (Large factories only).
 First aid boxes and cupboards.
 Canteens (Large factories only)
 Rest rooms and lunch rooms (Large factories only).
 Crèches (Factories employing more than 30 women workers).

Working hours:
Working hours for adults are as follows:
 Not more than 48 hours a week
 Not more than 9 hours a day.
 Interval for rest of at least 30 mins. After 5 hours of work.
 Total period of work including rest interval must not be spread more than 10 ½ hours a day.
 Holiday for whole day once a week.
 Overtime for working more than 9 hours a day or 48 hours a week at double the rate.
 Women cannot be employed after 7pm and before 6am.

Employment of children:
The following rules apply to the employment of children:
 Employment of children below 14 yrs of age is prohibited.
 A child who has completed 14 years of age but less than 15 may be employed for a maximum
period of 4 ½ hours a day provided:
o A certificate of fitness has been granted by the certifying surgeon.
o He is not employed between 10pm and 6am.
 The manager must maintain a register of child workers in the prescribed form.
 A child who has completed the age of 15 but less than 18 may e employed as an adult
provided he has certificate of fitness for a full days’ of work.

Leave rules:
Rules for annual leave:
 A worker must be allowed annual leave with wages at the rate of one day for every twenty
days worked during the previous calendar year provided he has worked for 240 days or more
in the previous calendar year.
 A child worker must be allowed annual leave with wages at the rate of one day for every 15
days worked during the previous calendar year provided he has worked 240 days or more in
the previous calendar year.
 Leave ma be accumulated up to 30 days for adults and 40 days for children
 The leave is exclusive of holidays occurring during or at either end of the leave period.
 Wages for leave allowed must be paid before the leave period begins.

4. Minimum wages Act-1948:

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The government is required to fix minimum rates of wages payable to employees employed in the
employment specified in part1 or part2 of the schedule appended to the act. The employer is
bound to pay to every employee engaged in that employment wages at a rate not less than the
minimum rate fixed and enforced.

5. Payment of bonus Act – 1965

The act is applicable to every factory and every other establishment employing 20 or more
persons. Every employee drawing a salary or wage up to Rs.2,500/- per month and who has
worked for a minimum period of 30 days in a year is entitled to be paid bonus.
 The minimum bonus payable is 8.33% of the salary or wage or Rs.100 whichever is higher.
 The maximum bonus payable is 20% of the salary or wage.

6. The payment of Gratuity Act- 1972

Applicability of the Act:
The act is applicable to:
 Every factory, mine, oilfield, plantation, port and Railway Company.
 Every shop or establishment in which 10 or more persons are employed.
 Such other establishments in which 10 or more employees are employed as central govt. may
specify.
Eligibility:
The employee has to work for a minimum of 5 years to earn gratuity. In case of death or
disability gratuity becomes payable to his nominee or heirs even if he has rendered less than 5 yrs
of service.
Rate of payment:
Gratuity is paid at the rate of 15 days’ wages for every completed year of service or part thereof
in excess of six months, based on his last drawn wages.

7. Payment of wages act:

Applicability of the act:

 Factories
 Railways
 Any other establishments specified in sub-classes) to g) of section 2(ii) of the act.

Employees earning less than Rs.1600/- per month are covered and protected by this act.
Time and method of payment:
 The wages must be paid on a working day and not on a Holiday.
 Establishments employing less than 1000 persons must pay wages before the expiry of the 7 th
day of every month and other establishments must pay before the expiry of the 10th day of
every month.
 When the employment of any person is terminated the wages earned by him must be paid
before the expiry of the second working day from the day of termination.

8. The workmen’s compensation Act – 1923:

Applicability of the Act:

Every employer:
 Employing persons listed in schedule II to the Act.
 Carrying on an occupation listed in schedules III to the Act is liable to pay compensation
Injuries are classified into:
1. Death

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2. Permanent total disablement
3. Permanent partial disablement
4. Temporary disablement (total/Partial)
If an accident occurs out of or in course of employment is entitled to receive compensation.

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