Emerging Trends in HRM - Manipal University Jaipur MBA PDF

Human Resource Management Manipal University Jaipur (MUJ) MASTER OF BUSINESS ADMINISTRATION SEMESTER 1 HUMAN RESOURCE MANAGEMENT Unit 15: Emerging Trends in HRM 1 Human Resource Management...

Human Resource Management Manipal University Jaipur (MUJ) MASTER OF BUSINESS ADMINISTRATION SEMESTER 1 HUMAN RESOURCE MANAGEMENT Unit 15: Emerging Trends in HRM 1 Human Resource Management Manipal University Jaipur (MUJ) Unit 15 Emerging Trends in HRM Table of Contents Fig No / SL SAQ / Topic Table / Page No No Activity Graph 1 Introduction - - 3 1.1 Objectives - - 2 Competency Mapping 1, 2 1 4-5 3 Business Process Outsourcing - 2 6-7 4 Right Sizing of Workforce - 3, I 7-8 5 Flexitime - 4 8-10 6 Knowledge Management 3 5 11-13 7 Talent Management - 6 14-15 8 Employee Engagement 4 - 16-19 9 Other Recent Emerging Trends - 7 19 10 Summary - - 20-21 11 Glossary - - 21 12 Terminal Questions - - 21 13 Answers - - 22-23 14 Case Study - - 24 15 References - - 25 Unit 15: Emerging Trends in HRM 2 Human Resource Management Manipal University Jaipur (MUJ) 1. INTRODUCTION In the previous unit, we discussed the concept of employee welfare, welfare measures, and their types. We also discussed employee welfare responsibility and the benefits of employee welfare activities. Privatization, economic liberalizations, and globalization of economies adopted by various countries led to increased competition in global markets. HRM is a process of bringing people and organizations together to meet their goals jointly. HR managers' roles have transferred from that of a protector and screener to the role of a planner and change agent. Nowadays, it is not possible to show a good financial or operating report unless personnel relations are in order in an organization. Over the years, highly skilled and knowledge-based jobs are increasing while low-skilled jobs are decreasing. This calls for future skill mapping through proper HRM initiatives. Indian organizations are also witnessing a change in systems, management cultures, and philosophy due to the global alignment of Indian organizations. There is a need for multi-skill development. The role of HRM is becoming more critical. In this unit, we will discuss competency mapping, business process outsourcing, and the right-sizing of the workforce. We will also study knowledge management, talent management, and employee engagement. 1.1 Objectives After studying this unit, you should be able to: ❖ Define competency mapping. ❖ Analyze business process outsourcing. ❖ Evaluate the right sizing of the workforce. ❖ Describe knowledge management. ❖ Describe talent management. ❖ Analyse employee engagement. Unit 15: Emerging Trends in HRM 3 Human Resource Management Manipal University Jaipur (MUJ) 2. COMPETENCY MAPPING Employee skills, knowledge, and. abilities are not sufficient to achieve the desired goals. Additional skills such as mindset, values, belief, and commitment are required by employees to achieve their desired performance. Thus, competency is the sum of an individual's knowledge, skills, attitude, and personality as required for performing current and future organizational needs. Competency mapping is a process of identifying key competencies for an organization and/or a job and incorporating those competencies throughout the various processes (i.e., job evaluation, training, recruitment) of the organization. We would define competency as a behavior (i.e., communication, leadership) rather than a skill or ability. The steps involved in competency mapping as a result of job evaluation include the following: 1) Conduct a job analysis by asking incumbents to complete a Position Information Questionnaire (PIQ). This can be provided for incumbents to complete, or you can conduct one-on-one interviews using the PIQ as a guide. The primary goal is to gather, from incumbents, what they feel are the key behaviors necessary to perform their respective jobs. 2) Using the job analysis results, you are ready to develop a competency-based job description. A sample of a competency-based job description generated from the PIQ may be analyzed. This can be developed after carefully analysing the input from the represented group of incumbents and converting it into standard competencies. 3) With a competency-based job description, you are on your way to begin mapping the competencies throughout your human resources processes. The competencies of the respective job description become your factors for assessment on the performance evaluation. Using competencies will help guide you to perform more objective evaluations based on displayed or not-displayed behaviors. 4) Taking the competency mapping one step further, you can use the results of your evaluation to identify in what competencies individuals need additional development or training. This will help you focus your training needs on the goals of the position and Unit 15: Emerging Trends in HRM 4 Human Resource Management Manipal University Jaipur (MUJ) the company and help your employees develop to achieve the organization's ultimate success. Figures 15.1 and 15.2 depict the competency mapping and assessment. Fig. 15.1: Competency Mapping (Source: http://www.nahrs.in/our_services.aspx?id=8) Fig. 15.2: Competency Mapping and Assessment (Source: http://www.nahrs.in/our_services.aspx?id=8) SELF-ASSESSMENT QUESTIONS – 1 1. ______________________ is a process that identifies key competencies for an organization and/or a job and incorporates those competencies of the organization. 2. To conduct a ________________________ by asking incumbents to complete a position information questionnaire (PIQ) is the first step in competency mapping. Unit 15: Emerging Trends in HRM 5 Human Resource Management Manipal University Jaipur (MUJ) 3. BUSINESS PROCESS OUTSOURCING In the previous section, we discussed competency mapping. Let us now learn about business process outsourcing. Business process outsourcing is the assignment of one or more important business processes to external providers. Outsourcing is contracting with another company or person to do a particular function. Almost every organization outsources in some way. Typically, the function being outsourced is considered non-core to the business. An insurance company, for example, might outsource its janitorial and landscaping operations to firms that specialize in those types of work since they are not related to insurance or strategic to the business. The outside firms that are providing the outsourcing services are third-party providers, or as they are more commonly called, service providers. Although outsourcing has been around as long as work specialization has existed, in recent history, companies began employing the outsourcing model to carry out narrow functions, such as payroll, billing, and data entry. Those processes could be done more efficiently and, therefore, more cost-effectively by other companies with specialized tools and facilities and specially trained personnel. Currently, outsourcing takes many forms. Organizations still hire service providers to handle distinct business processes such as benefits management. However, some organizations outsource whole operations. The most common forms are Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO). BPO includes call center outsourcing, Human Resources Outsourcing (HRO), finance and accounting outsourcing, and claims processing outsourcing. Dominant outsourcing providers in information technology and business process outsourcing include IBM, EDS, CSC, HP, ACS, Accenture, and Capgemini. Unit 15: Emerging Trends in HRM 6 Human Resource Management Manipal University Jaipur (MUJ) SELF-ASSESSMENT QUESTIONS – 2 3. _____________________ is contracting with another company or person to do a particular function. 4. Business process outsourcing is the assignment of one or more important business processes to _______________________. 5. The outside firms that are providing the outsourcing services are ____________________. 4. RIGHT SIZING OF WORKFORCE In the previous section, we discussed business process outsourcing. Let us now learn about the right-sizing of the workforce. Proper sizing of the workforce refers to employing and maintaining an exact number of employees with the required skills, abilities, and knowledge to perform an organization's existing number of jobs. Clear and systematic job analysis, job specification, and job description provide the basis for arriving at the required number of employees. Overstaffing results in high labor costs and high costs of production, in addition to organizational policies. This ultimately affects the profitability of the companies. Indian organizations retrench employees through voluntary retirement schemes and golden handshakes. Activity 1 Find a company where few HR activities have been outsourced and find out how it is effective for organisation as a whole? Unit 15: Emerging Trends in HRM 7 Human Resource Management Manipal University Jaipur (MUJ) SELF-ASSESSMENT QUESTIONS – 3 6. _________________________ refers to employing and maintaining exact number of employees with required skills, abilities and knowledge to perform the existing number of jobs in an organisation. 7. _________________________results in high labour cost, high cost of production in addition in organisational policies. 8. Indian organisations retrench the employees through various schemes like ___________________ and ______________________. 5. FLEXI TIME Flexitime is a scheme where an organization gives its employees the opportunity of a flexible working hours arrangement. Under flexi-time, there is usually a core period of the day when employees must be at work (e.g., between 10 A.M. and 4 P.M.), whilst the rest of the working day is "flexi time", in which the staff can choose when they work, subject to achieving total daily, weekly or monthly hours. An employee must work between the basic core hours and have the flexibility to clock in/out between the other hours. An example of a typical flexi-time day is below: Begin work between 0700 – 1000 (flexitime) Must be there between 1000 – 1200 (core time) Lunch break between 1200 – 1400 (flexible lunch hour) Must be there from 1400 – 1600 (core time) Leave between 1600 – 1900 (flexitime) The hours employees work between these times are credited to their flexi time balance. For example, if the employees work a 35-hour week, then, over four weeks, they will be obliged to work for 140 hours. They will be in credit if they work more than the required hours in those four weeks. If they have enough flexi time credit, they can turn that into time Unit 15: Emerging Trends in HRM 8 Human Resource Management Manipal University Jaipur (MUJ) off, one of the best-liked features. This could be one or maybe 2 days a month, depending on their scheme. Benefits of flexi-time Utilizing a flexi-time policy in an organization can benefit everyone involved– employers, employees, and their families. Benefits to an organization Introducing flexible working hours could bring the following benefits to a business: Greater staff morale and job satisfaction. Most employers offering flexi-time work report improvements in recruitment reduced absenteeism, and productivity. Reduces stress and fatigue and unfocussed employees. Increases employee satisfaction and production. Greater staff retention and increased ability to attract new staff. Recruitment costs are thus reduced. Ability to attract a higher level of skills because the business is able to attract and retain a skilled and more diverse workforce. Work time visits to doctors/dentists are in employees’ time. Measures employee’s attendance – you only pay for the time in attendance (delayed arrival caused by traffic congestion, delayed trains, etc., are at the employee’s expense). An incentive to complete the tasks the same day, instead of being carried forward to the next day, since extra hours worked count towards the final target. Greater competitiveness, for example, being able to react more effectively to changing market conditions. Increased customer satisfaction and loyalty as a result of the above. Benefits to employees Increased opportunity to fit other commitments and activities with work and use their free time better. Better control of their workloads and manage a better balance between life and work. Allows the employees to schedule their travel time to avoid congestion. Allows employee's bank time to be used for leisure/personal activities. Unit 15: Emerging Trends in HRM 9 Human Resource Management Manipal University Jaipur (MUJ) Avoid the stress of commuting at peak times if their start and finish times are staggered or if they work from home. Personal matters can be sorted without having to take time off. Helpful for people caring for children or other dependents; others also may find flexible working helpful, too. Disadvantages of flexi-time If the scheme is not monitored correctly, there is potential for employees to abuse the system. For example, if the time is recorded on paper or spreadsheets by staff, they can quickly fabricate their time. System administration may force an HR department to create an additional workload. SELF-ASSESSMENT QUESTIONS – 4 9. ______________________ is a scheme where an organisation gives its employees the opportunity of a flexible working hours arrangement. 10. Flexi time increases employee _____________________ and _________________. 11. Flexi time benefits employees to avoid the _____________________ of commuting at peak times if their start and finish times are staggered. Unit 15: Emerging Trends in HRM 10 Human Resource Management Manipal University Jaipur (MUJ) 6. KNOWLEDGE MANAGEMENT In the previous section, we discussed flexi-time. Let us now learn knowledge management. Most of the software companies have been contributing to knowledge management. Knowledge management is one of the hottest topics today in both the industrial and information research worlds. Daily, we deal with massive amounts of data and information. Data and information are not knowledge until we know how to get the value out of it. Knowledge Management (KM) is a multi-disciplined approach to achieving organizational objectives using the best knowledge. KM focuses on acquiring, creating, and sharing knowledge and the cultural and technical foundations that support them. Some of the critical features of KM are: KM may be viewed in terms of: o People – How do you increase the ability of an individual in the organization to influence others with their knowledge? o Processes – Its approach varies from organization to organization. There is no limit on the number of processes. o Technology – It needs to be chosen only after all the requirements of a KM initiative have been established. Utilization of human knowledge through knowledge management Companies can retain talented people by using KM so that they can transfer and share their knowledge. They can enhance employee retention rates by recognizing the value of employee knowledge and rewarding them for it. As human capital, the knowledge-based perspective understands workers as assets that create the organization's value. By joining and staying in the organisation, employees invest and put at risk some of their human capital. Their human capital is deepened and expanded by taking advantage of continuous learning and development opportunities. Employees have certain obligations outside of work to their families, communities, and themselves, so sometimes, they cannot commit their full energies to the organization. Efforts are needed to integrate work and personal aspects of life and also to engage employees, individually and collectively, in ways to simultaneously address organizational and Unit 15: Emerging Trends in HRM 11 Human Resource Management Manipal University Jaipur (MUJ) individual interests and expectations. Most of the people are hired to do specific functions based on current needs and as they have certain limited knowledge about that area, they never think beyond that limit. Employees hired for a specific function may never have their full capabilities assessed or explored. Employers can motivate them and give them sufficient support and training to utilize their capabilities – create an environment where people can share and exchange their knowledge and interests and create a job environment conducive to individual growth. Organizations can take a chance to identify those people they think have a certain interest in exploring themselves in a specific area other than their functional area. Acquisition of knowledge is another important variable for the development of the employee, provided the individual is interested in it. One of the essential elements of knowledge management is to develop special strategies to encourage the spontaneous exchange of knowledge. Knowledge Transfer Transferring knowledge can be one of the essential parts of the organization. Organizations can build relationships and trust through face-to-face meetings with their employees, encourage people to create common ground through academic discussion and publications, establish time and place for knowledge transfers like talk rooms and conference reports, and inform people about it. Using a common language while sharing knowledge can create a knowledge repository. Unit 15: Emerging Trends in HRM 12 Human Resource Management Manipal University Jaipur (MUJ) Fig. 15.3 Process Flow Diagram for KM Activities (Source: Juin Choudhury, Human Asset, Effective Executive the magazine for decision makers, IUP Publication, Hyderabad, 2007) SELF-ASSESSMENT QUESTIONS – 5 12. ___________________ refers to a multi-disciplined approach to achieving organisational objectives by making the best use of knowledge. 13. Knowledge management focuses on processes such as _________________, _________________ and ____________________ knowledge and the cultural and technical foundations that support them. 14. _________________________ needs to be chosen only after all the requirements of a knowledge management initiative have been established Unit 15: Emerging Trends in HRM 13 Human Resource Management Manipal University Jaipur (MUJ) 7. TALENT MANAGEMENT In the previous section, we discussed about knowledge management. Let us now learn talent management. The term talent management is usually associated with competency-based HRM practices. A set of organisational core competencies and position-specific competencies often drives talent management decisions. The competency set may include knowledge, skills, experience, and personal traits. Talent management is the recruitment, development, promotion, and retention of people, planned and executed in line with the organization’s current and future business goals. Because it aims to build leadership strength in depth, it creates flexibility to meet rapidly changing market conditions. A structured talent management process will systematically close the gap between an organization's human capital and the leadership talent it will eventually need to respond to future business challenges. Talent management, focusing on soft skills, leadership development, and succession planning, is the defining trend in HR. Matching the right person to the right job is an acknowledged need in organizations. But one of the toughest challenges in selection that is often overlooked is matching the right candidate to his/her immediate boss. That goal is particularly tough when the boss does not know what kind of candidate would work well with them. Employers must also identify critical competencies people will need to develop for success. Many organizations consider their employees or human resources as the most valuable element in their asset portfolio. People are not organizational assets; they cannot be owned or controlled. However, people own human capital talent, skills, knowledge, and enthusiasm, some of which are invested in their work. In India, technically qualified people are easier to find. But what companies require is a domain expert with managerial skills to leverage that expertise in the interest of the company. Selections are increasingly based on soft skills such as attitude, ethics, or people skills. Unit 15: Emerging Trends in HRM 14 Human Resource Management Manipal University Jaipur (MUJ) Today, one’s educational qualification is not enough to get a job. This becomes even more important as we go to middle, senior, and top-level managers. One of the scarce capabilities is leadership. As organizations, their customers, employees, and their environment become more global and competitive, the competency requirements for successful leadership are increasing exponentially. Leadership comes with empowerment and changing work cultures across the levels through continuous learning, skill development, and change management. We now live in a world where the job and job requirements constantly change. Many of us are in jobs that didn’t exist three years ago, and three years from now, many of us will be in jobs that don’t exist now. In this context, succession planning must be re-engineered to focus on competencies rather than positions. Thus, succession planning will evolve into broader talent management, regardless of the organizational structure. SELF-ASSESSMENT QUESTIONS – 6 15. _____________________ term is usually associated with competency-based HRM practices. 16. Matching the ______________________ to the right job is an acknowledged need in organisations. 17. People are not ___________________; they cannot be owned or controlled. Unit 15: Emerging Trends in HRM 15 Human Resource Management Manipal University Jaipur (MUJ) 8. EMPLOYEE ENGAGEMENT In the previous section, we discussed about talent management. Let us now learn employee management. Employee engagement is the level of commitment and involvement an employee has towards their organization and its values. An engaged employee is aware of business circumstances and works with his/her organization to improve the performance within the job for the organization's benefit and to make an effective organization. The main idea of employee engagement is to offer a positive environment to employees so that they are free to add and desire to contribute more of their energy, efforts, and thought processes in more ways than one and significantly and favorably impact the goals of the organization. It’s about having employees feel fully connected to their company and keen about their job. It empowers employees to imagine and to start change from their viewpoint. Employee engagement activates increased job satisfaction and employee retention. It maximizes workforce productivity. Employee engagement is essential for meeting corporate sales and effective objectives. Six factors that define employee engagement within an organization are: Challenging work for employees Employees get appropriate decision-making authority Company gives importance to customer satisfaction Employees have excellent career opportunities The company has a reputation as a good employer Individual work is better than teamwork Employee engagement can change any company’s rights over best practices to NEXT PRACTICES. How well an organization manages talent acquisition and develops human capital, the capital that delivers world-class customer service that truly differentiates that company from the rest. The Hewitt model has gained a lot of importance in employee engagement, and it seems to fit into the Indian scenario very well. The Hewitt Model is based on the following parameters: Unit 15: Emerging Trends in HRM 16 Human Resource Management Manipal University Jaipur (MUJ) People Work motivation Opportunities Quality of life/values Procedures Total rewards Figure 15.2 shows the parameters in the Hewitt model. Fig. 15.4: Hewitt Model (Source: http://was2.hewitt.com/bestemployers/canada/pages/driving_engagement.htm) Employee engagement activities for business organisations Before an organization attempts to start with employee engagement activities, they first understand why this business concept is important. In any business, the effectiveness of employee engagement is high because it is inextricably linked to the business results. Employee engagement can be considered to be directly proportional to the growth and success of an organization. Useful employee engagement activities There are a number of things an employer can do to make their employees feel engaged with the overall performance of the business they are working with. Organizations can choose to make posts every week or every month, keeping their employees up-to-date with what is Unit 15: Emerging Trends in HRM 17 Human Resource Management Manipal University Jaipur (MUJ) happening around them, or can go the extra mile with their employee engagement activities, setting up initiatives such as real-time tracking of the company’s progress online or even bringing into existence an employee suggestion system. Setting up conferences on a platform accessible to all and face-to-face communication with their staff members can also be helpful in employee engagement activities. Business owners often forget this, but business is not a one-man show. As a Business owner or even a manager for that matter, they need to know their employees and need to listen to their ideas, acting on their contributions. Special employee engagement activities 1. Family employee engagement activities These are the most promising employee engagement activities. Bringing the employees together for a magnificent get-together with their families does that extra little bit. Giving employees a day off for their birthday, or even anniversary, for that matter, can also be considered. It will hardly cause any dip in your business. On the other hand, it will make the employees feel that they belong, and they will do what it takes to make the business flourish. 2. Introduce employee engagement activities at work Organizations can provide meditation rooms and playgrounds for the people who work for the organization to help them combat stress. It will undoubtedly cost a few thousand rupees, but employers can expect much more. Employee engagement activities are essential if a company wants its employees to truly engage in what they do. 3. Awards for high achievers Organizations can also introduce employee engagement activities such as spotlight awards for the employees who outdo themselves for the sake of the business organization. This is truly beneficial in the sense that not only do they reward and acknowledge the hard work of some of their staff members, but they also encourage others to do so. Employers must keep things healthy if they choose to introduce such employee engagement activities. Perhaps the one thing employees dislike is unfair treatment. 4. Festivals In a diverse work culture, one of the best things that can be done in terms of employee engagement activities is to organize parties to celebrate different communities' different Unit 15: Emerging Trends in HRM 18 Human Resource Management Manipal University Jaipur (MUJ) festivals without showing any discrimination. Celebrate Diwali, Eid, and Christmas keeping employees united and happy. 9. OTHER RECENT EMERGING TRENDS Recent emerging trends in Human Resource Management are as follows: 1. Remote Work and Hybrid Workforce: The COVID-19 pandemic has expedited the adoption of remote work and hybrid workforce. As a result, numerous organizations have shifted to remote or hybrid work models. Consequently, HR departments have developed sophisticated policies and practices to support distributed teams, ensure productivity, and maintain employee engagement. These efforts have been crucial in achieving business continuity and ensuring that organizational goals are met, even in the face of unprecedented challenges brought about by the pandemic. 2. Gig Economy and Contingent Workers: The emergence of the gig economy has resulted in a surge of contingent workers and freelancers. HR departments are modifying their talent acquisition strategies to attract and manage these non- traditional employees. 3. HR Analytics and Predictive HR: The application of HR Analytics and Predictive HR has revolutionized the HR industry by providing powerful insights into workforce trends and identifying key areas that require immediate attention. HR managers can make informed and strategic decisions that significantly impact the organization's progress by analyzing employee engagement data, predicting turnover risks, and optimizing workforce planning. Now adays use of these tools is crucial for any organization to stay ahead of the competition and succeed. SELF-ASSESSMENT QUESTIONS – 7 18. ______________________ is the level of commitment and involvement an employee has towards their organisation and its values. 19. The _______________________ has gained a lot of importance in employee engagement and it seems to fit into the Indian scenario very well. 20. Organisations can introduce ______________________ for the employees who outdo themselves for the sake of the business organisation. Unit 15: Emerging Trends in HRM 19 Human Resource Management Manipal University Jaipur (MUJ) 10. SUMMARY Let us recapitulate the important concepts discussed in this unit: Employee skill, knowledge, and abilities are not sufficient to achieve the desired goals. Additional skills, such as mindset, values, belief, and commitment, are required by employees to achieve the desired performance. Competency is the sum of an individual's knowledge, skills, attitude, and personality as required in performing current and future organization. Business process outsourcing is the assignment of one or more important business processes to external providers. Outsourcing is contracting with another company or person to do a particular function. Flexitime is a scheme where an organization gives its employees the opportunity of a flexible working hours arrangement. Right-sizing of the workforce refers to employing and maintaining an exact number of employees with the required skills, abilities, and knowledge to perform an organization's existing number of jobs. Knowledge Management (KM) refers to a multi-disciplined approach to achieving organisational objectives by making the best use of knowledge. KM focuses on acquiring, creating, and sharing knowledge and the cultural and technical foundations that support them. Transferring knowledge can be one of the essential parts of the organization. Organizations can build relationships and trust through face-to-face meetings with their employees and encourage people to create common ground through academic discussions and publications. Talent management is usually associated with competency-based HRM practices. A set of organisational core competencies and position-specific competencies often drives talent management decisions. Companies require a domain expert with managerial skills to leverage the expertise in the company's interest. Selections are increasingly based on soft skills such as attitude, ethics, or people skills. Unit 15: Emerging Trends in HRM 20 Human Resource Management Manipal University Jaipur (MUJ) Employee engagement is the level of commitment and involvement an employee has towards their organisation and its values. Employee engagement is to offer a positive environment to employees so that they are free to add and desire to contribute more of their energy, efforts, and thought processes in more ways than one and significantly and favorably impact the goals of the organization. 11. GLOSSARY Competency matrix: A competency matrix is a tool by which a person’s competencies are assessed. It is used as a means to define the required competencies for a particular position, as well as a tool to help identify the most suitable individuals for the job. Talent management: Talent management refers to the process of developing and integrating new workers, developing and retaining current workers, and attracting highly skilled workers to work for a company. 12. TERMINAL QUESTIONS 1. Describe competency mapping. Discuss the steps involved in competency mapping with an end result of job evaluation. 2. Explain business process outsourcing. 3. What are the benefits we can see if an organisation is providing flexi time to their employees? 4. What is right sizing and how do companies manage right sizing? 5. Explain knowledge management. 6. Discuss talent management. 7. Explain employee engagement and discuss the special activities an organisation can introduce to engage their employees? Unit 15: Emerging Trends in HRM 21 Human Resource Management Manipal University Jaipur (MUJ) 13. ANSWERS Self-Assessment Questions 1. Competency Mapping 2. Job analysis 3. Outsourcing 4. External providers 5. Third-party providers 6. Right sizing of workforce 7. Overstaffing 8. Voluntary retirement schemes, golden handshakes 9. Flexi time 10. Satisfaction, production 11. Stress 12. Knowledge Management 13. Acquiring, creating, sharing 14. Technology 15. Talent management 16. Right person 17. Organisational asset 18. Employee engagement 19. Hewitt model 20. Spotlight awards Terminal Questions 1. Employee skill, knowledge and abilities are not sufficient to achieve the desired goal. Additional skills such as mind-set, values, belief and commitment are required to achieve the desired performance. Thus competency is the sum of knowledge, skills, attitude and personality of an individual as required performing current and future organisation. Refer section 15.2 for more details. Unit 15: Emerging Trends in HRM 22 Human Resource Management Manipal University Jaipur (MUJ) 2. Business process outsourcing is the assignment of one or more important business processes to external providers. Outsourcing is contracting with another company or person to carry out a particular function. Refer section 15.3 for more details. 3. There has been a tremendous increase in the number of female employees in all types of organisations.Flexi time is a scheme where an organisation gives its employees the opportunity of a flexible working hours arrangement. Refer section 15.5 for more details. 4. Right sizing of workforce refers to employing and maintaining exact number of employees with required skills, abilities and knowledge to perform the existing number of jobs in an organisation. Refer section 15.4 for more details. 5. Knowledge Management (KM) refers to a multi-disciplined approach to achieving organisational objectives by making the best use of knowledge. KM focuses on processes such as acquiring, creating and sharing knowledge, and the cultural and technical foundations that support them. Refer section 15.6 for more details. 6. Talent management is usually associated with competency-based human resource management practices. Refer section 15.7 for more details. 7. Employee engagement is the level of commitment and involvement an employee has towards their organisation and its values. Special activities can be family employee engagement activities, introduce employee engagement activities at work, Awards for high achievers, celebration of all the festivals. Refer section 15.6 for more details. Unit 15: Emerging Trends in HRM 23 Human Resource Management Manipal University Jaipur (MUJ) 14. CASE STUDY M/s. Shubha Medical Limited was established in 1985 and started experiencing abnormal increase in human resource cost by 2004, consequent upon its revised retention policy. The revised retention policy aimed at increasing the salaries of pharmacists and top level managers more than that of market leaders. Mr. John took charge as the CEO in 2005. Upon his takeover, he began to look for ways to make the organisation more profitable. Throughout his investigation he found that the company’s human resource cost was too high and is a major cause for the dwindling financial position of the company. Mr. John instructed the HR manager of the company to downsize the number of employees by 30 percent creating a saving of Rs.3 billion. The HR manager offered a counter proposal that it would be wise to expand the production and marketing operations of the company by revising the corporate strategy, as the market was providing opportunities for the pharmaceutical industry. The CEO did not agree to the counter proposal of the HR manager and consequently, the HR manager initiated the downsizing process. The HR manager officially informed the employees about the details of the downsizing programme. The flourishing pharmaceutical industry enabled the employees of M/S Shubha medical to find jobs in other companies with much difficulty. However, most were successfully out- placed by June 2006. The company’s financials improved slightly in 2007 and the CEO told the HR manager that we achieved the goal. But the HR manager replied, “we achieved the goal, but we lost the appropriate strategy, and our competitors gained a lot by employing our trained and expert staff”. Discussion Questions: 1. Who is right: HR Manager or CEO? 2. Would it be appropriate to modify the strategy based on availability of staff and also when market is favourable? (Source: P.Subba Rao, Personal and Human resource Management, Himalaya Publication House, 2011) Unit 15: Emerging Trends in HRM 24 Human Resource Management Manipal University Jaipur (MUJ) 15. REFERENCES Rao, P. S. (2011). Personal and Human Resource Management. Himalaya Publication House. Choudhury, J. (2007). Human Asset, Effective Executive the magazine for decision makers. Hyderabad: IUP Publication. http://www.chillibreeze.com/articles_various/human-resources.asp: http://www.e- hresources.com/Samples/sample1.html http://www.flexitimeplanner.com/Flexi-time-policy.aspx http://www.articlesbase.com/human-resources-articles/emerging-trends- of-talent- management-and-challenges-of-hrm-957837.html http://employeeengagementsurvey.net/employee-engagement-activities- take-care- of-your-employees-and-boost-your-profits Unit 15: Emerging Trends in HRM 25 Human Resource Management Manipal University Jaipur (MUJ) MASTER OF BUSINESS ADMINISTRATION SEMESTER 1 HUMAN RESOURCE MANAGEMENT Unit 14: Employee Welfare and Working Conditions 1 Human Resource Management Manipal University Jaipur (MUJ) Unit 14 Employee Welfare and Working Conditions Table of Contents Fig No / SL SAQ / Topic Table / Page No No Activity Graph 1 Introduction - - 3-4 1.1 Objectives - - 2 Concept of Employee Welfare - 1 5-8 3 Welfare Measures - 2 8-10 4 Types of Welfare Measures - 3, I 11-13 5 Employee Welfare Responsibility - 4 13-14 6 The Business Benefits of Employee Welfare - 5 14-17 Activities 7 Summary - - 17-18 8 Glossary - - 19 9 Terminal Questions - - 19 10 Answers - - 20-21 11 Case Study - - 21 12 References - - 22 Unit 14: Employee Welfare and Working Conditions 2 Human Resource Management Manipal University Jaipur (MUJ) 1. INTRODUCTION In the previous unit, we discussed the concept, causes and the need for grievance. We also learnt grievance forms and effects and the handling procedure. Employee welfare measures are one of the key inputs to bring about the desired level of employee satisfaction, motivation and productivity in the organisation. The primary objective of welfare measures is to ensure the physical and mental well-being of the employee. Employee welfare is a comprehensive term including various services, benefits and facilities offered to employees by the employer. The employer makes life worth living for employees through such generous fringe benefits. The welfare amenities are extended in addition to regular wages and other economic rewards available to the employees as per legal provisions. Welfare includes anything that is done for the comfort and improvement of employees and is provided over and above the wages. Welfare helps keep the employees' morale and motivation high to retain them employees for longer. The welfare measures need not be in monetary terms only but in any kind/form. Employee welfare includes monitoring working conditions, creating industrial harmony through infrastructure for health, industrial relations, and insurance against disease, accidents and employment for the workers and their families. The working environment in a factory adversely affects the health of the employees. This has to be contained through preventive steps to improve the lot of workers. In this unit, we will discuss the concept of employee welfare, welfare measures and its types. We will also discuss employee welfare responsibility and the benefits of employee welfare activities. Unit 14: Employee Welfare and Working Conditions 3 Human Resource Management Manipal University Jaipur (MUJ) 1.1 Objectives After studying this unit, you should be able to: ❖ Analyse employee welfare. ❖ Explain the types of welfare measures. ❖ Analyse the responsibility for welfare facilities in an organisation. ❖ Describe the basic features of labour welfare measures. Unit 14: Employee Welfare and Working Conditions 4 Human Resource Management Manipal University Jaipur (MUJ) 2. CONCEPT OF EMPLOYEE WELFARE Employee welfare is a comprehensive term including various services, benefits and facilities offered to employees and by the employers. The employer makes life worth living for employees through such generous fringe benefits. Employee welfare entails all those activities of an employer directed towards providing the employees with certain facilities and services in addition to wages or salaries. The logic behind providing welfare schemes is to create an efficient, healthy, loyal and satisfied labour force for the organisation. The purpose of providing such facilities is to improve the employees’ work life and raise their standard of living. The essential benefits of welfare measures can be summarised as follows: 1. Enhanced Physical and Mental Health: Welfare measures contribute to the overall well-being of workers by improving their physical and mental health. This, in turn, fosters a positive and healthy work environment, reducing absenteeism and enhancing productivity. 2. Improved Living Standards for Workers and Families: The provision of facilities such as housing schemes, medical benefits, education, and recreational amenities not only uplifts the living standards of workers but also extends these benefits to their families. This creates a sense of security and stability, enabling workers to focus more on their jobs and increase productivity. 3. Stability in the Workforce: Welfare measures foster loyalty and commitment among workers towards their employers. Employers can attract and retain a stable labor force by offering these benefits. Workers feel valued and respected, leading to increased job satisfaction and a stronger sense of involvement in their work. 4. Increased Productivity: Employee welfare measures have a direct correlation with organisational productivity. When workers feel cared for and supported by their employers, they tend to be more motivated, engaged, and productive. This ultimately contributes to the overall success and growth of the organisation. 5. Promotion of Healthy Industrial Relations: Welfare initiatives benefit individual workers and foster healthy industrial relations within the organisation. By addressing employees' needs and concerns, welfare measures promote mutual respect, trust, and Unit 14: Employee Welfare and Working Conditions 5 Human Resource Management Manipal University Jaipur (MUJ) cooperation between labour and management. This helps in mitigating conflicts and maintaining industrial peace. 6. Reduction of Social Evils: Welfare policies can also serve as a means to address and mitigate social issues prevalent among labourers, such as substance abuse. By providing support services and resources to improve workers' overall quality of life, welfare measures can contribute to reducing the incidence of such problems and promote a healthier workforce. Organisations provide welfare facilities to their employees to keep their motivation levels high. Employee welfare is a primary concern of employers. Prior to the labour union movements of the early 20th century, employers cared little about employee welfare and instead thought of employee/labour as something to be bought at the lowest price possible. In today's world, employers must be more careful to watch out for employee welfare. In short, employee welfare involves watching out for the good of all employees. Employers should seek several different objectives in promoting employee welfare. Objectives of employee welfare: The most crucial purpose of employee welfare measures is to improve the employer- employee relationship within an organisation. However, an organisation can achieve multiple objectives while developing employee welfare measures. An organisation aims to accomplish long-term and short-term objectives through employee welfare measures. Employee welfare has the following objectives: 1. To provide a better life and health to the workers. 2. To make the workers happy and satisfied. 3. To relieve workers from industrial fatigue and to improve intellectual, cultural and material conditions of living of the workers. Production One of the primary concerns of employee welfare promotion is to create happy employees. However, this type of objective has a greater purpose and is not always due to the benevolence of the employer. Instead, good employers both genuinely care for their employees and do so because they know that a happy employee is one who will be productive and do his/her job correctly. In careers like sales, where production is essential Unit 14: Employee Welfare and Working Conditions 6 Human Resource Management Manipal University Jaipur (MUJ) to making money, employers who promote employee welfare know that employees will make more money for themselves and for the company. Loyalty Another reason to promote an employee's well-being is that it can improve employee loyalty. In the long run, employees who are taken care of by their employers are less likely to jump ship and change companies or careers. Even when it might be possible to make more money with a different company, the employee who feels accepted and needed by his employer may not even consider other job offers when they come along. Organisational improvement Because employee welfare deals explicitly with the well-being of employees, employee welfare programmes adopted by employers are more effective when employees' wants and wishes are considered. In organisations where employees are well-cared for and are asked to provide suggestions on improving the company, employees feel they play an essential role in improving the organisation. Health Health promotion is another primary objective of most employee welfare programmes. The health of an employee is integral to the success of a company. Employees who are happy and healthy show up to work every day and do their jobs correctly, whereas those in poor health and have no means to change the situation will miss work and slow production. Organisations are obliged to provide employees with a safe and healthy environment. Health is a general state of physical, mental and emotional well-being. Safety, like sound health, is of utmost importance. Health and safety policies primarily aim to protect people and the work environment. Industrial health is essential to: Promote and maintain workers' highest physical, social and mental well-being. Improve productivity and quality of work. Reduce accidents, injuries, absenteeism and labour turnover. Unit 14: Employee Welfare and Working Conditions 7 Human Resource Management Manipal University Jaipur (MUJ) Protect workers against any health hazard arising from work or conditions in which it is carried on. SELF-ASSESSMENT QUESTIONS – 1 1. Organisations are obliged to provide employees with an _____________________ environment. 2. Main purpose of health and safety ______________________ is the protection of people and the work environment. 3. The objective of labour welfare is to make people ______________________ and ___________________. 3. WELFARE MEASURES In the previous section, we discussed the concept and objectives of employee welfare programmes in an organisation. Let us now learn the welfare measures. Employee welfare is a term which must necessarily be elastic, with somewhat different interpretations in different countries. This is because of the different social customs, the degree of industrialisation and the educational levels of the workers in these countries. Welfare means faring (or) doing well. It is a comprehensive term and refers to an individual's physical, mental, moral and emotional well-being. Trade unions and governmental and non-governmental agencies It isn't easy to define employee welfare accurately because of the relativity of the concept. Welfare includes anything that is done for the comfort and improvement of employees and is provided over and above the wages. Welfare helps keep the employees' morale and motivation high to retain employees for longer. The welfare measures need not only be in monetary terms but also kind. Employee welfare measures We must keep the employee attached to the organisation and happy to the extent possible. The solution is welfare measures. Welfare measures are over and above the wages paid to employees. These include improved working conditions, health care facilities, insurance for Unit 14: Employee Welfare and Working Conditions 8 Human Resource Management Manipal University Jaipur (MUJ) self and family, recreation facilities, improved industrial relations, etc. These measures may not be in the form of monetary benefits. All these measures aim to keep the workers happy and satisfied, provide better employment life and health to workers, reduce stressful situations, and improve intellectual, cultural and material conditions. Welfare measures are provided mainly by employers. However, government schemes, social setups and charitable agencies may also extend their help, all aimed at improving employee health, economic betterment and social status. Principles for providing welfare measures are: 1. Statutory Provisions and Collective Bargaining: Statutory provisions often govern welfare measures. Additionally, collective bargaining plays a role in enhancing welfare facilities for employees. 2. Dynamic Nature of Welfare Measures: Welfare measures are not static; they evolve over time. They reflect the Welfare Officer's vision, creativity, and understanding and may change based on the prevailing work ethics and organisational culture. 3. Personality Development of Employees: Welfare measures can contribute to the personality development of employees to a certain extent. This could be through education, recreation facilities, and other initiatives aimed at holistic development. 4. Motive Behind Welfare Schemes: The primary motive behind providing welfare schemes is to create an efficient, healthy, loyal, and satisfied labour force for the organisation. By ensuring the well-being of employees and their families, employers can expect increased productivity, loyalty, and job satisfaction. 5. Key Welfare Measures: Housing Schemes: Providing affordable and suitable housing options for employees and their families. Medical Benefits: Access to healthcare services and medical insurance for employees and their dependents. Education Facilities: Supporting educational needs, such as scholarships or tuition assistance for employees' children. Unit 14: Employee Welfare and Working Conditions 9 Human Resource Management Manipal University Jaipur (MUJ) Recreation Facilities: Offering recreational activities and facilities for employees to unwind and relax, promoting a healthy work-life balance. Overall, these welfare measures aim to improve the quality of life for employees and their families, foster loyalty and engagement, and ultimately contribute to organisational success. Statutory and non-statutory welfare schemes Under the Factories Act and Rules, Dock Worker’s Act, Mines Act, etc, there are specific provisions on Welfare. These are to be complied with, failing which legal proceedings will be initiated against the employer. Even the appointment of a Labour Welfare Officer where more than 500 workers are employed is a statutory requirement. The basic features of labour welfare measures are as follows: Labor welfare includes various facilities, services and amenities provided to workers for improving their health and style of living, value, economic betterment and social status. Welfare measures are in addition to regular wages and other economic benefits available to workers due to legal provisions and collective bargaining. Labour welfare schemes are flexible and ever-changing. New welfare measures are added to the existing ones from time to time. Welfare measures may be introduced by employers, government, employees, or any social or charitable agency. The purpose of labour welfare is to develop the whole personality of the workers to make a better workforce. SELF-ASSESSMENT QUESTIONS – 2 4. The purpose of labour welfare is to bring about the development of the whole personality of the workers to make a ______________________. 5. Employee welfare measures increase the _____________________ of an organisation. 6. Facilities such as housing schemes, medical benefits, and education and recreation facilities for workers’ families help in raising their ______________________. Unit 14: Employee Welfare and Working Conditions 10 Human Resource Management Manipal University Jaipur (MUJ) 4. TYPES OF WELFARE MEASURES In the previous section, we discussed the welfare measures. Let us now learn the types of welfare measures. The employee welfare schemes can be classified into two categories, i.e., statutory and non- statutory welfare schemes. Statutory schemes are those schemes that are compulsory to be provided by an organisation in compliance with the laws governing employee health and safety. These include provisions in industrial acts such as the Factories Act, 1948, Dock Workers Act (safety, health and welfare), 1986, and Mines Act, 1962. The non-statutory schemes differ from organisation to organisation and from industry to industry. Statutory welfare facilities: Statutory welfare facilities organisations offer in compliance with central and state government regulations. The relevant provisions of various acts that deal with employee welfare measures are: Factories Act, 1948 Contract Labour Act, 1970 The statutory welfare schemes include the following provisions: 1. Drinking water: Safe drinking water should be provided at all workplaces. 2. Facilities for sitting: In every organisation, especially factories, suitable seating arrangements are to be provided. 3. First aid appliances: First aid appliances are to be provided and should be readily accessible, so that initial medication can be provided to the needed employee in case of any minor accidents. 4. Latrines and urinals: A sufficient number of latrines and urinals are to be provided in the office and factory premises and maintained neat and clean. 5. Canteen facilities: The employer will provide a Cafeteria or canteens to provide hygienic and nutritious food to the employees. 6. Spittoons: In every workplace, such as warehouses, store places, dock areas and office premises, spittoons are to be provided in convenient places and are to be maintained in a hygienic condition. Unit 14: Employee Welfare and Working Conditions 11 Human Resource Management Manipal University Jaipur (MUJ) 7. Lighting: Proper and sufficient lights are to be provided for employees to work safely during the night shifts. 8. Washing places: Adequate washing places, such as bathrooms and wash basins with tap and tap on the standpipe, will be provided in the port area near the workplaces. 9. Changing rooms: Adequate changing rooms are to be provided for workers to change their clothes in the factory area and office premises. Adequate lockers are also to be provided to the workers to keep their clothes and belongings. 10. Restrooms: Adequate numbers of restrooms are provided to the workers with provisions of water supply, wash basins, toilets, bathrooms, etc. Non-statutory welfare schemes Organisations are increasingly offering some form of personal financial education as part of their employee benefits programmes. They recognise that this service increases workplace productivity and morale while reducing stress. Other benefits of offering some form of workplace financial education include: 1. Helping employees improve their financial wellness. 2. Assisting employees with workplace stress associated with financial problems. 3. Helping employees navigate major financial milestones, including managing credit and debt, insurance needs, investing basics, tax planning, etc. Activity 1 Visit a nearby factory and list out the employee welfare facilities that the employees enjoy. Unit 14: Employee Welfare and Working Conditions 12 Human Resource Management Manipal University Jaipur (MUJ) SELF-ASSESSMENT QUESTIONS – 3 7. Two types of welfare measures are ____________________ and. 8. ________________________ offered by the organisations in compliance with the central and state government regulations. 9. ________________________ are to be provided by the employer to provide hygienic and nutritious food to the employees. 10. Proper and sufficient _______________________ are to be provided for employees to work safely during the night shifts. 5. EMPLOYEE WELFARE RESPONSIBILITY In the previous section, we discussed the types of welfare measures. Let us now discuss employee welfare responsibility. Employees' welfare facilities rest with the employers, central government, state governments, and trade unions. Employers: Employers have the first and direct responsibility to provide welfare facilities to the employees. They usually provide facilities to attract and retain their talented employees. To facilitate their employees, organisations generally appoint labor welfare officers to supervise the welfare activities carried out in the organisation. Central Government: The central government is empowered to make rules to protect the health, safety and welfare of the employees working in factory premises. The laws governing welfare facilitates are the Factories Act 1948, the Contract Labour Act 1970, the Employees’ State Insurance Act 1948, etc. State Government: The state governments are usually the enforcing authorities for laws enacted by the central government occasionally. They can also create laws to regulate the employees' condition and welfare. Unit 14: Employee Welfare and Working Conditions 13 Human Resource Management Manipal University Jaipur (MUJ) Trade unions: Trade unions take an active role in offering welfare facilities to employees to improve their well-being. In a few organisations the unions, as a representative of the employees, undertake employee welfare activities to improve the health and safety of their members. SELF-ASSESSMENT QUESTIONS – 4 11. _______________________ have the direct responsibility to provide welfare facilities to the employees. 12. The ________________________ is empowered to make rules to protect the health, safety and welfare of the employees working in factory premises. 13. ______________________ takes an active role in offering welfare facilities to the employees to improve their well-being. 6. THE BUSINESS BENEFITS OF EMPLOYEE WELFARE ACTITIVIES In the previous section, we discussed the employee welfare responsibility. Let us now discuss about business benefits of employee welfare activities for the management and employees of organisations where the backlash of recession has struck, it would take some time to handle the issue of employee welfare. Management's responsibility is to ensure that employee welfare initiatives should not be put on the back seat in the name of cutting costs. One of the measures to overcome this situation is to handle the situation carefully and with constant communication to ward off adverse rumours and protect employee sentiments. However, it is not easy to look beyond the profit margins and focus on employee well-being in times of reducing the bottom line, but that is perhaps the need of the times. Many organisations, however, consider employee welfare a hygiene issue. It needs to be combined with the motivation factor because that brings about employee satisfaction and enhances productivity. An organisation's profitability is directly related to the employees’ productivity. Therefore, an organisation should create a motivating environment that promotes job satisfaction, thereby developing motivated, productive and fulfilled employees. Unit 14: Employee Welfare and Working Conditions 14 Human Resource Management Manipal University Jaipur (MUJ) Cost-cutting measures do not mean employee welfare compromise. It does not mean reducing the facilities provided to employees to reduce the cost. An employer must eliminate all organisational inefficient and unproductive activities to reduce wastage, increase productivity and reduce turnaround time in all operations, automatically resulting in cost savings. The current economic scenario should never drive an attempt to bring about employee friendliness; it has to be an ongoing effort. An organisation is made up of its people. Employee friendly HR policies are the primary sources to enhance productivity. It also helps to maintain a synergy between the employer and the employee. It would be too impractical to mention that an organisation should focus on employee welfare even if the profit margins are reducing during tough times. It becomes important for both – the employer as well as the employee – to put in their best efforts to flow through the tough phase. The company needs to accept a balanced approach in such a situation; cutting down on all the benefits is also risky, and taking no action is also hazardous from the survival point of view. Earning employee goodwill When an organisation's attrition rate is low, the employer needs to earn employee goodwill and loyalty. Team spirit and collaboration should be encouraged among employees. Initiatives such as celebrating success/achievements in small ways go a long way in raising the confidence and morale of the team. If a company is required to take cost-cutting measures, it should be taken in a manner that would not directly impact employees; during tough times, it becomes essential to keep employees' sentiments high, and nothing should hurt their morale. Management of companies has to look at a sufficient amount of options so that the situation is taken care of without putting undue pressure on the workforce. Companies that resort to direct cost- cutting measures directed towards employees will always be at risk of higher attrition, which may hurt the company in the long run. HR, which generally takes care of employee events, has to work with the employee clubs to manage the same company events in lower budgets and different ways. Money that they would have otherwise spent on lavish events should be Unit 14: Employee Welfare and Working Conditions 15 Human Resource Management Manipal University Jaipur (MUJ) cut down. The focus should be on frequent but small-scale events that are economical yet add to the fun element. Advantageous for business The tough times also bring about certain human and system capabilities benefits. Think tanks of the organisation are utilised to the maximum possible efficiency. The organisation's family members realise their true potential and learn how to use it best. Efficiency becomes the driving factor for any organisation to stay alive; hence, it is time to focus on delivering the best by optimally using the existing resources. Organisations that resort to cost-cutting measures directed at employees will lose good talent, spoiling their brand image. Besides, higher attrition may impact the business and clients, further negatively impacting the company's overall business strategy. Long-term perspective It is essential to have a long-term perspective of things to ensure that good people do not go away when the organisation most needs them even after the downturn, organisations that want to do business must continuously create and maintain the bond between them and the employees’ goals and welfare. Employees would gladly accept cost-cutting measures and would even contribute to it. However, they need to be very clear about the strategic importance of the harsh measures. They need to be constantly reassured that their welfare is considered necessary. Developing and maintaining the proper communication process is essential to these trying times. Any minor carelessness or lack of caution might result in a situation that might lead to a total decline in the work culture and employee morale. For example, at Bajaj Electricals, there are many welfare activities such as long service and retirement awards on 14th July every year for employees, categorised into 15 years long service and 25 years long service. There is also a welfare trust that Bajaj Electricals forms to provide loans to employees for housing needs and also for the reimbursement of medical expenses. They have created a “social responsibility business fund” to provide scholarships to employees and children for Unit 14: Employee Welfare and Working Conditions 16 Human Resource Management Manipal University Jaipur (MUJ) higher education. Also, there is emergency assistance in the form of financial assistance to the family in case of the death of any employee in harness. SELF-ASSESSMENT QUESTIONS – 5 14. When an organisation's attrition rate is low, the employer must earn employees. 15. An organisation is made up of its ______________________. 16. Profitability of an organisation has a direct relationship with the employees’ ______________________. 17. ________________________ of the employee affects the business as a whole. 7. SUMMARY Let us recapitulate the essential concepts discussed in this unit: Employee welfare measures are one of the key inputs to bring about the desired level of employee satisfaction, motivation and productivity in the organisation. The primary objective of welfare measures is to ensure the physical and mental well-being of the employee. Employee welfare entails all the employer's activities directed towards providing the employees with certain facilities and services in addition to wages or salaries. The logic behind providing welfare schemes is to create an efficient, healthy, loyal and satisfied labour force for the organisation. The purpose of providing such facilities is to improve their work life and raise their standard of living. Employee welfare is a term which must necessarily be elastic, bearing a somewhat different interpretation in each country according to the different social customs, the degree of industrialisation and the educational level of the workers. Welfare means faring (or) doing well. It is a comprehensive term and refers to an individual's physical, mental, moral and emotional well-being. Safety is a person’s physical health. The primary purpose of health and safety policies is the safety and protection of people and the work environment. The welfare measures Unit 14: Employee Welfare and Working Conditions 17 Human Resource Management Manipal University Jaipur (MUJ) undertaken to improve the well-being of the employees can be divided into two categories: statutory and non-statutory. Employee welfare facilities rest with employers, central government, state governments, and trade unions. The central government is empowered to make rules to protect the health, safety and welfare of the employees working in factory premises. The state governments are usually the enforcing authority for laws enacted by the central government from time to time. Trade unions take an active role in offering welfare facilities to employees to improve their well-being. In a few organisations, the unions, as employees' representatives, undertake employee welfare activities to improve the health and safety of their members. Welfare benefits of the employees affect the business as a whole. During the recession, organisations would take some time to handle the issue of employee welfare. It is the responsibility of the management to ensure that employee welfare initiatives should not be put on the back seat in the name of cutting costs. One of the measures to overcome this situation is to handle the situation carefully and with constant communication to ward off adverse rumours and protect employee sentiments. When attrition rate is low in an organisation, the employer needs to earn employee goodwill and loyalty. At that time, team spirits and collaboration should be encouraged among employees. Initiatives such as celebrating success/achievements in small ways go a long way in raising the confidence and morale of the team. It would be too impractical to mention that an organisation should focus on employee welfare even if the profit margins are reducing during tough times. It becomes essential for both the employer as well as the employee to put in their best efforts to flow through the tough phase. The company needs to accept a balanced approach in such a situation; cutting down on all the benefits is also risky, and taking no action is also hazardous from the survival point of view. Unit 14: Employee Welfare and Working Conditions 18 Human Resource Management Manipal University Jaipur (MUJ) 8. GLOSSARY Employee welfare: Employee welfare includes monitoring of working conditions, creation of industrial harmony through infrastructure for health, industrial relations and insurance against disease, accident and unemployment for the workers and their families. Gratuity: Gratuity is a part of the salary that an employee receives from their employer in gratitude for the services offered by the employee. Labour Welfare Officer: According to Section 49, The Factories Act, 1948, every factory having five hundred or more workers shall employ in the factory such number of Welfare officers as may be prescribed. The respective State Government prescribe the duties, qualifications and Conditions of service of the officers. 9. TERMINAL QUESTIONS 1. What is employee welfare? Explain its primary objectives. 2. Discuss the types of welfare measures. 3. Who all are responsible for welfare facilities in an organisation? Discuss. 4. Explain the basic features of labour welfare measures. 5. How do the welfare benefits affect the business of an organisation? Unit 14: Employee Welfare and Working Conditions 19 Human Resource Management Manipal University Jaipur (MUJ) 10. ANSWERS Self-Assessment Questions 1. Safe, healthy 2. Policies 3. Happy, satisPrfied 4. Better workforce 5. Productivity 6. Standards of living 7. Statutory, non-statutory 8. Statutory welfare 9. Canteens 10. Lights 11. Employers 12. Central government 13. Trade union 14. Goodwill and loyalty 15. People 16. Productivity 17. Welfare benefits Terminal Questions 1. Employee welfare measures are one of the key inputs to bring about the desired level of employee satisfaction, motivation and productivity of the organisation. The basic objective of welfare measures is to ensure the physical and mental well-being of the employee. Refer section 2 for more details. 2. The welfare measures undertaken to improve the well being of the employees can be divided into two categories, namely statutory and non-statutory. Refer section 4 for more details. 3. Employees' welfare facilities rest with the employers, central government, state governments and trade unions. Refer section 5 for more details. Unit 14: Employee Welfare and Working Conditions 20 Human Resource Management Manipal University Jaipur (MUJ) 4. Labour welfare includes various facilities, services and amenities provided to workers for improving their health and style of living, value, economic betterment and social status. Refer section 3 for more details. 5. Welfare benefits of the employee affect the business as a whole. During the recession, an organisation would take some time to handle the issue of employee welfare. It is the responsibility of the management to ensure that employee welfare initiatives should not be put on the back seat in the name of cutting costs. One of the measures to overcome this situation is to handle the situation carefully and with constant communication to ward off adverse rumors and protect employee sentiments. Refer section 6 for more details. 11. CASE STUDY Aqua food company Ltd is a FMCG company in Delhi. It is engaged in manufacturing and distribution of food and personal care products. The company views its human resources as its most important asset and sure competitive advantage. Its compensation packages focus on encouraging efficiency and emphasises on linking pay with performance. It has been successful in achieving an optimum level of efficiency and productivity. However, this company faces problems of employee retention as labour turnover is slightly higher than industrial levels. Through employee survey and other sources, management has identified the inadequacies in employee welfare schemes as the main reason for the existing problems. Management has decided to revamp the existing scheme and make them more effective and attractive for their employees. Discussion Questions: 1. If you are the HR manager in Aqua Food Company what all welfare schemes would you introduce to retain your employees? (Source: Pravin Durai, Human Resource Management, Pearson Publication, New Delhi.2010.) Unit 14: Employee Welfare and Working Conditions 21 Human Resource Management Manipal University Jaipur (MUJ) 12. REFERENCES Fisher, S, and Shaw. (2010). Human Resources Management. New Delhi: Cengage Publication. Aswathappa, K. (2010). Human Resource Management. New Delhi: Tata McGraw Hills. Wayne, C. F. (1998). Managing Human Resource. Irwin/McGraw Hills. Durai, P. (2010). Human Resource Management. New Delhi: Pearson Publication. E-References: http://industrialrelations.naukrihub.com/employee-welfare.html (Retrieved on 15 January 2012) http://smallbusiness.chron.com/objectives-employee-welfare-17425.html (Retrieved on 15 January 2012) http://www.expresscomputeronline.com/20090309/technologylife 01.shtml (Retrieved on 15 January 2012) http://www.citehr.com/176307-employee-welfare.html (Retrieved on 15 January 2012) http://deeparaajahumanresourcemanagement.blogspot.in/2007/12/ employee- welfare.html (Retrieved on 15 January 2012) Unit 14: Employee Welfare and Working Conditions 22 Human Resource Management Manipal University Jaipur (MUJ) MASTER OF BUSINESS ADMINISTRATION SEMESTER 1 HUMAN RESOURCE MANAGEMENT Unit 13: Grievance and Grievance Procedure 1 Human Resource Management Manipal University Jaipur (MUJ) Unit 13 Grievance and Grievance Procedure Table of Contents Fig No / SL SAQ / Topic Table / Page No No Activity Graph 1 Introduction - - 3 1.1 Objectives - - 2 Concept of Grievance - 1 4-6 3 Causes of Grievances 1 2 6-7 4 Forms and Effects of Grievance - 3, I 8-10 5 The Grievance Handling Procedure - 4 10-11 6 Need for Grievance Redressal Procedure 2 5, II 12-14 7 Summary - - 14-15 8 Glossary - - 15 9 Terminal Questions - - 15 10 Answers - - 16 11 Case Study - - 17-19 12 References - - 19 Unit 13: Grievance and Grievance Procedure 2 Human Resource Management Manipal University Jaipur (MUJ) 1. INTRODUCTION In the previous unit, we discussed the meaning and objectives of discipline and the principles for maintaining discipline. We also learnt the basic guidelines of a disciplinary policy, disciplinary action penalties and the procedure for disciplinary action. It is human nature to express discontentment when we feel it. Employees differ as individuals in their needs, expectations and behaviour. Employee dissatisfaction results when their needs are unsatisfied, or their objectives are not achieved. It is not an easy task for the management to keep all employees satisfied and to motivate them, all the time. There are different reasons for an employee being dissatisfied. For example, failure to get a pay hike and promotion can lead to unhappiness and dissatisfaction for an employee. This dissatisfaction takes the shape of a grievance when it is formally brought to the notice of the management. The grievance redressal procedure of an organisation enables employees to release their dissatisfaction. Organisations need to introduce an effective grievance redressal system. This unit will discuss the concept, causes and the need for grievance. We will also study the forms and effects of grievance and the grievance handling procedure. 1.1 Objectives After studying this unit, you should be able to: ❖ Explain the meaning of ‘grievances. ❖ Analyse the importance of grievance handling. ❖ Describe grievance machinery and its procedure. Unit 13: Grievance and Grievance Procedure 3 Human Resource Management Manipal University Jaipur (MUJ) 2. CONCEPT OF GRIEVANCE Grievance is a sign of an employee’s discontent with the job and its value dissatisfaction or feeling of injustice in connection with one’s employment situation that is brought to the notice of the management. The definition of grievance often varies from company to company and author to author. The term's broadest interpretation would include any dissatisfaction that affects organisational performance. It can be stated or voiced, written or oral, legitimate or ridiculous. The word grievance is often used in a generic form to indicate various forms and stages of an employee’s dissatisfaction while at work. While dissatisfaction could be defined as anything that disturbs an employee, a complaint is a spoken or written dissatisfaction brought to the attention of the manager or the HR department/team member. Often, employees view the HR team as the custodian of employee content/discontent and take up their grievances with the HR team. A group of employees could also voice a grievance; it need not necessarily be a single employee with a complaint. Dale Yoder defines grievance as "a written complaint filed by an employee and claiming unfair treatment." Prof. Jucious defines grievance as “any discontent or dissatisfaction, whether expressed or not and whether valid or not, arising out of anything connected with the company that an employee thinks, believes or even feels unfair, unjust or inequitable.” Prof. Pigors and Meyers define grievance as dissatisfaction. According to them, dissatisfaction with an employee disturbs the employee, whether expressed or not. The International Labour Organisation (ILO) classifies a grievance as a complaint of one or more workers concerning wages and allowances, conditions of work, and interpretations of service stipulations, covering such areas as overtime, leave, transfer, promotion, seniority, job assignment and termination of service. The National Commission of Labour states that complaints affecting one or more individual workers regarding their wage payments, overtime, leave, transfer, promotion, seniority, work assignment and discharges would constitute grievances. It must be expressed by the employee and brought to the notice of the management and the organisation. Unit 13: Grievance and Grievance Procedure 4 Human Resource Management Manipal University Jaipur (MUJ) Grievances take the form of collective disputes when they are not resolved. Also they will then lower the morale and efficiency of the employees. Unattended grievances result in frustration, dissatisfaction, low productivity, lack of interest in work, absenteeism, etc. In short, grievance arises when the organisation does not fulfil employees' expectations, resulting in discontentment and dissatisfaction. This dissatisfaction must crop up from employment issues and not from personal issues. In an organisation, a grievance may arise due to several factors, such as: Violation of Management's Responsibility: This can encompass issues like inadequate working conditions, lack of safety measures, insufficient resources or support for employees, and ineffective communication channels within the organisation. Violation of Company Rules and Regulations: When employees perceive company policies not being upheld consistently or fairly, it can lead to grievances. This may include favouritism, discrimination, harassment, or unequal treatment. Violation of Labor Laws: Non-compliance with labour laws and regulations set by government bodies can result in grievances. Examples include failure to provide fair wages, denying overtime pay, or disregarding employee rights protected by law. Violation of Natural Rules of Justice: This refers to instances where employees feel they have been treated unfairly or unjustly, such as being passed over for promotions or rewards despite meeting the criteria, experiencing discrimination based on gender, race, or other characteristics, or facing retaliation for whistleblowing or exercising their rights. Addressing these factors promptly and effectively is crucial for maintaining a positive work environment and ensuring employee satisfaction and productivity. Employers should establish transparent grievance procedures and foster open communication channels to address and resolve issues as they arise. Unit 13: Grievance and Grievance Procedure 5 Human Resource Management Manipal University Jaipur (MUJ) SELF-ASSESSMENT QUESTIONS – 1 1. The broadest interpretation of the term grievance would include any discontent or dissatisfaction that affects. 2. In the language of the labour management relations, a grievance is a complaint formally presented by the _____________________to the management. 3. The _____________________ states that complaints affecting one or more individual workers regarding their wage payments, overtime, leave, transfer, promotion, seniority, work assignment and discharges would constitute grievances. 3. CAUSES OF GRIEVANCES In the previous section, we discussed the concept of grievance. Let us now discuss the causes of the grievance. Grievances can arise from the day-to-day working relations in an organisation. Relations with supervisors and colleagues also determine employee’s job satisfaction. Grievances may occur for a number of reasons: (a) Economic: Wage fixation, overtime bonus, wage revision etc. Employees may feel that they are paid less when compared to others. (b) Work environment: Poor physical conditions, tight production norms, defective tools and equipment, poor quality of materials, unfair rules, lack of recognition, etc. (c) Supervision: Relates to the supervisor's attitude towards the employee, such as the perceived notion of bias, favouritism, nepotism, caste affiliations, regional feelings, etc. (d) Workgroup: Employee cannot adjust with his colleagues and suffers from feelings of neglect and humiliation. (e) Miscellaneous: These include issues related to certain violations concerning promotions, safety methods, transfer, disciplinary rules, fines, granting leave, medical facilities, etc. Figure 13.1 shows the causes of grievance. Unit 13: Grievance and Grievance Procedure 6 Human Resource Management Manipal University Jaipur (MUJ) Economic Work Causes of so rvc supervis ion environment Workgroup Fig. 13.1 Causes of Grievance Many organisations form committees and involve employees in most employee-impacting decisions, be it the choice of a new office location, what needs to be served for lunch in the cafeteria, or other workplace hygiene factors. In job-related issues such as promotions, compensation and merit hikes, today’s organisations provide transparency in their policies and practices. The increasing focus on skills and competencies for employee reward and growth does not allow for personal biases that can lead to grievances. SELF-ASSESSMENT QUESTIONS – 2 4. Employees may feel that they are _______________________ when compared to others. 5. Poor physical conditions of ___________________, tight production norms, defective tools and equipment, poor quality of materials, unfair rules, lack of recognitions, etc. are the work environment causes of grievance. 6. Employee is unable to adjust with his _____________________ suffers from feelings of neglect, humiliations. Unit 13: Grievance and Grievance Procedure 7 Human Resource Management Manipal University Jaipur (MUJ) 4. FORMS AND EFFECTS OF GRIEVANCE In the previous section, we discussed the causes of grievance. Let us now discuss the forms and effects of grievance. Forms of grievance Grievance may take any one of the following forms: Factual: A factual grievance arises when the legitimate needs of the employees remain unfulfilled. For example, a wage hike has been agreed upon but not implemented, citing various reasons. Imaginary: An employee’s dissatisfaction is not because of any valid reason but because of a wrong perception, attitude or information they have gathered. Such a situation may create an imaginary grievance. Disguised: An employee may have dissatisfaction for reasons that are unknown to them if they are under pressure from family, friends, relatives, or neighbours and may come to the workplace with a heavy heart. Effects of grievance The effects of grievances within an organisation can indeed be detrimental and wide- ranging. Here's a breakdown of how grievances can impact various aspects of the organisation: On Production: Low Quality of Production: Grievances can lead to a lack of motivation and commitment among workers, resulting in a decrease in the quality of output. Decreased Productivity: Discontented employees may not work efficiently, leading to lower productivity. Increase in Wastage and Costs: Poor morale and lack of focus can contribute to increased wastage of materials and higher production costs per unit. On Employees: Higher Absenteeism and Turnover: Employees dissatisfied with their work environment are likelier to miss work or seek employment elsewhere. Unit 13: Grievance and Grievance Procedure 8 Human Resource Management Manipal University Jaipur (MUJ) Reduced Commitment and Morale: Grievances can diminish employees' dedication to work and overall job satisfaction. Increased Accidents: A lack of motivation or focus due to grievances can lead to more accidents in the workplace. On Managers: Strained Relationships: Grievances strain the relationship between managers and employees, making maintaining a positive work atmosphere harder. Increased Supervision and Control: Managers may need more control and supervision to ensure tasks are completed correctly, which can be resource-intensive. Rise in Disciplinary Actions: If grievances are not addressed promptly, they may escalate, leading to more disciplinary actions against employees. Increased Unrest: Unresolved grievances can create tension and unrest within the organisation, requiring additional efforts to maintain peace and stability. If left unaddressed, grievances can have cascading effects on the organisation, impacting productivity, employee morale, and managerial effectiveness. Organisations must have effective grievance resolution mechanisms to mitigate these negative consequences and foster a positive work environment. Activity 1 Visit the following website and read it. http://www.indianmba.com/Faculty_Column/FC338/fc338.html Reflect on what the author is trying to convey. How practical is it? Unit 13: Grievance and Grievance Procedure 9 Human Resource Management Manipal University Jaipur (MUJ) SELF-ASSESSMENT QUESTIONS – 3 7. A ___________________ arises when the legitimate needs of the employees remain unfulfilled. 8. _____________________ is when an employee’s dissatisfaction is not because of any valid reason but because of a wrong perception. 9. Grievances, if not identified and redressed, may affect ____________________ the workers, managers and the entire organisation 5. THE GRIEVANCE HANDLING PROCEDURE In the previous section, we discussed the forms and effects of grievance. Let us now learn the grievance handling procedure. The following guidelines may help a supervisor while dealing with a grievance: Treat each case as necessary and get the grievance in writing. Talk to the employee directly. Encourage them to speak the truth. Give them a patient hearing. Discuss in a private place. Ensure confidentially, if necessary Handle each case within a time frame