DISCIPLINE AND GRIEVANCES

Definition and Meaning: The term discipline refers to a condition in an organization when employees conduct themselves as per the expectations of management which are laid down in the form of rules, regulations and standard norm of behavior. Some of the definitions are given below: 1. Discipline is the force that prompt an individual or a group to observe the rules, regulations and procedures which are deemed to be necessary to the attainment of an objective. Dr. Spriegel 26 2. Discipline may be considered as a force that prompts individuals or groups to observe the rules, regulations and procedures which are deemed to be necessary for the effective functioning of an organization. Calhoon 27 3. Discipline is control, gained by enforcing obedience. Webstar Dictionary. 4. Discipline is the order, members of an organization who adhere to its necessary regulations because they desire to cooperate harmoniously in forwarding the end which the group has in view. Tead 28 Discipline is essential for the following: Smooth running of the organization. Increase working efficiency. Maintenance of industrial peace. Improve working relations and tolerance. Develop a working culture which improve.

Principles of Disciplinary Actions: (1) Corrective and not Punitive: The primary objective of disciplinary action is to correct the behavior. (2) Progressive Actions and Punishment: First offence may lead to an oral warning, which is followed by a written one. Later repetition of offence may lead to suspension or some such punitive actions like fines or loss of seniority or increment. (3) Natural Justice: This means the following: Assume the accused is innocent till the time the charges brought against him are proved. Give full opportunity for the accused to prove his innocence. It is not sufficient that the administration is fair, it must appear to be so. All facts are to be investigated and all witnesses are to be examined. Punishment must be fair and proportional to the gravity of offences. Punish in private and praise in public dictum be used in punishing an employee. Page 1 of 19

(4) Hot-stoveRules: McGregor has proposed Hot-Stove Rules in disciplinary action. This rule compares disciplinary action as that of a hotstove. (i) Immediate Response: Just as you touch a hot stove, the burning is immediate. Whenever an employee violates the rule, the disciplinary action must follow immediately leading to punishment. (ii) Adequate Warning: It is a well known fact that one will burn his finger by touching a hot stove. Similarly, all employees must know violation of rules attract disciplinary action. The organization to prepare the Rules and Regulations and give adequate publicity. (iii) Consistent: Everyone who touches a hot stove gets the same punishment viz. burning. This implies the rules and regulations are applicable for all and equal punishment is awarded to same offence. There is no discrimination in disciplinary actions and there is consistency in punishment awarded. (iv) Impersonal: Stove is impersonal. This shows punishment awarded must be related to the nature of offence and do not change from person to person. All persons are equal before law. Rules must be equally applicable to all.

CODE OF DISCIPLINE
Mutual Agreement between Management and Union: There shall be no strike or lockout without due notice. No unilateral action on industrial matter. Industrial disputes must be settled at appropriate level utilizing existing machinery. Affirm faith in democratic principles. Bind themselves to settle disputes/grievances by mutual negotiations or through voluntary arbitration. Neither party take the line of coercion, intimidation or go-slow tactics. Avoid litigation, sit-down and stay-in strikes or lockouts. Promote constructive cooperation. Agree to establish mutually accepted procedure for settling grievances and do not resort to arbitrary action. Educate management personnel and workers in regards to their duties, responsibilities and obligations.

Agreement on the Part of Management: Do not increase workload unilaterally. Discourage unfair labor practice victimization, etc.

like

discrimination,

coercion,

Page 2 of 19

Take prompt action for redressal of grievances and implementation of settlements and awards. Publicize Code of Discipline in local language and display the same promptly. Follow laid down sequential steps in disciplinary action like warning, suspension etc, and provide reasonable chance for accused to defend himself including right of appeal against punishment awarded. Take disciplinary action against officers/management staff who are found guilty of precipitating indiscipline among workers. Recognize trade union according to criteria evolved at 16th session of Indian Labor Conference held in May1958 and amendment there of, if any.

Agreement on the Part of Trade Unions: Do not encourage physical duress. Do not permit rowdyism and violent demonstration. Do not allow members to engage in any union activity during working hours. Discourage unfair labor practices such as go slow damage, carelessness etc. Take prompt action to implement award and settlement. Display at a prominent place the Code of Discipline for the knowledge of workers. Take actions against office bearers of unions who are found violating Code of Discipline.

ROLE AND RESPONSIBILITY OF PERSONAL DEPARTMENT

Personal Department plays an important role in administration of discipline, even though line managers exercise the authority of punishment and are charged with the responsibility of discipline among the employees placed under them. Following are the responsibilities of Personal Department. Advice and assist top management and line managers to develop proper organization culture and quality relationship between employees. Assist formulation of policy on administration of discipline which is compatible with Government/Public policies. Develop procedure of administration of discipline and communicate the same to all employees. Ensure faithful implementation of policies and procedures. Assist management in conducting enquiries. Training and developing line supervisors on administration of discipline. Assist to solicit cooperation of union in disciplinary proceedings. Develop standard of self discipline among employees. Become an example of high standard of discipline and code of conduct by words and actions. This is very essential to spread the message of
Page 3 of 19

good discipline. Any disciplinary lapse of Personal Dept. is highlighted and they will be accused as the fence eating the Crop. Equity and fairness in discipline matters must be adhered to. This is possible only when we ensure that no one is above the law. Otherwise Personal Dept. will be accused of following a policy of show me the person, I will tell you the rules.

Causes of Grievances: Broad classification of grievances and their causes. Sl.N o. 1. Classification Wage Grievances Causes

2.

3.

4.

5.

6.

7.

Demand for individual wage adjustment. Complaint about job classification Complaint about incentive system Miscellaneous. Supervision Complaint against discipline/administration Complaint against be behavior supervisor Objection to the method of supervision Working Condition Safety and health Violation of rules and regulations Miscellaneous. Seniority and Promotion Loss of seniority And Transfers. Calculation/Interpretation of seniority Promotion-denial or delay Transfer or change of shifts. Discipline Discharge/Dismissal/Layoffs Alcoholism, absenteeism and accidents. Harshness of punishment and penalty. Collective Bargaining Violation of contract/award/agreement Interpretation of contract/award/agreement Settlement of grievances Union Management Recognition of union Relations Harassment of union office bearers Soldiering/Go-slow tactics.

PERFORMANCE APRISAL AND MERIT TRAINING

Objectives (Purpose):

Page 4 of 19

1. Assist management of take decisions on promotion, transfer, extension of tenure termination etc. 2. Training and development: Training and development needs of employees vary depending on their skill level, knowledge level and experience. Hence an accurate, up-to-date information in regard to their competence level is needed. This is provided by evaluation. 3. Validation of selection criteria: Subsequent performance validates such criteria used for selection. 4. Feedback to employees: This is provided by objectives appraisals. 5. Reward management: Accurate, up-to-date and objective performance evaluation is needed for selecting employees to receive such awards. 6. Manpower planning: Manpower planning requires long-term successive planning career paths, determination of possible future vacancies and consequent promotional avenues. For all such activities, personnel appraisal data is very useful.

APPRAISAL METHODS
Types: Following are some of the important and popular individual appraisal methods: (a) Essay Appraisal. (b) Critical incident. (c) Checklist. (d) Graphic Rating Scale. (e) Relative Appraisal Method.
(a)

Critical Incident Method: Here employees past performance is critically examined by the rater. Here key behavior is identified which made a difference either doing that job effectively or non-effectively. Here specific behavior is under focus instead of assessing individuals attributes of personality or stating trait characteristics like intelligent, integrity, courageous etc. These words remain quite vague unless qualified to by actions or behavior which are attributed to such traits. Advantages: Specific behavior stated. Limitations: 1.Rater has to maintain a continuous record of behavior throughout the year. 2. Comparison becomes difficult. Checklist Method: Here a checklist of behavior descriptions is prearranged and each person is evaluated against such list. Rater merely record the list and a separate group can allocate weight ages for
Page 5 of 19

(b)

each list and finally arrive at total points or marks obtained. See the following table: TABLE: Sample Checklist of Appraisal
Sl. No. 1. 2. 3. 4. 5. CHECK LIST Is he punctual? Are the orders promptly attended to? Is he in the habit of postponing work? Is he helpful to other colleagues? Does he loose temper often? .. .. .. .. .. YES NO

Advantages: 1.Checklist reduce subjectivity because recording is done by some one else act as the rater. Rater, at the end put weightages and add marks. 2. Comparison possible. Limitations: 1. Normally confined to staff of personnel department. 2. Difficult for all jobs.
(c)

Behaviourally Anchored Rating Scales (BARS): These scales combine major advantages from critical method and graphic rating scale method. Here actual behavior of employee is rated rather than some vague personality or trait characteristics. Secondly each behavior pattern is rated on various degrees either on continuum or point scale (5-point or 10-point for example). Following are the steps of preparing behaviorally anchored rating scale (BARS). 1. Generate effective and ineffective job behavior from participants/actual workers from their own experience. 2. Retranslate the above into appropriate behavioral dimensions. 3. Behavioral incidents are then numerically scaled to a level of performance. 4. Incidents that are retranslated which are widely agreed by raters having impact on performance effectiveness are retained to use as anchors on performance dimension. 5. Prepare from the above, behavioral descriptions for each job which include things like anticipation, plans, execution, solution to problems, carrying out orders, emergency situation etc An example of BAR scale is shown in the following table for that of a machine-shop inspector: TABLE: A Typical Bars for Machine shop Inspector
Poor 1 Poor inspection Satisfactory 2 Defects not often Good 3 Defective are Very Good 4 Capable of identifying Excellent 5 Able to identify Page 6 of 19

Grade Points BEHAVIOUR DESCRIPTIO

majority of lots accepted by him got rejected in the field.

detected. Requires assistance in accepting lot, 50% rejection in the field.

identified in 2nd/3rd attempt. Majority of lots accepted are not rejected in field.

defectives. Accepted lot seldom returned. Requires assistance in adjusting machine.

defective lots in first attempt. Accepted lot never returned. Capable of adjusting machine independent ly.

The main limitation is that of elaborate effort is needed for preparing BARS. (d)

Relative Appraisal Method: Following are some of the Relative Appraisal Methods. Here individuals are compares each other, on their performance. The popular are the following: (i) Group Order Ranking Method. (ii) Individual Ranking Method. (iii) Paired Comparison Method. (iv) MBO & Goal Setting Method. (i) Group Order ranking Method: Here the members are graded as Top 10 per cent, Second 10 per cent etc. It has limited use for college/school promotions/Selection for competitive Examination etc. Individual Ranking Method: This is the method of ranking employees in the descending order of appraisal marks obtained. Paired Comparison Method: This is the ranking by taking two at a time for comparison. MBO/Goal Setting Method: These are other techniques to compute performance evaluation and compare employees.

(ii) (iii) (iv)

APPRAISAL ERRORS
Leniency Error: This is the tendency of awarding higher marks than what it is really due. This depends on variation of value system or standard between different raters. Halo Effect: Sometime an employee can create a certain impression on the rater because of some incidents or behaviour. This could be either positive or negative. For example, a employee might have been selected as a champion in athletics meet. This good impression has a tendency to influence the rater to provide higher marks on all factors being evaluated. Similarly a person who is shabbily dressed for an interview give a bad impression on the rater which carry negative feedback, where he is being appraised, giving a chance of putting less marks on all points on the appraisal card.
Page 7 of 19

Similarity Error: This is the situation in which appraisee possesses a certain similarity or identity with the rater himself. It could be identity in ideology, personality, cast, creed or language etc. Central Tendency: Appraisers have a tendency to play safe. This results in rating all employees above average or Good. Normally in all organizations there are about 10 per cent excellent and 10 per cent very poor. One cannot ignore this aspect. Reward Effect: Some time rating can affect promotion or some such reward to which the employee is a candidate. The tendency of rater is to award some extra marks in such occasions. Recent Incident Effect: Normally the annual appraisals are made some time in the month of December every year. This is the error in which the rate is biased because of certain incident which occurred during a period just prior to the date of appraisal. If such an incident has created a good impression on the rater, it leads to award of higher marks than deserved and vice versa. Rater Error: If the rate is one, all the above errors will have little effect in ranking since errors are equally affected to all the employees even though individual marks vary from realistic analysis. The problems become acute when raters are many. We have different types of raters, very strict, or very relaxed. The strict rater puts lesser marks where as the relaxed rater give very high marks. Thus the employees who are marked /appraised by strict rater suffer because the annual confidential report contain the raters marks of appraisal, which form the basis of further promotion or lucrative assignment or choice transfer etc. The personality of rater is another factor for such errors. For example, the marks allotted will be generally on the lower side by a rater who believes in Theory of X, compared to another rater who believes in Theory of Y.

METHOD OF IMPROVING PERFORMANCE APPRAISAL

Following are some of the methods of reducing errors and improving equity and fairness in performance appraisal: 1.Use Behaviourally Based Scale: Use of BARs instead of trait or personality attributes for appraisal. 2. Combine Individual and Group Ranking: This is the method of classifying employees in various grades and indicate position of each
Page 8 of 19

employee in their respective grade. This will also reveal the nature (Relaxed or Strict) raters and might help to correct them. 3. Continuous Feedback: If supervisor and worker, interact often and confront problems, solutions and performance, annual appraisals will not be a surprise to the subordinate. A sort of partnership can develop where supervisor continuously appraises him the areas requiring improvement. 4. Multiple Raters: Use of multiple raters minimise raters errors. This can also assist to employ suitably qualified and competent rater to appraise a person in specialized areas. This later method is also called Selective Rating Method. 5. Training Appraisers/Raters: Suitable training assists a lot to bring in uniformity in criteria and measurement of performance. 6. Peer Evaluation: Here peers are asked to evaluate their colleagues and suitable weight age is assigned. 7. Rewards to Accurate Appraisers/Raters: This will provide the following: Improve motivation to become objective in appraisal. Improve value of appraisal. Very often raters consider, rating is a routine affair which has no value on career prospect/promotion ect. of employees.

REWARDS AND LABOUR WELFARE

Block diagram of Types of Rewards:

REWARDS Page 9 of 19

INTRINSIC REWARDS

EXTRINSIC REWARDS

PARTICIPATION

FINANCIAL FINANCIAL REWARDS REWARDS

NON-FINANCIAL REWARDS

GROTH CHANCES

RERFORMANCE BASED REWARD PIECE WORK

MEMBERSHIP BASED REWARD DEARNESS ALLOWANCE SENIORITY BASED RUNNING SCALE QUALIFICATION PAY OTHER PERKS

BIG BUNGALOW TASTE FULLY FURNISHED OFFICER

RESPONSIBILITY

AUTONOMY-FREEDOM

ASSIGNED PARKING SPACE BUSINESS CARDS

INCENTIVE PLANS

TAX IDENTIFICATION

BONUSES

EXECUTIVE CLASS TRAVEL & STAY PERSONAL SECRETARY ASSISTANTS

TASK SIGNIFICANCE SKILL VARIETY

COMMISSION PROFIT SHARING MERIT PAY CAFETARIA TYPE COMPENSATION

FEED BACK OF PERFORMANCE

ADDITIONAL PHONE/FEX CELLULAR PHONES

BENEFITS

CHAUFFEUR DRIVEN CAR & OTHER PERKS

SERVICES

Principles of Effective Reward System: Researches have shown that rewards system become effective when the same suits to individual differences and there is a personal touch in it. Following are some of the principles to make reward system effective: 1. Importance of reward: This is fixed by recipient not by the person giving it. For example cash award is important to some, but not so to some others.
Page 10 of 19

2. 3. 4.

5.
6.

Equity and fairness: It increase the value of reward. Reward must be visible: Publicity and public function used to announce on handing over reward. It motivates individual as well as his peers. Flexibility of Criteria: Criteria for award must be flexible to adjust realistic constraints. Less costly but more valuable Criteria of award: It must be clear and significant. Some such criteria are the following: Performance. Effort. Seniority. Knowledge and Skill. Difficulty of Job. Responsibility and discretion.

LABOUR WELFARE
Advantages of Labour Welfare: Following are the advantages of labour welfare. 1. Industrial Harmony: Welfare measures create a good impression of workers on employers and state. This will enhance their sense of belongingness and motivation. Ultimately it improve union-management relations and secure industrial peace. 2. Real Income Reduces Inflation: Welfare measures indirectly increases the real income of workers. Examples are subsidised food in the canteens, free medical and educational facilities are being paid in kind reduces inflation. 3. Stabiluty of Employment: Welfare measures reduces the labour turn over, absenteeism and some times even the strikes which deprive them these facilities. 4. Improve Mental Health: Welfare measures improve mental health by providing scope for promoting hidden talents like music, arts and other extra-curricular activities. 5. Physical Health: Welfare measures like sports improve physical health. 6. Quality of Work Life (QWL): Medical facilities, educational opportunities and social security go a long way in increasing quality of work life. 7. Increase Productivity: Points mentioned at points (2), (4), (5) and (6) above will increase the living standard, efficiency and productivity of workers.
Page 11 of 19

8.

Empowerment: Empowerment involve competence and intrinsic motivation.

interest,

commitment

and

BENEFITS (EXTRA-MURAL)
Classification: Following are the categories of benefits. 1. Statutory Benefits 2. Voluntary Benefits, and 3. Flexible Benefits. Statutory Benefits: These are as follows: (a) Social Security. (b) Compensation Against Employment Injury. (c) Maternity Benefit. (d) Provident Fund. (e) Unemployment Benefit. (f) State Insurance Scheme. (g) Pension/Family Pension. (h) Gratuity. (i) Medical Cover Central Government/ Defence Services Employees. (j) Group Insurance/Individual Insurance Cover. Voluntary Benefits: This covers the following: Rest period or coffee break. Holidays. Leave-Earned leave/Casual leave. Paid vacations. Sick leave.

Page 12 of 19

INDUSTRIAL HEALTH AND SAFETY

Importance of Industrial Health: Industrial environment can impair employees health because of the following: Malnutrition. Continuous work. Poor sanitary condition. Environmental pollution like excessive smoke, sound, dust and heat etc. Chemical effluents and contamination of air and water. Stress and strain. Anxiety and uncertainty. Time pressure conditions. Fatigue introduced by monotony of work. Exhaustion due to poor design of work place and tools. Protection against Diseases: There are two steps viz. a) Preventive measures. b) Curative measures. a) Preventive Steps: Pre-employment medical examination. Periodic post-employment medical examination. Removal of hazards materials/processes wherever possible. Surveillance of employees exposed to health hazards. Emergency treatment in case of accidents. Availability of First-Aid Equipment. Training of First-Aid treatment. Education of workers on health and hygiene. Special surveillance of health of worker persons like aged children and women employees. Proper factory layout and illumination. Proper design of factory building with proper ventilation. Proper Effluent Disposal Treatment Plants. Careful design and selection of handling equipment. Careful design of work places and tools based on principles of Ergonomics. Proper redesign of Job to remove monotony and fatigue. Proper scheduling the work with adequate rest. Registration with BARC Trombay and their period inspection wherever radiation materials are used. (b) Curative measure: These steps involve the following: Adequate medical treatment. Allowing adequate period of convalescing and recuperating. Adequate compensation. Provision of best medical treatment from outside hospitals. Statutory Protection: The Factories Act 1948 and Workers Compensation Act 1923 have certain provisions to safeguard employees against occupational diseases/hazards. Some of these are mentioned here mostly from Factories Act. Cleanliness. Disposal of waste and Effluents. Adequate ventilation and temperature. Protection against dust fumes. Lighting/Illumination-adequacy. Page 13 of 19

Prevention of overcrowding. It is specified that the space must be sufficient but not les than 500 cft per worker. Provision of potable drinking water. Provision of latrines/urinals. Provision of First Aid and Compensation on injury/sickness due to occupational diseases (compensation Act).

ACCIDENTS
Causes of Accidents: Causes of accidents can be broadly divided under the following four broad classifications. (a) Intrinsic causes. (b) Extrinsic causes. (c) Personal causes. (d) Exogenous causes. (a) Intrinsic Causes (Job Contents): These are the causes of accidents arising out of job content. Examples are the following: Inhaling dangerous chemical fumes while dealing with processes like electroplating. Over exposure to radiation hazards when working with X-Ray, -ray equipment's. Fire accident and over exposure to heat such as operation in heating furnaces like steel melting. Fall from tall towers, chimneys , and overhead cranes and moving parts etc. Accidents due to incompetence and lack of adequate training or supervision while working. (b) Extrinsic Causes (Environmental): These are causes arising out of the work context (environment). Some of these are listed here. Lack of adequate lights and ventilation resulting accidents. Injuries due to atmospheric/environmental pollution like air, water and noise pollutions. Use of defective machinery and equipment. Lack of protective equipment and safety devices. Poor layout and faulty location of equipment, tools and work station. Work stress due to anxiety, monotony and fatigue. Dangerous stacking of materials. Improper maintenance, especially electric wires and gas pipelines and poor housekeeping. Slippery floors, and leakage of oil. Improper safety guards and CAUTION BOARD to dangerous area. Poor work schedule. Insufficient supervision and training. (c) Personal Causes: These are the causes contributed by individual workers which are influenced by their own individual personality contributed by physical, mental, psychological and physiological factors. Some examples of accidents which are caused by personal reasons are given below: Lack of knowledge and skill. Lack of physical characteristics like stamina or any physiological infirmity. Failure to follow laid down instructions and safety precautions. Behavioural aspects like taking unnecessary risks and chances like over speed. Psychological aspects like forgetfulness, carelessness, indifference, lack of interest, day dreaming, frustration, anxiety and sabotaging tendencies etc. Poor mental health manifested in the form of alcoholism and drug addiction. Page 14 of 19

(d) Exogenous Causes: Causes which are not covered under (a), (b) and (c) above are classified as exogenous causes. Examples are: Act of God. Lightening. Floods. Earthquakes and Enemy actions like bombing etc. STRESS MANAGEMENT Employee stress is an increasing problem in orgs. Stress: A dynamic condition in which an individual is confronted with an opportunity, constraint or demand related to what he desires and for which the outcome is perceived to be both uncertain and important. Schuler. More typically, stress is associated with constraints and demand. Constraints: Forces that prevent individuals from doing what they desire. Demands: The loss of something desired. A Model of Stress

Potential sources
Environmental factors Economic uncertainly Political uncertainty Technological uncertainty Individual differences Perception Job experience Social support Belief in locus of control Hostility

Consequenc
Physiological symptoms Headaches High blood pressure Heart disease Physiological symptoms Anxiety Depression Decrease in job satisfaction Behavioral symptoms Productivity Absenteeism Turnover

Organizational factors Task demands Role demands Interpersonal demands Organizational structure Organizational leadership Organizations life stage

Experienced stress

Individual factors Family problems Economic problem personality

Causes of Executive Stress: Full are executive job requirement which cause anxiety: Constant changes in work patterns/routines. Pressure from superiors for better performance. Page 15 of 19

Efforts to get better results from sub- ordinates. Remedial Measures Against Work Stress: (a) Steps: Following are steps towards cure of work stress. Identification: Early identification of stress symptoms is very desirable thing. Managers must be vigilant to look for such symptoms. Prevention: Try to look for constraints which cause anxiety and uncertainty. Managers must take effective steps to remove such constraints, wherever possible. Mediation: This is the method of halting and reversing burn out a sort of preventive measures. Remediation: These are steps/techniques prescribed to remedy the stress which must be unique to suit individual. This include medication, meditation and exercises. (b) Organizational Efforts: Followings Effort/methods/measures are relevant to mitigate work-stress from the part of organization: Undertake-stress audit: In this effort, data and information is gathered on the working climate, role-stress, Job-satisfaction level or frustration if any. Attitude/morale survey is one such method. Mass interview, counseling and Exit interview are other means of gathering information. Use scientific Inputs: Collect information in regard to causes, symptoms and consequences of work-stress and educate the employees how to overcome the ill-effects of work-stress. Medical Assistance: Progressive organizations employ Qualified doctors and psychologists to advice management on various aspects of work-stress including its preventive steps. They will also assist management to detect physiological, psychological and psychosomatic symptoms of work stress on their employees. Publicity, through education & training: It is necessary to give adequate publicity so that an awareness is build up on causes and remedies of workstress. (c) Individual Efforts: Following individual efforts can also assist to over come ill-effects of work stress. Take a hard look at yourself: Look for occasion and reasons for origination of stress in your life. Critically examine your own contribution towards stress. Stay alert: Do things other than routine job which give you better mental satisfaction viz sports/artistic, academic contribution etc. Take risks: Moderate and calculated risks give better meaning of life and satisfaction. Avoid isolation: Avoid isolation whether at home or in office. Isolation can only increase stress in the long run even though it might appear to give temporary peace of mind. Always keep channels of communication open. Stretch for success: Keep hopes high. Have optimism. Stretch for success always keeps you on your toes. These efforts assist to overcome obstacles/constraints. Overcome obsolescence: Update your knowledge and skill to improve your competence level which is very essential to succeed in highly competitive environment.

Page 16 of 19

WAGES SALARIES Principals of wage/ salary administration: a. It must be easy and simple to understand. b. Consistent with the org policies. c. Understood and acceptable by the employees. d. Plan must be flexible to take care of local conditions. e. Must be consistent with govt. policies. f. Management techniques used must be significant e.g. job evaluation and merit rating. g. Chief of wages and salaries administration must be a senior person who would report to CEO. h. Participation of employees representative in wages and salaries survey and in development of wages and salaries structure. Objectives: a. Attract and retain competent employees. b. Improve motivation and productivity. c. Develop and maintain fair and equitable wages structure. d. Control cost. e. Minimise grievances and simplify collective bargaining. f. Reduce subjectivity and favoritism in payment. g. Recognise merit and effort. h. Improve good will to the organisation.

PROCESS OF WAGES PAYMENT:

WAGES SURVEY

WAGES LEGISLATION JOB DESCRIPTION

WAGES LEVEL

JOB EVALUATION

JOB SPECIFICATION Page 17 of 19

WAGES STRUCTURE

WORK/JOB STANDARD

WAGE FIXATION

MERIT RATING WAGE (EVALUATION) FIXATION

INCENTIVE PAYMENTS

WAGES INCENTIVE PLAN

Wages level: Wages, from early stages itself, remain the most important of WAGE PAYMENTS all other factors which motivate the workers. Steady wages provide him the physiological needs like food, shelter and security. Regular employments with relative higher levels of payment also provide him to meet the psychological needs like companionship, social recognition, status and prestige and above all satisfy his individual ego. A number of factor influences fixing the level of wages. These are discussed broadly under the following: a) Lanham Factors and b) Other Factors. a) Lanham Factors: Lanham proposed following five factors which influence the wage level: 1. Prevailing wage rates 2. Ability to pay 3. Productivity 4. Cost of living 5. Attraction and retention of employees: Wage level must be such that the same must attract talents and retain them in the organization. In order to do so, organization must be prepared to fix higher pay scales. Higher level of wages motivates persons. Some time, there can be instances where qualified persons are prepared to work at lower levels due to personal exigencies or surplus of hands seeking positions. In such cases, if the firm chooses to exploit the situation and hire them at low level of wages, such employees will leave the organization at the earliest opportunity when they are offered better scale by other organization. Secondly, such persons might not be able to contribute their maximum efficiency in to the work during their tenure. Job seekers attraction to join a particular organization is a state of mind. Similarly, his continued stay in the organization is again, influenced by his attitude towards the organization. Thus we find, attraction and retention are profoundly influenced by psychological and sociological factors. A person who gets higher wage perceives him successful. This will give him a Sense of security. His position and level of pay and perks provide him the social
Page 18 of 19

status and satisfy his ego. Thus we find level of payment has both sociological and psychological factors. Organization must take these things also into consideration while fixing the levels. b) Other Factors: In addition to the factors mentioned by Lanham, following factors also determine the level of wages: 1. Government legislation and public policy. 2. Labour market of supply and demand: These are instances of exploitation of market conditions in fixing wages levels. For example in India where educated unemployed are many, firms offer them low level of wages. Similarly certain vocations like woodwork (carpentry), and computer system analysis, the wage levels are high because of shortages of trained manpower in such areas. 3. Psychological and social factors: These are already discussed briefly under heading attraction and retention. 4. Job requirements: Difficult jobs and jobs requiring higher responsibilities often carry higher levels of wages. 5. Union-Management relation: Union has a greater say in fixing wages level based on collective bargaining. 6. Management philosophy and attitude: Above all, policy of management has greater say in fixing wages levels. Such policy is influenced by philosophy and attitude of top management.

Page 19 of 19