Editor’s Note
HR issues ahead fter two decades of economic liberalization and open business environment, time has come for India Inc. to revisit and prepare its performance report card especially in respect of HR issues. It is true that investment confidence which declined in last 12 months, inflation which has soared up and governance by and large has been ineffective, has a direct impact on human capital of the industry but for HR, all times, be it a rough weather or a smooth ride, are full of challenges. The trouble is that India Inc. appears to have got too comfortable, too soon. Just a few short years of high growth with harmoneous employee relations appeared to have boxed them into a mindset which fears the slightest disturbance to the status quo- and expects the Govt. or somebody else to bail them out. HR has to be on crease now and forever because it is the people who make the difference in business. The coming time of India Inc. is for Innovation, Restructuring and Re-Organizing its business which is directly linked with HR initiatives. Sensitivity to the environment, cohesion and identity, tolerance and decentralization are few challenges where India Inc has to concentrate. Providing skilled manpower and continuous up gradation of skills in the present employees according to fast changing requirements would be an area which will pose serious challenge to HR professionals. Is the organization able to learn and adapt? Is the organization innately able to build a brand? Can the organization build constructive relationship with outer and inner stakeholders and enjoy the credibility? Answers of these questions, India Inc. has to find with the help of HR. As the business grows it faces a number of influencing factors like need of improving work practices and meeting ever rising demands of employees. Any changes occurring in business has to be communicated effectively by HR to employees because researches show that organizations that involve the employees are more successful than those exclude them. One of the most difficult aspects of the organizational change is getting employees committed to the changes you are planning to effect. This time Cover feature talks about issues that HR may face while India Inc. revisit its whole back ground, current environment and measures needed to take for future. Business stalwarts who have seen the ups and down of business and kept their flag flying in all times, share their experiences and put a road map of growth for India Inc. If you like it let us know. If not, well, let us know that too. Happy Reading!
A
Anil Kaushik
Readers’ Response
First Magazine My first impression is that it is first magazine that focuses on Women Leaders as special issue. Congrats to all specially Aparna for highlighting Karma theory and versatility of women in her write up and Ms. Mandeep Maitra who are alumni of TISS plus Dr. Tanya Mishra [NHRDN]. Apart from this study of Prasenjit (TISS Alumni) on Rewards, Case studies and end notes on Labour Laws are worth appreciating. D.K. Srivastava
All more interesting
Pankaj Pradeep becomes GM-HR
This issue focused on Women Leaders made it all the more interesting for me to read. I particularly liked the Cover article that talked about women leaders from various backgrounds and sectors who were able to excel against odds and have been able to come out as exemplary leaders inspite of questioning glances by their male colleagues and society at large. Women like Aparna, Mandeep and Tanvi are truly an inspiration for every women.
Pankaj Pradeep has been elevated to the position of General Manager-HR at Fiat India Ltd. (Power Division), Pune. Pankaj is given this challenging opportunity in a short period due to his high performance & leadership rating.
Infact Aparna’s gesture of taking out time to send me this copy just shows that her colleagues are absolutely right when they say that she is a "People's Person". I hope I can learn many things from aparna in future also. Namita
Women can deliver I appreciate the theme of Anniversary Issue. In fact there is no doubt that the journey of women from home manager to human resource manager has not been very easy in the back drop of cultural context. Corporate India is dominated by male fraternity and its nice to see the visibility of HR women at higher levels. Women can deliver best in an "environment full of respect" - having the best practices in place. Hemant Agarwal
Wonderful thought "You have brought out an excellent issue reiterating the "Women Power in HR". Thanks to all the Successful Women HR Leaders who brought Laurels to the community by showing their presence and incredible Leadership qualities. Your efforts are really appreciated for a wonderful thought to bring the issue like this which helps to motivate all the Lady colleagues in HR ". Cover page design was also awesome. Keep going... Y Nagendra Kumar
Matter of pride Received the July 2012 issue. It is really a nice one showcasing achievement of women HR Professionals. We are proud of them. Though our lady HR Professionals have excelled in service sectors, their achievements are hardly visible in IR ( except research in IR) and in manufacturing sector which is still a male dominated area. The success of HR initiatives in service sector is rather easier comparing to manufacturing sector where the challenges are more as there are several oppositions from unions. We should do some introspection and lady HR professionals should join / be encouraged to enter into manufacturing sector and unionized environment. Utpal Mukhopadhyay
Informative Read the contents. Nice to see it.but striking a work life balance is very difficult and longway to go.To the best of our knowledge the approach on either side should be human being not a gender right from home to work place which is not happening. More discuss and say on this. Once again thanks for a good information. Its not only by globalisation etc. There are women entrepreneurs already in various organisations in South India in Indian cos too.Names not came out. BICON/TVS/TAFE. M.S. Krrishnan
Readers are invited to comment on articles published in BM through email at : bmalwar@yahoo.com, bmalwar@gmail.com 2
Business Manager
August 2012
Inside
QUICKComments
by Anil Kaushik
Maruti Violence leaves GM (HR) dead
No words to condemn‌ August 2012 Vol. 15 No. 2 Chief Editor ANIL KAUSHIK Associate Editor Anjana Anil Hon'y Editorial Board Dr. T.V. Rao Dr. Rajen Mehrotra Dr. V.P. Singh H. L. Kumar Hon’y Research Lead Indranil Banerjee indranil.hr@gmail.com
COVER Feature
pg. 05 pg. 11-26
Revisiting India Inc. :
The HR Issues
DELHI : F- 482,Vikaspuri, New Delhi-18 GHAZIABAD : A - 39, Lohia Nagar, Naya Ghaziabad (UP) Hon'y Co-ordinators A.S. Sharma - Gurgaon
Building Organisations around people The HR Issues Ahead New DNA of Leadership Engaging with Young Indian India Inc. growth Road Map The human touch factor
assharma@jurishr.com
Pankaj Pradeep- Pune Pankaj.Pradeep@fiapl.com
Mihir Gosalia- Mumbai mihir@mihirgosalia.com
Deep Sikha Chakravorty-Kolkata cheerpom@gmail.com
K.Sounderraj- Chennai ksounderraj1643@yahoo.co.in Owned, Published and Printed by Anil Kaushik at Sun Prints, Ganpati Tower, Nangli Circle, Alwar - 301001 and Published From B138, Ambedkar Nagar, Alwar - 301001 ( Raj.) India Editor : Anil Kaushik The views expressed in the articles published in Business Manager are those of the authors only and not necessarily of the Publisher/Editor. While every effort is made to have no mistake in the magazine, errors do occur. Publishers do not own any responsibility for the losses or damages caused to any one due to such ommissions or errors.
S.Y. Siddiqui Vishal Talreja
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B. Muthuraman
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Pranabesh Ray Hemant Kanoria Asim Kumar Basu
Dr. Arup Varma
Inside
Surrogate HR
HR’s New tool : Social Media Today the social media has become an integral part of communication, through which people connect with each other, share information & keep themselves aware of what is happening around them.Business & organizations are not aloof of it. And organizations are embracing social media for various reasons & it has emerged as a new tool for new age's HR. An article by Monika Soutiyal
pg. 06
Creating sense of belonging to organization pg. 09
I do advocate doing what it takes to make employees feel wanted, appreciated and at home.This is the greatest employee motivator of all. An article by Madhu.
Women in IT : Spelling Co-operation The steady increase in the number of female employees is attributed to the balance achieved between the women's need to excel at work and the support received from the companies they work for. An article by Shivi Kalia.
pg. 28
pg. 38 Govt. Notifications
pg. 39
Helpline
pg. 41
Labour Problems & Solutions Questions by readers on variety of problems they face at work and answers by Anil Kaushik Chief Editor. Look at it. These may also be of some help to you.
Keeping away the stress Stress- bad stress can cause a person a multitude of problems. But the worst of these is that bad stress has the capacity to completely burn out the energy of a person leaving him dull. An article by Dr. Jaya Bhalla
pg. 30
Attitudinal Orientation for Brands Building A job is only as well done as the person who does it and this is applicable to branding as well. Brand building is a focused job and it is vital to have the right people to do it. Requirement is for different types of people at the various stages of the exercise. It may not be possible to have different people but it would certainly be pertinent to have people who can show evidence of different attitudinal strengths at the different stages. An article by Prof. Prabir Guha.
pg. 34
Labour Code of Timor-Leste I am sharing the brief history of a young nation Timor- Leste and its efforts at growth and development, prospects of business for various countries including India and the Labour Code of Timor-Leste where certain clauses are unique and can be adopted in the labour laws of India to benefit both labour and employers. An article by Dr. Rajen Mehrotra.
pg. 52 pg. 54 pg. 57
case STUDY
Monopoly to Competition case ANALYSIS Little else matters but loyal customers... By Mihir Gosalia
Book Review
pg. 60
Judgments pg. 43 Latest from the Courts Latest verdicts from different High Courts and Supreme Court effecting employer employee relations.
EVENT REPORT
Clarks Inn Anniversary pg. 62
& HR News
pg. 63
As PSBs salary increases, RBI raises productivity issue Campus hiring deferred Cos now turning to half yearly appraisals Changing gear : Cos hike variable pay than fix Supreme Court stays M.P High Court Judgment on treating allowance as basic wages for P.F
QUICK Comments
- Anil Kaushik
Maruti Violence leaves GM (HR) dead
No words to condemn… One more sacrifice by HR professional for the cause he learnt to live for. One more murder of General Manager-HR by workers .One more occasion for all of us to shed tears for few hours or days… After that..? I know and you all know. The names of such HR professionals in last seven years who laid their lives for organisations are increasing. By the time this writing will be in the hands of readers may term it as old stuff with nothing new in it and turn off the page but issues came up out of this whole incident committed by persons with criminal mind (Whom we address workers) will remain live and keep haunting us till properly addressed. Avinish kumar dev, General Manager-HR of Maruti Manesar plant was burnt to death by mindless criminal workers while setting ablaze the Adm. Building of the plant on 18th july. Along with him around 100 officers also got injured including two Japanese officials. Issue was neither of any wage demands nor of any "exploitation or arbitrariness". It was a simple disciplinary matter. One shop floor executive when simply expressed displeasure on work attitude of worker and advised him to be more concentrated, that worker slapped the executive and assaulted openly on the floor. Worker was suspended pending disciplinary proceedings which is minimal action in any industry in such a situation. Union made it a point of prestige. Negotiations went on to resolve the matter. Management even reportedly assured that worker will be taken back shortly but union leaders were adamant to revoke his suspension immediately. This inability sparked the violence.It appears to be quite abnormal. Workers of A shift stayed back in the plant. B shift workers were also in plant. Workers used Factory tools and car parts to attack managers and everyone whom they saw. It was riotous. The events of incident suggest it was high level of conspiracy hatched out by workers to attack management officials and lay the fire. Management was caught unawares. Side door beams were used to attack management officials. No worker is reportedly injured. In this fire of Adm. Building, Avinish could not come out as he was attacked brutally and burnt alive to death. BM condemns this organized act of crime by workers and union officials. we have no words to condemn rather feel speechless. Violence in industrial relations can not be justified in any situation whatever it may be. Avinish family is ruined for no fault of him. But through this unfortunate incident we should analyze the basic issues which are raised every time after such incident but appear not addressed properly by organizations to prevent such happenings.
The issues which come up are: Was it not a studied calm boiling inside workers since last year labour unrest and were looking for an opportunity to vent out and 'teach' a lesson to management which could not be smelled by the management well in time? Could management not sense the ulterior motives of workers well in advance who hatched the conspiracy to attack and resorted to violence while negotiations were going on the fateful day? Should such incidents of organised violence, riot and arson in the industry be investigated to find out the influence of outside trade unions having political affiliations on workers and expose them? Are not international HR consulting firms advising many MNCs in India for devising 'Innovative ways and measures to 'engage ' Y gen employees and keeping 'good and harmonious' employees relations proving to be a big failure and unsuccessful? Are not such agencies always advising organizations to think globally, and not giving proper strategies to equip managements act locally? Is it not that rampant outsourcing/hiring of people without verifying their antecedents could also be a cause of such mindless violence by workers who are not keen to understand and adapt to the industrial culture and discipline? Has time not come to redefine the dynamics of employee relations specifically for blue collar employees and understand the total environmental impact on them in which they have born and brought up? Should managements not invest in developing HR / People management skills in Shop floor executives who are first one to face the heat of estranged relationship with employees? Is it not the high time for the trade unions to introspect as to where their movement is going on? One can read from the history that the workers/ union who have indulged themselves in violence have almost lost ground? Should managements not accept the challenge of educating their workers and union to be on constructive side always and keep away from any act which harms the organization and themselves? Should HR professionals be not fully empowered to decide and execute employee relations strategies and not to look at top managements for decisions? Unless these issues are addressed by organizations, these unfortunate incidents of violence will continue to happen in the industry and HR Person will fall prey to it. This time Avinish has laid his life, next time may be someone else…… Business Manager
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Monika Soutiyal Asst. Professor, Shri Ram Murti Smarak Women's College of Engg& Technology, Bareilly
HR’s New tool :
Social Media Today the social media has become an integral part of communication, through which people connect with each other, share information & keep themselves aware of what is happening around them.Business & organizations are not aloof of it. And organizations are embracing social media for various reasons & it has emerged as a new tool for new age's HR. According to a survey one out of every nine people in the world use Facebook, with an estimated 700 billion minutes being spent monthly. It is interesting to note that over 2.5 million organizations have a Facebook presence in addition to their corporate websites. Facebook currently has 845 million active users & twitter has over 100 million active users. Facebook account for 1 out of every 5 page reviews on internet worldwide & its users share over 100 billion connections collectively. All these statistics reflects the impact of social media on our lives. Today the social media has become an integral part of communication, through which people connect with each other, share information & keep themselves aware of what is happening around them.Business & organizations are not aloof of it. And organizations are embracing social media for various reasons & it has emerged as a new tool for new age's HR. Social Media, a social instrument of communication, is a widely known term today which consists of networking sites, blogging sites, information sharing sites & organization specific forums. A social network site is a web-based service that allows individuals to construct a public profile, define a list of other users with whom they share a connection, view their lists of connection & those made by others. There are so many social networking sites available like Friendster, Hi5, LinkedIn, MySpace, Orkut, Facebook etc. Social media is not just limited to social networking sites but sharing photos, videos & other multimedia content is also a popular social media activity e.g.Photobucket, Flickr, Youtube, Slideshare etc. Apart from this there are blogging sites like BlogSpot or Twitter that enable individuals to 6
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present their thoughts to a wider audience & at last Organization-specific forums like Intranet, discussion boards, and other forums that encourage communication among employees. SOCIAL MEDIA & HR HR being the face of the organization has always been the anchor for setting the right environment & ensuring that organizations have the right culture fosteringchange.This is the reason that HR cannot remain unaffected from the tossing social media in this world, where 2/3rd of world's population visit social networking or blogging sites. Social media is a kind of a platform that fosters more interaction. In organizations, it allows employees to communicate, share and digest more information any time they want and about virtually every aspect of their lives. As per a survey conducted by SHRM of 532 randomly selected HR professionals in 2011,68% reported their organization currently engages in social media activitiesto reach external audiences. And the most frequently used social media and multimedia platforms include: Facebook (45%), LinkedIn (34%), Twitter (28%) and YouTube (18%). Other popular platforms include company blogs (17%) and webinars/webcasts (16%). Earlier, the most effective use of social media as a tool was considered to be for marketing, public relations or effective customer support. But now, HR is also opening up to the idea of usage of social media for reaching out to the employees. As per Social Media and Human Resources Report -
HR’S NEW TOOL : SOCIAL MEDIA
Organizations should tap into the communities within the organizations more from an employee engagement perspective. While publicly available social media applications will provide organizations with a bigger network to tap into, it is the employees who will ultimately play the biggest role in all spheres whether it is hiring or employer branding. Feb 2012, 72% agreed that Marketing and Sales is the main area where social media is used by organizations which is closely followed by the Human Resources function with 56% across industries. Social Media platforms can be used in these four major HR areas: 1. RECRUITMENT Social networking is considered a great tool to connect with people. Everyone, right from a fifteen year-old student to an eighty year old granny is trying to keep on top of the ever-changing world of social media.According to experts, 80% of the candidates available on job portals are also present on social media, whereas not even 50% of the social media users are present in the job portals. Hence, social media provides a platform to look at huge untapped reservoir of talent pool. Many companies are increasingly turning to social media sites for identifying and researching job candidates for meeting their hiring needs. The referral program at Wipro is now strongly promoted through social media & they also leverage LinkedIn and other forums for targeted hiring, campus hiring, on boarding, and to create peer networks.Social Media recruiting is a low cost tool which helps to assess the individuals capabilities and alignment to the organisations values and culture, & to know them a bit more personally by observing their preferences, dislikes, views and opinions that are shared on public forums which may not be reflected in their resume. Thus social media recruitment is redefining and reshaping the traditional hiring processes of companies. "Social Media has helped us increase our reach. Today, candidates do not have to fill-up long winded forms on job portals. They have to merely follow or like and the requirements come to them. This is a significant shift in the way sourcing takes place." - Vijay Sivaram, Head-ITES - Ikya Global 2. COMMUNICATION Social media is rapidly becoming an ideal way of increasing knowledge-sharing & encouraging
teamwork Thus, many organisations are using social media tools, like forums, blogs and social networks, to enable their staff and stakeholders to converse, collaborate and connect. It results in authentic conversations with employees, allowing communication to flow from the top down, bottom up, and even from side to side. CEO blog is another effective means of one-tomany communication. VineetNayar of HCL & NV Tiger Tyagrajan of Genpact, Kevin Lynch of Adobe, Jonathan Schwartz of Sun Microsystem are some CEO's who are active bloggers. Social media helped SAP in catching the eye of potential employees in the warm up period. Recently they hired 236 college graduates' who will join them in July. They continuously stay connected with them on FB so that they become aware of their work culture. They practice this with lateral hires also because they can always choose to move to another organization. 3. EMPLOYER BRANDING Now the big companies are leveraging the concept of employer branding & making potential employees well-versed with their organizations work-culture. With the advent of online media, it has become simpler to express organization culture through a tagline. Since this is the generation of technology & tech-savvy, so it has become necessary to use online media to reach out.Study by the global employer branding leader Universum reveals that apart from corporate websites & on-campus activities, social media is increasingly becoming an important tool for employee branding. HCL portray itself as "Employee first, Customers second" whileGenpacthighlights its culture on its facebook& LinkedIn pages by posting stories of employees who have gradually progressed on the career front. 4. EMPLOYEE ENGAGEMENT Employee engagement has become one of the key elements in this competitive era. According to Watson Wyatt's Work Asia Survey Report for 200809 (Business Today, 14 June, 2009) the employee Business Manager
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HR’S NEW TOOL : SOCIAL MEDIA
More organizations are embracing social media as a means of engaging employees. Organizations are using internal social networks to recognize employees for a job well done or to promote initiatives that the organization is doing in the community. engagement score has declined 3% in India compared to the last year. Organizations are now paving newer ways for increasing employee engagement. More organizations are embracing social media as a means of engaging employees. Organizations are using internal social networks to recognize employees for a job well done or to promote initiatives that the organization is doing in the community. Wipro, as an organization, has various internal social media platforms: myWiproWorld, an in-house social network plus Xperience Wipro and Earthian are two communities on facebook for employees and others to share experiences & it leverages various initiatives likeSpirit of Wipro ,Online Diversity, Moments that Click& many more.
strategy & policy in place. Organizations need to invest in training its employees on different social media platforms. As per survey, currently only 27% of the organizations provide social media training to employees who engage in social media activities on behalf of the organization to reach external audiences.Dell, have a social media university that renders certifications across different platforms to employees. At Genpact, there is a 5 to 10 minute online test for employees, which certifies them to act as employee ambassadors. Such trainings make them informed about social media policies of the company. HCL has monitoring teams to keep track of online discussions.
Similarly, Infosys has created an interactive portal called Infosys Bubble in June 11, where the workforce can exchange notes as well. The portal has seen 2,61,030 connections and74376 profiles created in a span of few months. Likewise, Johnson & Johnson has Yammer, an effective and popular way to communicate on sustainability topics with younger employees.
Technology has been changing the face of the HR industry over the past 15 years & social media is no different. Human Resources have always been struggled with issue of reaching out & social media has helped to sort out this issue to a greater extent. It is upto the HR fraternity to tap into this. However, at the same time one needs to ensure that one is not too reliant and compromise on the hygiene factors of employee relations.
III. SOCIAL MEDIA ISSUES Despite social media making significant inroads into our lives, most organizations are apprehensive about using it. It has been found that 43% of the organizations block access to any social networking services on company-owned computers. Across all industries, close to 85% respondents said data security and privacy were the biggest concerns, while around 71% cited organizational maturity as a concern. Thus, organizations using social media in their business processes needs to have a social media
IV. CONCLUSION
At last, the definition of social media is changing every day and organizations need to keep up with the speed of change. Organizations should tap into the communities within the organizations more from an employee engagement perspective. While publicly available social media applications will provide organizations with a bigger network to tap into, it is the employees who will ultimately play the biggest role in all spheres whether it is hiring or employer branding. BM
REFERENCES 1. Anupam, Pratik, &Santhi, Social Media: Impact & relevance in managing human resources in India, Social Media and Human Resources - Feb 2012, By Wipro Ltd 2. SHRM Survey Findings: Social Media in the Workplace, November 10th, 2011 3. Trends in Global Employee Engagement: By Aon Hewitt Consulting 4. http://www.managementstudyguide.com/understanding-employee-engagement.htm 5. http://www.neefusa.org/pdf/Toward_Engagement_2.pdf 6. Kishore Bhave, New age employee engagement, Business Manager, May 2012, pg 19-23 7. BlessyPais& K. SrinivasaRao, Social Media & HR, Human Capital, Vol 13, Jan 2012, pg 31-35 8. http://www.indiasocial.in/social-media-for-recruitment/ 9. http://www.digitalbuzzblog.com/social-media-statistics-stats-2012-infographic/ 10. http://ansonalex.com/infographics/facebook-user-statistics-2012-infographic/ 11. http://gautamghosh.net/?s=How+can+HR+build+a+ 8
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Creating sense
of belonging to organization Madhu Manager-HR, Universal Group, Gurgaon
Five ways to create sense of belonging Give Employees a chance to explore Give Employees a choice to work Give Employees options Give Employees time to understand them Make it in a fantastic manner
E
mployee Motivation Comes When Employees Feel at Home. Employees are like people everywhere-they perform best when they are appreciated, comfortable and feel like they belong. Many managers make the mistake of assuming that they know what their employees want in the way of rewards, workplace freedom, etc. They think that their employees will be motivated by the same things as they are. I once went to meet a manager and his team members for some research work for a small division of a very large corporation. I immediately noticed that absolutely no one felt at home or appreciated. In fact, the company had a habit of hiring over-qualified people for every position. The result was that these over-
achievers each spent their time trying to justify their own existence by nit-picking every decision and discussing situations via endless email threads. Their fear was that if they did not contribute to the discussion, they would be left out of the process. There was open warfare among senior management that sometimes broke out into arguments. This was not a model of employee motivation. I can quote lot many examples here. Some managers feel that it's important to keep their employees' off-base, always wary and wondering where they stand. They think this approach will instill fear and that fear makes people work harder. Nothing can be further from the truth. This approach will always honor the law of self-fulfilling prophecy-what you expect to get, you will get. If this is your employee motivation Business Manager
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CREATING SENSE OF BELONGING TO ORGANIZATION
technique, you will get employees who are offbase, wary and wondering. Employee motivation has to be an on-going program that is supported by upper management and carried out with enthusiasm by the entire management team. I don't advocate throwing parties all the time, although in this case it was needed. I do advocate doing what it takes to make employees feel wanted, appreciated and at home. This is the greatest employee motivator of all.
Give Employees a choice to work: When do you feel more engaged, when you choose something or when something is forced on you? Rather than picking people for a team, give people the latitude to join the group, project team or study group that they want to join. Make a group within organization. Anyone can be volunteered for that group .While you might have to persuade some people to move to a different team for balance, experience or other reasons; it is hard to overlook the value of people making choices related to belonging. People will be more excited about the work at hand and therefore more committed to the outcome.
Give Employees options: We can take a tip from this example. As a leader you can look for a variety of ways for people to be involved and make a contribution. Think of new ways yourself, but more importantly (and more powerfully) invite others to suggest how they could contribute and how they would like to belong. Smart associates can create multiple ways to be involved, be connected and feel that sense of belonging. But we should not forget The 20-80 rule.
I do advocate doing what it takes to make employees feel wanted, appreciated and at home. This is the greatest employee motivator of all. We want to belong. In fact, as human beings, we need to feel a sense of belonging. A sense of belonging provides meaning, context and value in our lives. It provides a feeling of comfort and security that can't be found in many other ways. So we've established the importance and power of a sense of belonging. Which begs an interesting question: How can we as leaders use this basic human need to create more productive individuals and more successful results? Even we have created such a wonderful environment for our organization. We feel at home at work. Here are five ways you can use the principle of belonging to create better results and better understanding for your team and organization.
Give Employees a chance to explore: People should be given to chance to work with you. Invite people to volunteer their ideas. Encourage a team to share the results of their project to date and invite them to participate surprisingly, offer comments and insights. Think inclusion, rather than exclusion. 10
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Give Employees time to understand them:
Every employee is a new member of a Team or in organization.Dont make him/her feel new all the time. Think about any major change effort. Not everyone is going to agree with or support the change immediately. Be patient and give them appropriate time, to come on board or be a part of team.
Make it in a fantastic manner: If you have a team, are leading a change, and/or want people to be more excited, make it fabulous to be a part of the team. Create a sense of pride and accomplishment. Look for ways to make the team an environment where people want to belong. This could be with tangible things (team members have t-shirts) or intangibles (people feel a sense of community; people enjoy or have fun belonging). Think about what would make it attractive to belong from the perspective of potential members - remember that they will be drawn to the group for their reasons, not yours. Reading these five steps might lead you to think that I am proposing you build cliques or exclusive groups of people. While you certainly want to do what you can to help people feel a sense of belonging - for the passion, energy and engagement that comes with it - the focus shouldn't be to create one "in" group to the exclusion of others. Rather the idea is to create multiple ways for people to feel a part, to be involved, and to know that they belong. BM
COVER Feature
Revisiting India Inc. :
The HR Issues
B. Muthuraman- Vice Chairman, Tata Steel, Dr. PVR Murthy, CEO, Exclusive Search, S.Y. Siddiqui- COO, Maruti Suzuki, Vishal Talreja- Executive Director-dream A Dream, Hemant Kanoria- C.M.D., Srei Infrastructure, Pranabesh Ray, Asim Kumar Basu & Dr. Arup Varma- Professor, Loyola University, USA Share their wisdom, experience & put a road map of growth for India Inc. Indranil Banerjee & Deep Sikha Chakravorty
COVER Feature
Building
Organisations around
people B. Muthuraman,
Vice Chairman, Tata Steel
I. In a world that is ……Indian organization are only 400-500 years old…..they are really babies …. India Inc is barely 100 years old…..But in this very short time, they have been the engine of growth ….they have created wealth for the world ….improved the quality of life of people around the world …. Therefore business organisations and their well being is important …. But being babies they are still evolving …. All their business processes – how to figure out what the customer really wants, how to market a product, developing new technologies and new products, their Human Resource processes – how to identify good people, how to train them, how to make them leaders ….. all these are still evolving. I have a view that, as of now, the HR processes of India Inc is less developed than all other business processes. We all know that people are the most important ingredient in any organization. There is no doubt about this. The challenge is how to develop people to run complex business organizations in an increasingly complex environment. This challenge is going to become bigger in the 21st century. During the 20th century, while the population quadrupled, the global economic output grew by some 20 times, mainly based on abundant, cheap resources. The 21st century is going to be different at least in 4 ways : - There will be severe constraint on resource availability and we will see high resource prices. - There are bound to be higher environmental concerns. - There will be a big growing concern about inequality. All of these putting challenges on growth and HR processes and therefore people’s ability to grow their organizations. Add to this, reduced people to people interface due to the advent of TVs, mobile phones, iPads and the like. So, people development and leadership development in the 21st century is even more important. II. People development is a continuous life long process. It happens through education, imagination, experiences, introspection – action – introspection cycle, some training and so on. For the sake of simplicity, let me divide people development into two buckets : i. through formal education ii. during work life. III. First on ‘formal education’. 12
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The 21st century is going to be different at least in 4 ways There will be severe constraint on resource availability and we will see high resource prices. There are bound to be higher environmental concerns. There will be a big growing concern about inequality. All of these putting challenges on growth and HR processes and therefore people’s ability to grow their organizations.
Building Organisations around people
What do we study in schools & colleges? Maths, Physics, Chemistry, Biology,
History. All knowledge inputs. Which, in my view, constitute 20-30% of a person’s make up. All these tickle our right brain. How a person behaves or performs in executive life depend not merely on these. It really depends on a person’s intrinsic qualities like: - Passion and hunger to perform - Decisiveness - Courage of conviction - Empathy towards others. - A people development mindset - Ability to handle disappointments and failures - A mindset to tolerate and accept other cultures I believe 70% of a person’s performance or delivery comes from these characteristics. Where are these taught? Where do these come from? We are actually leaving these to chance. For a person to pick these up through experiences and if the person cares or is trained to reflect on him / her experiences. Should we leave 70% of a person’s make up to chance? The current education system, even the executive education system does not address this 70%. I see it in the Japanese system and a bit of it in the Chinese education system. But, India is the origin of this system, in our age old “gurukuls” and other forms of teaching. We seem to have forgotten it. This 70% possibly comes from reflections, meditation, music, sports, yoga, … may be, golf…. Sports and activities such as these. These tickle the right brain. How can we have an effective education system that develops the left brain and leaves 50% of our brain power out of education? We need to reflect on it. IV. Let me now come to ‘People Development through Work life’. All of us know that people got developed in the work place – in the shopfloor and at offices on the basis of what they experience and what they learn from others experiences. This is
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where ‘processes’ are important. What HR processes does that company have? Some of the HR processes that I would look for in a company are : 1. Imparting solid functional knowledge at early stages and reinforcing it at regular intervals – this is basic stuff and most of us do this quite well. 2. Creating a “tension” in the organization, a “Positive tension”– which develops the hunger to perform characteristics - External tension - Inter tension through ‘stretched’ and ‘aspirational’ targets. 3. Not sufficient to set ‘stretched’ or ‘aspirational’ targets but also teaching them the tools to achieve these targets to create a mindset of wanting to win. 4. Involving people in creating a shared vision of the organization. It is a powerful process. Tata Steel example. 5. An open and fear free atmosphere where ideas can flow and failures are accepted ….. failures, daring to try, are also rewarded. 6. Constant communication by leaders – through dialogues, two way communications, mentoring opportunities. 7. Careful and pre-planned job rotation, exposure to unrelated areas, getting people out of their ‘comfort zone’ cross cultural learning opportunities. 8. Reward system NOT based on results alone but on willingness to take on stretched goals even if they fail (many of us don’t have the patience for this). 9. Active membership in cross-functional teams, even in unfamiliar areas. The HR professionals job is not just in recruiting the best, sieve people through a result based performance criteria, throw those who don’t pass and keep people who pass. The job of a HR professional is to create good HR processes, several of them, and monitor their effectiveness. He is the custodian of HR processes. V. There is a high probability that the 21st century will belong to India or at least India is one of the countries to which it will belong. But the high probability is not a guarantee for it to happen. It will happen only if we have good people. BM Business Manager
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COVER Feature Dr. PVR Murthy CEO, Exclusive Search
The HR Issues Ahead The HR has to be a Mentor and Coach during periods of turbulence and economic uncertainties.
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he Indian HR Professionals have contributed hand in hand with industrialists in the industrialization of the country. They fine tuned the semi- skilled and predominantly agricultural labourers into world class employees in various sectors. They played a significant role in changing work cultures. In a large number of organizations , blue collar work force transitioned from a state of fighting for rights all the time to a state of becoming change agents themselves owning up responsibility. HR facilitated change of work culture from, “Chalta Hai” or “Compromise at every stage” to a culture of “global excellence”. Thanks to efforts of all including HR,the feudalistic ,top-down ways of working of 60s and 70s have given way to bottoms up ways of working like in some cases forming leaderless teams or self-managed teams. However HR has a long way to go in its journey of evolution of its function. HR as a function, needs to go beyond corporate sector in to other Sectors and even to un-organised sectors like agriculture sector, NGOs. Even in corporate sector , each sector throws its own sector specific HR challenges.
To cite a sample of challenges in some sectors: In case of IT sector, where rate of innovations is very rapid, every technological innovation leads to certain skill obsolescence. For example if cloud computing takes off the ground, a lot of Networking job holders may need to re-orient their skills. Continuous developments in computing technology for instance may lead to replacement of desk tops by tablets soon, resulting in demands for new skills. Thus HR in the IT and ITES sectors have a constant need for reskilling their skilled employees. 14
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Revisiting India Inc.: The HR Issues
In case of pharmacy industry Dr.Prasanth Nair, Global HR Head, CIPLA Laboratories opines that the emerging HR challenges are: Creating organizations with global mindset – wherein the global practices and culture can blend into a local context which addresses the local needs; Succession planning for key jobs, given the importance of knowledge in this industry; From an Indian perspective, high skilled talent creation and availability at junior levels especially in R & Ds. Prince Augustin,EVP-Human Capital & Leadership Development Group HR, Mahindra Group opines that the challenges in manufacturing industry are: Skill development to make desired number of employable talent is available; Attracting and retaining such wanted talent; and bringing in generational cohesion seem to be biggest challenges for HR. As, the often spoken about issue points out, India needs to enhance its employable talent pool. HR needs to work closely in this regard with organizations like National Skill Development corporation (NSDC). HR needs to make intensive and planned effort to increase the supply base of right talent. Rather than fighting for the available limited talent, HR needs to facilitate development of right talent by closely interacting with the educational institutions in enhancing quality of the students passing out.
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the new generation and knowledge workers. Consumerism and constant exposure to TV ads is creating a desire to possess more and more leading to dissatisfaction with earnings.When earnings are not in tune with expenses, more and more dissatisfaction. HR has a challenge to handle the aspirations of work force while maintaining industrial harmony. To survive in a globally competitive environment, in a number of organizations still cultures of world-class excellence in quality, productivity and customer orientation needs to be built. Due to rapid globalization more number of ex pats may be working in Indian companies in India and HR has to quickly learn cross-cultural sensitivities and how to handle them. Due to problem of ageing of their own employees in certain parts of the world like in Japan and in Europe, the Visa regulations to attract and permit outsiders will be liberalized . Due to the single child policy in China with large population, may not be able to supply knowledge workers to these countries, thus making India the main source of supply. The Indian HR has to find the talent for their overseas companies and also plan replacements of flight from their Indian companies. Thus,the HR professional in every sector has his/her plate full of professional challenges and an optimistic that as he /she has proved in the past would meet the challenges successfully and come out with flying colours. BM
The HR Function is becoming more and more technology driven and hence the HR person has to rapidly assimilate new technology himself/herself, successfully implement the changes and constantly educate users. The HR has to be a Mentor and Coach during periods of turbulence and economic uncertainties. As statistics indicate, the number of young employees is increasing in the work force. By 2020,the average age of employees is estimated to be 29 yrs.. HR has a challenge of quickly understanding and learning to handle them successfully. Similarly, the number of highly skilled and knowledge based employees is increasing rapidly and HR has to sharpen their tools to handle them effectively. As the new generation is quick to learn, HR has to facilitate the employee growth from an “orbit of cheap labour to higher and higher orbits� especially in sectors like IT and ITES.Indian industry has to move quickly from offering price advantage to offering world -class products. HR need to design and implement flexible and innovative benefit plans to retain Business Manager
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COVER Feature S.Y. Siddiqui COO, Maruti Suzuki
New DNA of
Leadership… Leadeship has nothing to do with Job Titles…..Leaders build their people. They build the culture of Perpetual Entrepreneurship.
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ncertainty of investment flows, inflation, increasing trend of fuel prices, volatile FE movement & weak rupee trend are creating enormous pressure on corporate as we are trying to move ahead. Demographic of the workforce is undergoing a major change. Increasing diversity and emergence of strong middle class. We need to estimate the impact on the Industry The India Business environment can be described as Volatile Competitive Global The IR trends are again cropping up; The workforce is more misguided by external elements than the business reality lack of sensitivity to changing business environment. Contract manpower continues to be a complex issue…. The Global economies e.g Greece, France, Italy are becoming potential threat to the Global business environment…. Business environment is volatile-dynamic The world is getting smaller-speed wins! New products, Newer services & Intense competition The future will entail marked departures from the past But at the same time I firmly believe that there will be opportunities also for those who can identify. In my thinking, one of the critical enabler to the growth of our nation and our economy will be our PEOPLE.
Gen Y. It is pertinent to mention here how India is apart from the rest of the world. We have the advantage of being one of the YOUNGEST COUNTRIES. India's work force (15-59 years) would be around 1020 million by 2050 compared to 755 million in China and 225 million in the United States. We are extremely lucky and privileged to be part Business Manager
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of this ERA!! Loads of opportunities in this phase of phenomenal growth. If you have the right credentials and attitude - sky is the limit. However, one of the biggest challenges ahead for business managers today is managing the GEN Y. Practices which worked in managing the earlier generations might not be effective in managing the future generation. Need for managers to unlearn and relearn Therefore, Organizations need to leverage on the people talent and nurture them with global mindsets. India Inc needs to sketch an inclusive growth path and make the bottom of the pyramid a part of the success story. I think the definition of right talent is "Capability & Commitment" rather than either/or.
New DNA of leadership… There is a need to provide pro-active leadership so to create a high connect with the changing global business scenario, while retaining focus on People towards value creation. Leadership is not a destination. It's a journey; it's a choice and it has nothing to do with Job Titles…..Leaders build their people. They build the culture of Perpetual Entrepreneurship. Leaders create Engagement - Concept of Checked out employees" - who is responsible….? South West Airlines /SAS… two companies and their CEOs - Culture of Perpetual creativity & innovation; Pepsi - Culture of Perpetual disruption; Ratan Tata- Culture of Perpetual Possibilities ; Somebody somewhere is creating a new business idea, new product or process, who will 18
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outplace you from your space hence change. Innovation should be the way of life.
Skill/talent development… Building the Skill inventory. Talent pipelinePeople & Capability development. A proactive approach will be much better from a medium to long term professional strategy rather than poaching / stealing talent from one another. Zero on commitment & bleeding on compensation.
Employee Relations… Employee relations strategy is going to be crucial but majority of key HR professionals are attracted on the white collar. HR Generalist role leading to deficit & decay of Employee relations competence which I think may potentially spell trouble going forward - whether Mfg Sector or others including IT/ITES; Principle of Fair & Firm, Positive Work Culture, Employee communication, Education & Training and Employee Engagement for blue collar will be equally critical;
MSIL Maruti … Manesar Labour Issue …. Gurgaon / Manesar belt ridden with negative political Trade Unions Young workforce - Highly impressionable; High aspirations; High risk taking but low or no maturity Volatile business environment; Ups and down of operations Communication gap between the senior managers & the young workforce at Manesar Plant. BM
COVER Feature Vishal Talreja Executive Director-dream A Dream
Engaging with
Young Indian The biggest contribution that the current generation can make is to change their roles as adults in a rapidly young driven country.
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n 2010, there were an estimated 450 Million people under the age of 18 in India. That is nearly 37% of the total population. Out of this, the adolescent population (10-19 years) was nearly 242 Million. It is no surprise that the vast majority of the world's young people - 88 per cent live in developing countries including India.
Young people today, especially in India, face a unique set of challenges, including an uncertain global economic outlook and high levels of youth unemployment, an increasing number of humanitarian crises and conflicts, climate change and environmental degradation, and rapid urbanization. The severity of challenges is expected to worsen over the next decade. In such a scenario, the key question before the present generation is definitely "How do we engage Young India in Nation Building?". I believe that biggest contribution that the current generation can make is to change their roles as adults in a rapidly young driven country. Unlike, in the previous generation, adults are no longer the treasurers of knowledge and information. Technology access has ensured that access to knowledge and information is easily available. The key contribution of the adults can be in mentoring about the ways to seek and apply that knowledge. In my work at Dream A Dream, we come across thousands of young people from urban slum communities. What I experience is that they are driven, ambitious and hungry to change their circumstances and move out of the cycle of poverty. I sense an innate self-confidence or fearlessness about being able to deal with challenges of life. They don't need to be told what to do. But, they definitely need to be mentored to make responsible, healthy choices in Life. When I say mentoring, I believe it is about giving them access to the learning opportunities and building in them abilities to make their decisions based on choices and its consequences. A young 17-year old man chooses to drop out of education and support his family. He struggles and finally starts a cab service that is on its way to become profitable. Today, he needs education and having taken care of his family, he wants to invest time on completing this education. A young 16-year old young girl makes a choice to be a domestic help and aspires to be the best domestic help around doing her job with dignity, pride and good skill. A young 19-year old starts his own Rugby program in his community after exposure to the sport transforms him. He wants to ensure that younger children in his community get access to the same opportunities that transformed him. This is young India for me. They are charting their own journey and are committed to making their lives successful and inturn build a nation of dreams, aspirations and achievements. BM Business Manager
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COVER Feature Hemant Kanoria C.M.D., Srei Infrastructure Finance Limited
India Inc. growth Road Map... Manpower and infrastructure are the two factors that are critical to the success of all three sectors - agriculture, industry and services. In fact, while infrastructure is a necessity for all, the need for proper training of manpower is critical to the success of sectors like services and industry.
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he India Growth Story has captured the imagination of investors from around the world. Over the years, the economic centre of gravity has been gradually shifting from the West to the East. It is expected that by 2050, China and India would be driving global growth. In fact, certain research reports state that in terms of purchasing power parity India will emerge as the largest economy in the world by 2050. During the 2000 decade, India had set a scorching pace of growth and despite the global slowdown post-2008 India's growth momentum remained intact. For a while, it seemed that nothing could stop us. However, of late things are not looking all that rosy. None of the key economic indicators has anything positive to portray at this juncture. High interest rate as a result of high inflation has already affected the investment appetite. Index of Industrial Production (IIP) figures indicate a sharp slowdown in sectors like mining and manufacturing. Slowdown in production of capital and intermediate goods implies that the demand is muted. Exports have also slowed down reflecting the muted demand from developed nations because of their own economic problems. As a result India's current account deficit has widened which has contributed to a sharp depreciation of the Indian 20
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COVER Feature INDIA INC. GROWTH ROAD MAP... rupee. High fiscal deficit has also constrained government's ability to make any major investment. In this backdrop, it becomes essential to introspect and find out what actually went wrong and what can government and private sector do in order to bring the growth story back on track. While some of the factors responsible for today's state of affairs are external, many of the problems are home-made. We need to carefully analyse these and work towards remedial measures. It is perhaps best to look at the three sectors agriculture, industry and services - and analyse how these have fared over the years. For that, there is a need to look at the history of our growth. Since independence, our GDP has grown almost 800 times whereas our population has grown nearly 3.5 times. However, a closer look at our GDP growth pattern reveals that postliberalisation our GDP growth rate started moving up sharply. 1991 was an inflection point for our economy when the economic reforms were unveiled and Indian business was freed from the license-permit era. The entrepreneurial spirit in India was actually unleashed around this time. This gets reflected in the sharp rise in the contribution of the services sector to the
composition of GDP from 1991 onwards. Today services sector constitutes almost 57% of our GDP. However, it is equally intriguing that while the contribution of agriculture sector to the GDP composition has consistently declined and today stands at only around 15%, a huge segment of the population is still dependent on agriculture. Around 65% of the population is still directly or indirectly dependent on agriculture, and by agriculture here we mean farming as well as various allied activities. This implies that development has been skewed and the distribution of the benefits of economic reforms has been extremely uneven. This is definitely a recipe for social unrest in the long run and this problem needs to be addressed fast. It is a historically proven fact that as an economy grows, more and more people move out from the primary activities and take to secondary and tertiary activities as livelihoods. India is a peculiar case where while the secondary and tertiary activities in the economy have boomed, a large segment of the population sticks to agriculture and allied activities as their source of livelihood. I feel to some extent the government sponsored programmes like Mahatma Gandhi National
We have to make our manpower more competent and efficient. Incentives need to be created so that more and more manpower come out from agriculture and allied activities and take up professions in industry and services.
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COVER Feature INDIA INC. GROWTH ROAD MAP...
HR Protagonists have to move beyond..... “If HRD is to become an activity for "all" then surely the protagonists have to move beyond what is being practiced currently. They have to be, as I would like to call more "rustic". Currently we are observing trends (e.g. automotive sector) which needs to be discussed if we are serious about the people agenda Just to elaborate HRD as perceived today seems to be a "cool" topic to discuss in an air conditioned atmosphere. The mistrust that exist and consequently the conflicts that takes place in organizations are an important aspect to be appreciated / dissected and solved if India Inc is serious about the people agenda. Building Organisations can only be completed when "ALL" are included. The People Agenda remains unfulfilled if issues which actually vex / agitate / stir the workers / employees of any organization are not deliberated.� -Pranabesh Ray
Rural Employment Guarantee Act are responsible for creating a strong disincentive for rural people to move to towns and cities for earning. MGNREGA ensures that a villager gets employed for a certain period and gets a certain amount during the year at his place of domicile irrespective of the nature of the work he does. There has been a raging debate on MGNREGA and its efficacy. Government perhaps needs to do a proper evaluation of this programme in terms of the quality of work dome and the actual outcomes from this scheme. While agriculture's share of GDP has declined over the years, still 43% of India's geographical area is used for agricultural activity. While agriculture and allied activities have witnessed booms like the Green Revolution, Blue Revolution, White Revolution, Yellow Revolution, etc. from time to time, in terms of rise in productivity progress has been uneven. Irrigation has been partly responsible for that around 45% of the gross sown area is irrigated in India. The figure should have been more keeping in mind that Indian agriculture is still dependent on the monsoons. One bad monsoon can play havoc with the crops. Land holdings have become more and more fragmented as each agricultural plot has got successively sub-divided with each generation. The concept of cooperative farming has not taken off in a big way and Indian agriculture has failed consistently to reap the benefits of economies of scale. Introduction of biotechnology to increase productivity is still a topic of debate. 22
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As a framework for scaling up agricultural growth, there is a need to embrace mechanization in farming. Mechanization should also drive irrigation. The excess manpower in rural areas needs to be channelized towards non-agricultural activities. The farmers need to be trained in scientific methods of production. Perhaps time has come for a shift towards production of high nutrient products. Huge wastage of agricultural production has been a persistent problem for India. Due to lack of storage facilities and inadequate logistics facilities, every year a significant portion of our agricultural production is wasted or they rot before they reach the markets. Union Budget 2011-12 made a beginning towards addressing this problem. Infrastructure status was extended to cold storage chains and augmentation of storage capacity through private sector participation was encouraged by making capital investment in storage capacity eligible for Viability Gap Funding. This, along with the increased allocations for the various subprogrammes under Bharat Nirmaan, aimed at boosting development of rural infrastructure and thus leading towards long-term solutions in the supply-chain management of agricultural produce. There were some follow-up announcements in Union Budget 2012-13 towards encouraging creation of warehousing facilities for agricultural production. I feel that MGNREGA should aim at creating more of such facilities so that those can have a palpable impact on the rural society.
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INDIA INC. GROWTH ROAD MAP...
HR issues call for focussed attention Building india inc would call for the following ingredients and means: finance, infrastructure, administrative machinery in place, good governance, regulations, technology and above all, the human resources. If we look holistically, to my mind, many of these issues are still not matured to the extent; it should have been by these two decades of liberalization of Indian economy. Few areas really call for focused attention and aggressive implementation, like, infrastructure, good governance and administration to name a few. Some of the states have definitely progressed quite well, but, a national vision with time bound action plan and high level responsibilities shall help build india inc. to the desired level in sync with international standards. Almost all the opinion leaders in such forums inevitably compare India with China so far infrastructure and industry-friendliness is concerned. What China did through various long term plans in the areas of infrastructure is huge, and we probably do not stand any where compared to that. Asim Kumar Basu Head Corporate HR, Tata Steel Processing and Distribution Limited Kolkata I sincerely believe that Indian agriculture has immense potential, it just needs to be tapped. Introduction of mechanization, high yield seeds, better warehousing and cold storage facilities, improved logistics support and proper marketing efforts can do wonders for this sector. In fact, there is tremendous scope for agro-related services. To facilitate this, there is need for training. And also, there is need for micro-finance for such initiatives. With limited reach of banking sector in the hinterland, the NBFCs are poised to play a very important role here. Government needs to ensure that commercial banks, under their priority sector lending obligations, provide adequate funds to NBFCs so that these entities are able to serve the rural enterprises. Connectivity between agricultural produce and markets is essential. Thus, building rural infrastructure is also crucial. Infrastructure in terms of roads and railways is crucial, both for transporting agricultural produce to other markets as well as for bringing in machinery and other essentials that are needed for raising productivity. Building of local markets beside the warehouses and cold storages can also cater to the local markets. Industry now accounts for about 28% of the GDP. However, of late a high interest rate regime has slowed down industrial activity. All the three principal segments - manufacturing, electricity and mining - have suffered. Here I would like to dwell a little on electricity and mining since it is a key input for the entire manufacturing sector and
coal being the principal raw material for electricity production in India. In mining, coal mining accounts for almost 80%. And 55% of India's electricity production is from coal. Coal mining is a sector where a public monopoly has prevented rise in productivity and efficiency creating an artificial scarcity of coal in spite of India being endowed with huge coal reserves good enough to meet our domestic needs for centuries. This has stifled coal production thereby impacting the power sector and with demand for power far exceeding supply today India stares at an impending power crisis. There is an urgent need to open up the coal sector to bring in new technology and promote healthy PPP in the area of coal mining. This will create a multiplier effect in enhancing the output from our mines, introduce the much needed technological advancement and be able to supply fuel to the key end-users at a reasonable price. While the high interest rate has resulted in less investment in industries like electricity and mining, the above-mentioned policy change can do wonders to bring in private investment. Also, power tariff remains mostly regulated in India. While government exempts power industry from competitive bidding of coal mines through the auction route, government should ideally accord priority in terms of allocation of mining rights to those players in the power sector who are able to bring down per unit cost in production and supply of electricity. Such cost reduction is possible if power distribution companies are encouraged to set up their own Business Manager
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COVER Feature INDIA INC. GROWTH ROAD MAP... power generation plants, by way of backward integration. This needs to be encouraged through suitable policy amendments. Land acquisition for industrialization is a very sensitive issue in India now and in many cases, holding at ransom, the growth of new industries. While Central Government has prepared a draft Land Acquisition Bill, land remains a State subject. Thus, even if the Bill gets passed, that document can at best serve as a guide for creating a suitable enabling framework for each State. Presently the process of land acquisition varies widely across states. Some states have put in place policies, while others have not. It is imperative that every state should create a databank of available land - Centre should provide all assistance to states in creating such a database. Land categorization should be on the basis of location. Price of land should reduce from urban areas to smaller towns to villages to backward areas and inaccessible areas. Pricing of farmland and the rehabilitation & resettlement packages of the displaced need to be arrived at taking into consideration factors like soil type, accessibility, distance from markets, etc. Services sector has been growing the fastest. Segments of services sector namely travel and tourism, financial services, health and education have grown exponentially in India in the post-1991 phase. Transportation and allied services have grown keeping pace with the growth of the economy. With renewed emphasis on infrastructure creation, industrialization and growth of the realty sector, construction activities also increased. In India, there was never a dearth of entrepreneurism. Post-1991, services sector had taken off in a big way as numerous micro, small and medium enterprises started their own ventures depending on their own areas of core competence. Millions of these enterprises constitute the backbone of the India Growth Story. Manpower and infrastructure are the two factors that are critical to the success of all three sectors - agriculture, industry and services. In fact, while infrastructure is a necessity for all, the need for proper training of manpower is critical to the success of sectors like services and industry. As per government's estimates, by 2022 India will have 700 million in the youth category. Of them, 200 million are expected to be graduates. In order to exploit the demographic dividend and to enable the right mapping for manpower so that they fit into the right sectors, the remaining 500 million are to be up-skilled. Five years ago, Honourable Prime Minister had announced that 50,000 skill development centres (SDCs) would be set up with the objective of up-skilling India's unskilled and semi-skilled youth. The scheme has remained a pipe-dream and not a single SDC has been set up yet. The SDC model has not been finalized because of differences of opinion among Labour Ministry, HRD Ministry and Planning Commission. Mr. S Ramadorai, advisor to PM, has been given the task of reconciling all proposed models by the various agencies and finalise a 24
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composite model. In Union Budget 2008-09, the formation of National Skill Development Corporation (NSDC) was announced whose mandate is to up-skill 150 million (out of the total target of 500 million) by 2022. But NSDC works in the PPP mode with active involvement from the industry. Government has to ensure that the SDCs become operational, and along with the NSDC, these entities can do wonders to enhance the skill level of our manpower. Education system needs to be revamped with a focus on vocational training. This is bound to provide a further fillip to the spirit of entrepreneurism. India needs to build world-class infrastructure in order to emerge as a superpower. Our infrastructure is almost saturated and there is urgent need for increasing the carrying capacity of our infrastructure assets. Government realizes this and to this end for the Twelfth Five Year Plan (2012-17) infrastructure investment to the tune of USD 1 trillion has been envisaged. Earlier infrastructure creation was exclusively in the public domain. However, post-liberalisation government realized the importance of private sector participation and gradually this sector was opened up for private investment. India has relied on PPP to a large extent for infrastructure creation and the role of private sector in infrastructure creation is increasing over the years. Of course, government has to put in place the enabling policy and regulatory framework needed to attract private investment into a capital-intensive sector like infrastructure so that private sector finds it worth investing. So far, government has been successful to some extent as the quantum of private investment in infrastructure has grown over the years. However, a lot more needs to be done. For the Twelfth Plan, government expects half of this amount to come from the private sector. As the Twelfth Plan has started in particularly difficult macroeconomic conditions, experts are not too much optimistic about realizing the target investments. Optimists like me view this situation as an occasion for government to launch a new round of economic reforms. We will have to wait and watch how the India Growth Story unfolds in the coming years. India can emerge as a winner from this present phase of global slowdown if the government gets its act together fast. Every economy goes through booms and troughs. The entire global economy has slowed down, but this phase will pass too. In the interim, if we are able to put in place the right policies and regulations, India will certainly be able to attract investment from around the world. We have to make our manpower more competent and efficient. Incentives need to be created so that more and more manpower come out from agriculture and allied activities and take up professions in industry and services. By attracting investment in infrastructure the long-term competitiveness of our economy will only go up laying the foundation for more robust growth. We will once again start eyeing double-digit growth. BM
COVER Feature Dr. Arup Varma Professor HRM, School of Business Administration, Loyola University, Chicago, USA
The human touch factor
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mployees need to know that they are valued, that the organization genuinely cares for their welfare, and cares for them as human beings. Therein lies the critical distinction between being treated as a resource that the organization employs and a human being that the organization respects (the two are not mutually exclusive). Over the years, I have come to believe that the difference between employees who excel and those who just do enough or leave earlier than the organization expected them to, has less to do with their competencies and much more to do with how they feel they are/were treated. This theory was borne out of numerous conversations I have had with individuals in all kinds of organizations in numerous countries around the world. This has got me thinking - why can't we come up with a simple list of "human touch" tips for all managers - after all, it can't be wrong to respect people, and most people will respond well to being treated well. So, here goes - these are tips I have developed based on my experience, and labeled it the "The Human Touch Four."
1. Get to know your team members (no, really!) Too often, people mistake being professional for being cold and aloof. Well, there is no doubt that it is important to be professional in the workplace, and not cross certain lines. However, at the same time, it is important that managers get to know the people who work for them - their hopes, their wishes, their ambitions, their strengths, their weaknesses, their needs, and so on. The list goes on and on, and can seem almost Business Manager
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COVER Feature THE HUMAN TOUCH FACTOR impossible to achieve. Thankfully, it is easier done than said (yes, easier done than said) - the trick being to really care about people and to treat them as one would like to be treated.
2. Look for ways to help team members From helping them with job-related knowledge and skills, to assisting them with a gas connection or finding a school for their children, there are numerous ways that one can help team members. Why is this important? Well, because people feel indebted to those that come through in their times of need. This is how bonds are made, and relationships develop. Indeed, it is a well known fact that people always remember those that helped them in their hour of need. So, how do we know when someone needs our help? See point 1 (get to know them).
3. Try to learn from your team members The age-old adage that "everyone has something to teach us" is indeed true. What is needed is an open mind, of course. Somehow, most of us seem to believe that we can only learn from those who are older or higher up in the organizational hierarchy. This has the unfortunate effect of restricting knowledge flow. Instead, what is needed is to promote learning in all directions. But, more specifically, it is important to identify things one can learn from one's subordinates, and then make it happen. I have heard many individuals complain that their bosses "think they know everything .. and won't listen to anyone else." Of course, case books are full of stories about organizations where things went horribly wrong because the decision maker was too blinded by his/her own so-called brilliance. How often do we stop to wonder if everybody else in the organization would have made the same decisions?
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The point is that in addition to helping the organization increase overall learning, the effort to learn from team-members (i.e., subordinates) can have a very positive impact on the relationship, as it shows the manager to be openminded and respectful.
4. Respect the person, not the title This one is related to point 3, but needs elaboration, and is important enough in its own right. We all seem to have a tendency to respect people's titles, and get so enamoured that we forget there is a person behind the title. The bigger the title, the more respect we seem to offer. Obviously, there is nothing wrong with this - if the person deserves it. But, I can bet every single reader has already thought of a few people s/he knows/knew who fit my description. On the other hand, there are all those other people who may not (yet or ever) have that big title that impresses us, but who are fully deserving of respect. First, simply because they are human beings, and next, because often it is they who make us look good, by putting in their best efforts. There is, of course, another side to this picture - not all employees are sincere (think Theory Y), and some will not respond to any of the interventions I have suggested above. But, it is to address these very issues that we have systems in organizations (probationary period, disciplinary proceedings, and so on). The majority of the employees will respond to the "human touch," and ironically, the organization is the beneficiary after all. By the way, if the majority of the employees in any organization fail to respond, it might be time to take a good look at the recruitment and selection systems! Finally, the message above is not aimed at HR folks alone. But, clarity begins at home. Let's be clear as to why we got into the HR profession in the first place, and we can then go ahead and educate our colleagues in all the other functions. BM
Shivi Kalia Director - HR, CSS Corp
Women at work
Women in IT :
Spelling Co-operation The steady increase in the number of female employees is attributed to the balance achieved between the women's need to excel at work and the support received from the companies they work for.
G
one are the days when publications used the phrase 'First woman in ‌' as women have found their way into every sector there is, and Information Technology is no exception. A decade ago, women entering board rooms made front page news. Today women are an integral part in business organizations and are making strategic decisions with their counter parts, across the globe. The trend of women joining various IT companies began almost a decade ago. They worked equally hard and stretched the work timings enough to prove their commitment, integrity and efficiency. It's 2012 and the list of Women CEOs has increased considerably. In 2011, ASSCOHAM said in a study titled 'Corporate Women: Close the Gender Gap and Dream Big' that women executives would play a fundamental role in building and shaping market-leading institutions. Even though the same study mentions that the number of women at top levels in India is low, the statistics show a high increases in the overall number of female employees in the Indian technology sector. NASSCOM along with PwC, pegs the number of women employed in large IT firms (of 20,000 70,000 people) at 24 percent-30 percent, and in back office firms 35 percent-42 percent. The steady increase in the number of female employees is attributed to the balance achieved between the women's need to excel at work and the support received from the companies they work for. Firms have extended various methods to ensure the women employees receive adequate facilities to ensure smooth flow in work. A boon for a woman is the maternity leave; an opportunity for her to retain her job while addressing the inevitable family requirements. Besides leave policies and flexible timings IT /ITES Services Companies have incorporated women employee safety measures both at work and while travelling from
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Women in IT : Spelling Co-operation
I think companies need to provide women with customized training modules in order to support their growth in respective companies. This is not due to gender bias, on the contrary, to hone the natural skills of the women like multitasking and intuitiveness. work. For instance, CSS Corp, an IT Services company that has a BPO arm, where women work the graveyard shift along with the men, need additional safety measures while being dropped back home. The company has devised a unique technology solution that enables seamless tracking of the cab fleet plus employees by integrating RFID (Radio Frequency Identification) with GPS (Global Positioning System). For this system to function, the employees are required to swipe their access card in the card reader, to confirm their boarding which gets recording and is then used for the tracking purpose. Beyond the safety of the employees, CSS Corp plans to throw open the live cab status to the family members/care takers of employees travelling by cabs, especially during unearthly hours. They are given a unique log in id and password to do so. With women centric initiatives, the women of today strive for equal status as that of their male counterparts, along with recognition. They love challenges and enjoy
proving their worth repeatedly. As an HR professional, I think companies need to provide women with customized training modules in order to support their growth in respective companies. This is not due to gender bias, on the contrary, to hone the natural skills of the women like multitasking and intuitiveness which would benefit them, their colleagues and the organization. Recently, at a women CEOs convention, a popular media company's woman CEO was quoted saying, "The technology landscape has flattened (with respect to women)". This throws light on today's reality; women are no longer the 'sweet voice' at a BPO, but they are innovators of technology and creators of business models. Be it as an employee or as an entrepreneur, women are taking on multiple roles at the professional and domestic fronts which are blurring the gender divide. In other words, women are here to cooperate and co-innovate and not compete. BM
Business Manager
August 2012
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Dr. Jaya Bhalla Faculty, National Institute of Financial Management,Faridabad
Stress- bad stress can cause a person a multitude of problems. But the worst of these is that bad stress has the capacity to completely burn out the energy of a person leaving him dull.
Keeping away
the stress T
he body and mind's reaction to everyday demands and threats is stress. It arises when pressure exceeds a person's potential and his ability to cope up with different types of pressures which come in life. It is an inescapable part of modern life. It is necessary as we need stress for creativity, learning and for our own survival. It is more pervasive and persistent. Overwhelming stress is the main feature of the current environment. Beyond a limit, stress is harmful and act as slow poison.
KEY TO EXCEL Some amount of stress is essential for us to excel in life. We call it as good stress or eustress. Dealing effectively with stress improves performance and quality of life. All stress can be good if we work on it and convert it into eustress. But unfortunately above 75% of adult visit their physicians because of stress related problems. The common problem world-wide is the mixture of anxiety and depressions are result of both anxiety and depression arise due to stress.
EXCESS STRESS IS SLOW POISON There are many situations that occur in our day to day life and cause us great stress. Some of these situations may be as simple as Driving in rush hour; getting last minute assignments at work; misplacing something at home or work; helping your child with homework; dealing with siblings or children; planning house hold budget; being unnecessarily blamed for something; surrounded by negative people; physical conditions in the working environment e.g. excessive noise, heat, humidity and vibration etc. 30
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Keeping away the stress
Human behaviour of an individual may undergo a complete change and he may pick up habits like that of smoking, drinking, impulsiveness, aggression and over-reacting.
On the other hand, some situations are far more complex and are bound to cause stress. These situation may be like dealing with incompetency at work in relation to people and resources; lack of prospects or security of jobs; prolonged conflict between individuals, including sexual or racial harassment bullying; staff treated with contempt or indifference; change in relation e.g. organizational structure, location, new equipment including IT and software; change in arrangements such as partnership working, procedures, work patterns, colleagues and managers, events outside of work and so on. All these different situations bring some form of stress that in turn affects our lives. The different effects of stress in our life which can be termed as Psychological Effects, Behavioral Effects, Mental Effects, Physiological Effects and Burn out Effects. Each of these different effects brings about various problems. The problems under these effects are as follows:
Psychological Effects The effects of stress are varied and affect each and every part of our lives, be it psychological or behavioral or mental or psychological. One area where stress has a very major impact is the psychology of a person. Stress may lead to depression, nightmares, or a sudden urge to cry. The person develops a negative attitude. His personal life gets affected to the extent that he becomes irritable, has low self esteem and becomes lethargic. He may start the use of sleeping pills. He becomes prone to sudden outbursts of temper, hostility, nervous attacks or
breakdowns and anxiety. The professional life of an individual too suffers from lack of concentration at work, poor decision making skills, poor performance in office and low self esteem.
Behavioral Effects Human behaviour of an individual may undergo a complete change and he may pick up habits like that of smoking, drinking, impulsiveness, aggression and over-reacting. He may become anti-social and develop a poor appetite. He may loose his concentration and become accident prone and blame others for his faults and shortcomings. These behavioural changes are very commonly seen in people with very high stress quotient.
Mental Effects Such stress has a bit of negative effect on the mental health of an individual as well. The mental state of an individual may be affected such that one may have difficulty in concentrating on difficult matters. He may develop a negative selfconcept and make negative self statements. Such individuals lack creativity and rarely develop new ideas nor do they introduce any kind of innovation in their work. The have no intellectual relaxation.
Physiological Effects The physiological effects of stress are innumerable. There is an unending list of such problems that are caused by or due to stress. Some of these effects may be hypertension, migraine, Business Manager
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Keeping away the stress
Exercise is one of the best stress reduction techniques. It not only improves our health, it also relaxes our muscles and helps us to sleep well. Exercise can be physical, mental or spiritual or a combination of all three. It improves the blood flow to our brains.
headache, asthmatic conditions, chronic backaches, allergies, skin disorders, more frequent infections, sexual dysfunction, heart pounding, bowel alterations, stomach distress, dizziness, lingering cold, dry mouth, fatigue, insomnia, muscle tension, generalized aches and pains. These are just some of the problems faced due to stress. The list can go on and on. Some more major problems like coronary heart disease, ulcer, arthritis etc also state stress as a major cause in vast cases.
Burn-Out Effects Stress- bad stress can cause a person a multitude of problems. But the worst of these is that bad stress has the capacity to completely burn out the energy of a person leaving him dull, inefficient and lethargic. Being over worked, exhaustion, fatigue and loss of enthusiasm, energy, drive & team spirit is very common in stressed out people. He not only lacks imagination and creativity but also refuses to take risks. He lacks the drive to do better. On the other hand, he becomes defensive and disorganized; cannot maintain good social relations. Rather, he suffers from poor recall and memory loss.
Stress Management Techniques The good news is that duress can be tackled with the help of certain stress management techniques. As I have already mentioned earlier, dealing effectively with stress helps in improving performance and quality of life. These techniques may be adopted to make us free from stress. These are not only stress management techniques but also essential to lead a healthy and full life. These are 1. Laugh 2. Exercise 3. Attitude 4. Diet 5. Sleep
LAUGH A good laugh has short-term and long-term effects. It can enhance our intake of oxygen which helps in stimulating our heart, lungs and muscles. It not only improves our immune system but also gives us personal satisfaction. Laughter can not only make our life easy but also help in coping with difficult situation. It releases endorphins and endorphins make us feel good. Laughter is surely the best medicine. 32
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But many people have this misconception that they can't laugh or that they don't know how to laugh. I want to tell you that humor can be learned. We can develop the ability to laugh and have potential to make other people laugh. Let's have a look on some of the ways of learning humor. 1. Keep funny movies, comedy albums, photos or comic strips which make you chuckle. 2. Find humor on internet. 3. Compile some jokes and go through them often. 4. Take your work seriously but yourself lightly. 5. Share a laugh. 6. Try to spend your time with your entertaining friends. 7. Cultivate your own sense of humor. 8. Don't complain about life's frustrations but rather try to laugh on them. There are social benefits of laughter as well. Laughter connects people. It helps in building good and lasting relationships. Laughter is contagious. If we bring laughter in our lives, we are most likely to help others and make them laugh and reduce their stress level as well as ours.
EXERCISE Exercise is one of the best stress reduction techniques. It not only improves our health, it also relaxes our muscles and helps us to sleep well. Exercise can be physical, mental or spiritual or a combination of all three. It improves the blood flow to our brains. Fit people are able to handle long term effects of stress without any impact on their mind, body and soul. Exercise is therefore very important and should be an integral part of our daily lives. Consult doctor before starting exercises. It should be fun. It is difficult to continue if you do not enjoy what you do. Exercises which suit most of us are stretching, walking, yoga, aerobics and playing sports.
ATTITUDE Positive attitude is a major contributing factor in the entire performance. It is, in fact, one of the major elements in accomplishing a remarkable life and success. Our thoughts are strong and powerful and they put an impact on our behavior and mind-set. People who have a confident mindset carry a smile on their face and they have the ability to handle anything that comes their way. Negative thoughts have no place with them and they are on their way to achieve what they
Keeping away the stress want. Our success and failure depends upon our choice of attitude. Choosing a positive state of mind will lead to virtually unlimited success. Learn and practice a positive attitude and enjoy the rewards. Stress is a result of a negative attitude, carried out via perceptions, choices and behaviours. A negative attitude will lead to unhappiness, poor relationships, difficulty at work and ultimately, poor health.Negative thinking and negative selftalk are normal activities that the mind likes to engage in. We live in an energetic universe. Any negativity has an effect on our energy. It weakens us. It creates a wide gap in our energetic immunity. Sooner or later, it manifests in the physical health. When having negative thoughts, one must stop it as soon as we notice it. We should turn our attention to all the good things we have. Every mistake has a lesson in it.
One of the Yoga Sutras, states: "When disturbed by negative thoughts, opposite (positive) thoughts should be envisioned/focused on." Having a positive attitude will improve our relationships, make us happier and lead to success. The rewards of a positive attitude are
Stress is a result of a negative attitude, carried out via perceptions, choices and behaviours. A negative attitude will lead to unhappiness, poor relationships, difficulty at work and ultimately, poor health.Negative thinking and negative self-talk are normal activities that the mind likes to engage in. We live in an energetic universe. Any negativity has an effect on our energy. It weakens us. enormous, if we are willing to keep our spirits up. In place of blaming or regretting, we should appreciate what we have.
RELAX Every person has his/her own style of relaxation. Sitting in front of T.V. sets, talking to friends on phone, sleeping for more than the required hours - give some people immense pleasure but all these techniques are not able to reduce the damaging effects of stress on our mind and body. We can use different relaxation techniques which can help us in relieving us from long-term effects of stress. These are meditation, muscle relaxation techniques, yoga, tai-chi, rhythmic exercise such as running, walking, rowing or cycling.
DIET Diet is also very important. FOOD NOT TO EAT- Caffeine, Alcohol, Nicotine, Sugar, Fried and fatty food, Junk food, Non-vegetarian, smoking. FOOD TO EAT- Fruits like Apple, Orange, Banana, Pomegranate and watermelon, almonds, Brown rice, Pasta, Ginger tea, Porridge, Green
vegetables, Salad, Hot water, Fatty fish, Black tea, Milk (low fat), Herbal supplements, Broccoli, Cottage cheese, Fortified breakfast cereals, Blue berries. We must drink 8 glasses of water daily. Most of us eat more than our body requires. We eat for taste and not according to appetite. We should not splurge at social gatherings. Don't sit in front of T.V. while eating as it leads to over eating. Prefer fresh food in place of canned, tinned and bottled items. Also, chew food properly. Don't let stomach do this job.
SLEEP Imagine that at some time during the day, we know that we're going to have to fight to stay awake. At some point during the day, we may even have an overwhelming urge to sleep, which means we'll have to drop whatever we're doing and sleep. People may involuntarily fall asleep while at work or at school, when having a conversation, playing a game, eating a meal, or, most dangerously, when driving an automobile or operating other types of potentially hazardous machinery. Lack of sleep not only impacts the overall quality of life and productivity of a person's life but also leads to serious health issues such as increased risk of diabetes, weight gain, high blood pressure and irregular heartbeats among others. If left untreated, lack of sleep and snoring could signal a more serious condition such as obstructive Sleep Apnea (OSA), a condition characterized by the repeated cessation of breathing during sleep which can potentially lead to heart disease, worsen heart failure and in rare cases even trigger heart attacks. . The chronically sleep deprived also have a huge economic impact; in addition to significantly reduced productivity, their condition may result in industrial or road accidents. I emphasize that even a slight improvement in a person's quality of sleep can have significant benefits for their overall health and well-being. "What I have noticed at home is that I sleep more soundly, have better dreams remember more of my dreams and awaken very refreshed." "In my office I notice that I am able to stay calm, focused and sustain my energy for long periods of time no matter what chaos may be going on around me.Sleep is not optional, it is absolutely critical to people's health," said Anjan Bose, Vice President and Business Head, Philips Healthcare, India, Bangladesh, Sri Lanka and Nepal We can say that "Sleep is not optional. It is something we need to perform well in our day to day life. Sleep at least 7 to 8 hrs in a day. It will help in complete rejuvenation of body and mind. Eat at least 2 hrs before bed time. Take a shower, play your favorite soft music and use dim light." Stress is a part of life which may be there because of life style and circumstances in which we live or it may due to the high expectations, bigger vision, inferiority complex of non-performance etc. We have to analyze and reduce the stress so that it can have minimum effect on us by adopting various techniques as explained above. It may have minimum negative effect and creates synergy for excellence. BM Business Manager
August 2012
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Prof. Prabir Guha Kolkata
A job is only as well done as the person who does it and this is applicable to branding as well. Brand building is a focused job and it is vital to have the right people to do it. Requirement is for different types of people at the various stages of the exercise. It may not be possible to have different people but it would certainly be pertinent to have people who can show evidence of different attitudinal strengths at the different stages.
Attitudinal Orientation for Brands Building
A
rose is just a rose. Similarly soap is just soap. But it transcends the borders of its mundane existence when it becomes a Lux or a Dove or a Fiama. It evolves into the rarefied world of a brand and then it exudes more charm, more satisfaction and hence commands a higher price.
So with an apology to the bard of yore, a rose is just a rose so long as there is only one of its kinds. When thousands of varieties enchant this planet it becomes necessary to identify each one and differentiate it from the rest. And at the end, one variety would justifiably be considered the best and be able to command the highest price. And it will rule for quite a period - till an able competitor comes along. The able competitor might have to struggle a good deal as the patrons of the time-honoured variety may not readily shift their custom because of the emotional bondage that might have developed over the years. It therefore becomes necessary for a company to build an identity for its product and use that identity to differentiate it from the rot in the marketplace. This is the story of branding. It is giving the product a place in the society and this process enhances the value of the product and makes it more unassailable in the face of competition. But then it is the customers who would pay the exalted price. So the ultimate test of the brand is in their hands. If they are willing to pay an astronomical price for a Rolls Royce - so be it. The brand is then accepted. The creation of the brand is an effort of the company but the acceptance and establishment of the brand is the prerogative of the customer. The creation of a brand is a marketing effort, but it is a different ball-game compared to the other marketing efforts as marketing research, sales presentations, after-sales service etc. And quite as expected the type of people required for brand building will be different from the type of people required for the other marketing efforts. Brand building is normally done progressing through a number of stages. The first step would be to make the customers aware of the brand. They should be able to recall the brand at as many situations as possible and through as many experiences as possible. For instance the customers should be able to recall Coca Cola whenever they are thinking of a get-together with friends, be it for a birthday bash or a wedding party or an anniversary
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celebration or a picnic or a long drive or whatever; and they should be able to think of it right through all the stages of these experiences like from the time of conception through the implementation and finally till the time of reflections at the end of the event. People entrusted with the marketing job at this stage should certainly be extroverts and gregarious in nature. They should enjoy making friends with strangers. Secretive people will not be able to make a mark. On the other hand those who are not dogmatic and can adapt themselves to the environs and be liked by people would be better able. It is also important that these people have a penchant for travelling within or outside the city and have no family or other compulsions preventing them from doing that. But once the potential customers are made aware of the product they need to see that the product performs. So the next step would be to persuade the customers of the performance of the brand. For instance the customers need to be convinced that the Samsung refrigerator will really keep the food fresh better than the competitor's refrigerators. A product has to perform to get established in the market. But unfortunately for the marketing company all the products put up by the competitors also perform and the differences in the performance standards may not be always readily perceptible. It requires specialized communication to make the customers understand. What is being said by the seller is not as important as what the buyer understands and so a prominent speaker in the customary sense may not be able to deliver.
People entrusted with the marketing job at this stage should certainly be extroverts and gregarious in nature.
What the marketing company requires are people who can demonstrate the product. For this a thorough knowledge of the product and its functions is a prime necessity. A seller who thinks that the customers can be type-cast is a candidate for failure. Each customer is different by needs, and also by attitudes. They have different ways to look at the same problem and needless to say they all require customized solutions. On the other hand, the seller of the Whirlpool washing machine has only a few models to fit into the requirements of thousands of buyers. How these sales people talk euphorically of the same machine characteristics to different people in different ways is their forte and they must be able to do it. Objections will also be raised at this point. Potential customers will talk about real or imaginary problems which according to the sellers need not be rational at all. And yet these sellers will have to keep their calm, not cast any aspersions on the good judgment of the customers and diligently and intelligently manoeuvre their persuasions to reach the proper goal. The marketing executives at this stage of brand building need to show their knowledge of the product. How can sales people who do not have hands-on experience with washing machines ever be able to talk convincingly to customers who have problems washing their clothes? But along with that they need to show their attitude of playing the second fiddle in encouraging the customers to make their assessments. And yet they must be strong in their convictions about the quality of the product that they are selling. A brand however does not always sell mainly because the buyers are aware of them or because they are certain of their performance. Many a promising new product or a well established product would not have bitten dust if this had been true. So the third step would be to realize the psychological and social factors that play their roles in making the customers prefer a brand. While it is true that KFC is progressively being accepted in the market mainly because it projects an American way of life and appears to be more in tune with the modern, trendy, fast and urban ways; it is also true that Tata salt is accepted as it tugs sentimentally at the patriotic heartstrings of the customers. It is important for the marketers to understand which psychological factors would affect the decision-making process of their customers. Besides, the customers could often be influenced by the social milieu that they live in. Otherwise no one would have ever bought larger motor cars. The smallest and the cheapest one being the most logically acceptable one would have been the only one sold. The sellers should therefore have an uncanny ability to guide the potential customers on a path of imagination. They should be able to make the customers aspire for the ultimate satisfaction of being worshipped by their peers for Business Manager
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Attitudinal Orientation for Brands Building
owning the larger automobiles. They should be able to imagine things for themselves and pass on that imagination to others putting their own products in the central spot of that panorama of imagination. This is valid when the company is trying to create a brand or when it is trying to nurture its brand.
A brand is not a brand unless the customers come back to it over and over again. And these repeat orders would be the result of the judgements at this stage. The seller should be able to stand in the midst of the vast millions of sellers as the only individual on whom the customer can repose all faith.
Now at the fourth stage the customers would on the basis of their being aware of the brand, being sure of its performance and being convinced that using it would make them more accepted in society finally sit down to judge the brand. This judgement would help them chart out their course of intimacy with the brand for future transactions. A brand is not a brand unless the customers come back to it over and over again. And these repeat orders would be the result of the judgements at this stage. The seller should be able to stand in the midst of the vast millions of sellers as the only individual on whom the customer can repose all faith. The responsibilities of the marketer become graver from this stage onwards. It is relatively easier for a marketer to make the customers aware of the brand, convince them of the performance and even make them imagine situations where possession of the brand would enhance their own positions in society. It is easy to gain knowledge and use it to advantage but difficult to be known and appreciated in society as a person with knowledge on the subject. A marketer who has to influence the judgement process of the customers must be able to do just that. A sales person who has to impact upon the judgement process of the chief of an infrastructure development corporation regarding the acquisition of a Caterpillar bull-dozer would actually have to be considered a repository of knowledge in bulldozing. Besides should also be considered prudent enough to advise the purchaser purely on technical grounds. If required, these marketers should be able to harness the opinions of other knowledgeable people in the market to swing the purchase decisions in their favour. These people should have the network that matters. A brand becomes a strong brand only when the customers feel for the brand. The fifth stage is when customers are found who are happy when the brand succeeds and are sad when it does not do well and even go to the extent of castigating the buyers who do not favour the brand. They are so wedded to their brands that they cannot even think of life without them. Coca Cola, Amul, Bata all conform to this category. Examples could be many more. There are people who spend enormous amounts of money in maintaining their antiquated Pontiacs and Studebakers and bring them out only on ceremonious occasions to cruise down the present-day streets in the hallowed glory of their yester-years. These brands have ceased to exist, but for them the brands have outlived the products. To them the brand is as much alive today as it was in 1965 when they bought it. This happens to be a testimony of their strong and indissoluble kinship with the brands. Which brand would not like to be in this category? But who will put the brand in that bracket of the customers' mind and how will they do it? A very special type of a marketer is required for this. The quality that is called for at this stage would be empathy. These customers do not need to be made aware, they do not need to be convinced, they do not need any help in making their own judgements which in any case they have made years ago, they are aware of their feelings towards the brands and are quite resolute in maintaining them even standing up to ridicule at times; what they now require is someone to confide their feelings on to. They need someone who would listen to them why they are still maintaining the old manual Remington type-writers though they are using the latest lap-tops for all their typing work. They need a little appreciation for loving a brand when all others are laughing at them. The brand builders at this stage should be able to show them that they care and agree to their points of view. A tough call for the marketer and very few will show these qualities. But then not many brands have lived to this stage where they are lovingly talked about though not used. The final stage is when the customers truly vibrate with the brand and there is complete harmony. This certainly is beyond all the nitty-gritty of arriving at the proper judgement and having the right feelings. Manoj (name changed on request) came to know of the Maruti brand when he was in his
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A job is only as well done as the person who does it and this is applicable to branding as well. Brand building is a focused job and it is vital to have the right people to do it.
mid-twenties and was contemplating his first motor car. He found out about the performance standards and was satisfied. He bought a low end model that suited his budget. It gave him enormous clout with his friends and relatives. He became confident that it was the best car in the world. Slowly he moved up the professional and social ladder and kept on changing his car at regular intervals to keep up with his expanding needs and expanding ego. He feels that the brand is good and had recommended it to many of his friends. Now after twenty-five years of romancing the Maruti he has come to a state where he has to rethink. All his friends now own the superior and definitely the more expensive German models and they swear by their technological excellence. Besides, they love talking about their cars. Manoj is left out. He thinks of shifting his custom in favour of a BMW. He does not vibrate with Maruti anymore. His life-style has changed and Maruti has not been able to keep up. The brand in any case cannot communicate. The Maruti marketer has to talk. This Maruti executive will be accepted by Manoj only if he is of the same social status. What type of marketer can make the customer vibrate in sync with the brand? He will be the person who himself is in sync with Manoj. He has to have the same life-style as the customer. How can a sales person who has never owned a Rolls Royce ever talk with eulogy about the car? Even his knowledge of the subject will not make him acceptable to a possible buyer simply because he does not belong to the same social group. The brand at this stage has to be supported by marketers who can meet and interact with the buyers at level social planes. A person who drives a Rolls or is about to drive one would interact with and believe an executive who shares his own life-style. Sellers of premium brands will therefore have to conform. A person who can talk about the caviar and champagne served on the Mediterranean cruises might be better able to represent the brand than the person who knows only about the suspension and the transmission of the car. Who would believe a teetotaller if he talks about the finest malt whisky from Scotland in spite of his profound knowledge in the art of distillation? A job is only as well done as the person who does it and this is applicable to branding as well. Brand building is a focused job and it is vital to have the right people to do it. Requirement is for different types of people at the various stages of the exercise. It may not be possible to have different people but it would certainly be pertinent to have people who can show evidence of different attitudinal strengths at the different stages. BM Business Manager
August 2012
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Responding to Joyous Choices of Freedom
F
reedom is excellent in its raw form; but it starts missing its real essence as it travels with new connotations. It becomes an entity completely transformed to suit the requirement of material world. 'What I know' by reading a book is not the freedom I can apply due to the distortion in transit. How can I get into the mode while I continue to receive life forces from 'bondage'? I can experience freedom only through my relationships with people, property and idea and by recognizing what I have done in bondage. Awareness initiates its reaction within and receives power and potential to change. My positive emotions can create a new state and conquer life as the source of all changes is in responding to joyous choices of freedom. I wish someone had taught me the impact of liberation on various choices in life. I know, my need is the driver and selection from diverse alternatives satisfies my needs. I also come to recognize the important elements of life only when my basic needs are resolved? Limitations cannot rule me as I am here to go beyond boundaries and I do not want to compromise with my life. What was significant earlier may not serve its purpose now even though I may feel like giving it highest priority. (He): hello sir, how r u? (Me): great as always; tell me how is life there. (He): Sir, we miss you a lot. (Me): Do not miss; instead see why you are missing; you have not come experienced many things in life to make right choices. (He): maybe, but I enjoyed ur lecture the most; ur subject was related to our personal life also. (Me): It happened because you liked yourself most when you had expanded within; unfortunately no one discusses in class the foundation of life. (He): may be; but I discovered myself. Sir, I want to do my M-Tech in Aerospace. Is it a good branch and are jobs available in the domain? (Me): Do not study something for a job; do it with so much passion than jobs will search you out. (He): Yea, I am passionate about Aerospace. (Me): Then why do you have doubts? Why do you think about job; you can create your own job with your feeling with strong emotions. (He): not me; my relations are very concerned about me. (Me): Take ownership of your life; others can never feel your feelings. (He): I will do sir. (Me): You can make difference with your feelings anywhere. (He): Sir I have news that organizations will recruit in thousands in 2013; is it true? (Me): See how unfortunate you are to compare yourself with massses when you want to be different. (He): kkkk, i understand; thank you for your support. (Me): Be the person you want to be....bye Freedom is a sparkle which spreads out in the universe as it gets experienced by an individual. Most of us do not like to spend the 'precious' energy as we remain conventional by matching up to the established practices. Profit gains importance for its advantage of being 'excess' which has the potential to undermine and surpass need. Every human has a dying need to make profit in everything he carries out in daily life for the thrill of 'excess' and before he defines enough, he has already experienced more than enough. Decision to beg from others with the feeling of 'not having' is an illusion, 38
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whomsoever he may be. 'Not having' is not a crime or a curse but losing faith CHINMOY SARKAR on 'having' is. Having comes Author, AXELL into view from nowhere when emotion of not having fades away. I am absolutely in sync with my mission of life when I move from a state of not having to having. My journey here is exactly meant to do that. The gap between having and not having calls the attention to the notable difference between a human who asks for and who does not. Asking is a freedom of choice when doubt disappears in the expression of gratitude to life. There are three important questions we all need to answer; 1) who am I? 2) Where am I? 3) Why am I? The answer of first question secures the answers of other two. If I answer it as a human being, they will be 1) a peaceful and happy being, 2) in the relationships with others, 3) to experience and express satisfaction. But the perspective is changed if I try to answer as my organizational role, 1) a doctor, 2) in the hospital with patients, 3) to cure patients. The ultimate usefulness of life depends on the purpose rather than upon mere survival. 'What I do' has more potency than 'I do'. 'What' is governed by faith and 'doing' is the manifestation of that in action in my daily life. If I attach more value to achievements, actions are focused on success. However, if I am influenced by my expansive energy, 'what I repeat' loses its essence and 'what I create' gives satisfaction. My thoughts develop my faith and finally choose my work. Thinking thus receives more attention than doing. What I think makes me who-I-am. We receive the goals from OUTSIDE without experiencing the purpose WITHIN. 'Give me' is the action instead of 'be it'. It is a futile journey toward endless void as 'what next' has become the key to life. If the perspective is changed, a peaceful and happy human can perform his role with absolute satisfaction. What a life it will be! No anger, no frustration and life's flow keeps on receiving what it seeks. Whose purpose of life is this? The ARTIST who is playing the role or the ROLE itself ? Every morning he is running to a space to accomplish the GOAL of his role as a 'doing' entity whereas his PURPOSE is to derive satisfaction for the 'being'. HE plays the role of a doctor whose main goal is to cure the patients; but HIS purpose remains, to become a peaceful and happy human being. Human doing has taken over human being and as a result the suffering has increased manifolds. No one receives satisfaction in spite of achieving all the goals because the purpose is never experienced by human beings. Life moves on faster without looking inward. We are all excited to jump from one success to the next and finally die on bed at night without learning to respond to joyous choices life provides in the freedom of NOW. BM
GOVERNMENT Notification Revised Minimum Wages in Himachal Pradesh W.e.f. 1.4.2012 (Proposed) Category
Where no benefit is provided
Where food tea & combined accommodation provided
Monthly
Per Day
Monthly
Un-Skilled
Rs. 3900.00
Rs. 130.00
Rs. 3315.00
Per Day Rs. 110.49
Semi-Skilled
Rs. 4257.00
Rs. 141.91
Rs. 3651.00
Rs. 121.70
Skilled
Rs. 4914.00
Rs. 163.79
Rs. 4322.00
Rs. 144.07
Highly Skilled
Rs. 5211.00
Rs. 173.70
Rs. 4644.00
Rs. 154.80
Employees' Provident Funds (Second Amendment) Scheme, 2012 F.No. S-35012/01/11-SS-II
Dated : 4th May, 2012 Notification
G.S.R. 336 (E).- In exercise of the powers conferred by Section 5, read with sub-section (1) of Section 7 of the Employees' provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), the Central Government hereby makes the following Scheme further to amend the Employees' Provident Funds Scheme, 1952, namely :1. (1) This Scheme may be called the Employees' Provident Funds (Second Amendment) Scheme, 2012. (2) It shall come into force on the date of its publication in the Official Gazette. 2. In the Employees' Provident Funds Scheme, 1952 (hereinafter referred to as the said Scheme), in paragraph 27, after sub-paragraph (2) the following proviso shall be inserted, namely"Provided that above mentioned returns shall be submitted by the employer in electronic format also, in such form and manner as may be specified by the Commissioner." 3. In paragraph 27A of the said Scheme, after sub-paragraph (2), the following proviso shall be inserted, namely :"Provided that above mentioned returns shall be submitted by the employer in electronic format also, in such form and manner as may be specified by the Commissioner." 4. In paragraph 27AA of the said Scheme, after condition (16) of the Appendix 'A', the following proviso shall be inserted, namely :"Provided that above mentioned returns shall be filed by the employer in electronic format also, in such form and manner as may be specified by the Commissioner." 5. In paragraph 36 of the said Scheme,(i) in sub-paragraph (2), after the proviso, the following proviso shall be inserted, namely :"(c) Provided further that a coy of the forms as mentioned in clauses (a) and (b) above shall be provided by the employer toe concerned employees immediately after joining the service or at the time of leaving the service, as the case may be." (ii) after sub-paragraph (6), the following sub-paragraph shall be inserted, namely :"(7) Every employer shall send to the Commissioner such returns in electronic format also, in such form and manner as may be specified by the Commissioner." 6. In paragraph 36-A of the said Scheme, after the proviso, the following proviso shall be inserted, namely :-
"Provided further that above mentioned details shall be furnished by the employer in the electronic format also, in such form and manner as may be specified by the Commissioner." 7. In paragraph 38 of the said Scheme, after sub-paragraph (3), the following proviso shall be inserted, namely :"Provided that the employer shall send to the Commissioner returns or details as required under sub-paragraph (2) and (3) above, in electronic format also, in such form and manner as may be specified by the Commissioner." 8. In paragraph 42 of the said Scheme, after the proviso, the following proviso shall be inserted, namely :"Provided further that above mentioned contribution card in respect of each employee shall be prepared by the employer in electronic format also, in such form and manner as may be specified by the Commissioner." 9. In paragraph 43 of the said Scheme, after the second proviso, the following proviso shall be inserted, namely :"Provided also that above mentioned contribution card in respect of each employee together with statement in Form 6 shall be sent by the employer in electronic format also, in such form and manner as may be specified by the Commissioner." 10. In paragraph 72 of the said Scheme, after clause (e) of subparagraph (5), the following clause shall be inserted, namely :"(f) Every employer shall, at the time when an employe joins the service, be required to get the application for transfer of provided fund in cases specified in sub-paragraphs (1) and (2) of paragraph 57, duly filled in and attested, and to forward the said application within five days of its receipt to the Commissioner or any other officer authorized by him in this behalf." 11. In the paragraph 82 of the said Scheme in sub-paragraph 2, in clause (4), after the existing entries, the following proviso shall be inserted, namely :"Provided that the particulars of disabled employees shall be sent by employer in electronic format also, in such form and manner as may be specified by e Commissioner." 12. In the paragraph 83 of the said Scheme, under the heading "36 Duties of employer", in sub-paragraph (2), after the existing proviso, the following proviso shall be inserted, namely :"Provided further that a copy of the forms as mentioned in clauses (a) and (b) above shall be provided by the employer to concerned employees immediately after joining the service or at the time of leaving the service, as the case may be." Ravi Mathur, Addl. Secy. Business Manager
August 2012
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GOVERNMENT Notification Employees' Provident Fund Organisation Bhavishya Nidhi Bhawan, 14-Bhikaji Cama Place, New Delhi-110 066 No. IWU/7(17)2009/2816
25.5.12
To All Additional CPFCs (Zones) All Regional P.F. Commissioners, ROs and SROs Sub : Compliance in respect of International Workersregarding Sir, Special Provisions in respect of International Workers included in the Employees' provident Funds Scheme, 1952 as well as Employees' Pension Scheme, 1995 have been given effect from 1st October, 2008. Subsequently, certain amendments have also been carried out vide notification dated 11th September, 2010 and the same were circulated vide Head Office letter No. Coord/5(15)2009/IW/07733 dated 25/26th November, 2010. In pursuance of these amendments detailed instructions were issued vide this officer letter No. IWU/7(6)2007/41959, dated 8th September, 2009 and No. IWU/7(11)/Compliance dated 30th August, 2011. 2. Representations have been received by this office seeking clarity on the status of International Workers (IWs). The matter has been reviewed holistically in the light of special provisions contained in para 83 of EPF Scheme, 1952 and para 43-A of EPS, 1995 and accordingly the position is clarified as under : i. The category of IWs will comprise only those Indian employees who have contributed to the social security programme of a country having SSA with India and having gained or going to gain eligibility for benefits under the said SSA only, and their contribution, membership tot he Fund etc. will be regulated by special provisions contained in para 83 of EPF Scheme 1952 and para 43-A of EPS, 1995. ii. The detached employee, who avails exemption from contributing in the other country by obtaining a Certificated of Coverage (COC) from India and contributes to the social security system in India, will not fall under the category of IW. However, it would be mandatory form his to contribute as a member in India, which is a pre-requisite for COC. iii. All employees holding other than Indian passport, employed in an establishment covered under the Act, and who do not hold COC, will contribute as IWs. 3. The other matters ins respect of such IWs will be regulated as under : (i) With effect from Ist October, 2008 each and every IW, other than an 'excluded employee' is required to be a member of the Employees' Provident Fund. (ii) A detached IW contributing to the social security programme of the home country and certified as such by a valid COC issued by the country of origin for a specified period in terms of the bilateral SSA signed between that country and India is an 'excluded employee'. (iii) The contribution in respect of all IWs is required to be paid by the employer on full salary (i.e., without any wage ceiling) as per provisions of the scheme. (iv) The components of salary to be included for the purpose of computation of contribution are the same as in the case of domestic Indian employees, except that in case of IWs, wage ceiling is not applicable. (v) prior to issue of notification dated 11th September, 2010, diversion of 8.33% portion from Employer's share of 40
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contribution to the Pension Fund was restricted to the wage ceiling of Rs. 6,500/- only i.e., upto Rs. 541 p.m. However, consequent upon notification dated 11th September, 2010, the 8.33% portion to be diverted tot he Pension Fund is to be calculated on full salary w.e.f. 11th September, 2010 (i.e. not restricted to the ceiling of Rs. 6,500/- p.m.). (vi) For the purpose f securing compliance, identification of all IWs is to be done in the first instance, and IW accounts are to be flagged separately in the Form-9 and Form-24 so as to ensure proper accounting as well as settlement of their claims in accordance with the Special Provisions. (vii) The provision of inoperative accounts would not be applicable to IW accounts. (viii) An IW covered under SSA who has not rendered the eligible service, is entitled to a totalisation of contributory periods of service as may be provided in the said SSA only for the purpose of determining eligibility for monthly pension. (ix) Withdrawal benefit under the EPS 1995 is available only to hose IWs who are covered under SSA and have not rendered the eligible service even after including the totalisation of service as may be provided in the said SSA. Withdrawal benefit under EPS 1995 is not available to IWs not covered under SSA. 4. You are accordingly requested to ensure that the above mentioned instructions are followed scrupulously and the reports/returns in respect of IWs are received and scrutinized regularly to detect evasion, if any In this regard, it has also to be ensured that the special provisions relating to the IWs are also implemented by the Exempted Establishments. Specific instructions may also be issued to the Enforcement Officers, who are responsible for securing compliance pertaining to their area. 5. IW-1 Return is mandatory for all covered establishments for reporting details of IWs. In case there are no IWs nil return must be submitted. It may be ensured that the return is submitted by all employers. 6. The frequently asked questions (FAQs) updated from time to time on the website www.epfindia.com may also be referred to and in case of any doubt clarification, International Workers Unit, Head Office may be contacted. Yours faithfully, (K.C. Pandey) Addl. Central PF Commissioner (IWU)
The Punjab Labour Welfare Fund (Haryana Amendment) Act, 2012 Dated : 11th April 2012 Notification further to amend the Punjab Labour Welfare Fund Act, 1965, in its application to the State of Haryana Be it enacted by the Legislature of the State of Haryana in Sixty-third Year of the Republic of India as follows :1. This Act may be called the Punjab Labour Welfare Fund (Haryana Amendment) Act, 2012. 2. In sub-section (1) of section 9A of the Punjab Labour Welfare Fund Act, 1965, for the words "five rupees" and "ten rupees", the words "ten rupees" and "twenty rupees" shall respectively be substituted. Manjit Singh Secretary to Government Haryana Law and Legislative Department
Labour Problems & Solutions
Anil Kaushik, Management Expert -HR & IR
Solutions provided here are in context to narrated facts & not in general.
Q. We have a settlement with union regarding payment of bonus linked with productivity. Are we liable to pay even more than 20% in case productivity increases and reached to higher level. Are we also required to maintain records under the Payment of Bonus Act ? Ans. As Sec. 31-A makes it clear, you need to pay bonus as per your settlement linked with productivity. But there are two riders: 1-You can not pay bonus less than minimum bonus percentage prescribed under the act. i.e. 8.33%. 2- You can not pay bonus more than the percentage prescribed under the the act i.e. 20%. It means law has the intention to give due respect to the existence of settlement allowing both the parties to operate within the ambit of terms of settlement but at the same time has put a check on the arbitrariness of employer and employee regarding relinquishing the right of getting minimum bonus. You can not come below 8.33% and employee can not go above 20%. However, this sec. does not exempt you from other provisions of the Act. hence you need to maintain the required records and registers. Q. We have a marketing office of a manufacturing Co. Most of the sales people belong to one community. Our peak sales time in the market is after noon. One of our employee without approval and even discussion with his HOD or HR shooted a mail to all sales staff to remain on leave afternoon during the Ramjan month to do religious offerings. On that basis and instigation, sales staff have made a formal request to their HOD to grant leave of three hours every day afternoon during the Ramjan month. Since it is a sensitive issue, how should I handle. Should we grant them leave? Ans. You need to be conceptually clear in your mind regarding one thing and that is leave is not a right. Secondly while granting such leave or taking any such decision in an organization, pl. visualize the future complexities of this decision you are going to take. As I always say your today's problems are yesterday's wrong decisions. Granting such kind of leave in bulk to a community whosoever it may be, will be highly damaging to the healthy organization culture. You cannot discriminate among cast, creed and religion while working in the organization. This country is full of festivals be it religious or otherwise. Can you afford to grant such kind of leaves to other
community and religion in bulk? By doing this you will be opening a Pandora box. Legally and administratively, I suggest not to accept such kind of requests. Now coming to HR angle, accepting all demands, requests, and always remaining soft, thinking that it will always keep employees motivated is myth. It is human nature, the more you accept to give, more will be asked to give further. You need to differ between need and desire. This kind of request may be a desire but certainly cannot be termed as need. Everybody in the organization has to accept collective behavior and in the set up you can not differentiate them in to various segments of cast and community. Call them, make them to understand that religion has its own high place in personal life but when comes to work, it should not override that. Sometimes. You need to get courage to say ‘NO’ to such things. I suggest one more thing. Take action against that person who, without your consent mailed to all employees and spoiled the work environment and unnecessarily raised a hope among employees. Q. Recently, our two employees-one male and female manhandled each other in a program organized by the company for reward and recognition. The program was in a hotel. After program, when dinner was gong on,male employee passed indecent comments on that female employee who was rewarded by the company for high achievements. Male employee was close contender. Female employee could not resist her and slapped him. Male employee threw the liquid having in his glass on her face and broken the glass too. Anyhow, Both were kept seperate and left the party. Management is very much annoyed. They are insisting me to take appropriate action against that male only and even thinking of stopping such R&R programs. How should I handle the situation? Ans. It is a matter full of sensitivity. I am not aware what kind of industry you have but presuming that it could of service industry, You need to examine the whole matter at micro level. First, examine whether your service Rules/ Standing orders provide such kind of incidence as misconduct outside the premises of the organization. Second, Examine whether there is any favoritism played in rewarding that female? What made that male employee to pass indecent remarks against that female openly? Conduct an open and preliminary inquiry. This will help you reaching to right conclusion. One thing is clear that be it as the case may, male employee cannot be allowed to pass Business Manager
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Labour Problems & Solutions
Anil Kaushik, Management Expert -HR & IR
indecent remarks against a female employee openly. It amounts to sexual harassment and should be viewed seriously. You should charge sheet him but first take the written complaint from that female employee and few others who saw the incident. Normally what happens, after sometime, under peer pressure, female employee becomes reluctant in pursuing the action against male employee. You should also review the whole R&R process and plug the loopholes if any, to make it more transparent and fair so that it ahieve the results. It makes no sense if any scheme or HR initiative creates bad blood among employees instead keeping them highly engaged. Q. Our organization is multi-location. I want to know that on many locations we have less than twenty employees engaged as contract labour and at some, it is more than twenty. Should the figure of twenty be taken as a whole to get contract labour act applicable or it is location wise? Ans. It is location wise. Because each location is considered as independent establishment in that particular area. If that location has more than 20 employees as contract labour you need to get that location registered under Contract Labour Act. The locations which have less than 20, need not to be registered under the Act. Q. We had suspended one employee in last financial year. Now while calculating bonus will he be entitled to bonus on the 50% of allowance paid to him during suspension period? Ans. No! As employee did not work and earned wages during the period of suspension, he will not be entitled to bonus for such period. Bombay HC in the case of Motor Industries Ltd. (1997 (75) FLR 589 )and Deccan Merchant Co-operative bank Ltd 2008, (116) FLR 993= 2008 LLR 30, has also held that bonus is not payable on suspension allowance firstly because the employee did not actually work during that period and secondly because the subsistence allowance could not be considered as salary or wage. Q. Can You pl. tell us what allowances form part of Salary or wages for the purpose of calculating Bonus? Ans. Apart from basic and D.A. Following are also deemed as part of salary or wages For the purpose of calculating the bonus: Maternity Benefit amount (IC Bombay in Mill owners Association case 1948 ICR 148). Officiating Pay (IT Madras in Workers of Standard Vacuum oli co. ltd. 1957(1) LLJ 165 ). Retaining Allowance (SC in Chalthan Vibhag sahakari Khand Udyog case1981(42) FLR 189). Leave pay (LATMadras In Nellimarla lute mills case 1955 (1) LLJ 167. Wages for national and festival Holidays(HC Kerala in Pappu Vs. Raj Tiles case 1988(1)LLN 643. Night Shift Allowance (LAT Bombay Trichinopoly Mills Ltd. Case 1952 (2) LLJ 608).
in
Q. In our industry, it is common that when workman goes on leave, he normally overstays. At the time of joining he comes with many excuses.
Please advise under what circumstances we can take action against the workman for overstay of leave? Ans. There may be many situations and circumstances for which employee cannot be blamed for overstay on the happening of any such contigency like illness, death in family etc. Absence of the workman from work if due to any cause beyond his control, it would not be reasionable for you to refuse leave to the extent required. In such cases termination on account of absenting without leave will be held illegal as held by Delhi High Court in the case of Delhi Cloth and General Mills Ltd. vs. Piaralal 1976 Lab IC 21. In this case workman was detained under defence of India Rules and he requested for leave for an indefinite period of about 6 months. Court said that the circumstances were beyond the control of the workman. In another case of Hamilton & Company Ltd. 1950-1-LLJ 670, workman was dismissed for overstay of leave originally granted and court set aside the dismissal order declaring that the circumstances under which the workman overstayed were beyond his control. Here workman, home was very much affected by the flood and after ten days he could only save his family but fell sick after flood for one and half month for which he produced medical certificate. So you have to closely analyse and examine the circumstances under which workman overstays leave and decide whether the circumstances were beyond his control or not. Q. Many employees are in habit of coming late on duty. In standing orders we have clause of terminating the services of such employee. What the law says in this regards? Ans. Normally when you give grace period for attending duty, it should be treated as an opportunity to be used in emergency and not as right. Employees are not entitled to misuse such provisions. Grace period does not mean amnesty from disciplinary action for coming late. If an employee wants to claim grace or indulgence frequently then he would certainly be guilty of misconduct. Late coming it not a major misconduct and employee cannot be dismissed for it unless it is habitual as held by the court in the case of Walford Transport Ltd. vs. Their Workman 1952-1 LLJ 407. Certainly, habitual late coming is a misconduct and employee can be dismissed for the same. Bombay High Court in the case of Chanderkant T. Kumar vs. Chairman Agriculture Produce Marketing Committee 1990 LLR 166 has held that where the workman was chronic defaulter and did not give up his habit of attending office late, his punishment of dismissal was held valid. Where in standing orders late coming is provided as minor misconduct, workman cannot be dismissed for one act of late coming in such case as has been held by the court in the case of JK Mills Company vs. Their Workmen 1954-1 LLJ 565. The basic concept of the act of late coming has to be understood with the ultimate effect of late coming of that person on the rest of the industrial activities. If the late coming of an employee can impact on majority of workers and cause serious inconvenience, then it is to be considered more serious. BM
Readers are invited to ask for Solutions of their Labour Problems through e-mail - bmalwar@yahoo.com
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From The Court Room
Latest Judgments
Recent Important
Judgments Abandonment
When the management stand of voluntary abandonment differs from the records, abandonment cannot be presumed and reinstatement with 50% back wages is justified. When the documents produced by the party/Management in evidence are contradictory or not in match with the pleadings taken n the pleadings/written statement, the stand of the arty/Management is liable to end in failure. Om Prakash vs. Camy Enterprises. 2012 LLR 727 (Delhi H.C.) Management has to establish the voluntary abandonment by sufficient material and evidence. Abandonment of service is different from absenteeism. Abandonment of service is voluntary relinquishment of ones service with intention not to resume the same. However management has to establish it by sufficient material and evidence. No enquiry in this case was set up by management. The case is a clear case of violation of section 25-F of I.D. Act. M/s. Fateh Chand vs. Presiding Officer, Labour Court and another. 2012 (134) FLR 73 (Delhi H.C.)
Back Wages Full back wages will be justified when workman’s categorical statement of remaining unemployed through out the years was not rebutted by the management. Full and not 50% back-wages, as awarded by the Labour Court, would be appropriate relief to a workman on his reinstatement when the workman has categorically stated that he remained unemployed all the years when he was pursuing litigation and his statement, regarding unemployment, has not been rebutted by the employer. Smt. Laxmi Bharat Bavise (Widow) & Anr. vs. M/s. Permanent Magnets Ltd. & Ors. 2012 LLR 728 (Bom. H.C.) Once the Labour Court finds that the workman remained unemployed after termination of his service, it cannot, without reason, deny him full back wages.
The petitioner was appointed as a peon on ad hoc basis by the Managing Director of the Haryana State Federation of Consumers Cooperative Wholesale Stores Ltd. He continuously worked from 1.5.1984 to 30.11.1986 and earned two increments on account of his good work and conduct. However his services were illegally and abruptly terminated without payment of any retrenchment compensation. Hence he raised an industrial dispute and the Labour Court to which reference was made held that the termination of the petitioner's service was illegal. Hence a direction for reinstating him in service with continuity benefit was given. The Labour Court further directed that back wages at the rate of 50% shall be paid to the petitioner. The management did not challenge the award but the petitioner feeling aggrieved at the denial of 50% of back wages, preferred a writ petition in the High Court. The High Court pointed out that the Labour Court had framed an issue namely whether the workman remained gainfully employed and recorded a negative finding on that issue. Thus the issue was decided against the management ad in favour of the petitioner. The High Court therefore observed that there was no occasion for declining 50% of the back wages, that too, without assigning any reason whatsoever. Therefore the petitioner was held legally entitled to full back wages. Accordingly the writ petition was allowed. Ram Chander Peon vs. Presiding Officer, Labour Court. LLJ (II) 2012 P.142 (P&H H.C.)
Compensation Even if the Chapter VA of I.D. Act is excluded from the state Kerala Public Service Act, I.D. Act including adjudication machinary is not excluded hence Labour Court Award declaring illegal retrenchment is not without juridiction. However reinstatement is replaced by compensation of 2.5 lakh. Award modified. Chapter 5A or other provisions of the Industrial Disputes Act, 1947 are excluded form the purview of section 4 of Kerala Public Service Act, 1968 as it only enables the government to prescribe rules regulating recruitment and conditions of service of its employees. Termination in violation of the provisions of section 25F of the ID Act is illegal. In view of length Business Manager
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From The Court Room of service, nature of job, compensation instead of reinstatement would sub-serve the ends of justice. Management of Kerala House vs. Sanjay Kumar & Anr. 2012 LLR 686 (Delhi H.C.) Even if the retrenchment is illegal without compliance of section 25F of I.D. Act, reinstatement with full back wages should not be granted mechanically. Lump-sum compensation of Rs. 50,000/- justified in lieu of reinstatement with back wages. Termination of workman, without compliance of section 25F of the Industrial Disputes Act, is illegal retrenchment attracting reinstatement with back-wages. Award of reinstatement with full back wages should not be granted mechanically when termination is held to be illegal. Lump sum compensation of a reasonable amount in lieu of reinstatement with back-wages is justified. M/s. D.S.I.I.DC. vs. Pravin Kumar Sharma. 2012 LLR 718 (Delhi H.C.)
Contract Labour Act It is for the employer to prove that workman was engaged by the contractor. Violation of relevant provisions and without following prescribed procedure. Defence of employer that there existed no relationship of master and employee as respondent was engaged by contractor. Relationship of employer and employee to be established by the workman himself. Also to show and prove that termination has been done without following prescribed procedure. Only thereafter question of consideration of defence of the employer arises. Relationship of master and servant does not normally exist between employer and contractor and servant of an independent contractor. If employer retains or assumes control over the means and methods by which work of a contractor is to be done, relationship of employer and employee may exist between him and servant of such contractor. Workman employed through contractor perform job in the industrial establishment asserts the employer. Initial onus shifts from person claiming himself to be a workman to the employer to prove that workman was engaged by the contractor. Finding recorded by the Labour Court supported by evidence in favour of respondent No. 3 that he satisfied the definition of workman. Such finding not shown to be perverse. Dos not warrant interference. Contention that non-impleadment of contractor makes entire adjudication vitiated in law misconceived. While terminating him procedure for retrenchment not followed. Termination illegal. I.C.I. (India) Limited (Formerly I.E.L. Ltd.), Fertilizer Division Panki, Kanpur vs. State of U.P. and others. 2012 (133) FLR 976 (All. H.C.)
COURT POWERS Subsistence allowance by way of interim relief cannot be granted by the court as the relationship of master and servant does not survive. 44
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Latest Judgments The respondent workman was engaged as a driver by the petitioner management in its technical education institution. It was alleged that he along with one person took away two bags of cement stealthily from the cement stockyard of the institution. Hence a fact finding inquiry in the matter was conducted. In that inquiry the respondent workman admitted his guilt before the Security Officer Accordingly a report was submitted to the Administrative Officer. Later on the respondent served with a charge sheet and in reply also the respondent admitted the said fact. Hence his services were terminated with immediate effect. Thereafter the respondent workman raised an industrial dispute with regard to the termination of his services and denied to have admitted his guilt. The dispute was referred to the industrial tribunal for adjudication which called upon the petitioner management to prove the charge by adducing evidence. During the pendency of the case the respondent workman filed an application praying for payment of subsistence allowance till the disposal of the reference. The said application was allowed with a direction to the petitioner management to pay tot he respondent workman Rs. 700/- per month by way of subsistence allowance. Feeling aggrieved thereby, the petitioner management approached the High Court by means of a writ petition. The High Court held that the interim relief of subsistence allowance granted by the Industrial Tribunal in favour of the respondent workman was not permissible since from the date of his dismissal i.e. 20.2.2008, his relationship with the petitioner as master and servant ceased to exist. If the impugned order is allowed to stand, it would lead to mis-carriage of justice. It was further observed that if the reference is answered in favour of the workman, he will get his back wages form the date of his dismissal. Accordingly the writ petition was allowed. Management of Synergy Institute of Engineering & Technology vs. Presiding Officer & Anr. CLR I 2012 P.1012 (Orissa H.C.) Labour Court in the matter of domestic enquiry, has to first decide about the fairness of the enquiry. Court cannot mix up the decision making process by recording the findings on the enquiry and the evidence together. The Industrial Tribunal/ Labour Court, in the matter of domestic enquiry, has firstly to decide validity of the enquiry conducted by the Management, generally treating it as a preliminary issue instead of adjudicating all the issues together. U.P. State Road Transport Corporation vs. Rajendra Singh & Anr. 2012 LLR 709 (All. H.C.)
Disciplinary Proceedings Chargesheet can be quashed by the court on the ground of delay in initiation of disciplinary proceedings. Removal or dismissal of delinquent must be by the authority not below the appointing authority.
From The Court Room Disciplinary proceedings can be initiated by the authority lower than the appointing authority. Punishment may be imposed by the authority higher than the appointing authority in case he is not the appellate authority. Court/Tribunal can quash charge-sheet on ground of delay in initiation of disciplinary proceedings or delay in concluding the proceedings only after considering gravity of charge and all relevant factors. Tribunal quashed the charge-sheet in respect of misconduct which took place on 31.8.1991. Allegation about demand and acceptance of bribe serious. Two decades passed since then. Chargesheet stand quashed. Nothing to show that respondent is still in service. Proceeding with the appeal on merit declined. Secretary, Min. of Defence and others vs. Prabhash Chandra Mirdha. 2012 (134) FLR 1 (S.C.) Enquiry vitiated when the complainant did not come forward to give evidence before enquiry officer. The absence of most vital witness makes enquiry invalid. It is the duty of the Disciplinary Authority to deal with the specific objections raised on behalf of the appellant in respect of the findings of the Enquiry Officer before accepting the report of the said Enquiry Officer and affirming his findings hence the findings of the Enquiry Officer as well as the punishment imposed by the Disciplinary Authority and the subsequent order passed by the Appellate Authority affirming the decision of the disciplinary Authority are quashed. The disciplinary proceeding initiated against the appellant was vitiated due to the absence of the most vital witness namely, the complainant from whom the demand of bribe was alleged since the absence of the evidence of the complainant cannot be altogether ignored by the Court specially when no reason has been furnished to justify the absence of the complainant before the Enquiry Officer. Pradip Kumar Banerjee vs. Airport Authority of India and Others. 2012 LLR 743 (Cal. H.C.) Even if one of the misconducts is established and is of serious nature, Courts cannot interfere in quantum of punishment. Punishment of removal from service cannot be said to be unjustified or disproportionnate. Where departmental enquiry conducted by Inquiry Officer and not by Disciplinary Authority. Disciplinary Authority is required to act upon report submitted by such Inquiry Officer. Service of report made by Inquiry Officer on delinquent employee with opportunity to such delinquent to have his say on such findings constitutes a integral part of principle of natural justice. In instant case, procedure has been followed and petitioner was given copy of inquiry report and comment also offered upon said report. Though in fact witness not examined by petitioner as his witness, unless and until petitioner shows resulted prejudice that fact itself not sufficient to vitiate departmental inquiry. Petitioner not refunded leave encashment secured by him for availing LFC. He did not carry out pre-sanction inspection before loan disbursement. In case of departmental enquiry, it is settled law that even if
Latest Judgments one of the misconducts is established and it is of serious nature, Courts cannot interfere in quantum of punishment. Punishment of removal from service cannot be said to be unjustified or disproportionnate. Adinath vs. Chief General Manager, (Appointing Authority), S.B.I. and others. 2012 (134) FLR 138 (Bom. H.C.) Labour Court cannot correct the decision making process of the Inquiry Officer. Labour Court is required only to find out as to whether inquiry initiated against rules of natural justice or motivated by using unfair labour practice or an act of victimization. In case Labour Court found any of three deficiencies in enquiry, it could quash the same. Employee was awarded punishment of withholding of three increments after enquiry report regarding misconduct. Labour Court rejecting conclusions of inquiry officer, substituted its own view and held enquiry to be bad. Justification of Labour Court was required only to find out as to whether inquiry initiated against rules of natural justice or motivated by using unfair labour practice or an act of victimization. Held, in case Labour Court found any of three deficiencies in enquiry, it could quash same. Decision making process of inquiry officer cannot be corrected by him. Once concluded that inquiry held in accordance with law, no occasion for him to set aside finding on ground that finding recorded was based upon deficient evidence or wrong appreciation of evidence. Labour Court lacking jurisdiction to set aside order on merits. Allahabad Bank vs. Presiding Officer Central Govt. Industrial Tribunal-cum-Labour Court, Kanpur and others. 2012 (133) FLR 1098 (All. H.C.)
Domestic Enquiry Enquiry will be vitiated when the findings of the enquiry officer are against the evidence on the record. Enquiry proceedings are liable to be vitiated when the sickness of wife of the respondent/workman and medical certificates submitted by him have not been denied. When the reason for long absence as submitted by the workman with the support of medical certificates has not been rebutted by the Management, the Enquiry Officer has no business to make observation that the workman was guilty of availing unauthorised leave and in such circumstances the Disciplinary Authority also could not impose punishment upon the workman for such charges without reversing or disagreeing with the Enquiry Officer. Delhi Transport Corporation vs. Anil Kumar (ExDriver). 2012 LLR 681 (Delhi H.C.) An advocate engaged as enquiry officer and paid by company would not conclude into biasness of the enquiry officer. Acquittal from criminal case, by itself, will not dilute or emit the scope and findings of the domestic enquiry. An advocate, engaged as an Business Manager
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From The Court Room Enquiry Officer and paid by the Company will not mean that he was bias or would have favoured the company. Shri Farid Khan Jabbar Khan vs. Wipro Company Ltd.\ 2012 LLR 732 (Bom. H.C.)
Employees’ Compensation Act Even if the contractor employee dies due to felling down the partition wall on him while carrying out repair job in the shop of the employer, such employer will be responsible bill for compensation under the Act along with the contractor. After amendment of the definition of 'workman' under the Industrial Disputes Act, an employee engaged to perform casual nature of job employed otherwise than for the purpose of employer's trade or business would also be covered within the definition of 'workman'. Principal employer as well as contractor or his agent are liable to pay compensation to the workman or his dependents, as the case may be, as per provisions of the Industrial Disputes Act. Govind Goenka vs. Dayawati and Others. 2012 LLR 675 (Delhi H.C.) Primarily the burden to prove employeremployee relationship is upon the claimant/workman. When claimant fails to prove the employeremployee relationship, he is not entitled to receive Award of any compensation by the Commissioner for Employees' Compensation. Primarily the burden to prove employer-employee relationship is upon the claimant/workman. Devarajan vs. N. Appuswamy. 2012 LLR 696 (Mad. H.C.) A major younger brother of deceased being not dependant cannot file claim for compensation under the Act. The younger brother of the deceased is not entitled to prosecute the claim petition for compensation under the provisions of Employees' Compensation Act since he was not dependant. Vilas vs. Smt. Hussainbee and Others. 2012 LLR 755 (M.P. H.C.) Mere delay in lodging FIR cannot be a ground to doubt claimant’s case. Insurer of the tractor cannot escape liability from payment of compensation under the Employees' Compensation Act when the accident has resulted into death of an employee working on tractor/thresher attached to the tractor since there is coverage of one employee under the provisions of the Act. United India Insurance Company Ltd. vs. Shanker Lal and Another. 2012 LLR 771 (Raj. H.C.) Appeal under the Act has to be supported by a certificate of commissioner regarding deposit of awarded amount. An appeal against the Order of Commissioner 46
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Latest Judgments under the Employees' Compensation Act would not be tenable unless it is supported with a certificate stating that the amount as awarded by the Commissioner has been deposited and the certificate to this effect is enclosed thereto. Thattuparambath Govindan Asari and Others vs. Tharammal Sureshan and Another. 2012 LLR 774 (Ker. H.C.) Insurer not liable for compensation when death caused due to violent attack in quarrel and not due to accident in the course of employment. Death of workman not due to accident arising in course of employment but violently attacked in quarrel. No nexus between his death and accident. Compensation could not be awarded. No liability of insurance company. Impugned order fastening liability on insurance company set aside. New India Assurance Company Ltd. vs. St. Noorjahan Begum and others. 2012 (133) FLR 1023 (A.P. H.C.)
Employees’ Provident Fund Exempted establishment under the EPF Act cannot be made liable for paying contribution of registered contractors. However liability of unregistered contractor will remain with establishment even if it is exempted from the Act having its own PF scheme. The provisions of the Employees' Provident Funds & Misc. Provisions Act and Scheme framed thereunder reveal that exempted establishments under section 17 of the Act, are out of the net of the Scheme in respect of employees of registered contractors having their independent code numbers. However, the liability in respect of nonpayment of contributions by the unregistered contractor would fall on the Principal Employer, even when it is an exempted establishment under section 17 of the Act. The Madurai District Central Cooperative Bank Ltd. Rep. by its Special Officer vs. Employees' Provident Fund Organisation. 2012 LLR 702 (Mad. H.C.) For levying damages under section 14B, there must be a mens rea on the part of the company. For levying damages under section 14B of the Act, there must be a misconduct/mens rea on the part of an employer as the provisions of this section do not lead that penalty must be levied in all situations and levy of damages must commensurate with the situation/facts of the case and not in a mechanical routine. M/s. Solidaire India Limited & Anr. vs. The Employees' Provident Fund Appellate Tribunal and Anr. 2012 LLR 704 (Mad. H.C.) Trainees are not included in the definition of the employee as contained in the EPF Act. The controversy involved in the present case is squarely covered by the aforesaid decisions of the Apex Court as well as of High Court wherein it
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has been held that trainees are not included within the definition of "Employee" as contained in the EPF & MP Act.
deleted their names from the muster rolls. Reinstatement with 50% back wages justified.
M/s. Subros Ltd. vs. Regional Provident Fund Commissioner, Meerut and Others. 2012 LLR 742 (All. H.C.)
Deletion of names of the Workmen from the muster roll by the Management on the ground that they have been absenting unauthorisedly without conducting proper enquiry and holding the workmen liable for their absenteeism and terminating the services of the workmen on the basis of enquiry report as per procedures laid down under the laws, would be illegal, attracting reinstatement of the workmen with back-wages.
When the board has certified about the permanent incapacity of the employee for any further employment, he will be entitled for the pension. When the Board has certified that the petitioner has become permanent incapacitated for any further employment hence the petitioner has occurred "permanent total disablement" within the meaning of the Employees' Pension Scheme and is entitled to pension in view of provision under paragraph 15 of the Scheme. Satyabadi Patra vs. Regional Provident Fund Commissioner and Another. 2012 LLR 757 (Orissa H.C.) Establishment is not only liable for its own employees but also for the contract labour for PF dues. Bihar State Electricity Board is covered by the Employees' Provident Funds & Miscellaneous Provisions Act and the exemption from this Act does not mean that the employees, as engaged through the contractor covered under the Contract Labour (Regulation & Abolition) Act are exempted since it is the primary liability of the Electricity Board to enroll such employees and in case the contractor does not have an independent Code Number under EPF Act, the recovery for contribution of the contract employees for the period from 1986 to 2000 has been rightly made besides that the plea that the employees cannot be identified, would not be tenable since the list of workmen as supplied by the concerned contractor has never been rebutted by the Electricity Board. Bihar State Electricity Board through its Chairman vs. Regional Provident Fund Commissioner, Regional Office, R. Block, Patna and Others. 2012 LLR 777 (Patna H.C.) Merely a list of 40 persons without names cannot be a basis for recovery of PF dues. The proceedings, as initiated under section 7A of the Employees' Provident Funds & Miscellaneous Provisions Act, are of quasi judicial nature, hence they are to be conducted in a judicious manner and not in whimsical manner. When the enquiry report mentions employment of 40 persons in an establishment but their names are missing, hence it will not be believable and as such recovery of provident fund contributions, as initiated, is liable to be set aside. M/s. Shiva Agro Industries Pvt. Ltd. Through its Director vs. Employees' Provident Fund Organisation Through its Commissioner and Others. 2012 LLR 779 (Patna H.C.)
Employment Management plea of leaving the job by workmen of their own and no termination by them cannot be believed in the light of having
Admission in cross-examination by the Management witness, even contrary to his chief evidence on the basis of his affidavit filed, can certainly be used against the Management and in favour of the workmen. M/s. Classic Bottle Caps (P) Ltd. vs. Usha Sinha & Ors. 2012 LLR 738 (Delhi H.C.)
E.S.I. E.S.I. Court justified in reducing the damages when it found that delay on the part of the employer was not intentional. High Court will not interfere with the findings of the Employees' Insurance Court holding that the delay in payment of contributions by the employer was not intentional and also the litigation has been pending for a long-time. Employees' State Insurance Corporation, Madurai vs. Hafeez Motor Transport, Pudukottai. 2012 LLR 763 (Mad. H.C.)
Factories Act Prosecution justified of occupier and factory manager for violation of non submission of stability certificate. When at the time of inspection of the factory premises, it was found that stability certificate in respect of building of factory in Form 34 has not been sent by occupier or manager of factory to Chief Factory Inspector which is violative of Rule 3A of Bihar Factory Rules, 1950 the section 92 of the Factories Act provides that if there is contravention of any provisions of Factories Act, or any rules made thereunder, then occupier and manager of the Factory shall be held guilty of the offence. When factory inspector gave direction to the petitioner to remove irregularities within a certain period, but said direction has not been complied, therefore, in such case a complaint can be filed within six months from the date on which said offence came in the knowledge of inspector, as such, there is no delay in filing of complaint petition. Anup Kumar Gupta vs. State of Bihar (Now Jharkhand) and Another. 2012 LLR 750 (Jhar. H.C.) Occupier and factory manager are liable to be prosecuted for not providing creche while 170 female workers were found working in a single shift. When at the time of inspection of factory premises, about 170 female workers were Business Manager
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employed in one shift, but there is no proper creche, it is in violation of section 48 of Factories Act and Rules 73 to 76 of the Bihar Factory Rules, 1950. Section 92 of the Factories Act provides that if there is contravention of any provisions of Factories Act, or any rules made thereunder, then occupier and manager of the factory shall be held guilty of the offence. Ram Kumar Lal @ R.K. Lal vs. State of Bihar (Now Jharkhand) and Another. 2012 LLR 751 (Jhar. H.C.) Manager cannot be held responsible or prosecuted for an offence which was committed before his taking over the management of the company. There is no difficultly in accepting the statement made in the petition that the petitioner took over the Management of the Company in May, 1997 whereas the breach, which has been alleged, pertains to year 1988 to 1994 during, which the petitioner was never holding the Management of the Company and, as such, the petitioner cannot be held responsible for breach of any of the provisions of the Factories Act hence the petitioner is discharged from the accusation punishable under section 92 of the Factories Act. P.K. Saraf vs. State of Bihar and Another. 2012 LLR 754 (Jhar. H.C.)
Gratuity Benefits of gratuity arising out of settlement or private scheme cannot be agitated/claimed before the controlling authority under the payment of Gratuiy Act. The Controlling Authority under the Payment of Gratuity Act, 1972 does not have power/jurisdiction to enforce settlement between employer and employee in respect of gratuity or private scheme for payment of gratuity. The Controlling Authority under the Payment of Gratuity Act, 1972 has powers only to entertain and try the claims of gratuity which fall under the provisions of the Act. Venugopal vs. Joint Commissioner of Labour, The Appellate Authority under The Payment of Gratuity Act, Madurai and Anr. 2012 LLR 699 (Mad. H.C.) Mere pendency of criminal proceedings would not authorise the employer for with holding the gratuity. Forfeiture of gratuity of two employees, during pendency of their criminal trial, will not be justified since such trial cannot be construed, in any manner, to fix responsibility of any loss to the employer. Harnam Singh Yadav vs. State of Uttar Pradesh and Others. 2012 LLR 782 (All. H.C.) While calculating the amount of gratuity, the period of break-in-service of the employee has to be excluded. The respondent workman was in the employment of the petitioner Corporation and he resigned from service on 11-7-1997 by accepting Rs. 35,100/- as gratuity, reckoning 13 years and 9 months as continuous service. After a lapse of 11 48
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years, the respondent filed an application to redetermine the gratuity at Rs. 1,97,354/- on the premise that he had served the Corporation for a period of 20 years and four months (6 years, 7 months and 25 days plus 13 years and 9 months). It appears that the authorities reckoned the respondent's service of 6 years 7 months and 25 days in addition to 13 years and 9 months as continuous service despite the fact that the said period was treated as break-in-service. Feeling aggrieved by the order passed by the authority, the petitioner Corporation approached the High Court by filing a writ petition. The High Court observed that the dispute is over the exclusion of the period of break-inservice of 6 years 7 months and 25 days due to leave, LWA, suspension etc. from the total service rendered by the respondent workman. It was further observed that the respondent did not question the exclusion of 6 years 7 months and 25 days as break-in-service at the earliest opportunity in the year 1997 when he received the gratuity on resignation. Therefore it is too farfetched for the respondent to contend that the petitioner is bound to retain record of all its employees over break-in-service and produce the same before the Controlling Authority. The High Court held that the authorities under the Act were not justified in reckoning 21 years 4 months as continuous service rendered by the respondent Hence the petition was allowed in part and the order of the authority under the Act was modified entitling the respondent to gratuity of Rs. 47,025/for the service of 13 years and 9 months after deducting Rs. 35,100/- already paid to him. Bangalore Metropolitan Transport Corpn. vs. Dy. Labour Commissioner & Ors. CLR I 2012 P.287 (Kar. H.C.)
Industrial Disputes Act Dismissal without approval under section 33(2)(b) pending dispute will be void deeming employee continued in service. Removal of a workman, on the ground of commission of any misconduct by him, without prior approval of the concerned Labour Court or Authority where there is already pendency of an industrial dispute concerning to that workman, would be invalid. Rajasthan State Road Transport Corporation & Ors. vs. Prithviraj Meena & Anr. 2012 LLR 690 (Raj. H.C.) Where the very basis of the claim of the workman to certain benefit is disputed and there being no earlier adjudication or recognition thereof by the employer, the dispute regarding the entitlement is not incidental to the benefit claimed. The appellant had filed an application under sec. 33-C(2) of the I.D. Act making an averment that he joined the respondent management as a part time accountant on 10.4.1986. In April 1998 he was made full time accountant. His last drawn salary was Rs.12000/- which consisted of Rs. 8000/- as wages and Rs. 4000/- as conveyance allowance for
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discharging outdoor duties. According to the appellant he was also looking after the work of two other sister concerns. On 8.9.2006 he sent a representation to the respondent management for the release of due salary unpaid since November 2005 which was followed by a legal notice. However, instead of paying the salary the respondents terminated the appellant's services on 30.9.2006. Thereafter the appellant filed the application under sec. 33-C(2) praying for his salary for the period from 1.11.2005 to 30.9.2006 and due gratuity amount and due bonus amount. The respondent resisted the application by contending that the provisions of the Payment of Gratuity Act and Payment of Bonus Act were not applicable as the total number of employees was not more than three. It was contended that the appellant did not work form November 2005 and therefore no salary or wages were payable to him for that period. The Labour Court accepted the respondent's contention and the Single Judge of the High Court in Writ Petition filed by the appellant agreed with the finding of the Labour Court. Hence the appellant filed Letters Patent Appeal before a Division Bench. The Division Bench agreed with the finding of the Single Judge in so far as gratuity and bonus were concerned. However, as regards the question of unpaid salary of the appellant, it was pointed out that there is no denial that the appellant was employed with the respondent and was drawing salary of Rs. 12000/- per month. The only denial was for the period in question the appellant did not work. The Division Bench observed that on the mere denial of the respondent the appellant's application cannot be thrown out since that aspect would be incidental and can be examined in the proceeding under sec. 33-C(2). The High Court therefore partly allowed the appeal and held that the application under sec. 33-C(2) was maintainable and remitted the matter back to the Labour Court to decide the appellant's claim regarding wages. Vishnu Kumar Mangla vs. Dhaneshwar Gupta & Sons. CLR I 2012 P. 818 (Delhi H.C.)
Interim Relief Even if the employee is earning, interim relief has to be granted when the award is challenged by the employer in the higher court, since such relief is in the nature of sustenance allowance. As per provisions of section 17B of the industrial Disputes Act the superior court has no discretion but to grant the benefit to the workman which is in the nature of a sustenance allowance till the battle against the Award continues and even more than last drawn wages also in the interest of justice and the same are not returnable even if the employer succeeds in superior court. M/s. Shri Ram Institute for Industrial Research vs. Rajesh Kumar Gandhi. 2012 LLR 736 (Delhi H.C.) Workman entitled to minimum wages as interim relief pending writ petition. The Municipal Board, Sri Karanpur vs. Pyare Lal and another. 2012 (134) FLR 58 (Raj. H.C.)
Leave Privilege leave not encashable beyond 240 days as per rules of the establishment. Claim for
accumulation beyond limit not permissible even if employee could not work due to wrongful termination. Save and except when the application for sanction of leave has been received by the employer, the accumulation and encashment of leave, as per rules, would not be beyond 240 days. Leave is to be earned by an employee while working hence an employee will not be entitled to privileged leave beyond 240 days during the period when he could not work due to wrongful termination. R.A. Banga vs. State Bank of India & Ors. 2012 LLR 733 (P&H H.C.)
Punishment When neither the charges were proved nor show cause notice was issued, setting aside the punishment by the court is justified. Industrial Tribunal has rightly set aside the punishment as imposed by the petitioner-Corporation since the workman (driver) has denied the occurrence of the accident and also while imposing the penalty, show-cause notice was not issued besides that the charges, as levied against the workman, were not proved against him. Divisional Controller, Gujarat State Road Transport vs. Ahmedabad Division State Transport. 2012 LLR 768 (Guj. H.C.) When the charge of mis-appropriation of funds is proved and punishment of dismissal is awarded to the delinquent, it would not be appropriate for the court to interfere with the quantum of punishment. The appellant was appointed as Probation Clerk in the respondent bank on 28.10.1982. The respondent bank issued a charge sheet to him alleging that he had concealed the fact of mis-appropriation of money in his earlier employment. In the departmental inquiry the appellant was held guilty of the charge and as a consequence, a dismissal order was passed against him on 30.5.1987. The appellant challenged that order before the Central Industrial Tribunal which set aside the order of dismissal and substituted the order of withholding of four annual grade increments with cumulative effect. Being aggrieved by the said award, the respondent bank filed a writ petition and the Single Judge allowed that appeal and maintained the punishment of dismissal imposed on the respondent. The appellant has therefore filed a writ appeal before a Division Bench submitting that the order passed by the tribunal was absolutely justified. The Division Bench pointed out that the charge against the appellant was that he had mis-appropriated money of Rs. 16,772/- while he was working in a Central Co-operative Consumers Store Ltd. and there he was served with a charge sheet for misappropriation and dismissed from service after an inquiry. The High Court further observed that the appellant concealed this fact while applying for a job in the respondent bank. The High Court relied upon the decision in N.E.K.R.T.C. vs. H. Amaresh 2006 (6) SCC 187 and U.P.S.R.T.C. vs. Vinodkumar 2008(1) SCC 115 wherein it was held that in a case of mis-appropriation of funds if an employee is found guilty, the court should be reluctant to reduce the punishment on misplaced sympathy. The High Court observed that Business Manager
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since the charge of misappropriation in earlier employment was a material fact, it should have been disclosed by the appellant at the time of his recruitment in the respondent bank. The High Court therefore dismissed the appeal. Ram Ratan vs. Canara Bank & Ors. CLR I 2012 P.835 (Raj. H.C.)
Reference Reference of Industrial Dispute of termination of a temporary driver after seven years is liable to be rejected. Unreasonable delay having no rational in making reference of an industrial dispute by the Labour Department may prove the reference to be bad and unsustainable resulting into rejection of the reference by the adjudicator. Delhi Transport Corporation vs. Presiding Officer, Labour Court-1 & Anr. 2012 LLR 683 (Delhi H.C.) Reference not justified of a termination raised after 6½ years.
dispute
of
Unexplained delay of 6-1/2 years in raising an industrial dispute by the workman may disentitle him from any relief by the Industrial Tribunal. A writ of certiorari can be issued by the High Court only for correcting errors of jurisdiction or where principles of natural justice have not been followed or where an error of law is apparent on the face of record or erroneous refusal to admit admissible material evidence or erroneously admission of inadmissible evidence is there by the Labour Court/Industrial Tribunal and a finding of fact cannot be challenged in such a writ. The High Court in exercise of its certiorari or supervisory jurisdiction will not convert itself into a court of appeal. Ramesh Kumar vs. Delhi Jal Board. 2012 LLR 713 (Delhi H.C.) Employer has remedy to challege the reference if he feels that it was belated. If does not challenge, cannot claim in reference that it should be dismissed on the ground of delay. Even when there has been delay for making a reference for adjudication to the Labour Court and the Labour Court has awarded reinstatement , the aggrieved employer cannot contend that the dispute was belated since it was open for him to challenge at an appropriate time which he failed to do so. H.P. State Forest Corporation vs. Presiding Judge, Labour Court, Shimla and Another. 2012 LLR 770 (H.P. H.C.) Reference made after 25 years of dispute is bad in law and liable to be quashed. The Supreme Court has consistently held that stale claim should not be referred unless there is good reason to condone the delay hence there is no doubt that the statute i.e., Industrial Disputes Act does not prescribe any period for invoking the right to get a reference, as such, it cannot be said that 25 years would qualify as a reasonable period to raise such a claim. M/s. Areva T&D India Ltd. vs. State of U.P. and Others. 2012 LLR 773 (All. H.C.) The Government can refuse to make a reference of a stale dispute raised by a workman. According to the respondent he was employed as a 50
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daily rated Beldar with the petition in January 1983 and he continued working with artificial breaks up to December 1994 when his services were terminated. Thereafter the respondent raised an industrial dispute in the year 1999 and prayed for a reference to be made to the Labour Court for adjudicating the said dispute. The stand of the government was that the respondent in fact worked only from July 1984 to April 1985 and therefore the dispute raised by him in the year 1999 was stale and it ceased to exist. Therefore, the State Government refused to make any reference to the Labour Court for adjudication. Feeling aggrieved thereby the respondent filed a writ petition to challenge the rejection of making a reference to the Labour Court and the Single Judge while allowing the writ petition held that the State Government has no power to refused to make a reference on the ground that the claim is belated. This finding was therefore challenged by the appellant through a Letters Patent Appeal. The Division Bench observed that the question whether the State Government while exercising powers under sec. 10(1) of the I.D. Act is precluded from deciding the question as to whether the claim made by a workman is stale or not was considered by a larger Bench in CWP No. 1486/2007 Liaqram vs. State of Haryana wherein it was observed that the Government is authorized to form the opinion whether a dispute exists or not. This clearly shows that the government is not powerless and in case there is great delay and there is no explanation for the delay, then the government can refuse to make a reference on the ground that the claim is stale and therefore the industrial dispute no longer exists. In the instant case, the Division Bench observed that there is no material whatsoever to show that the dispute was kept alive by the respondent. Therefore the dispute has apparently become stale and ceased to exist . Consequently the State was justified in refusing to make a reference. Hence the appeal was allowed. Labour Commissioner & Anr. vs. Dharam Pal & Ors. CLR I 2012 P.916 (H.P. H.C.) Second reference maintainable.
made
by
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not
Applying the law laid down by the Supreme Court in the case of D.N. Ganguly (AIR 1958 SC 1018) it is quite clear that the second reference order dated 6.5.1998 made by the Dy. Labour Commissioner, Moradabad was not maintainable nor permissible under the law. In view of the above, the second reference order dated 6.5.1998 is held to be illegal and inoperative and is, therefore, quashed. M/s. Raunaq Automotive Components Ltd. vs. Labour Court, Bareilly and others. 2012 (133) FLR 1008 (All. H.C.)
Reinstatement Reinstatement with back wages not justified when management offered to engage the workman subject to production of medical certificate justifying unauthorised absence. When the Management has made an offer to engage the workman subject to production of appropriate Medical Certificate to justify unauthorised absence of the workman being on sick leave and the workman failed to produce the same, Award of reinstatement or 50% back-wages passed by the Labour Court is not justified.
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Oil Palm India Ltd. & Anr. vs. President, Oil Palm Plantation Workers Union I.N.T.U.C & Anr. 2012 LLR 692 (Ker. H.C.) Termination without complying section 25-F of I.D. Act will lead to reinstatement. Tribunal held that respondent-workman was entitled to reinstatement but without back wages. Respondent-workman has completed more than 240 days preceding date of termination. Provisions of section 25-F not complied with. Consequently Tribunal rightly held that the respondent-workman was entitled to reinstatement. No infirmity found with impugned award. Specially when the workman did not come within ambit of section 2(oo) (bb) of Act. The respondent-workman brought his grievance squarely within the ambit of the provisions of Industrial Disputes Act by establishing that he had completed 240 days in the calendar year preceding the date of his termination and that further the petitioner did not comply with the provisions of os section 25-F of the Act. Municipal Council Raman, Bathinda vs. Presiding Officer, Labour Court-cum-Industrial Tribunal, Bathinda and another. 2012 (134) FLR 114 (P&H H.C.)
Retrenchment Reinstatement justified when retrenchment was found illegal without complying section 25F of the I.D. Act. The respondent's service was not on any contract basis for limited and specified period and though undisputedly his service period was of more than 12 months during which he had worked for more than 240 days, the obligation to comply with the mandatory requirement under section 25F of the Industrial Disputes Act had come into operation but the said requirement was not complied with hence he has been rightly held entitled to reinstatement. Jasdan Municipality vs. Kantibhai Bachubhai Thummar and Others. 2012 LLR 759 (Guj. H.C.)
Settlement After executing settlement with the employer employee not entitled to any further amount beyond what was settled in compromise. Agreement executed towards full and final settlement of all dues of petitioner. Agreement in nature of compromise between company and petitioner. Matter already settled by way of a compromise between parties. Petitioner, therefore, not entitled to any amount beyond what was settled in compromise. Anand Shanker Shukla vs. State of U.P. and others. 2012 (133) FLR 1102 (All. H.C.)
Trainee Government is justified in denying the reference of a dispute of trainees who were appointed under specific training scheme with an agreement for a fixed period, being no relationship of master and servant. Simply extending benefits of ESI, PF & Bonus will not make such trainees as workmen.
The trainees, appointed under specific 'training scheme' for imparting training under a specific contract or agreement for a fixed period, cannot be termed as regular employees merely on the ground that they were entitled to the benefits of the schemes under the Employees' Provident Funds & Misc. Provisions Act, Employees' State Insurance Act and the Payment of Bonus Act, unless such a condition is there in the contract or agreement of the trainees. Gujarat Mazdoor Sabha & 12 Ors. vs. Government of India & Anr. 2012 LLR 690, 2012 (134) FLR 181 (Guj. H.C.)
Union Demonstration Workers and union have no right to use abusive language, commit violence or prevant ingress and egress. Such activities must be restrained. No doubt, employees and their Union have a right to demonstrate for the purpose of achieving their legitimate demands, but at the same time, they do not have any right to use abusive language and/or commit violence or prevent ingress and egress of other employees and visitors etc., and in case such unlawful activities are not restrained/curbed by the court in the vicinity of the organisation, within the radius of 100 metres of the premises, of the personal safety of employers and visitors may get jeopardised. G4s Security Services (India) Pvt. Ltd. (M/s) vs. G4s Krantikari Karamchari Union. 2012 LLR 673 (Delhi H.C.)
Workman A doctor serving in a hospital is not a "Workman". The petitioner is a Charitable Eye hospital. It is registered as a society and it has set up a small hospital in an economically backward and congested are. Respondent no. 3 is a doctor who is appointed as a resident surgeon on 1.4.1980 and he was performing operations in the hospital and eye camps organized by the management. His services were terminated on 30.5.1990. He therefore raised an industrial dispute alleging that the petitioner has flouted the provisions of the I.D. Act. The dispute was referred to the Labour Court for adjudication and it was held that the respondent is a workman. Feeling aggrieved by the award, the petitioner filed a writ petition in the High Court. The High Court observed that there is a distinction between an employee rendering or doing work of technical nature and a professional who has technical and educational degree. It was held that respondent no. 3 is a professional and it cannot be said that he was employed for doing technical work. He did used his professional skills and knowledge for diagnosing the diseases and treating the patients but this does not fall within the ambit and scope of sec. 2(s) of the Act. Hence the writ petition was allowed and the award passed by the Labour Court was set aside. Management of Multan Sewa Samiti Charitable Eye Hospital vs. P.O. Labour Court. CLR I 2012 P. 829 (Delhi H.C.)
Courtsey - Labour Law Reporter,FLR, CLR & APS Labour Digest
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Dr. Rajen Mehrotra Former Sr. Specialist on Employers' Activities for South Asia with International Labour Organization (ILO).
Labour Code of Timor-Leste I am sharing the brief history of a young nation Timor- Leste and its efforts at growth and development, prospects of business for various countries including India and the Labour Code of TimorLeste where certain clauses are unique and can be adopted in the labour laws of India to benefit both labour and employers.
T
imor-Leste was the youngest nation on the world map till last year, before the violent birth of South Sudan, another oil rich nation where infighting is still continuing regarding the border which is oil rich. TimorLeste is a half island nation located in the southern hemisphere, with a land mass of approximately 14,610 square kilometres and a population of nearly 1.1 million people, which in population terms is very small compared to most cities of India. The country is located near the northern part of Australia which is sixty minutes flying time from Darwin, Australia and hundred minutes flying time from Bali, Indonesia. Every country that gets independence comes forward with a new constitution and along with it the other laws follow including Labour Laws. Timor- Leste on getting independence in 2002 chose to have Portuguese as the official language along with the local language Tetum and discarded Bahasa Indonesia which was the official language till 2002. All the laws have been written in Portuguese language which is presently spoken and understood by less than 10 % of the population, which does include the elite and politicians that had an opportunity to study in Portugal or learnt the language during Portuguese rule which was prior to 1975 or have Portuguese lineage . The Portuguese Government has been assisting Timor-Leste in framing of the laws and presently there are a substantial number of Portuguese nationals helping the country in the functioning of the Judiciary and the legal 52
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system. Timor-Leste as a country did not desire to inherit any labour laws which were applicable when Indonesia ruled the country, so the ILO facilitated the process of coming out with a "Labour Code of Timor-Leste" which is brief and concise, but does not presently cover benefits of terminal nature such as Provident Fund and / or Pension, which are planned to be introduced later. There is a minimum wage which has to be paid while engaging labour including labour in agriculture and violations may not be identified and acted upon unless reported. The Labour Code is inherited from the coverage of the ILO Declaration of Fundamental Principles and Rights at Work of 1998 thus subscribing to the following six of the eight ILO core conventions i.e. "Freedom of association and the effective recognition of the right to bargain collectively (Convention 87 & 98)", "Elimination of all forms of forced and compulsory labour (Convention 29 & 105) "and "The elimination of discrimination in respect of employment and occupation (Convention 100 & 111)". As for the effective abolition of child labour (Convention 138 & 182) the code does permit children above the age of 12 years to do light work. The Labour Code which is brief deals with the following five areas which are summarized below:i.
Introductory Definitions,
Provisions
dealing
with
ii. Employment dealing with the ILO Declaration of Fundamental Principles and Rights at Work of 1998. The employment
Labour Code of Timor-Leste relationship covers the contract of employment , working conditions , disciplinary measures , special modalities for certain workers , foreign workers , conditions of work including working hours, rest period ,over-time and leave benefits including maternity benefits, penalties and remedies, appeal to the competent court. iii. The Labour Administration deals with the establishment, composition and functioning of the National Labour Board which is tri partite plus as it has representation from workers' organization, employers' organization, civil society and the Government. iv. Labour Relations deals with the rules , regulations , registration, dissolution and cancellation of registration of workers' and employers' organization including the Collective
Timor-Leste is a half island nation located in the southern hemisphere, with a land mass of approximately 14,610 square kilometres and a population of nearly 1.1 million people, which in population terms is very small compared to most cities of India. The country is located near the northern part of Australia which is sixty minutes flying time from Darwin, Australia and hundred minutes flying time from Bali, Indonesia. Bargaining Procedures involving conciliation and mediation service by a Labour Relations Board including jurisdiction, penalties and remedies ,appeal to competent court . v.
Termination of Employment deals with implementation and scope; jurisdiction for termination of employment; rules for termination of employment; period of notice; economic, technological, structural or similar reason for termination; procedure for disputes on termination of employment; appeal to the competent court
vi. Establishment of a Minimum Wage Board deals with the establishment, composition and functioning of a tripartite board with representation from workers' organization, employers' organization and the Government. It also deals with the Board's recommendation and the responsibility of the Government to ensure enforcement of the minimum wage. A striking feature of the Labour Code of TimorLeste is that every worker is covered under the Labour Code and the definition of a "Worker" is "a natural person who performs paid employment under the direction of a firm or another person". By this definition every employee is a worker, irrespective of the level at which he/she works except when the Labour Code deals with "Termination of Employment". The Labour Code on "Termination of Employment" under Implementation and Scope specifies that the following category of workers (a) Workers engaged under a contract of employment for a specified period of time or for a specified task (b) Workers occupying
managerial, executive or confidential positions; are excluded from the benefits' under Termination of Employment. However under the same chapter on "Termination of Employment" under Implementation and Scope specifies "Contracts of Employment shall be deemed of indeterminate duration if renewed on one or more occasions", this is an innovative clause in the Labour Code of Timor- Leste and most countries can use this clause in their labour code. The Code also specifies that if termination is found unjustified then the Board shall (a) declare the termination invalid and order the reinstatement of the worker , and / or (b) order payment of compensation in lieu of reinstatement which is thirty days payment if the worker has been employed for more than three months but less than one year; is sixty days payment if the worker has been employed for more than one year but less than two years ; is ninety days payment if the worker has been employed for more than two years but less than three years; is one hundred twenty days payment if the worker has been employed for more than three year ; and/or (c) order such relief as may be deemed appropriate. The retirement age in Timor-Leste is 65 years though the life expectancy at birth is 60.2 (females), 58.6(males) as published in 2010 by Ministry of Health in their National Health Strategic Plan In Timor-Leste there are large number of International Donor Agencies / NGO's that have been employing Timor- Leste Nationals and International staff on annual fixed term contracts and renewing the same at the end of the year. This approach of The International Donor Agencies / NGO's as per the present Labour Code of Timor-Leste renders the employee as permanent, hence eligible to receive compensation when the service is dispensed with. I had experience on advising some of the International Donor Agencies / NGO's associated with the Ministry of Health on handling such cases. Termination of Employment at the behest of the Employer has been a requirement of employers when an organization has to down size or close down. Every country has a legislation based on the Labour Code of that country on how it desires to deal with this issue. In India, substantial number of employers / enterprises are engaging increasing number of employees through Contractors / Service providers / Temping companies under the Contract Regulation and Abolition Act or ensuring that employees engaged by the enterprise or through the Contractor / Service Provider/ Temping Company are given fixed term contracts and the employment is such that the employee does not complete more than 240 days of continuous employment in a year at any time. However, the Labour Code of Timor-Leste has a clause that "Contracts of Employment shall be deemed of indeterminate duration if renewed on one or more occasions" thus giving benefit to employees, at the same time specifying payment of compensation in lieu of reinstatement. This part of the Labour Code of Timor-Leste is worthwhile being considered in India, as it can benefit both the employees as well as the employers, so that we can move forward on the much discussed and undecided labour reforms even though The Second National Commission on Labour submitted its report in Sept 2002 nearly a decade back and its recommendations have still not been implemented. BM Business Manager
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CASE
study
BM’s fictionalized case studies present dilemmas faced by leaders in real organisations. Experts are invited to send solutions. Best will be published.
Monopoly to Competition B
harat Ships Limited (BSL) came into existence on 1st July 1966. The Company was formed by the merger of Hindustan Ships Limited with Ships India Limited and Ships Manufacturing Depot, Pune.The Company traced its roots to the pioneering efforts of an industrialist with extraordinary vision, the late N.R.Namboodripad, who set up Hindustan Ships Limited at Kochi in September 1941. The Government of India became a shareholder in July 1942 and took over the Management in 1943. All the chairmen of BSL were internal. In 2009, BSL had 16 Production Units and 7 Research and Design Centres at 5 locations in India. Each division was headed by a General Manager who reported to Chairman and Managing Director. The Company had an impressive product track record - 10 types of ships manufactured with in-house R & Dand 11 types produced under license. BSL had manufactured over 2950ships, 3200 engines andoverhauled over 7250 ships and 2,5500 engines. BSL was successful in numerous R & D programs developed for both defenceand shipping companies. BSL had made substantial progress in its several projects. Dolphin was delivered to the Indian Navy and the Coast Guard in March 2001, in the very first year of its production, which was a unique achievement. The company had played a significant role in India's marine programs by participating in the manufacture of structures for advanced sub marine ships. The supplies / services of BSL were mainly to Indian Defence Services and Coast Guards. Transport ships were also supplied to Shipping companies as well as State Governments of India. The Company had also achieved a foothold in export in more than 24 countries, having demonstrated its quality and price competitiveness. BSL had won several International & National Awards for achievements in R&D, Technology, Managerial Performance, Exports, Energy Conservation, Quality and fulfillment of Social Responsibilities. The Company scaled new heights in the financial year 2008-09 with a turnover of $ 2.1 billion. The Export constituted 5% of the total sales turnover. The company had an export division which was 100% Export Oriented Unit. The company had grown steadily over the years with consolidation and enlargement of its operational base by creating sophisticated facilities for manufacturing ships, ship engines and accessories. The company promoted the values of customer satisfaction, commitment to total quality, cost and time consciousness, creativity and innovation, trust and team spirit, respect for individual and integrity. It also laid emphasis on competence building, commitment, and motivation and employee relations.
Manpower Planning The company employed 38,000 personnel who were classified into two cadres: officers (senior executives and executives) and workers. The focus of the company was on: Outsourcing of low tech and medium tech jobs Fresh induction only in critical / highly specialized areas based on requirements due to increase in workload and superannuation profile. In the Workmen cadre, induction was restricted to Direct Workmen only Improving the qualification profile by focusing on induction of professionally qualified personnel and diploma holders Hence, focus of recruitment was to recruit people with a combination of knowledge, skills, experience and attitude in line with the organizational requirements through appropriate manpower plan both short term (contract appointments) and long term recruitment programme. The company had the tradition of appointing chairman out of the internal human resource pool. 54
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BSL had been enjoying monopoly in shipbuilding for over four decades. The changing business environment in view of some private players entering the market had compelled BSL to start formulating and implementing new strategies to remain sustained in the changing scenario.
CASE
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Training and Development Training was one of the most important mechanisms for developing human resource. The following objectives were set in this regard: To provide training to all employees at regular intervals in a plan period of 5years Training to become an integral component of individual professional evolution by: - updating knowledge to avoid obsolescence - enhancing professional creativity - enabling employees to shoulder higher responsibility - creating a business trend and strategic thinking to take up new business (creation of the Centres of Excellence) The goals of training were to progressively achieve 7 days training per employee per year with a budget of 3% of annual Wage Bill. Keeping in view the organizational requirements and objectives of training, the technology, Tooling, Quality and Information Technology were identified as the key focus areas of training. Further, to facilitate the development of soft skills (change of mind-set, managerial development etc.) in-house training was imparted on a continuous basis through Bharat Management Academy (BMA) and Technical Training Institutes. Tie-ups with Centres of Excellence and premier institutions in India and abroad were established. BSL organized in-house training twice a year for the customers. It also sent their trainers to the customer bases as and when required.
Performance Appraisal System Appraising people for meeting the company's goals was the prime focus of performance management. The Performance Appraisal System based on work planning and commitment (mutually agreed tasks) , self-review and performance analysis, performance review and feedback ensured that the focus was on value adding activities rather than on routine activities which bore no relationship with the organization's goals and objectives. Identification of low performers and resultant corrective action throughout the company was given priority. Similarly, faster career growth opportunity was provided to high performers. Since inception, the Performance Appraisal System was too conventional where immediate superiors used to evaluate the subordinate performance. In 2003, with the initiative of the then chairman, HanumantRao Mutually Agreed Task (MAT) was introduced under which the superior and the subordinate used to mutually agree upon the set of tasks to be done for a quarter and by the end of the quarter the employees' performance was reviewed and evaluated by combining the appraisal of all the four quarters. In 2007, MAT was upgraded to Mutually Agreed Improvement Tasks (MAIT) following the introduction of six sigma concepts. MAIT also included discussion between the superiors and the subordinates but 60% weight age was given to regular tasks and 40% to improvement tasks. The evaluation of the four quarters together constituted Performance Appraisal Review (PAR). The Performance Appraisal Report was consisted of PAR and behavioral components like professional competency, team building, quality consciousness, cost & time consciousness, developing subordinates and potential to shoulder high responsibilities. The PAR was given the weightage of 70 percent whereas, the behavioural components had the weightage of 30 percent. However, this weightage varied as per the hierarchy. The performance appraisal system for the officers operated on a three tier pattern starting with initiating authority evaluating the subordinate, followed by reviewing and senior reviewing authorities. To take care of disparities the company had evolved a Performance Review Board, which was constituted of heads of departments and General Managers in each division. This board met once in a year to discuss the cases with wide disparities and tried to decide on the basis of previous two years record of the concerned employee. In the case of officers, performance appraisal had self assessment and training assessment components also. Self assessment system was not introduced for the employees other than officers' categories. Based on MAIT the company had also established performance linked incentive system for the officers.
The focus of the reward system in the company was to promote team work and cultivate a sense of achievement and excellence in the organization.This was in addition to the existing reward system for an individual who through creativity and innovation made exemplary contributions in the key thrust areas of the company that lead to its achieving overall excellence.
Reward System The focus of the reward system in the company was to promote team work and cultivate a sense of achievement and excellence in the organization. This was in addition to the existing reward system for an individual who through creativity and innovation made exemplary contributions in the key thrust areas of the company that lead to its achieving overall excellence. Coupled with this system Inter Divisional Competition and Profit Sharing Scheme were institutionalized in the company for team reward. Business Manager
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Welfare Measures BSL provided its employees with healthcare facilities at all the locations. Schools were also run by BSL for the benefit of children of its employees. These schools also included schools for disabled children. These schools were also open to outside people with differential fee structure, but preference was given to the children of BSL Employees. These schools were affiliated to State Boards, CBSE and ICSE. Employees were reimbursed the education fee only for the first two children. Apart from this, BSL also provided scholarships to meritorious children of BSL employees for undergraduate and postgraduate courses. BSL encouraged their employees for pursuing higher education by sponsoring them to some premier institutions. BSL had number of welfare societies for their employees in all the divisions, which were the non profit organizations. These cooperative societies facilitated the employees in subsidized transportation, lunch, ration, loans, equipment, clothes, school books, cracker, and investment. BSL was also having number of workers union and was not having any problem related to industrial health. The company had a major strike in 1985 related to wage revision. After that no major strike took place as they enjoyed harmonious industrial relations with their employees. The steps taken were by creating one plant level committee which used to meet the workers union monthly at divisional level and corporate level related to day to day issues.
Questions 1. Enumerate the 2. 3.
Quality Assurance BSL gave lot of importance to Quality Assurance where the major areas of focus were customer satisfaction, internal rejections and export certification. Customer satisfaction was dependent on number of factors. The customer dissatisfaction was reported due to field failures in terms of manufacturing, design or usage deficiencies. The usage deficiency included maintenance and environmental reasons. As customer requirements in this field were very stringent, the percentage of failures was high. Premature withdrawals and defect investigations were the techniques adopted for handling customer complaints. Internal rejections at component level were reported to be 0.24 percent in the year 2009 which was 0.28 percent in the year 2008. The percentage of rejection was measured in terms of the value of loss incurred because of the wide range of products. Raw material was also very costly and almost 100% was imported. To avoid the internal rejection BSL preferred 100% inspection over sample inspection. Rate of internal rejection = (value of rejection / value of production) x 100, wherein value of rejection took into consideration labour and material cost. Though quality circles were still operating in some segments of the company, six sigma had become more popular. For exporting products, BSL needed certification from the international certifying bodies. The company had to cater to the quality standards of the vast number of organizations abroad.
Challenges In 2002-2007, the young technocrats left the company for better prospects as IT industry was in boom. In order to check the turnover of the young technocrats despite having entered into a 5 years bond, the bond amount was increased from $ 1,000 in 2002 to $ 6,000 in 2005. Though, the employee turnover reduced by 2009, the company was facing the problem of having a gap in middle management cadre. BSL had monopoly as it had fixed set of customers particularly Indian Navy till recent past. It carried an inventory of one and a half years, which took care of 60 percent of the requirement at any given point of time in view of company being dependent on import of its raw material. Private domestic and international players had entered the market of ship building in last few years. A number of small competitors were also present in the market; some of them had the potential to turn large at any time. The sub-contractors of BSL could also emerge as major competitors for the company. Indian Navy which was the major customer of the company had tried some foreign manufacturers in the past, but had to burn its fingers. However, it was an indication to BSL that its monopoly in this sector may not last forever. BSL was also aware that Indian Navy could procure products from any other manufacturer as later was not legally bound to buy from BSL. Company had therefore, started to take initiatives for expanding the civil market in both domestic and international arena. The company emphasized on up gradation in three major areas, such as technology, manpower and design. The importance of R & D was realized and company had established R & D sections for each division. The strengths of BSL were to provide the turnkey products falling under the umbrella of ship building at the lowest cost. To supplement the strengths, BSL had introduced the practice to double the sales every three and half years. Though top management was optimistic about the market position of BSL in short run, it did not want to leave any stone unturned for the long term future of the company. BM 56
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4. 5.
strengths and weaknesses of BSL. Do you agree with the steps taken by BSL to retain technocrats? Comment. Comment on the gap in middle cadre of BSL. Discuss the strategies that BSL should formulate to correct such aberrations. Comment on the performance appraisal system of BSL. If you were CMD of BSL, what strategies you would formulate to retain the market position of BSL.
This case was developed by Dr. Upinder Dhar (JK Lakshmipat University); SheelanMisra; RajshriPatnaik; KarthigaiPrakasam; JishaJayakumar (New Horizon College of Engineering, Bangalore.India) in a case writing workshop organized by New Horizon College of Engineering, Bangalore in collaboration with JK Lakshmipat University on September 18-20,2009
CASE
Analysis
The case analysis refers to case study ‘Drem Big & Dare to Step In’ published in July 12 issue
Little else matters but loyal customers... T
his case study illustrates how Bhaskar Prasad, a qualified mechanical engineer, who after gaining sufficient work experience and expertise in the function of flow control valves decided to do what one would like to be ultimately i.e. to become an entrepreneur. The success and phenomenal rise of Bhaskar Prasad's firm Sugandhaval Flow Controls Private Limited is a testimony to his entrepreneurial spirit.Bhaskar Prasad by setting up his own venture in 50:50 partnership with an USA based firm - Stech Controls made himself solely responsible for his firm's development, the inherent risks and returns associated with it.Normally entrepreneurship is a difficult proposition as many new businesses fail to survive in their initial periods and never take off. But here Bhaskar Prasad was confident of the partnership venture because he knew that he had the required technical expertise to run the business having had sufficient previous work exposure in the same function. He had to combine his technical expertise with business acumen and thus manage it.
It is appropriate that since Prasad started his business venture with an investment of 20 million and considering that the challenge before him was to make Sugandhaval the most preferred brand in the industry with an initial focus on product & market development and product launch, that land, building, other required infrastructure & even shop floor human resources were outsourced. Prasad knew that in order for his company to be sustainable, he needed to focus on something that he could do best - and that was his core competency of product development, market development & product launch. He did not wish to get into non-critical functions inhouse, as in this case, one of them was shop floor human resources which he rightly outsourced as he felt that by getting into those activities, might pull him away from focusing on what he wanted to do best i.e. make his company Sugandhaval the most preferred brand in the industry. He however maintained contact directly with the shop floor workers to minimise production related issues since he himself earlier worked on the shop floor and thus was aware of the issues that could arise if the shop floor workers interests were neglected. By also leasing out land, building and other required infrastructure initially, BhaskarPrasad smartly avoided the hassles of repair& maintenance function and other overhead costs that could have been associated with it, were he to own & manage it by himself. His initial focus when starting out his own venture was purely on business and product development. Hence it is the right thing to do on outsourcing other non-core activities associated with it. Once the business venture flourishes and there are sufficient funds raised, then Prasad can consider investing in his own land, office building, etc‌as they would give him appreciation later.
Mihir Gosalia Asst. Manager - ISO & OHSAS, Kesari Tours, Mumbai
It is also appropriate that Prasad has restricted his loan exposure to working Capital requirements only since his business was at a start-up stage and he Business Manager
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CASE
Analysis
did not wish to take high risks by taking a huge loan. He invested his own personal savings in his business venture. Since Prasad owned the firm, this was his own venture; he had the opportunity to control it. He could aim to achieve targets that were important to him. Entrepreneurship provided Prasad a chance to take decisions according to his wishes. Besides Prasad by starting with an investment of Rs20 million indicated how much capital he had at risk should the business fail? Prospective lenders and investors would have expected him to have contributed from his own assets and to have undertaken personal financial risk to establish the business before him asking them for working capital loan. Prasad achieved break even by the end of the second financial year of his start-up. The company had a high turnover. Starting with an investment of Rs 20 million, Sugandhaval had a turnover of Rs 100 million in the first financial year 2005-06 (5 times more than the investment) and Rs 170 million in the second financial year 2006-07 (more than 50% as compared to previous). It is also to be noted that Sugnandhaval could achieve the turnover of Rs 450 millions in 2009-10 and thus having gained the confidence and financial strength, it was planning to have its owned premises before termination of the lease of the rented infrastructure in 2012. One of the challenges that Sugnandhaval had was that it had to compete with both organized and unorganized sectors and establishing a brand image against key players was a herculean task. Also, the cost of the final product of Sugnandhaval was not competitive as compared to similar products from China and Korea.Sugandhaval desired to achieve a leadership position for itself. Prasad had understood the competition well. On the pricing front, he tried counter competition's prices through trading and budgeting with new vendors for supplying the finished components. Prasad also tried to control costs by good management of stocks. Another strategy employed by Prasad to counter competition was through deployment of quality standards such as ISO 9001-2008 which aimed to give him internal operational efficiency and thus have lower production costs because of fewer nonconforming products, less rework, lowered rejection rates, streamlined processes and fewer mistakes.Getting the prestigious ISO 9001 certification enhancedthe company's image by distinguishing it in the organized sector and getting 'preferred supplier' status for Sugandhaval. Additionally the products of Sugandhaval were certified for CE &Atex compliance. Prasad knew that if he wanted Sugandhaval to be the most preferred brand for his customers then he must work at improving it and as well as there should be innovation in its services. Anything less would allow the competitors to overtake it. Anything less would allow the customers' expectations to exceed the speed of change, causing the customers of Sugandhavalto look elsewhere. Prasad also had a focus on the future to combat competition & keep Sugandhaval growing as well as remain competitive and sustainable by considering new & revolutionary ideas. One of his strategic objectives was to enter newer geographical areas via joint ventures & partnerships in countries such as Russia, South Africa & Malaysia. Another strategic objective for the future to combat competition was to increase the existing product portfolio by adding higher level of niche products with existing ones. Prasad had an ERP System designed locally to meet out the needs of Sugandhaval since beginning. There was thus Systems Perspective right from the beginning of Sugandhaval's operations commencement, managing the organization and its key processes to achieve results - and thus aim to strive for performance excellence. Prasad approached management from a systems perspective to optimize organizational performance. He found better ways to do things by his decision to implement SAP ERP Solution which he felt was required to cater to the evolving needs of the organization and also by implementing it, would assist in strengthening its position in the organized sector. Prasad aimed to create an environment - a work climate where better work methodologies would be sought out. By deciding to implement SAP ERP solution, the technology would help in improving operational efficiency and reduce costs. All of this would help Prasad in making Sugandhaval a sustainable organization, capable of addressing its current business needs 58
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One of the challenges that Sugnandhaval had was that it had to compete with both organized and unorganized sectors and establishing a brand image against key players was a herculean task. Also, the cost of the final product of Sugnandhaval was not competitive as compared to similar products from China and Korea.
CASE
Analysis
SWOT Analysis of Sugandhaval Flow Controls Pvt. Ltd. Strengths
Weaknesses
1. Entrepreneurial leadership of Bhaskar Prasad
1. Established valve manufacturers in the marketplace thus making it difficult for Sugandhaval's products to gain acceptance
2. Collaboration with STech Controls, USA thus the product getting ready acceptance in US Market 3. Wide range of products manufactured to exacting international standards 4. Lower operating costs by outsourcing shop floor human resource activities, less advertising spend, combining sales & promotional efforts with customer visits 5. ISO 9001-2008 certification 6. Product compliance to CE &Atex
2. Cost of the final product of Sugandhaval is not competitive as compared to competitors from China & Korea 3. Inventory management is a challenge which if not appropriately addressed may lead to undermine Sugandhaval'sprogress in achieving its strategic objectives
Opportunities
Threats
1. Future business plan to introduce higher level of niche products
1. No significant innovation made recently in the design stage due to production and markets in maturity stage. If this continues, it is likely to add to production cost but not value - making it increasingly difficult to be successful in highly competitive industry
2. Tapping Newer market places such as Russia, South Africa and Malaysia 3. Potential market value for the products is 15 billion as of 2011 out of which Sugandhaval's is 2%. Hence there is scope for market growth.
2. Competition in the export market from Chinese and Korean manufacturers 3. MNC's from US, UK entering into partnership with Chinese companies and selling products manufactured in China in Indian markets as their own thus leading to market stagnation
and thus also be able to possess the agility and strategic management to prepare successfully for its future business, market, and operating environment. The personal characteristics of Bhaskar Prasad which come to light as a successful entrepreneur in his firm Sugandhaval are 1) He was goal oriented. His initial business focus was very clear i.e. product launch, development & business development. 2) He was willing to take risks. He invested his own savings in his start-up and also took a loan on working capital. He was confident of repaying the loan and achieving turnover also since he knew that he had the technical business expertise to do what he had set out to do. 3) Bhaskar Prasad had a positive attitude & approach to his business. He dreamt big, dared to step in the business of his choice where there were present already MNC companies from US, UK and other European Countries. Yet Bhaskar Prasad created a market space for his business by believing in himself. 4) Bhaskar Prasad was a visionary. He had a strong urge to do things differently and wanted to grow big. His aim was to turn Sugandhaval into a multi-hundred crore company. 5) Bhaskar Prasad exhibited Customer-driven excellence by realising that for his company to grow and to achieve the vision that he had set for it, he needed to deliver to customers of Sugandhaval, superior performing flow control products and thus win their loyalty for life. Without loyal customers, little else matters. Customers are the final judges of how well the organization did its job, and what they say counts. A customer driven organization addresses not only the product and service characteristics that meet basic customer requirements but also those features and characteristics that differentiate the organization from its competitors.Bhaskar Prasad realised this and thus he aimed to be different from competition by delivering superior performing products. This strategic concept of customer-driven excellence culture would also enhance Sugandhaval's ability to remain agile in the future - having a capacity for rapid change & flexibility. BM Business Manager
August 2012
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BOOK Learning
Human Resource Management By Uday Kumar Haldar & Juthika Sarkar Publisher : Oxford University Press,YMCA Library Building, 1 Jai Singh Road, New Delhi-110 001 Price : Rs. 465/Website : www.oup.com
The book under review is primarily designed for the students of business management. It provides an in-depth coverage of the theoretical and practical aspects of managing human resources supported by numerous industrial examples, exhibits, and illustrations but can also be a interesting read for HR professionals. The book is divided into four parts. Part I, Inception, outlines the concept of HRM and provides an understanding of talent management and competency framework. Part II, HR Systems, covers the various HR functions such as manpower planning, recruitment, performance management system, development system, multi-source feedback, compensation management, and employee development. Part III, Contemporary Issues in HRM, elaborates on the current issues influencing human resources such as globalization, technology, HRD audit, corporate social responsibility, and ethics. The HR
Make Your Will Yourself By H.L. Kumar Publisher : Universal Law Publishing Co. Pvt. Ltd., C-FF-1A, Dilkhush Industrial Estate, (Near Azadpur Metro Station) G.T. Karnal Road, Delhi-110 033 Price : Rs. 295/Website : www.unilawbooks.com Ironically, the most certain thing in one's life comes at the very end of it-the curtain call, the death. But life still goes on and beyond. And the dead lives among the alive-in their memories that he leaves behind besides other things. Other material things most of the time become a bone of bitter contention. This is where enters the Will. Will is a legal document containing the desire of the dead regarding his/her 'other material things-his property. A Will goes a long way in precluding the probability of all possible disputes that might arise after the death of the testator among his/her legal heirs. 60
Business Manager
August 2012
strategies being used in various sectors are also covered. Following this, Part IV, Research in HRM, provides a chapter on contemporary research findings on various issues in HRM. The book concludes with appendices on stress management, organizational climate and role stress, and leadership styles in organizations. Comprehensive in its coverage of topics and with a lucid approach, the book also provides various examples and case studies, which serve as a valuable guide for professionals. The USP of the book is in its numerous exhibits and examples to help readers relate to the concepts, covers various facets of HR systems including acquiring, retaining, and developing talent, dedicates a chapter exclusively to the contemporary research findings in the field of HRM and discusses HR strategies in different sectors such as manufacturing, service, and knowledge industry.
Since wealth is a well-known corrupter of mind, which blinds humans from the distinction between the right and the wrong, it is important to preserve the confidentiality of the Will, for, the lack of confidentiality may pose a grave threat to the life of the testator. The book will serve as a guide to the intending testators well, in preparing the flawless Will, capable of standing the test of any legal scrutiny after the death of the Willmaker. But then, it is not a child's play to tackle the baffling conundrums and cobwebs of legal niceties. This book attempts to provide an answer to nearly all legal problems that might arise after the death of the testator so that the ill conveys exactly what the testator desires it to.
BOOK Learning
Law Relating to
Computers, Internet & E-commerce By Nandan Kamath Foreword : N.R. Madhava Menon Publisher : Universal Law Publishing Co. Pvt. Ltd., C-FF-1A, Dilkhush Industrial Estate, (Near Azadpur Metro Station) G.T. Karnal Road, Delhi-110 033 Price : Rs. 650/Website : www.unilawbooks.com The Information and Communication Revolution (ICR) is now under way throughout the worlds. The book in hand is an eye-opener to the type of problems thrown up by ICR and the nature of gaps in the existing laws and practices. Edited by a young lawyer who is the product of the revolution, the book, which is a compilation of essays, offers analysis on a range of topics, which are at once informative and interesting.
All sources of information, digital or otherwise, have been cited in footnotes to the main text and these may serve us useful tools to guide those desiring to undertake more in depth research in any of the areas that the work contains Once world of caution though : websites and URLs being rather transient in nature, many links might have lapsed, the footnotes only tell of those sites that existed at the time of writing. This edition has been updated with case laws, developments and statutory amendments. We hope this edition will prove useful to lawyers, judges, law Students, IT professionals, Police Departments, Government Departments and everybody concerned with the subject.
CYBER LAWS
employees, a new chapter of the same name has been included in this edition.
By Justice Yatindra Singh Publisher : Universal Law Publishing Co. Pvt. Ltd., C-FF-1A, Dilkhush Industrial Estate, (Near Azadpur Metro Station) G.T. Karnal Road, Delhi-110 033 Price : Rs. 475/Website : www.unilawbooks.com
There has been an ongoing debate regarding the law for patentibility of computer software. This edition takes into account the US Supreme Court's decision 'In re Bilski case' as well as decisions of our Supreme Court that came after the last edition.
The Information Technology (Amendment) Act 2008 (Central Act no. 10 of 2009) was enacted by the time the fourth edition came out but it was not enforced. It has been enforce since then. Considering the fact that most of the software companies enter into 'Invention and Proprietary Information Agreement' (IPIA) with their
Domain name disputes are increasing day by day. The courts are also requiring websites to render more information in cases of breach of law. The new cases in these areas have been included. Part 2 of the book containing Act, Rules, Regulations and Guidelines has been updated. Business Manager
August 2012
61
EVENT
Report
Clarks Inn Anniversary
Serve guest from heart, not with plastic smile a holistic manner that benefits the travel "Connectivity to alwar and Sariska are built staff accommodation facility and was trade reflected in organizing cross country two main issues which will decide the fate expressed his pleasant surprise towards run for tourism. Mr. Kumar facilitated the of Alwar to remain as attractive tourist the approach of Manish Bhatia, M.D. by winners of the run. destination", said Rajender Kumar, adding that it was a great step in the right director ,Ambassador Hotel New Delhi direction to keep the moral high of the "Clarks Inn being the pioneer and leader while flagging off the cross country run for employees by providing them in Alwar has a great future and to my mind tourism on 1st July as chief Guest accommodation, which will certainly would do very well with the increase in organized by hotel Clarks Inn, Alwar , a increase the retention and commitment of inventory", said Kumar with giving a word spectacular event of 4th employees. On this occasion, while anniversary celebrations of the throwing cultural program in the hotel owned by MGB Group. honour of Rajender Kumar, Rajender Kumar, hotel industry Manish Bhatia, M.D. Of MGB veteran, a firm disciplinarian group, Of which Clarks Inn Is a and perfectionist to the core, Constituent, said, "that being the created sweet memories while first family of hospitality of the Clarks Inn Alwar was privileged city, the onus lies on us to promote at having him as Chief guest for the city as ultimate destination for this mega event. While tourists. Still there is so much to addressing the children, young explore in this city which remain males and females along with hidden. Bhatia Is taking pains to dignitaries of Alwar, Kumar ensure that sariska gets its glory expressed satisfaction over back." The cultural night program AlwarBhiwadi express with folk flavor was attended by highway providing excellent dignitaries of Alwar from various connectivity but Sariska walks of life like Ajay singhal, Chief Guest Rajendra Kumar (C) with Vandna Bhatia Director sanctuary still stood CA,chairman ICAI , alwar branch, Clarks Inn (L), Manish Bhatia M.D. (R). unattended. Mr. Kumar stressed Rajan Jhiriwal, Chairman, NIET the need to encourage more budget hotels Group Of Institutions, Anil Kaushik, of caution to concentrate closely on strong in the organized sector which would go a Renowned Management Guru and infrastructure, upkeep and keeping staff at long way in promoting tourism in Alwar. corporate advisor, Bhupesh Rajawat, high motivation level. Rajender kumar day He said that he was quite hopeful that Township developer, Suresh Mishra, earlier, in the evening before cherishing Sariska road issue will be sorted out Founder Organiser, Rajasthan Marathon. cultural night with Rajasthani folk shortly in bigger interest of the city Run for tourism event dais was shared by flavours, hosted in his honour by Manish economy and public at large because Alwar dignitaries like Harshpal kaur , Bhatia, gave wonderful life lessons to the has very high potential of attracting chairperson Municipal council ,Alwar ,S.N. employees of the hotel . He shared his domestic and international tourists giving Patwardhan, Principal A.P.S.School, secrets of success and facts of life with best of joy and pleasure. , Rajender Kumar Daulat Ram Hajrati,Ahok Ahuja, Eminent employees. "There is no shortcut to success appreciated the tireless efforts of manish Social Activist,Lt. Col.Manish Marnal,, in life. One has to earn it by hard labour, Bhatia who is the guiding force behind Gopinath Bhargav,Narender Sharma, commitment and dedication. In hospitality mapping Clarks Inn as a professionally Political activist, R.S.Bohra, AGM, PNB, business, service from heart to guests is the managed hotel at his 33 rooms property. and Niranjan, famous tourist guide. The core competency, one should have. Without Manish Bhatia who himself is a qualified run was coordinated and conducted under this trait and original smile on face makes hotel management graduate, interests has the guidance of Bishan Kalra, National employee and guest both delighted" Said he. always been towards promoting the city in fame, Athlete. Mr. Kumar also inaugurated the newly 62
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August 2012
News
HR
As PSBs salary increases, RBI raises productivity issue The average cost per employee for public sector banks has overtaken that of their private sector employees since FY11- a development that has emerged from data released by RBI. This has prompted RBI to raise issues of productivity. The central bank has warned that public sector banks are losing their cost advantages with peremployee expenses of public sector banks today being 150% of their peers in the private sector. The central bank has said that an HR transformation is required to address the issue of lower productivity as there is competition for talented manpower. "The per-employee expenses of public sector banks have gone above that of private sector banks and today, is more than 150% than that of private sector banks. This is despite the fact that pension expenses of PSU banks are not fully reflected in their staff expenses," said KC Chakrabarty, RBI deputy governor, while addressing public sector bank chiefs at an HR conference recently. The deputy governor came up with numbers which showed that the staff strength of public sector banks had gone down between 1998-99 and 2010-11 due to retirements and voluntary retirement schemes, but that of private sector banks has gone up significantly. Also, PSU banks expanded their employee base to grow operations pan-India in the ' 80s and a big chunk of their employees are in their 50s and set to retire in the present decade. As against this, private banks have expanded in the last four years and their lower-end staff are in their 20s and middle managers are in mid-30s. "One thing is clear the competitive advantage in terms of staff costs that we always thought the public sector banks had is no longer there. Hence, the time has come for us to pay attention to this critical aspect. We can no longer postpone this is sue," said Chakrabarty. Traditionally, jobs in public sector banks were seen to be relatively low-paying but secure as salaries were not subject to the vagaries of economic cycles or the bank's performance. Also, in cities, several banks provided accommodation to staff in company-owned quarters, which was seen as an advantage. However, bank unions have been successful in negotiating higher salaries under
Rising Employee Costs Year
Public sector banks
Private sector banks
Number of Cost per employees (employee Rs.)
Number of employees
Cost per employees (Rs.)
1998-99
8,83,648
1.68L
60,777
1.69L
2002-03
7,57,251
2.70L
59,374
3.55L
2003-04
7,52,627
2.98L
81,120
3.17L
2006-07
7,28,878
3.81L
1,37,284
3.83L
2007-08
7,15,408
4.01L
1,58,823
4.48L
2008-09
7,31,524
4.72L
1,76,339
4.84L
2009-10
7,39,646
5.56L
1,82,520
5.16L
2010-11
7,57,535
7.16L
2,18,679
5.63L
bilateral pacts. There is also a large component of the wage bill in the public sector, such as dearness allowance, petrol allowance and rents that rise with inflation. The deputy governor also highlighted the need to select not just "good" candidates but also those who were "suitable" for the public sector.
IT Slowdown impact
Campus hiring deferred Information technology companies have put off campus recruitment by three months to September 2012. Companies said they have delayed visits to engineering campuses because of "operational reasons". However, industry insiders attribute the deferral to the slowdown the industry is facing. Usually, companies visit campuses during the eighth semester, but last year Nasscom advanced campus hiring to the seventh semester. "When we went in the eighth semester, we found the core sector (manufacturing) drew the best of talent; therefore, we advanced it to seventh last year on a trial basis. It worked well. The industry issued offer letters to two lakh candidates," an industry source said.
Every year, India produces an estimated 10 lakh engineering graduates, of which two lakh are recruited by IT companies. In 2010, these companies hired 1.7 lakh new graduates, and in 2011, they offered jobs to 2 lakh engineers. In 2012, industry body Nasscom said its members will recruit 2 lakh engineers, despite economic gloom in the West and other slowdown flags hosted on the tech horizon. For candidates who were offered jobs in 2010, the "on boarding" was supposed to start in May-June 2011, but it was delayed by nearly three months. IT companies have delayed campus hiring this time because, officials said, they are not expecting manufacturing firms to recruit in large numbers this year. "We have decided to visit the campus only in September. This was decided internally among Nasscom members," a recruitment head of an IT company said. Industry insiders also attributed the hiring delay on the general slowdown that is weighing on the sector. Business Manager
August 2012
63
HR
News
Cos now turning to half yearly appraisals A growing number of companies are opting for mid-year and even quarterly reviews. The main argument in favour of this trend is that it may not be wise for a company to wait as long as one year to assess employee performances. Whether it is to reward employees for something they did two quarters back or bringing them back on the path of growth, in case they have strayed, companies have realized the earlier they do so, the better. Organizations like Deutsche Bank and Akzo Nobel India have been following mid-term performance reviews for a few years now, while the list of other companies following this model appears to be growing. Nivea India is among those which have recently adopted the practice. According to Makarand Khatavkar, MD and head, HR at Deutsche Bank, the bank is trying to make its mid-term reviews more robust. The move is aimed at making managers and employees more accountable. "We are currently conducting a communication and education exercise to train and convey to all our employees about the new performance system," said Khatavkar. At Deutsche Bank, performance standards are being made more objective so that they are easy to understand and implement. This is based on a research that shows that people to whom the performance systems are communicated well perform 25% better, said Khatavkar. During annual appraisals, mostly recent accomplishments and disappointments may get noticed as these are fresh in the memory while the events which date back a few quarters could go unnoticed. At global paints and coatings major, Akzo Nobel India, appraisals are a continuous process. "The HR team conducts workshops with managers before the mid-year and yearend cycle based on the performance and development dialogue process. The midyear review is not about ratings but is geared at reviewing and providing guidance to the employees. The yearend process, on the other hand, focuses more on self assessment and involves feed-back by both primary and secondary reviewer," said Sangeeta Pandey, director, HR, Akzo Nobel India. 64
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Changing gear : Cos hike variable pay than fix To stay within tight budgets and motivate their skilled workforce, some companies are shifting their employee compensation structures from a fixedpay approach to one that relies more on variable compensation 10% to 15% rise in compensation levels across the board and the hike in variable pay has been more tank fixed pay is witnessed. Search firms like Executive Access, Elixir Consulting and Global Hunt and Mercer point to a hike in variable pay in proportion to the fixed pay by companies over the past year in a bid to retain talent. Hiking variable pay over fixed is seen as allowing companies to gauge an employee before giving out the rest of the salary when the market conditions are tough, and enables them to retain quality talent till the end of the year. Though that may not be the only reason. "Hiking the variable pay could be about ensuring a higher level of contribution from employees, retaining quality talent or reducing the liability of the wage bill," says Mayank Panda, Director, India and Saarc of consulting firm Hay Group. Arun Shankar Das Mahapatra, partner-in-charge of
Heindrick & Struggles in India, attributes the rise in variable component over the past few years to rising compensation levels and the India growth story, which was marked by the growth of private equity investments in the country and more money coming into traditional sectors like pharma and manufacturing, "Even in a traditional sector like manufacturing the variable pay would have gone up to 40% to 45% at the senior level from 10% to 15% five years ago," he says. Performers in other sectors are also being promised hiked variable pay at he end of the year. "If the sectors the companies operate in do not perform well, the company will not perform well, and it becomes difficult to give out increments. Then, variable pay becomes effective for distinguishing the high performers from the rest and retaining them in your company," says Adil Malia, group president, human resources, Essar. For instance, at Essar, high performers this year got variable hikes which were about 25% more than the average performers.
Supreme Court stays M.P High Court Judgment on treating allowance as basic wages for P.F Supreme Court stays the M.P High Court order in Surya Roshni Ltd. Case (2012 LLR 42), which held that when Special Allowance, DA, Conveyance Allowance and other allowances are paid universally to all employees, they would be treated as part for basic wages for P.F Contributions. S.C Stayed the above High Court order, against which Company Surya Roshni Ltd. filed a special leave petition number 8781-8782/2012. S.C Stayed the judgment and ordered the Company to deposit 60% of the amount demanded after getting credit to the amount already paid to P.F. Department based on the HC judgment.
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