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THE INDIAN INSTITUTE OF BUSINESS MANAGEMENT AND STUDIES
SUB: HUMAN RESOURCES MANAGEMENT MAX MARKS: 100
CASE I
EMPLOYEE MOTIVATION IN A GOVERNMENT ORGANIZATION"
Bhumika Services Ltd., one of the largest public sector companies of India, was serving
more than 31 million customers. Along with its vast customer base, BSNL's financial and asset
bases too were vast and strong. Changing regulations, converging markets, competition and ever
demanding customers had generated challenges for BSNL. The Indore division of BSNL was the
first in the country, which faced competition in basic telecom services from 1998. In spite of being
a government department, Indore telephones had to face the competition, and relentless efforts
were put in to improve the services and provide worldclass telecom services to its customers.
Among the various services offered by Indore Telecom, 197 and 183 were two special services.
197 provided non-metered enquiry services to obtain telephone numbers by simply giving the
name of person/name of organization/ name and designation of person, or by giving address. 183
on the other hand, was a nonmetered enquiry service that provided similar services for distant
stations. There were a large number of complaints related to these services. Complaints were
either directly forwarded to the district office by customers or raised during Telephone Adalats or
pointed out by correspondents during press conferences, which were conducted quarterly.
Complaints ranged from non-response, long waiting time to rude responses.
S. Baheti took charge as Area Manager (North) on July 25, 2001 In the Indore Division.
Immediately after taking charge, he realized that special services like 197 and 183 required
urgent attention as they were directly affecting the image of the organization amongst customers.
Since most of the complaints during Telephone Adalats and press conferences were related to
these services, Baheti wanted to reach the root cause of the problem, to solve it forever. In this
process, he looked at the background of the employees involved in the special services and found
that most of the employees were office bearers of various unions that were active in the
organization. The problem was more complicated than it seemed to during interactions, the
employees indicated that they were not to be blamed for poor services since they were facing a
number of problems in providing services and senior officials were not paying enough attention to
alleviate their problems. Defective handsets, non-operating telephone lines, disturbance in lines,
jacks not making proper connections, fans and air conditioners not working properly and non
availability of typewriter/computer terminals were some of the problems brought to the notice of
Baheti by operators.
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Further investigation revealed that in addition to these technical problems, there were
some Human Resource Management problems as well, such as frequent short leave, extended
breaks, uninformed leave and indifferent attitude of employees towards customers. Baheti
identified that despite technical problems, some operators were sincere towards their viork and
tried their best to provide better services. To improve these services, Baheti decided to use
multipronged strategies. Most of the technical problems were solved immediately, other problems
that could not be solved at his level were forwarded to higher authorities and pursued rigorously.
As the technical problems were taken care of, efficiency of sincere employees went up. Moreover,
Baheti also began regular interaction with the operators, appreciating their good work, listening to
their problems and explaining them the;-i. importance of their jobs. The employees were made
aware of the facts that B5NL did not enjoy a sole monopolistic position any more and had to
compete with private players. So the laidback attitude towards customer complaints was not only
detrimental to the image of the organization, but also could lead to a reduced market share.
After gaining the confidence of operators, the next step was to motivate them. Towards
this end, Baheti started announcing the best operator of the month and recognition was given to
the operator by displaying his name on the board of honor. The criteria for award were minimum
200 calls attended per day and 20 days' attendance. In addition, based on last six months
performance, three best performers were identified. Appreciation letters from Area Manager and
General Manager were conferred upon these operators in a public function and prizes of their own
choice were given to them. These efforts had a desired result and the performance of all the
operators showed a marked improvement. The number of calls attended by some operators
increased from 200 to 700 calls per day. Further, quick and polite response had reduced customer
complaints. While reviewing the situation, Baheti was quite contended to see a remarkable
change in the behavior of operators just four months. He wondered whether this change was a
permanent phenomenon or he would have to strategize further.
QUESTIONS
1. Discuss the long-term relevance of motivational techniques used by Baheti in the
light of prevailing environment in the organization.
2. Had you been Baheti, what other techniques you would have used to improve the
special services provided by the organization?
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CASE II
EMPLOYEE RELATIONS AUDIT
Triveni Foods Pvt. Ltd., a multinational confectionary company, having its branches in
more than 50 countries and marketing its products in about 135 countries, established one of its
production units in 1988 at Mathura near Delhi. It had a workforce of nearly 320 employees and
sales turnover was more than Rs. 150 crores. Being a confectionary unit, hygiene was given the
upper most priority to the extent that no one was allowed to enter the production area without
taking bath and wearing sterilized clothes provided by the company. The entire process was
automatic and required only food specialists and labor. In order to match the required standards,
emphasis was given on training and welfare of employees on regular basis. Facilities like
transportation were also provided since delay by ten minutes could cause production losses at the
time of shift changes.
Over a period of time due to start and workers' redundancy, it was observed that problems
like lethargy, absenteeism, violation of work practices were increasing. Absenteeism rate went up
to 18 percent. Employees visited canteen for drinking water and started gossiping during working
hours. Buses did not arrive on time due to which production suffered. Operators came late and
left shop floor early without waiting for relievers. Employees were found hovering in
administration building without any reason. It was also found that employees were violating
personal hygiene standards. Malpractices were also reported with attendance process and
records. These activities were having a negative impact on managerial effectiveness and
performance of the unit. The management tried to take number of initiatives to overcome these
problems. However, these initiatives seemed ad hoc solutions and did not serve the purpose in
the long run.
In 1996, Alok Trivedi joined the company as Head of the Department H.R. While facing
these problems, he realized that the causes of these problems were deep rooted and required a
proactive approach. He started with an approach called Employee Relation Audit, developed by
him, where everything was to be monitored, regulated and reported on regular intervals. He
along with his team prepared an action plan (Appendix 1) and corrective measures were taken
accordingly. Facilities of drinking water were arranged at 3 to 4 places in the production area
which stopped employees from going to canteen for this purpose. Action was taken against the
late arrivals of the buses. A proper time study was done and they were given ten minutes margin
so that they could report on time. Operators were frequently questioned and stringent vigilance
was kept for amenities. Regular counseling was also arranged. A grievance register was also kept
and effective grievance redressal was undertaken. Groups were formed called 'Pragati' groups for
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solving work related problems. Employees were frequently checked for ensuring their strict
adherence to personal hygiene standards. For ensuring timely processing and printing of
attendance records, training was given to al! line officers and production of records was made
mandatory on shift basis.
It was further decided that based on this action plan an audit should be carried out at
regular periods so that actual performance could be measured. For quantification, a 5 point. scale
0- poor, 2-below average, 3-average, 4-good, 5-v.good) audit report was prepared featuring
practices, criteria for evaluation, standards, observations/comments and rating :Appendix 2). For
example, in canteen criteria for evaluation there were food quality, menu, timings and
unauthorized presence of the employees in the kitchen. The standards were strict adherence to
the rules defined. For transportation, arrival, departure and punching of cards by drivers were the
criteria for evaluation. Internal teams of auditors were asked to observe and comment against the
set standards and give the rating accordingly. Performance vas evaluated on the basis of
percentage, the highest point being 215. For example, if the total points scored on various
parameters in a audit report was one hundred and fifty five, hen percentage score would be
seventy-two (l55/215xl00 = 72 per cent). The first audit "as carried out in August 1999 and
percentage of performance was sixty two.
In the year 2000, the performance rose to sixty-five per cent. Proactive approach of
solving le problems was adopted. For example, registers were maintained at different work areas,
write down the complaints experienced by employees and action was taken by the concerned
person. A complaint of tap leaking in a bathroom was recorded in register by a workman. It was
attended by a supervisor in charge and he got it repaired immediately. At times these were
reviewed and signed by H.R. department and the higher management. Due to these practices, a
lot of improvement was observed. Better working conditions, increased productivity, rise in
employees' commitment towards their goals and better superior -subordinate relationship could
be seen. In 2001, the percentage of the performance rose to seventy two. While reviewing the
Employee relation audit, Alok Trivedi was quite satisfied to note the steady though slow
improvement in the figures of performance.
QUESTIONS:
1. Had you been in place of Alok Trivedi, what additional measures would you have
taken?
2. Critically analyze the Employee Relations Audit in the light of its contribution to
self motivation of employees.
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CA S E III
EMPLOYEE TURNOVER AT XYZ MOON LIFE INSURANCE
In 1950, with the enactment of the Insurance Act, Government of India decided to bring
all the insurance companies under one umbrella of the Life Insurance Corporation of India (LIC).
Despite the monopoly of LIC, the insurance sector was not doing well. Till 1995, only 12% of the
country's people had insurance cover. The need for exploring the insurance market was felt and
consequently the Government of India set up the Malhotra Committee. On the basis of their
recommendations, Insurance Development and Regulatory Authority (IRDA) Act was passed in
parliament in 2000. This move allowed the private insurers in the market with the stop foreign
players with 74:26% stake. XYZ- Moon life was one of the first three private players getting the
license to operate in India in the year 2000.
XYZ Moon Life Insurance was a joint venture between the XYZ Group and Moon Inc. of US.
XYZ starred off its operations in 1965, providing finance for industrial development and since then
it had diversified into housing finance, consumer finance, mutual funds and now its latest venture
was Life Insurance. Its foreign partner Moon Inc. was established in 1858 and had grown to be
the largest life insurance and mutual fund company in the U.S. Moon Inc. had its presence in Asia
since the past 75 years catering to over 1 million customers across 11 Asian countries.
Within a span of two years, twelve private players obtained the license from IRDA. IRDA
had provided certain base policies like, Endowment Policies, Money back Policies, Retirement
Policies, Term Policies, Whole Life Policies, and Health Policies. They were free to customize their
products by adding on the riders. In the year 2003, the company became one of the market
leaders amongst the private players. Till 2003, total market share of private insurers was about
4%, but Moon Life was performing well and had the market share of about 30% of the private
insurance business.
In June 2002, XYZ Moon Life started its operations at Nagpur with one Sales Manager (SM)
and ten Development Officers (DO). The role of a DO was to recruit the agents and sell a career
to those who have an inclination towards insurance and could work either on part time or full time
basis. They were very specific in recruiting the agents, because their contribution directly
reflected their performance. All DOs faced three challenges such as Case Rate (number of
policies), Case Size (amount of premium), and Recruitment of advisors by natural market,
personal observations, nominators, and centre of influence. Incentives offered by the company to
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development officers and agents were based on their performance, which resulted into internal
competition and finally converted into rivalry.
In August 2002, ,a Branch Manager joined along with one more Sales Manager and ten
Development Officers. Initially, the branch was performing well and was able to build their image
in the local market. As the industry was dynamic in nature, there were frequent opportunities
bubbling in the market. In order to capitalize the outside opportunities, one sales manager left
the organization in January 2003. As the sales manager was a real performer, he was able to
convince all the good performers at XYZ Moon Life Insurance to join the new company. As a result
of this, the organizational structure got disturbed and the development officers, who were earlier
reporting to the SM had started reporting directly to the branch manager. Now, nepotism crept in
and the branch manager began reallocating good agents to his favorite development officers. The
sales team of another sales manager became weak (low performer). Seeing the low performance
of the sales manager and his development officers, the company decided to terminate their
services. As the employees' turnover rate of the organization was more than the industry rate,
the company had to continuously recruit sales agents as well as development officers to sustain
itself in a highly competitive environment. The internal competition among development officers
resulted into problems like, high employee turnover and dissatisfaction. Hence the branch was not
able to perform as per the benchmarks set by the company. Its performance was not even
comparable to that of other branches of the same company.
In April 2004, the company faced a grave problem, when the Branch Manager left the
organization for greener pastures. To fill the position, in May 2004, the company appointed a new
Branch Manager, Shashank Malik, and a Sales Manager, Rohit Pandey. The Branch Manager in his
early thirties had an experience of sales and training of about 12 years and was looking after two
branches i.e., Nagpur and Nasik.
Malik was given one Assistant Manager and 25 Development Officers. Out of that, ten were
reporting to Assistant Manager and remaining fifteen were directly reporting to him. He was given
the responsibility of handling all the operations and the authority to make all the decisions, while
informing the Branch Manager. Malik opined that the insurance industry is a sunrise industry
where manpower plays an important role as the business is based on relationship. He wanted to
encourage one-to-one interaction, transparency and 4iscipline in his organization. While
managing his team, he wanted his co-workers to analyze themselves i.e., to understand their own
strengths and weaknesses. He wanted them to be result-oriented and was willing to extend his
full support. Finally, he wanted to introduce weekly analysis in his game plan along with inflow of
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new blood in his organization. Using his vast experience, he began informal interactions among
.the employees, by organizing outings and parties, to inculcate the feelings of friendliness and
belonging. He wanted to increase the commitment level and integrity of his young dynamic team
by facilitating proper civilization of their energy. He believed that proper training could give his
team a proper understanding of the business and the dynamics of insurance industry.
QUESTIONS:
1. If you were Malik, what strategies would you adopt to solve the problem?
2. With high employee turnover in insurance industry, how can the company retain a
person like Malik?
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CASE IV
FRAGRANCE COMPANY LIMITED
Petals Company Limited (PCL) was initiated in the year 1919. Since then, it had produced
a number of brands which enjoyed customer loyalty. It had adapted well with the changing
environment and had entered into a strategic alliance with the S & G Limited, the producer of
personal care products. The new company Fragrance Company Limited Was formed as a result in
1993 with equity participation from S& G and Petals Company Limited. This company marketed
the products manufactured by the PCL. This alliance had given PCL access to the latest
international technology in soaps and detergents. Thus, Fragrance Company Limited was now
ideally placed to offer high value, international quality products at competitive prices. It was
already an exporter of toilet soaps, detergents and cosmetics. It was a private organisation
headed by Dharamchand, with its company's headquarters at Mumbai and seven units all over the
country with one of the units at Faridabad. The turnover of the company was Rs 900 crores. The
company marketed the products using the latest international technology in soaps and
detergents.
The organization structure was traditionally hierarchical with the senior vice president at
the top of the management, the supervisory heads at the middle level and the workers at the
shop floor. The company had 450 permanent workers, and 150 contract workers, with an average
age of 32 years. The recruitment policy framed was to employ freshers. The various departments
in the organization were: purchase, finance, systems, engineering services, excise and dispatch,
operations and personnel department. The personnel and administration department were headed
by Gyanchand and the functions of the personnel administration department were: recruitment,
selection, training, counseling, performance appraisal, internal mobility of employees, negotiation
With workers, fixation and implementation of rules and regulations regarding wages, salary,
allowances and benefits to the workers. The philosophy of the company was based on Total
Quality Management (TQM) and Kaizen. The company was highly environment-friendly and was
oriented towards customer’s satisfaction.
Fragrance was facing an acute crisis due to high rate of absenteeism among its permanent
workers. The losses were soaring high. There was loss in production, and high expenses and
indiscipline were also observed. The personnel administration department conducted a survey in
the year 1998. They found that the rate of absenteeism was about 20% on an average. The rules
and regulations regarding leave were-12-17 days of leave with pay, 7 days casual leave with pay,
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5 day sick leave with pay, extra leave without any pay. The benefits were provided as per the
Employees State Insurance Act. The data collected revealed that 36% of the absenteeism was
due to transportation problem, 48% was because of the workers staying away from their families,
52% due to festivals, 32% due to farming, 48% on account of alcholism, 80% on account of
social occasions/marriages and 76% due to sickness of family members.
The other findings were that approximately 80% of the workers were married and they
had children to look after and hence had a greater tendency towards taking leave, 8% of workers
possessed dual jobs ,e.g., driving for others, mechanic work etc., so they felt that they could earn
more on a particular day by remaining absent; 96% of the workers did not like night shifts and
they remained absent from duty; 28% of the workers were not satisfied with the working
conditions i.e. canteen facilities, drinking water, social and cultural activities and cleanliness. In
1998, the company tried to reduce absenteeism by introducing conveyance allowance for
attendance and night shift allowance. The scheme called Inaam; was launched in which a worker
who did not avail leave in three months, received Rs 200 per month. Inhouse training was
imparted to workers In order to educate them about the consequences of absenteeism. They
were also sent for 3-6 months training to the Central Board of Workers Education on rotation.
Counseling sessions were held for the workers in order to increase their awareness. The
company also introduced the philosophy of workers participation in the management to increase
their involvement and commitment towards the work. The practice of organizing picnics, festival
celebration, informal get-togethers, and sports activities were also adopted to increase the
commitment. Regularity was made an important component of performance appraisal and
promotion. After one year, Gyanchand was highly perplexed to see only a negligible improvement
in the report of the survey conducted by the personnel administration department. The rate of
absenteeism had dropped by only 3%, i.e. from. 20% to 17%
in spite of introducing the aforesaid
schemes.
QUESTIONS:
1. What role do the non-financial incentives play in motivating the workers and
minimizing the rate of absenteeism?
2. What innovative solutions would you suggest to minimize the rate of
absenteeism?
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C A S E V
HE WHO RIDES A TIGER
In the Year of the Youth, the author took up a research project on young industrial
workers. It involved comparing young and old workers. Two industries producing the same
machines at similar technological level were selected. One belonged to the private sector and the
other to the public sector. While the latter was started a decade later than the former, it had
achieved greater expansion. Both were located in the same state.
After we obtained necessary permission to conduct our study, we reached the mofussil
town where the private sector industry was located. Before we could launch our study, as a
matter of principle, we wanted to meet the General Secretary of the workers' union. The
Personnel Department was not willing for this. On our insistence they called the union official. We
talked to him for about half an hour but Personnel Department people were all the time hovering
around. So we fixed a time in the evening to meet him in the union office in the town. We visited
the union office in the evening. The union was having problem regarding wage deduction of some
workers who did not show up for overtime. The overtime notice was short and they had not
consented either, even then the management was threatening wage deduction for one week. The
union could hardly do a thing' as they in the past had burnt their hands when they had to
unilaterally call off the 106 day old strike in which even their Treasurer had committed suicide.
They were scared to the extent that they had productivity linked bonus agreement for even 12%
bonus. Moreover, a new minuscue union was recently started in the company.
We visited the new union's office next evening and held a long discussion. They asked for'
our suggestions. The union believed in legal battles more than agitations. After a visit to the
industry the author visited the state headquarters of the new union. There every office bearer
was surprisingly a lawyer. In the HQ we learnt that after we left, their union took out a procession
and held a meeting in the temple. Perhaps this was the result of our discussion. While the older
union was a prisoner of its past, the new union was free to write its own history. Workers'
interests were being served perhaps by both.
QUESTIONS:
1. Discuss merits/demerits of the role of strike, agitation and legal approach in
unionmanagement relations.
2. What role does mutual trust play in building union-management relations?
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