ITM SCHOOL OF MANAGEMENT

ITM UNIVERSE, GWALIOR (M.P.)

SUMMER TRAINING PROJECT REPORT
IMPACT OF COMPENSATION AND PROMOTION PRACTICES ON
EMPLOYEES PERFORMANCE
FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT
FOR
THE DEGREE OF
MASTER OF BUSINESS AND ADMINISTRATION
SUBMITTED TO
ITM SCHOOL OF MANAGEMENT,
ITM UNIVERSE, GWALIOR (M.P.)

SUBMITTED BY:

SARIKA KETKAR
M.B.A IIIRD SEM. (2008-2010)
 ACKNOWLEDGEMENT:-

Practical experience is the best education & an opportunity to apply theoretical learning &

experience the result getting associated with organization like Bharat Heavy Electricals Ltd.

Experimental learning is more than a privilege, which cannot be expressed in words.

I would like to take the pleasure by expressing my gratitude towards Mr. N.S.Rathore

(Executive- Human Resources) for allowing me to undertake the project & making available all

facilities for the successfully completion of the study.

I would also like to thank

Mr. K.K. Nair (Sr. Vice- President HR)

(SARIKA KETKAR)
 DECLARATION:-

I, hereby, undertake that the project titled, “Impact of compensation and promotion
practices on employees performance," has been undertaken by. me and is an original
project.
The findings of the study are based on the information collected by me during my
summer training.

Ms.Sarika Ketkar
MBA III Semester
ITM-SOM, Gwalior
 PREFACE

Today it is acknowledged and widely accepted facts that beside money, material and machinery

the success of an organization greatly depend upon the quality of a human resource.

In the wake of increasing competition and the opening of the economy, people have become the

pivot around which any successful organization rotates.

In the light of above, industrial safety function in an organization has become more important

tool for prolonged development.

To develop people to grow in their respective organization.

To help establishment retain their staff.

As a part of curriculum of my M.B.A II Semester I undertook my research project in BHEL

(Bhopal).
CONTENTS :-

CHAPTER 1 INDUSTRY PROFILE

CHAPTER 2 ORGANISATIONAL PROFILE

CHAPTER 3 NEED FOR THE STUDY

CHAPTER 4 LITERATURE OF SURVEY

CHAPTER 5 RESEARCH METHODOLOGY

CHAPTER 6 ANALYSIS OF THE STUDY

CHAPTER 7 FINDING AND SUGGESTIONS

BIBLIOGRAPHY

APPENDIX
 CHAPTER :- 1

INDUSTRY PROFILE :-

Heavy Electrical Industry covers power generation, transmission, distribution

and utilization equipments. These include turbo generators, boilers, various

types of turbines, transformers, switchgears and other allied items. Majority of

the products manufactured by heavy electrical industry in the country, which

includes items like transformers, switchgears etc. are used by all sectors of the

Indian economy. Some major areas where these are used are the multi core

projects for power generation including nuclear power stations, petrochemical

complexes, chemical plants, integrated steel plants, non-ferrous metal units,

etc.

Sub-Sectors of Heavy Industry:-

Heavy Industry deals with the following 19 Industrial Sub-sector:
(i) Boilers

(ii) Cement Machinery

(iii) Dairy Machinery

(iv) Electrical Furnace

(v) Freight Containers

(vi) Material Handling Equipment

(vii) Metallurgical Machinery

(viii) Mining Machinery

(ix) Machine Tools

(x) Oil Field Equipment

(xi) Printing Machinery

(xii) Pulp an Paper Machinery

(xiii) Rubber Machinery

(xiv) Switchgear and Control Gear

(xv) Shunting Locomotive

(xvi) Sugar Machinery

(xvii) Turbines & Generator Set

(xviii) Transformers

(xix) Textile Machinery

The main players in field of heavy electrical manufacturing are:-

1. BHEL

2. Larsen

3. Suzlon Energy

4. BGR Energy

5. BEML

6. AIA Engineering

7. Alfa laval

8. Praj Industries

9. Shriram EPC

10. TRF
 CHAPTER -2:-

ORGANIZATION PROFILE

INTRODUCTION

BHEL is the largest engineering and manufacturing enterprise in India in the energy

related/infrastructure sector today. BHEL was established more than 40 years ago ushering in
then

indigenous Heavy Electrical Equipment industry in India, a dream which has been more than

realized with a well-recognised track record of performance. It has been earning profits
continuously

since 1971-72 and achieved a sales turnover of Rs.14,525 Crore with a profit before tax of Rs.
2,564

Crore in 2005-06. BHEL has been paying dividends over a quarter century and in line with the

excellent performance during the financial year 2005-06, an all time high dividend of 145% has
been

paid.

BHEL manufactures over 180 products under 30 major product groups and

caters to core sectors of the Indian Economy viz., Power Generation &

Transmission, Industry, Transportation, Telecommunication, Renewable Energy,

etc.

The wide network of BHEL's 14 manufacturing divisions, four Power Sector

regional centres, over 100 project sites, eight service centres and 18 regional

offices, enables the Company to promptly serve its customers and provide them

with suitable products, systems and service efficiently and at competitive

prices. The high level of quality &

reliability of its products is due to the emphasis on design, engineering and

manufacturing to international standards by acquiring and adapting some of the

best technologies from leading companies in the world, together with

technologies developed in its own R&D centres.

BHEL has:-

 Installed equipment for over 90,000 MW of power generation -- for Utilities, Captive and
Industrial users.

 Supplied over 2,25,000 MVA transformer capacity and other equipment operating in
Transmission & Distribution network up to 400 kV (AC & DC).

 Supplied over 25,000 Motors with Drive Control System to Power projects, Petrochemicals,
Refineries, Steel, Aluminum, Fertilizer, Cement plants, etc.

 Supplied Traction electrics and AC/DC locos to power over 12,000 kms Railway network.

 Supplied over one million Valves to Power Plants and other Industries

BHEL's operations are organised around three business sectors, namely Power, Industry –

including Transmission,

Transportation, Telecommunication & Renewable Energy -and Overseas Business. This enables

BHEL to have a strong customer orientation, to be sensitive to his needs and respond quickly to
the

changes in the market.

HIERARCHY:

 CHAIRMAN & MANAGING DIRECTOR

 BOARD OF DIRECTORS

 EXECUTIVE DIRECTOR (unit head), REGIONAL HEAD ( power

sector)

 GENERAL MANAGER ( either functional or product head)

 ADDITIONAL GENERAL MANAGER ( product if GM is

functional & vice versa)

 Sr. Dy GENERAL MANAGER

 Dy GENERAL MANAGER
 Sr. MANAGER

 MANAGER

 ENGINEER

 SUPERVISOR

 WORKER

SOCIAL RESPONSIBILITY:-

BHEL’s contributions towards Corporate Social Responsibility till date include adoption of
villages,

free medical camps/charitable dispensaries, schools for the underprivileged and handicapped

children, ban on child labour, disaster/natural calamity aid, Employment for handicapped,
Widow

resettlement, Employment for Ex-serviceman, irrigation using treated sewage, pollution checking

camps, plantation of millions of trees, energy saving and conservation of natural resources
through

environmental management.

Global Compact Principles

Addressed
In BHEL’s `VALUES` Statement

♦ Zeal to Excel and Zest for change

♦ Integrity and Fairness in all Matter

♦ Respect for Dignity and Potential of individuals

♦ Strict Adherence to Commitments

♦ Ensure Speed of Response

♦ Foster Learning, Creativity and Team-work

PRODUCT RANGE:-

 THERMAL POWER PLANTS

 GAS BASED POWER PLANTS
 HYDRO POWER PLANTS
 DG POWER PLANTS
 INDUSTRIAL SETS
 BOILERS
 BOILER AUXILIARIES
 Fan
 Air-Pre-heaters
 Gravimetric Feeders
 Pulverizes
 Pulse Jet and Reverse Air Type Fabric Filters (Bag
 Filters)
 Electrostatic Precipitators
 Mechanical Separators
 Soot Blowers
 Valves
 HEAT EXCHANGERS AND PRESSURE VESSELS
 PUMPS
 POWER STATION CONTROL EQUIPMENT
 SWITCHGEARS
 BUS DUCTS
 TRANSFORMERS
 INSULATORS
 High-tension ceramic insulators.
 CAPACITORS
 ENERGY METERS
 INDUSTRIAL ELECTRICAL MACHINES
 COMPRESSORS
 CONTROL GEAR
 THYRISTOR EQUIPMENT

Squirrel Cage Induction MotElectrical Machine : Product Profile

SQUIRREL CAGE INDUCTION MOTORS
SLIP RING INDUCTION MOTORS
SYNCHRONOUS MOTORS
INDUSTRIAL TURBO & DIESEL ALTERNATORS
VARIABLE FREQUENCY DRIVE MOTORS
 Highly reliable class ‘F’ (Thermally utilised to class 'B')
micalastic insulation system.

Low noise levels with means for further reduction.

Vibrostable frames and dynamically balanced rotors for

minimal vibrations.

Motor shipped completely assembled for quick and easy

installation.

Amplysized terminal boxes for easy connection.

Inductively brazed short circuit rings for enhanced

reliability.

Motors can be designed for special conditions and

applications on request.

Highly reliable class ‘F’ (Thermally utilised to class 'B') micalastic insulation system.

Low noise levels with means for further reduction.

Vibrostable frames and dynamically balanced rotors for minimal vibrations.

Motor shipped completely assembled for quick and easy installation.

Amplysized terminal boxes for easy connection.

Robust corrosion proof stainless steel sliprings ensuring life time use.

Induction resistance brazing of rotor joints.

Heat treated epoxy bandaging to prevent distortion in rotor winding due to centrifugal forces.

Motors can be designed for special conditions and applications on request.

Synchronous Motors
Highly reliable class ‘F’ (Thermally utilised to class 'B') micalastic insulation system.

Low noise levels with means for further reduction.

Vibrostable frames and dynamically balanced rotors for minimal vibrations.

Motor shipped completely assembled for quick and easy installation.

Amplysized terminal boxes for easy connection.

Brushless exciter for maintenance free operation

Motors can be designed for special conditions and applications on request.

Variable Frequency Drive Motors

Highly reliable class ‘F’ (Thermally utilised to class 'B') micalastic insulation system.

Low noise levels with means for further reduction.

Vibrostable frames and dynamically balanced rotors for minimal vibrations.

Motor shipped completely assembled for quick and easy installation.

Amplysized terminal boxes for easy connection.

Brushless exciter for maintenance free operation

Motors can be designed for special conditions and applications on request.

Located in the Piplani area, BHEL Bhopal spans its operations in a diverse range of fields. From

power and transmission to power utilization and renovation and maintenance of various power

plants, Bharat Heavy Electricals Limited in Bhopal is a renowned industrial unit

The services unit of BHEL Bhopal include troubleshooting, erection and commissioning and

renovation and overhauling. The troubleshooting operations at the Bhopal unit of Bharat Heavy
Electricals Limited comprises of a wide range of specialized fields such as:
• high stator winding temperature
• noise problem
• oil leakage from bearings
• rotor float problem
• excessive wear of brushes
• tripping of machine on earth fault
• temperature rise in anti-friction bearings
• temperature rise in sleeve bearings
• low insulation resistance (IR)/PI value of motor winding

The prime products manufactured at the BHEL division of Bhopal include slip ring induction

motors, squirrel cage induction motors, variable frequency drive motors, industrial turbo and
diesel

alternators and synchronous motors.

The operational facilities that are found inside the huge industrial space of Bharat Heavy
Electricals

Limited in Bhopal are :

• press shop
• winding
• core and assembly shop
• machine shop
• testing facilities
• coils and insulation shop

The installed capacity of Bharat Heavy Electricals Limited at Bhopal is 1000 nos per annum and
the

annual sales turnover of the unit is around US $ 25 million. Equipped with 25000 sq mt of total
area

and a manpower of more than 25000, BHEL Bhopal is a known and recognized name which is

considered as the best name in the arena of generations systems and power utilization.

Producing high voltage equipments and machineries for various industrial needs, BHEL Bhopal

symbolizes one pf the biggest commercially viable venture of Madhya Pradesh.

 Chapter- 3:-

NEED FOR STUDY

A number of researchers have established the relationship between HR practices and employee

performance but they mainly discuss developed countries. Little evidence is available about

relationship between HR practices and employee performance from developing countries

This study examines the relationship between three HR practices i.e. compensation,

promotion and performance evaluation and perceived employee performance .

The results of the study indicate a positive relationship between

compensation and, promotion practices and employee perceived performance while performance

evaluations practices are not significantly correlated with perceived employee performance.

The need to revise compensation practices and define clear career paths to

enhance the performance of teachers.

A number of researchers have reported that HR practices are positively linked with

organizational and employee performance (e.g. Guest, 2002; Harley, 2002; Gould-Williams,

2003; Park et al., 2003; Wright et al., 2003; Tessema and Soeters, 2006). The focus and thrust of

these studies have been towards developed countries. Little research has been done to test the

HR-performance link in developing countries like Pakistan. Aycan et al. (2000) termed Pakistan

as ‘under-researched’ country in the field of HRM practices.

The present study is an attempt to test the relationship between HR practices and employee

performance in a developing country i.e. Pakistan among university teachers. Pakistan is one of

the countries where literacy rate is very low. Apart from other factors teacher performance can

be considered a major reason for low literary rate. So far none of the Pakistani universities is

ranked among top universities of the world. Government of Pakistan is also emphasizing the

growth and development of university teachers with various initiatives. In this situation it is

important to find out the determinants which can enhance the teachers’ performance in Pakistani
universities. The objective of this research is to facilitate the decision makers in universities

across Pakistan to follow the HR practices which can improve the performance of University

teachers The present study could be helpful to human resource managers of public and private

sector universities in Pakistan for formulation and development of HR practices that will

ensure high level of teachers’ performance resulting in increased achievement and learning

among students.
 CHAPTER -4 :-

Literature of the study:-

The significant number of identified immediate and management system causes (root causes),

indicates many linked issues requiring further evaluation. In order to understand which

recommendations would prevent reoccurrence it was decided to go deeper to the causes issues.

Schuler, Randall S., Rogocsky Nikolai , Understanding Compensation Practice Variations

Across

Firms: The Impact of National Culture.,Journal of International Business Studies; 1998 1st
Quarter,

Vol. 29 Issue 1, p159-177, 19p, 2 Charts. Says that:

With operations spread worldwide, firms that find themselves competing in a global marketplace
are

looking at the implications of the admonition, "When in Rome. . .." This raises the question: "Do

cultures of countries have an impact on the generally accepted methods of managing human

resources?" The answer to this question is the focus of this article. By developing culture-
specific

propositions for four categories of compensation practices based on status, performance, social

benefits and programs, and employee ownership plans, we seek to determine the extent to which

Hofstede's four dimensions of culture are associated with specific compensation practices.
Support is
found for most of the propositions. The implications of the finding for the management of human

resources by multinational firms are discussed.

De Grip, Andries, Sieben, Inge, The effects of human resource management on small firms’

productivity and employees’ wages, Applied Economics; 5/20/2005, Vol. 37 Issue 9, p1047-

1054, 8p, 2 Charts.

This paper analyses whether employees and firms differently benefit from particular human
resource

(HR) practices. The focus is on small firms that may be badly informed on the impact of HR

practices on firm performance. In this study on Dutch pharmacies, it is found that firms do not

reward employees’ skills according to their contribution to firms’ productivity, as (1) employees
are

over-rewarded for their sector-specific skills and under-rewarded for the productivity enhancing

effect of their computer skills and (2) employees’ work experience positively affects their wages
but

does not have real productivity effects. Moreover, it is found that training employees in case of

vacancy problems seems to be an adequate HR practice, since it increases productivity without

affecting the average wage level. The opposite holds for offering higher wages to newly recruited

employees. Furthermore, we find that only the employees benefit from performance evaluation

interviews, whereas employing many employees by temporary contracts appears to have a

negative

effect on productivity, without affecting the wage level. [ABSTRACT FROM AUTHOR]
Donald P. Schwab and Lee D. Dyer, The motivational impact of a compensationsystem on
employee performance

Graduate School of Business and Industrial Relations Research Institute, University of

Wisconsin-Madison, USA

New York State School of Industrial and Labor Relations, Cornell University, USA

Received 19 March 1972. Available online 26 August 2004.

Using expectancy theory as a frame of reference, a review of the literature indicated that the
impact of perceptions about compensation systems on employee performance has not been
adequately tested. Through the design and analysis employed in the present study, an effort was
made to more appropriately examine this issue. Objective performance data and information
about three perceptual variables (valence of pay, instrumentality, and expectancy) were obtained
from a sample of 124 incentive-paid blue collar workers. The results offered some support for
the hypothesized relationships. Valence and expectancy were significantly related to performance
while instrumentality was not. An additive combination of the three variables explained a
significant proportion of the variance in performance (R = .39). The hypothesized interaction
among the variables, however, did not significantly increase the variance explained.

Christopher D. Ittner, Richard A. Lambert and David F. Larcker, The structure and
performance consequences of equity grants to employees of new economy firms, Accounting
Department, The Wharton School, University of Pennsylvania, Steinberg Hall - Dietrich
Hall 3620 Locust Walk, Philadelphia, PA 19104-6365, USA
Received 12 January 2002;
revised 15 January 2002.
The paper examines the determinants and performance consequences of equity grants to senior-
level executives, lower-level managers, and non-exempt employees of “new economy” firms. We
find that the determinants of equity grants are significantly different in new versus old economy
firms. We also find that employee retention objectives, which new economy firms rank as the
most important goal of their equity grant programs, have a significant impact on new hire grants,
but not subsequent grants. Our exploratory performancetests indicate that lower than expected
grants and/or existing holdings of options are associated with poorer performance in subsequent
years.

Donna L. Street, and Sandra Cereola , Stock option compensation: impact of expense

recognition on performance indicators of non-domestic companies listed in the U.S., a

Department of Accounting, School of Business Administration, University of Dayton,

Miriam Hall RM409, 300 College Park, Dayton, OH 45469-2242, USA

James Madison University, USA.

The IFRS 2, Share-based Payment, requires that companies recognize the fair value of employee
stock options as an expense. To ascertain the impact recognition will have on companies
domiciled in countries subject to accounting standards issued by the IASB’s liaison standard
setting partners, this research examines the pro forma stock option disclosures provided in Form
20-F by Australian, British, Canadian, French, German, Japanese, and Irish companies.
The findings indicate the average impact of expense recognition on diluted EPS will be
approximately 40% and will be material at a 5% level for the majority of the companies. The
impact varies significantly by country. On average the annual expense recognized will be
approximately 15% of beginning stockholders equity. For the majority of the companies, the
charge will represent less than 1% of beginning equity. Again the impact varies significantly by
country.
The findings indicate that absent requirements that stock compensation expense be recognized, a
material upward bias will be reflected in performance indicators of many non-U.S. companies
and cross-border comparability will be impaired. Since our analysis is based solely on data for
the year 2000 for companies domiciled in seven countries, future research will be needed to
ascertain the impact of expense recognition on a broader range of companies reporting under
IFRS 2.

Rajiv D. Banker, Seok-Young Lee and Gordon Potter , A field study of the impact of a
performance-based incentive plan ,
a
Carlson School of Management, University of Minnesota, Minneapolis, MN 55455, USA
b
Department of Management, Sungshin Women's University, Seoul, South Korea
c
School of Hotel Administration, Cornell University, Ithaca, NY 14853, USA

Much management accounting research focuses on design of incentive compensation contracts.

A basic assumption in these contracts is that performance-based incentives improve employee
performance. This paper reports on a field test of the multi-period incentive effects of a
performance-based compensation plan on the sales of a retail establishment. Analysis of panel
data for 15 retail outlets over 66 months indicates a sales increase when the plan is implemented,
an effect that persists and increases over time. Sales gains are significantly lower in the peak
selling season when more temporary workers are employed.

Danny Miller and Jangwoo Lee, The people make the process: commitment to employees,
decision making, and performance
a
Chaire MacLean-Hunter, Ecole des Hautes Etudes Commerciales, 3000 Cote Sainte
Catherine Road, Montreal, QC H3T 2A7, Canada
b
Columbia University, New York, NY, USA
c
Department of Economics and Business, Kyungpook National University, Taegu, South Korea

This study argues that a well designed decision making process will have its most positive
impact on company financial performance when it is carried out by a capable, motivated and
dedicated workforce. Prior research has determined that such a workforce can be developed via
an organization’s commitment to its employees (OCE) in the form of ample training and
compensation, fairness, and meaningful personal consideration. We argue that OCE will enhance
financial performance where it is able to improve the quality of a decision making process that
emphasizes ample information processing, collaboration, and initiative. Conversely, these three
dimensions of decision making are expected to be of little value where OCE—and hence a
capable and motivated workforce—are lacking. These expectations were borne out in our study
of Korean companies. Specifically, we found positive associations between return on assets and
the interactions between OCE and information processing, collaboration, and initiative,
respectively. We found also that these interactions contributed the most to return on assets in
uncertain environments, where effective information processing, collaboration and initiative
were especially important.

Anastasia A. Katou and Pawan S. Budhwar, Causal relationship between HRM policies
and organisational performance: Evidence from the Greek manufacturing sector,
a
Teaching Fellow in HRM and OB, Department of Marketing and Operations
Management, University of Macedonia, 540 06 Thessaloniki, Greece
b
Professor of International HRM, Aston Business School, Aston University, Birmingham B4 7ET, UK

Blending insights from the contingency theory, the resource-based view, and the AMO theory,
the purpose of this paper is to investigate the HRM-performance causal relationship in the Greek
context. The empirical research is based on a sample of 178 organisations operating in the Greek
manufacturing sector. Using structural equation modelling the results of the study revealed that
the ability to perform (resourcing and development), motivation to perform (compensation and
incentives), and opportunity to perform (involvement and job design) HRM policy domains are
moderated by business strategies (cost, quality, innovation), and additionally, the motivation to
perform is further moderated by managerial style and organisational culture. Further, the results
indicate that the impact of HRM policies on organisational performance is fully mediated by
employee skills, attitudes, and behaviour. The paper concludes that although the motivation to
perform HRM policy domain causes organisational performance, through employee attitudes, it
may be supported that organisational performance positively moderates the effectiveness of this
HRM policy domain, raising thus the question of reverse causality.

Longden Jenniffer, Pitt Michael, Riley Mike, Tucker Matthew, Towards sustainable

construction: promotion and best practices Construction Innovation: Information, Process,

Management, Vol. 9 Iss: 2, pp.201 – 224.

Purpose – The purpose of this paper is to understand what factors best promote or prevent
sustainable construction practices and establish the consistency of how sustainability is
measured.
Design/methodology/approach – A literature review considered the impact of the industry to
sustainability and identified what action and initiatives are already in place. Through this, the
main drivers, barriers, measures and benchmarks were identified. The opinions of building
surveying professionals were sought and analysed.
Findings – The paper suggested that fiscal incentives/penalties and regulations help to drive
sustainable construction. Such financial implications are consistent with “affordability” being the
biggest barrier highlighted. The majority of respondents believed the industry is taking some
account of sustainability issues, but identified that more needs to be done.
Originality/value – Sustainable development is an integral part of the lives and affects all aspects
of business operations. This paper provides an in-depth insight into the level of sustainable
development within the construction industry, identifying implications for both the demand and
supply side.

Ghada El-Kot, Mike Leat, (2008) "A survey of recruitment and selection practices in

Egypt", Education, Business and Society: Contemporary Middle Eastern Issues, Vol. 1 Iss:

3, pp.200 - 212

Purpose – The paper's aims are to ascertain whether there is evidence of Egyptian organisations
using recruitment and selection practices which are context specific and whether different
practices are used for different job types; whether responsibility for recruitment and selection is
shared between HRM specialists and line management; and whether there is evidence of
increasing devolution of this responsibility to line managers.
Design/methodology/approach – Data were collected between May and July 2007 and produced
108 usable questionnaires. The questionnaire was adapted from the Price Waterhouse Cranfield
project on HRM in Europe.
Findings – There is some evidential support for the influence of the Egyptian national context
upon the practices used, with different practices, including the number of techniques being used
for the recruitment and selection of different job types. There is evidence of substantial sharing
of this responsibility with line management through consultation and of an increased devolution
of responsibility to line management.
Research limitations/implications – Investigating recruitment and selection practices with the
influence of ownership and by organisational size is needed to pursue whether there are
significant associations between these variables.
Practical implications – Organisations moving into Egypt would not appear to be confronted
with substantial resistance to the adoption of new methods and techniques for recruiting and
selecting staff or the adoption of different methods for different job types, neither with resistance
if they wish to involve line management in the decision-making process.
Originality/value – The influence of the Egyptian national context upon the recruitment and
selection practices used is an important issue for organisations to know the best recruitment and
selection methods.

Coy A. Jones, Mary A. Lemons, Procedural justice in promotion decisions: using

perceptions of fairness to build employee commitment, Journal of Managerial Psychology
Volume:16, Number: 4, Year: 2001 , pp: 268-281.

Although companies spend millions of dollars each year in their attempts to comply with fair
employment laws, many firms continue to have problems with employees who perceive unfair
treatment in promotion decisions. Procedural justice refers to the perceived fairness or equity of
the procedures used in making decisions regarding the distribution of rewards, such as
promotion. Previous research indicates a positive relationship between procedural justice and
organizational commitment, but these findings relate to the effect of unfair selection decisions on
organizational commitment, instead of specifically focusing on justice perceptions in promotion
decisions. Because employee perceptions of unfairness may result in negative consequences for
organizations, the purpose of this study was to examine the significance of procedural justice in
promotion decisions in predicting organizational commitment. Regression analysis results
indicate a significant main effect of the perceived fairness of the promotion-decision system on
organizational commitment. Implications for research and practitioners are discussed.

James J. Cordeiro, Pracheta Mukherjee, D. Donald Kent, (2006) "Non-parametric

assessment of CEO compensation practices", Management Research News, Vol. 29 Iss: 5,

pp.242 – 251.

Purpose – The purpose of this research is to present an alternative to the vast majority of studies
on chief executive officer (CEO) compensation practices in the USA which have relied on
multiple regression analysis and its variants.
Design/methodology/approach – The paper points out the shortcomings of traditional parametric
approaches (such as regression analysis) to the analysis of CEO compensation practices and
suggest non-parametric alternatives.
Findings – Using tests for concurrent validity, the paper demonstrates how non-parametric
assessment may be successfully applied to the analysis of CEO compensation practices.
Originality/value – Because of the novelty of this approach, the findings should be of value to
those academics and practitioners interested in the evaluation of CEO compensation practices.

John O. Okpara, Pamela Wynn, (2007) "Human resource management practices in a

transition economy: Challenges and prospects", Management Research News, Vol. 31 Iss:

1, pp.57 – 76.

Purpose – The purpose of this study is to examine the extent to which organizations in Nigeria
use various human resource management (HRM) practices, and the perceived challenges and
prospects of these practices.
Design/methodology/approach – A combination of quantitative and qualitative research
methodswas employed to gather information. Specifically, data were collected from 253
managers in selected firms. Descriptive data analysis is presented with respect to the use and
execution of HRM practices such as recruitment, selection, performance appraisal and training
and development. In addition, information was collected and analyzed with regard to the
challenges and prospects of HRM.
Findings – This study provides significant current information on HRM knowledge and practices
in Nigeria. The findings reveal that HRM practices, such as training, recruitment, compensation,
performance appraisal and reward systems, are still in place. However, issues of tribalism, AIDS,
training and development and corruption are some of the challenges identified that need to be
addressed.
Research limitations/implications – The study was limited to 12 companies in ten cities. A
broader geographic sampling would better reflect the national profile. Another limitation could
stem from the procedure used in data collection method (drop off and pick up). However,
extreme measures were taken to protect the identity of the respondents.
Practical implications – The study identified challenges and prospects of HRM in Nigeria.
Organizations should employ requisite HRM practices to achieve excellent organizational
performance. Furthermore, the government may create policies to promote the above practices,
since, in the long term, achieving organizational excellence will reflect positively on the
economy. All these may be facilitated through proactive organizational and national human
resource development initiatives.
Originality/value – The significance of the present study stems from the fact that very few
studies have explored the impact of human resource challenges and prospects in Nigeria. The
results provide additional insights into HRM practices in Nigeria, a sub-Saharan African country.
A region that has been neglected by management researchers and has therefore been less
researched. Also, the insights gained from this study contribute to the future development of this
line of research, particularly in a non-Western country like Nigeria.
Ahmed A. Al-khabash, Ali A. Al-Thuneibat, (2008) "Earnings management practices from

the perspective of external and internal auditors: Evidence from Jordan", Managerial

Auditing Journal, Vol. 24 Iss: 1, pp.58 – 80

Purpose – The purpose of this paper is to provide evidence concerning the existence of earnings
management (EM) from the perspective of external and internal auditors in Jordan.
Design/methodology/approach – A specially designed questionnaire was distributed to a sample
of both external and internal auditors. To analyze the data of the study, t-tests and ANOVA were
used.
Findings – The results of the study showed that external auditors believe that management
engages significantly only in legitimate EM that either increases or decreases income. However,
internal auditors believe that management engages in legitimate practices that only increase
income. In both cases, there were significant differences between their views. There is no
significant difference between large and small companies regarding EM practices. However, the
characteristics of internal governance structure have a significant effect on illegitimate EM,
whereas no significant effect was found on legitimate EM.
Practical implications – The paper provides many recommendations, including the need to
strengthen and reinforce the internal governance structure of companies and train external and
internal auditors regarding EM techniques and measures of detection.
Originality/value – The originality of the study is that it provides evidence about EM practices
from the perspective of both external and internal auditor in a developing country.
Seraina C. Anagnostopoulou, (2008) "R&D expenses and firm valuation: a literature

review", International Journal of Accounting and Information Management, Vol. 16 Iss: 1,

pp.5 – 24

Purpose – The purpose of this paper is to provide a comprehensive review of the literature on
R&D expenses and subsequent firm valuation and to briefly highlight some gaps and
implications for future research.
Design/methodology/approach – The approach is a review of studies on R&D and valuation
between 1978 and 2007. The valuation issues have been grouped into general topics identified
among the overall volume of research: economic characteristics, actual and forecast firm
performance, capital structure, risk, and other topics which do not fit into the previous categories.
Findings – The paper provides a comprehensive assessment of the literature findings on a
variation of valuation topics useful for internal and external users of financial statements of firms
intensive in R&D investments. It sheds light on certain literature limitations and thus guides the
users of financial statements regarding to which issues they should pay attention when analysing
the financial statements of firms intensive in R&D.
Research limitations/implications – Existing research on R&D and valuation focuses mainly on
the USA and UK and therefore raises issues of generalisation of the results.
Practical implications – The paper provides a useful guide for the users of financial statements
of R&D intensive firms, since it provides information on possible consequences of these
expenses regarding a variety of valuation issues.
Originality/value – The paper fills an information gap by addressing a range of valuation issues
on R&D and offers relevant information guidance to the users of financial statements.
Sims, Robert H; Schraeder, Mike, Expatriate compensation: An exploratory review of
salient contextual factors and common practices, Career Development International,
Volume 10, Number 2, 2005 , pp. 98-108(11).

Purpose - This study aims to examine important situational factors impacting expatriate
compensation and common practices utilized in compensating expatriates.
Design/methodology/approach - A synthesis of literature was reviewed, leading to the
identification of numerous situational or contextual factors impacting expatriate compensation. A
review of extant literature also identified several customary approaches to expatriate
compensation. Findings - A variety of factors can directly affect expatriate compensation, with
three primary approaches an organization should consider. These factors include host-country
cost of living, housing, dependent education, tax implications and health care - factors most often
incorporated as a component of one of the primary approaches to compensation discussions:
destination-based approach, the balance-sheet approach, and the international headquarters
approach. Practical implications - This article was intended to enhance understanding of
expatriate compensation by collectively examining not only the "how" (primary approaches) but
also the "why" (salient contextual or situation factors) firms should consider when determining
how to assemble an appropriate package. Originality/value - Presenting the factors and practices
together makes an important contribution to the literature on expatriate compensation by
addressing not only the "how" (customary approaches) of expatriate compensation, but also the
"why" (salient contextual factors).

Narendar Sumukadas, (2006) "Employee involvement: a hierarchical conceptualisation of

its effect on quality", International Journal of Quality & Reliability Management, Vol. 23

Iss: 2, pp.143 - 161

Purpose – The purpose of this article is to study the effect of employee involvement (EI)
practices on quality comprehensively.
Design/methodology/approach – This paper views the EI domain as sets of related practices
interacting within a hierarchy. Using survey data, the paper tests a model of higher order
practices building on a foundation of lower order practices to affect quality.
Findings – The results support a hierarchical conceptualisation of EI practices. Some practices
are found to be more effective than others, yet even the less effective EI practices serve a
supportive purpose.
Research limitations/implications – The model was analyzed from a predictive perspective, using
a relatively small sample. Rather than simply identifying some EI practices as more effective
than others, it is important to view the practices as being interrelated.
Practical implications – Cherry-picking only the most effective EI practices may not work.
Managers must first install a foundation of less effective practices.
Originality/value – EI is recognised as an important enabler of quality management initiatives.
Yet, much of this support is based on normative and untested prescriptions. This paper provides
such a test. The paper models the entire EI domain, as sets of related practices rather than a
hodgepodge of sporadic individual practices. Further, the paper presents a unique
conceptualisation of an EI hierarchy.

Cheryl Zobal, (1998) "The “ideal” team compensation system - an overview: Part I", Team

Performance Management, Vol. 4 Iss: 5, pp.235 – 249

Teams have become a popular way to organize business because they offer companies the

flexibility they need to meet the demands of the ever changing business environment. While

many companies have been quick to organize their workforce into teams, they have not been as

eager to implement team-based compensation systems. The problem is that if team-based

organizations continue to utilize old, individually-oriented pay systems, they will not realize
fully the benefit of highly cooperative and motivated work teams. The purpose of this paper is to

examine the ÒidealÓ team compensation system. To do this, the paper will first review the basics
of both teams and compensation and then explore the ideal team compensation system

from three levels - framework, critical elements, and other, operational considerations. Given the

scope, this entire review will be divided into two separate articles. This article, Part I, provides

information through the ideal team compensation system framework.

Fitsum Ghebregiorgis, Luchien Karsten, (2007) "Employee reactions to human resource

management and performance in a developing country: Evidence from Eritrea", Personnel

Review, Vol. 36 Iss: 5, pp.722 - 738

Purpose – This paper seeks to examine employee reactions to human resource management
(HRM) and performance. It placed employees on a centre stage in analysing HRM to provide
theoretical insights.
Design/methodology/approach – To explore the theme, a survey of 252 employees drawn from
eight organisations was conducted. Furthermore, on-site interviews were carried out with
managers, thereby contributing to the generalisability of the findings.
Findings – The findings from the study indicate a positive attitude of employees to HRM
practices, such as promotion from within, staffing, equal employment opportunity, quality of
training, reasonable compensation and paid vacation and sick days. Moreover, the evidence also
shows that productivity has been increasing while employee turnover, absenteeism, and
grievances are low. However, the evidence also reveals that training was not integrated in a
planned way to employee career development.
Research limitations/implications – The present study adds to a growing literature that helps the
understanding of HRM policies and practices in a developing country context. Future research
would benefit from additional research in this area in other geographical settings to better
understand the generalisability of the findings reported.
Originality/value – In contrast with previous research, which has predominantly been conducted
from a managerial perspective, this article deals with employee perceptions. This emphasises the
importance of exploring employee reactions towards HRM practices, policies and other aspects
of firm life.

Richard S. Allen, Ralph H. Kilmann, (2001) "The role of the reward system for a total

quality management based strategy", Journal of Organizational Change Management, Vol.

14 Iss: 2, pp.110 - 131

This study examines the impact of reward practices on the relationship between an

organizational strategy based on the principles of total quality management (TQM) and

perceptions of firm performance. Major findings include: higher levels of firm performance were

significantly correlated with greater use of TQM practices, but not with greater use of quality

rhetoric in either formal strategic documents or informal strategic discussions; the use of

extrinsic reward practices – including profit sharing, gainsharing, employment security, and

comp time – exhibited a significantly positive moderating effect on the relationship between

TQM and perceived firm performance. Regarding implications for practitioners, it is insufficient

to include quality rhetoric in the formal and informal strategy. As the anecdotal literature has

often advocated, the current research provides empirical support that management must “walk

the talk” with regard to TQM efforts. Further, in order to realize even higher levels of firm

performance, an organization should utilize reward practices which specifically complement its

TQM-based strategy.
CHAPTER -5 :-

RESEARCH METHODOLOGY:-
 CHAPTER - 6:-

ANALYSIS OF THE STUDY:-

 CHAPTER - 7:-
FINDINGS AND SUGGESTIONS:-

FINDINGS:

RESULT:-

SUGGESTIONS:-
BIBLIOGRAPHY:-

1: www.google.com

2: www.wikipedia.com

3: journal of industrial safety BHEL.

International Review of Business Research Papers
Vol. 4 No.2 March 2008 Pp.302-315