Question 1:

You have been appointed as an HR Consultant in a premium company in U.K. The

management has asked you to highlight the benefits of workers participation in
management. Use concrete examples to illustrate your answers.
Workers Participation in Management has been defined as, the participation resulting
from practices which increase the scope for employees share of influence in decisionmaking at different tiers of organizational hierarchy with concomitant assumption of
responsibility.
Workers participation in management has assumed great importance these days because
of the following benefits:
1.

Reduced industrial unrest: Industrial conflict is a struggle between two

organized groups which are motivated by the belief that their respective interests are
endangered by the self-interested behavior of the other. Participation cuts at this very
root of industrial conflict. It tries to remove or at least minimize the diverse and
conflicting interests between the parties, by substituting in their place, cooperation,
homogeneity of objects and common interests. Both sides are integrated and
decisions arrived at becomes ours rather than theirs.

2.

Reduced

misunderstanding:

Participation

helps

dispelling

employees

misunderstanding about the outlook of management in industry.

3.

Increased organization balance: If worker are invited to share in organizational

problems, and to work towards common solutions, a greater degree of organizational
balance occurs because of decreased misunderstanding of individual and group
conflict. Participation leads to increased understanding throughout the organization.
People learn that others have problems beside themselves.

4.

Higher productivity: Increased productivity is possible only when there exists

fullest co-operation between labor and management. It has been empirically tested
that poor labor management relations do not encourage the workers to contribute

anything more than the minimum desirable to retain their jobs. Thus, participation of
workers in management is essential to increase industrial productivity.
5.

Increased Commitment: An important prerequisite for forging greater

commitment is the individuals involvement and opportunity to express himself.
Participation allows individuals to express themselves at the work place rather than
being absorbed into a complex system of rules, procedures and systems. If an
individual knows that he can express his opinion and ideas, a personal sense of
gratification and involvement takes place within him. This, in turn, fortifies his
identification with the organization resulting in greater commitment.

6.

Industrial democracy: Participation helps to usher in an era of democracy in

industry. It is based on the principle of recognition of the human factor. It tends to
reduce class conflict between capital and labor. It also serves as a support to political
democracy.

7.

Development of Individuals: Participation enhances individual creativity and

response to job challenges. Individuals are given an opportunity to direct their
initiative and creativity towards the objectives of the group. This facilitates individual
growth.

8.

Less resistance to change: when changes are arbitrarily introduced from above
without explanation, subordinates tend to feel insecure and take counter measures
aimed at sabotage of innovations. But when they have participated in the decision
making process, they have had an opportunity to be heard. They know what to expect
and why. Their resistance to change is reduced.

Question 2
The board of directors has asked you to work out different incentive schemes to present
to its employees. The company belief is that the employees will feel more motivated to
work harder if they have an incentive scheme.
Present the board different schemes. Explain different types of method by which
incentives can be presented.
There are various types of bonus plans that can be put into effect at your business.
Bonus schemes and employee rewards strategies are established to fulfill a number of key
business and HR objectives:

To improve business performance (e.g. productivity, sales or profits)

To focus employees efforts on key objectives such as customer service, quality and
on-time delivery

To increase employee motivation by establishing a clear link between pay and

performance (at an individual or team level).

To support stakeholder ideals by allowing employees to share in the success of the

business

To encourage change within the organization.

To create the desired workplace culture by, e.g. rewarding teamwork and good
attendance.

Incentive Scheme options

The number of features involved in the design of a bonus scheme means that there are a
significant number of permutations to choose from.
Operating level.
A bonus scheme or employee rewards strategy can operate at any one or any combination
of the following levels:

Individual Bonus Scheme

Team Bonus Scheme

Site Bonus Scheme

Corporate Bonus Scheme

In theory a company could operate a scheme at any one or more of these levels. The
constraining factor however, in any bonus scheme, is cost.
Factors
Bonus schemes can be based on a single factor or a range of factors. Single factor
schemes allow special focus to be put on a key target or business objective. This may be
of ongoing importance, such as profits or productivity, or a matter that needs particular
short-term attention. Multi-factor bonus schemes take in a wide range of factors and may
include targets at a corporate level in conjunction with targets aimed at particular
departments or teams. A similar outcome may be achieved by using a number of singlefactor or single-level schemes.
There is a wide range of factors that can form the basis of both single- and multi-factor
bonus schemes. These include:

Productivity and output

Quality

Safety

Cost Management

Financial performance/profits

Sales

Customer Service/satisfaction

Attendance

HR-Related measures

Project Work Targets

Team working

Individual Performance

Productivity and Output Bonus Schemes

Productivity bonus schemes and output bonus schemes are mainly used in manufacturing,
e.g. piecework (where employees are paid according to the number of pieces or units they
produce ), but is being used increasingly in other sectors e.g. to measure the time taken
from receiving details of a job to completing it. In this type of circumstance of course,
good productivity also equates with good customer service.
Quality Bonus Scheme
Again quality bonus schemes are relatively predominant in the manufacturing sector; its
easy to measure quality as the number of defects found per day, week or month.
However, the Service sector also uses quality as a factor e.g. setting a target for the level
of data capture accuracy each month or measuring critical success factors.
Safety Bonus Scheme
Health and safety is most likely to feature as a factor in bonus schemes in manufacturing
or other contexts where the perceived risks are highest.
Cost Management
Gain-sharing bonus schemes particularly focus on cost reduction and efficiency savings.
Gain-sharing is a formula-based type of bonus scheme that enables employees to share in
the financial gains and efficiency savings made by a company as a result of improved
performance. The formula determines how the gains are to be shared between the
company and its employees.
Many financial services organisations have bonus schemes based on the collection of bad
debts.
Financial Performance/Profits
A significant proportion of companies have bonus schemes based on financial targets
(e.g. net asset growth) and some are based solely on profits.

Sales
Sales revenue commonly features as a factor in bonus schemes operated by service sector
companies, particularly retail and financial services organisations.
Customer Service /Satisfaction
There is a growing tendency to include customer service measures in bonus schemes.
This is particularly the case in retail and elsewhere in the service sector. Public sector
organisations also increasingly link bonus payments to their customer service targets e.g.
processing 99% of documents within 5 days of receipt and responding to 90% of
telephone calls within 20 seconds. The bonus scheme can also be based on performance
against a number of customer service targets.

A number of organisations measure customer satisfaction through surveying

customers, customer comments/feedback cards or mystery customer visits.

Attendance
Attendance is often one of the measures included in multi-factor bonus schemes, usually
as an absence rate at site, divisional or team level.

Some organisations still continue to operate single-factor bonuses to reward

individual employees for perfect or full attendance, usually measured over a week or
a month and with resulting payments ranging from 10 per week to 800 per annum or
5% of salary. However, too many exemptions or valid reasons for absence can undermine
the rationale for an attendance bonus. This has no doubt played a part in the decision by a
number of companies to phase out attendance bonus schemes or consolidate them into
basic pay.

Many companies have chosen to use absence triggers for bonus scheme
payments regardless of whether sales targets are being met, to receive a bonus payment.
Other companies pay out full bonuses, proportions of bonus or no bonus depending on
the number of instances of absence or where the individual is in their absence

management procedure.
HR-related Measures

HR-related targets in bonus schemes are sometimes set for managers. These may,
for example, cover staff training and development targets and employee morale.

Project Work Targets

By operating bonus schemes based on multiple factors, targets can be included in a
scheme that are tailored to particular projects falling within the bonus period providing
incentives for completion to deadline, specification and cost. An organisation can base,
say 20% of its gain-sharing plan on input measures, which include the completion of
projects on time and development of new strategy.

Team Working Bonus Schemes

Effective team working can be a factor in a bonus plan. This factor can also be used as an
element of individual performance. Most companies use teamwork in their competence
framework or as a core competence which is rewarded through performance/contribution
pay.

Individual Performance
Individual performance can be included as a factor in its own right, being derived from
performance appraisals or separately measured. Many companies, especially financial
services sector, use individual performance to measure the individual element of a multilevel bonus scheme i.e. bonus schemes which reward corporate, team and individual
elements.

If employees are rewarded through performance pay and bonus for individual
performance then this would be referred to as double-loading, paying twice for the same
result. Its advisable therefore not to use individual performance as a factor in a bonus
scheme if the company has performance pay unless you are measuring different aspects
of individual performance.

Bonus Payments
Most companies are self-financing, using profits, sales or cost savings to create a bonus
pool which is distributed among employees in a variety of ways. The frequency of these
payments varies and often depends on the objectives of the scheme. However, before any
payments are made, qualifying hurdles or minimum target levels may have to be met.
Distribution of the Bonus Pool
Bonuses may be paid as an equal flat rate or as a percentage of salary across a
department, site or company. Payments may be further differentiated in the following
ways:

Vary by grade or role

Reflect individual performance

Be based on team performance

Frequency of Payments
The frequency of payments varies from weekly to annually and is linked to the objectives
and types of bonus scheme operated. Most companies make payments on an annual basis
because they have linked their bonuses to annual profit targets.

In some contexts, shorter measurement periods and regular bonus payments may have a
greater motivational impact. Conversely, the longer the bonus period, the more scope
there is for making a significant lump-sum payment that stands out more from basic pay.
Interest in a bonus scheme that measures performance over a longer period can be
maintained by communicating progress against targets to employees on a regular basis.
An annual bonus payment can also act as a retention tool, although there is likely to be a
surge of leavers immediately after bonus is paid.

Hurdles
Most companies only make payments from their bonus schemes if certain hurdles are
overcome:
Minimum targets for all factors if these minimum targets are not reached then
there is no bonus pay out for these factors
Threshold profit level most of the profit related bonus schemes fully or partly
based on financial measures include a threshold profit level that must be reached before
any payments are made.
Absence triggers many companies have chosen to use absence triggers for
bonus payments regardless of whether sales targets are being met, to receive a bonus
payment from the scheme.
Management Discretion organisations often maintain a degree of discretion over
the payment of bonuses e.g. the board may reserve the right not to make bonus payments

if a serious lapse, such as a major health and safety incident occurs on site or not making
bonus payments if financial objectives or critical success factors are not met.
Question 3
Due to expansion more products and more recruitment are being done in the
organization, you have been ask to reengineer the job title for each and every employee
of the organization. Explain the different components of job description and job
specification approach you will adopt to work out a better proposal for both internal
and new recruit staff.
Job Title
The formal position of the successful applicant. Use clear terminology.
Organization Name
The name of the organization.
Job Objective
This describes the general nature, purpose and objective of both the organization and the
job. Capture the broad scope of the position in no more than three or four sentences.
Duties and Responsibilities
Identify functions that are essential to meeting the objectives of the job, and secondary
requirements. These should be differentiated in the job description. As specifically as
possible, list each duty and responsibility of the job. Each statement should begin with an
action verb describing the activity. Examples of action verbs: performs, drives, cooks,
coaches, monitors, plans, delivers, supervises, recommends, analyzes, paints, weeds,
answers, trains, verifies, sells, organizes, files.
Qualifications and Requirements
Identify the minimum qualifications needed to perform the essential elements of the job:
education, languages, experience, credentials (for example, to practice in a profession or
to operate equipment), skills, and knowledge. Draw attention to any critical expertise or
skills. Say whether experience will be viewed as equivalent to formal education
requirements. Be careful not to inflate the qualifications for the job. If only a high school
education is necessary, make this the minimum requirement rather than a university
degree.
Lines of Communication
Identify where the position fits within the hierarchy of the organization.

Special Working Conditions

Are there are any unique working conditions that the candidate should know about - for
example, a non-office environment, or working with violent clients. It is also useful to
mention commitments your organization has to pay equity and/or employment equity.
Salary and Benefits
You may want to identify the starting salary or pay range and benefit entitlements that are
associated with the position. Mention whether the salary is fixed or falls within a range. If
it is negotiable, what factors will influence it? For example, is it dependent upon
experience? Job seekers prefer knowing as accurately as possible how much you expect
to pay them.
Contact
Provide a contact name for applications and information about how job seekers can get in
touch - telephone and fax numbers, e-mail and mailing address.

Question 4
Using an organization of your choice, highlight the role and process of HRD audit and
what are the various challenges of HRD? Use correct examples to illustrate your
answer.
HRD audit is a comprehensive evaluation of the current HRD strategies, structure,
systems, styles and skills in the context of the short and long-term business plans of a
company. It attempts to find out the future HRD needs of the company after assessing the
current HRD activities and inputs. I am familiar with Hoovers, Inc. It delivers
comprehensive company, industry, and market intelligence that drives business growth.
Their database of 12 million companies, with in-depth coverage of 40,000 of the world's

top business enterprises, is at the core of our business tools and services that customers
find vital to their business operations. Hoover's editorial staff of some 80 editors and
researchers brings vital business information and knowledge to its coverage, updating the
site daily to bring our visitors and subscribers the most up-to-date business information in
the industry.
Process of HRD Audit at Hoovers
HRD audit starts with an understanding of the future business plans and
corporate strategies. While HRD audit can be done even in organizations that lack
well formulated future plans and strategies it is most effective as a tool when
the organization already has such long-term plans.
The HRD audit starts with the following questions:
Where does the company want to be ten years from now, three years from now one
year from now?
The top management needs to provide the answer to this question. If there are any longterm plan documents they are also reviewed. On the basis of answers, the consultants
finalize the subsequent audit strategies and methodology. They identify the nature of the
competencies the organization needs to develop in order to achieve its long term, five to
10 years plans.
What is the current skill base-of the employees in the company in relation to
the various roles and role requirements?
This is assessed through an examination of the qualifications of employees,
job descriptions training programmes attended, and so on. Besides this interviews
are conducted to identify the skill gap in the organization. Training needs and
performance appraisal forms provide insights into the competency and other skill
requirements.
What are the HRD subsystems available today to help the organization competency
base for the present, immediate future and long-term goals?
The auditors identify various HRD subsystems that are available to ensure the availability
utilization and development of skills and other competencies in the company. The

framework for evaluating these HRD subsystems has been presented earlier where all the
component HRD systems have been presented. These systems and other HRD tools that
an organization may be using are studied in details for arriving at the systems maturity
score.
What is the current level of effectiveness of these systems in developing people and
ensuring that human competencies are available in adequate levels in the company?
The consultants assess the effectiveness of each system. For example, the effectiveness of
performance appraisal system is assessed by discussing with employees, individually and
in groups, about the efficacy of the systems. The auditors look at the appraisal forms, at
the. linkages between appraisal and framing, conduct questionnaire surveys to assess
the extent to which coaching and other components on other appraisals are being
utilized and also conduct systems.
Does the HRD structure exist in the company adequate enough to manage the HRD
in the company?
At this stage, the auditors or consultants examine whether the current HRD structure can
handle the pressing and future HRD needs of the company. They examine the existing
skill

base

of

the

HRD

staff,

their

professional

preparation,

attitudes,

values, developmental needs, the line managers perception regarding them and so on.
In addition to the full-time staff, the consultants also assess the HRD structure in terms
of the use of task forces and other mechanisms.
Are the top management and senior manager styles of managing people in tune with
the learning culture?
Here the consultants examine the leadership styles, human relations skills and so on, of
senior managers. The extents to which their styles facilitate the creation of a
learning environment are examined.
HRD Audit examines Linkages with other Systems:
Attempts Total Quality Management (TQM), personnel policies, strategic planning
etc., evaluates HRD strategy, structure, system, staff, skill, style and consultants
make suggestions the basis of evaluation about the future HRD strategies required by

the company. The structure the company needs to develop new competencies, the
systems that need to be strengthened, and the styles and culture that have compatibility
with the HRD process.
HRD Audit is Business-driven:
HRD audit keeps business goals in focus. At the same time, it attempts to bring in
professionalism in HRD. In keeping the business focus at the centre, HRD audit attempts
to evaluate HRD strategy, structure, system, staff, skill and style and their
appropriateness.
How HRD Audit helps in improving organizational efficiency?
It can get the top management to think in term of strategic and long-term business
plans Ironically, it may seem that HRD audit should begin with such strategic plans, but
in some cases it has propelled the top management to formulate such plans.
Another aspect in this regard is that people cannot participate in HRD audit without
some sharing of these plans. The audit, therefore, has forced the top management to
share their plans across the organization resulting in increased involvement and
commitment of employees. In a few system of annual planning and sharing of the
business plans with management staff, to enable them to plan their own activities and
competency development programmes, have been initiated.
Changes in the styles of the top management
Any successful HRD company has an excellent learning environment. Thus one of HRD
is to create a learning organization. A learning culture can be created managers of the
company exhibit an HRD orientation, ability to convert and conflicts and problems as
learning opportunities and so on. Some top level India have been found to block the
motivation and learning of employees through coercive, autocratic and even paternalistic
styles of management. HRD audit highlights styles of management thereby pointing out
the difficulties in developing and employees for the future. This has helped in providing
subtle

feedback

to the

top

management and

initiating a

change

process.

Role clarity of HRD department and the role of line managers in HRD

In almost all cases, the HRD audit has been found to draw the attention of employees at
various levels to the important role of the HRD department: current as well as the future,
better role clarity of the HRD department and the HRD function, resulting in increased
understanding of line managers about their HRD role and the uniform results of HRD
audit. While the degree may vary from organization to organization depending on various
factors,

this

exercise

has

favorable

impact

on

employee

productivity.

Improvements in HRD systems

HRD audit has helped most organizations in measuring the effectiveness of their
HRD systems, and in designing or redesigning HRD systems, the most frequently
changed or renewed system include performance appraisal, induction training, job
rotation care planing and promotion policies, monitoring communication and training. A
number of organizations have changed or strengthened one or more of their HRD
subsystem as a result of HRD audit.
Increased focus on human resources and human competencies
One of the results of HRD audit is to focus on new knowledge attitudes and
skills required by the employees. Comments are made about the technical,
managerial, human and conceptual competencies of staff at various levels. This
differentiation has been found to help organizations in identifying and focusing sharply
on the competency requirements and gaps. The audit establishes a system of role clarity
and fixing of accountability. This may take place through separate role-clarity exercises
or through the development of and appropriate performance appraisal systems. In any
case, the attention of the organization gets focused on developing the competency base of
the organization.

More

sensitivities

are

developed

towards

missing

aspects

of competencies. For example, one organization was found to neglect the human
relations competencies of their staff which led to quite a few problems and wastage of
time. With HRD audit many of these were streamlined. The various HRD policies also
got strengthened.
Better recruitment policies and more professional staff

HRD audit proposes the competence base required by tile organization. It gives direction
for competency requirements of employees at various levels, thus providing a base for
recruitment policies and procedures. As a result, in some companies, new recruitment and
retention strategies have been worked out. In other companies, the audit as led to
strengthening recruitment policies and procedures.
More planning and more cost-effective training
HRD audit has been found to assist in assessing the returns on training. One of
the aspects emphasized in the HRQ audit is to calculate the investments made in
training and ask questions about the returns. The process of identifying training needs,
and utilization of training and learning for organization growth development are assessed.
As direct investments are made in training, any cost benefit analysis draws the attention
of the management and HRD managers to review the training function with relative ease.
For example, one organization has strengthened its training function by introducing a new
system of post training follow up and dissemination of knowledge to others through
seminars and action plans. Many organizations have developed training policies and
systematized their training function. Training needs assessment also has become more
scientific in these organizations.
Strengthening accountability through appraisal system and other mechanism
HRD audit can give significant inputs about existing state of accountability of can
be assessed through performance appraisal as well as through the work culture
and cultural dimensions. A number of organizations have introduced systems of
planning, sharing of experience and documenting the accountability of staff. HRD audit
to the chaining of appraisal systems.
Streamlining of other management practices
Most often HRD audit points out the strengths and weakness in some of the management
systems existing in the organization. It also indicates the absence of system, which
enhance productivity and utilization of the existing competency base, e.g., MIS, rules and
procedure, etc., which may have an effect on the functioning of employees. In a few cases
helped the management to look at some subsystems and work procedures. Preparation of
a manual for delegation of powers, clarification of roles and responsibilities, developing

or strengthening the manuals of financial and accounting procedures and systems and the
information systems ad sharing of information are some of the resultant activities.
TQM interventions
Quality improvements and establishing TQM systems require a high degree
of employees. In a number of cases HRD audit has pointed out to the linkages
between TQM and other quality programmes, and helped in strengthening the same. Due
to improvements in the training systems, enhancement of the quality of strengthening of
the appraisals system, TQM programmes also get improved. In a few organizations
performance appraisal have been changed to integrate quality internal customer
satisfaction into the appraisal systems. Thus HRD audit leads to the strengthening of
quality systems.
It can enhance the ROI (Return on Investment) of the HR function
In addition to all the above points, HRD audit aligns the HR function and activities
with business goals. In the process it eliminates non-value adding HR systems,
activities and processes and enhances the value-adding activities and processes. It
reduces non-productive assets the HR department (For example, underutilized training
centers, ill-implemented appraisal systems, etc.) and sharpens the focus of the HR
function to get better results. The main contribution of HRD audit is to focus on valueadding HRD.