INTRODUCTION TO MANAGEMENT

INTRODUCTION:
Definition: Industrial Management can be defined as the effective and efficient running of an industry
using its human and non-human resources in order to achieve its set goals and objectives.
It can also be defined as the effective and efficient utilization of organizational resources to achieve an
industry set goals.
In the present context, managing has become one of the most important area of human activity because
of increasing role of large and complex organisation. Ever since people began forming groups to
accomplish aim they could not achieve as individuals, managing has been essential to ensure the
coordination of individual efforts. As society has come to rely increasingly on group effort and as many
organized groups have become large, the task of managers has been rising in importance. This has led
to the development of a new field of study known as management.
Management is an activity process composed of some basic functions, for getting the objective of any
enterprise accomplished through the efforts of its personnel. Wherever and whenever objectives are to
be achieved through organized and co-operative endeavour, management becomes essential for
directing and unifying the group efforts towards a common purpose. As human aims and beliefs are
mostly realized through the establishment of diverse associations in our society, management is
universally needed for operating all such organization. Management, viewed as a functional concept, is
of equal necessity to the educational religious, charitable and other non-business institutions as it is
required for business Organizations. Furthermore, the greatest and the most comprehensive of our social
organizations, viz., the Government of all types needs management as others require, perhaps more than
all other social organizations. That the Government without requires a management process has been
apply pointed out in the statement: A Government without good management is a house built on sand.
Put in short, management is an essential accompaniment of all social organizations, and it is to be found
everywhere as a distinct, separate and dominate activity. The nature and significance of the activity do
not change even if it is called administration in some social in situations and management in others.
History of management:
Industrial Revolution
Before the Industrial Revolution people worked with hand tools, Manufacturing articles in their ownhomes or in small shops. In the third quarter of the 18th century,steam power was applied to machinery.
People and machines vere brought together under one roof in factories, where the manufacturing process
could be supervised. Yhis was the beginning of shop management. In the next hundred years factories
grew rapidly in size, in degree of mechanization, and in complexity of operation. However, the growth
was accomplished by much waste and inefficiency. In the United States many engineers, spurred by the
increased competition of the post-civil war era, began to seek ways of improving plant efficiency.
A further growth of factory system was made possible by the development in transport by canals,
railways, roads, etc, in 1830. The factory system started in 1780s for cotton textile manufacture, then
came to be known as the Modern Industry.
Development of Management Managers
With the rise of modern industry two groups were formed- the management and the labour. Also with
the further modernisation of the industries by the use of power driven machinery, complex division of

labour, etc., many problems rose up between the management ant the labour class. Because of this, the
industrial owners could no longer succeed to manage their companies. This gave rise to the demand for
a new class of persons, Manages. However, no synthetic efforts were made for a long term to satisfy
the demand of managers. Gradually, a few progressive owners gave a lead in attempting such persons
to manage the affairs of their companies. Later some organizations began to give active support to the
training programmes for junior executives.
As a result of all these efforts it is now being understood that professional managers are necessary for
the success of the economic and commercial organization, and also for the success of all other forms of
organization, and also for success of all other forms of organised living.
Contribution by Pioneers
There are many pioneers who contributed for the development of scientific management. The most
important pioneers are:
1.
2.
3.
4.
5.
6.

Frederick W Taylor
Henry Fayol
Frank B Gilbreth
Mary Parker Follet
Hennery Gantt
Elton Mayo

Frederick W Taylor (U.S.A)

Frederick W Taylor (U.S.A) (March 20, 1856 March 21, 1915) was an American mechanical engineer
who sought to improve industrial efficiency. He is regarded as the father of scientific management and
was one of the first management consultants. Taylor was one of the intellectual leaders of the Efficiency
Movement and his ideas, broadly conceived, were highly influential in the Progressive Era.
The Principles of Scientific Management is a monograph published by Frederick Winslow Taylor in
1911. This influential monograph, which laid out the principles of scientific management, is a seminal
text of modern organization and decision theory and has motivated administrators and students of
managerial technique. Taylor was an American mechanical engineer and a management consultant in
his later years. He is often called "The Father of Scientific Management." His approach is also often
referred to, as Taylor's Principles, or Taylorism. In his book, Taylor explained his principles of scientific
management. Taylor's scientific management consisted of four principles:
1. Replace rule of thumb with science
2. Harmony in Group Action
3. Cooperation
4. Maximum Out-put
5. Development of Workers
Henry Fayol ( French Industrialist) 29 July 1841 - 19 November 1925
Henri Fayol was a French mining engineer and management theorist. He developed the theory of
modern management. He studied at the mining school "Ecole Nationale Superieure des Mines" in SaintEtienne of France. He is well known as the father of modern management theory. Fayol started as an
engineer at a mining company and he became its managing director in 1888.

Fayol's contributions were first published in book titled "Administration Industrielle et Generale", in
1916. He looked at the problems of managing an organisation from top management point of view. He
has used the term 'administration' instead of 'management'. His contributions are generally termed as
operational management or administrative management.
Fayol has divided the activities of an industrial organization into six groups. They are

Technical: Related to production.

Commercial: Related to buying, selling and exchange.
Financial: It is search for capital and its optimum use.
Security: Protection of property and person.
Accounting (Including statistics).
Managerial: It includes planning, organization, command, coordination, and control.

His greatest contribution is the principles of management. His fourteen principles of management are:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.

Division of work
Authority and Responsibility
Discipline
Unity of command
Subordinate of individual interest to the general interest.
Unity of direction
Remuneration
Centralization
Scalar chain
Order
Equity
Stability
Initiative
Esprit de corps

Frank B Gilbreth
Initially Frank B Gilbreth was an apprentice in a brick company. Then he passed through the posts of
Tradesman, Foreman, Superintendent and Manager and eventually he realised all his ambitions. After
ten years of experience in a construction company he set up his own contracting business. His
contributions are as follows:
1. He developed motion study. According to him, purpose of motion study was to establish the
least effort methods of doing a work for workers.
2. Gilbreth evolved the principles of motion economy.
3. He introduced process chart, showing the various activities in a job.
4. He identified THERBLIGS the fundamental motion involved in doing an activity.
5. He developed micro-motion study and SIMO (simultaneous motion) chart.
6. He carried out studies on fatigue by lightening the load, spacing the work and providing rest
periods.

Mary Parker Follet

Mary Parker Follett (September 3, 1868 December 18, 1933) was an American social
worker, management consultant, philosopher, and pioneer in the fields of organizational
theory and organizational behavior. Along with Lillian Gilbreth, Mary Parker Follett was one of
two great women management gurus in the early days of classical management theory. Follett is
known to be "Mother of Modern Management". The Mary Parker Follett Theory of Management
is marked by such principles as the following:
1. Conflict resolution through Integration (i.e., identifying and meeting each party's
underlying and often compatible need, as opposed to attempting to meet the frequentlyincompatible expressed desire of each) often results in a win-win situation.
2. In Mary Parker Follett leadership theory, genuine power is not "coercive" ("power over")
but "coactive" ("power with").
3. True leaders, according to Follett's theory, "create group power, rather than expressing
personal power."
Scientific Management
The idea of Scientific Management was first introduced by F W Taylor. He published a book titled
principles of Scientific Management in 1911. Because of his work on this he was called as the
Father of Scientific Management.
Scientific Management may be defined as the process of evaluating and resolving problems that
are faced while accomplishing the desired objectives. By adopting scientific methods in
management it is possible to1. Determine work standards
2. Plan work methods
3. Establish control procedure to maintain standards
Objectives of Scientific Management
1. To achieve higher production and acceleration in the rate of productivity by the use of
standardized tools, equipments and methods.
2. Betterment in the quality of the products by research, quality control and effective inspection.
3. Decrease in the cost of production by systematic planning, regulation and cost control
techniques.
4. Avoidance of wastage in the use of resources, time and method of production.
5. Placement of the right person on the right job through scientific selection and training.
6. Setting-up a sound system of wage payment so as to attain maximum efficiency.
7. Ensuring a regular supply of goods to the consumers at reasonable prices.
MANAGEMENT THEORY
Management
The word management has been defined in different ways by different people. The important
definitions are as follows:

a) Management is distinct process consisting of planning, organisation, actuating, and

controlling performed to determine and accomplish the objectives by the use of people
and resources (George R Terry)
b) Management is the function of an enterprise which concerns itself with the direction and
control of the various activities to attain the business objectives (William Spriegel)
c) Management is simply the process of decision making and control over the action of
human beings for the purpose of achieving predetermined goals (Stainkly Vance)
d) Management may be defined as the art of securing maximum results with a minimum of
effort so as to secure maximum prosperity and happiness for both employers and employee
and give the public the best possible service (John F Mee)
Administration
Administration is the function in an industry involving determination of corporate policy, the
coordination of finance, production and distribution, settlement of the organization and
ultimate control of the executive.
Organization
Organization is a system in which groups of persons work together who have a definite
structural relationship to accomplish a common goal. In general, organisation is the
determination and assignment of duties to individuals in a structured way and there by to
accomplish the goals of the concern.
Levels of Management
There are three levels of management:
1. Top level management: it consist of the chairmen and head of the concerns like
Managing Director, General Manager and Works Manager.
2. Top level management: it consist of dept. heads like Personal Manager, Production
Manager, Purchase Manager, Finance Manager etc. they form the link between the
Top level management and Top level management.
3. Lower level management: it consist of Foremen, Supervisors, Chargemen and office
superintendent.
General Principles of Management
Fayol listed and reviewed fourteen principles of management on the following aspects.

1. Division of Work: He emphasizes the production of more and better work with the same
effort as the object of division of work. He stresses that each change of work, whether of
the worker or the manager, brings in its train an adaptation which reduces output. Whilst
advocating specialization and division of work as the best means of making use of
individuals and groups of people, he warns that division of work has its limits which must
not be exceeded.

2. Authority and Responsibility: He explains authority as "the right to give orders and the
power to exact obedience".
3. Discipline: He believes discipline is absolutely essential for the smooth running of
business. The best means of establishing and maintaining discipline are good superiors at
all levels, agreements as clear and fair as possible, and sanctions (penalty) judiciously
applied.
4. Unity of Command: Here he advocates that an employee must receive orders from one
superior only for any action whatsoever. Uneasiness is felt immediately when two superiors
wield their authority over the same person or department. He feels that dual command is a
perpetual source of conflict.
5. Unity of Direction: This is explained as "one head and one plan for a group of activities
having the same objective". This is essential for "unity of action, co-ordination of strength
and focusing of effort". Unity of direction refers to "one head, one plan" whilst unity of
command emphasizes "one employee to have orders from one superior only".
6. Subordination of Individual Interest to General Interest: The interest of one employee or
group of employees must not prevail over that of the concern. He stresses that although
this is so obvious, it is lost sight of because of ignorance, ambition, selfishness, laziness
and weaknesses. All human passions tend to cause the overlooking of the general interest.
7. Remuneration: Remuneration being the price of services rendered by personnel, should be
fair and must, as far as possible, afford satisfaction to both the personnel and the firm.
8. Centralization: He explains this as "everything which goes to increase the importance of
the sub-ordinate's role is decentralization, everything which goes to reduce it is
centralization". A certain extent of centralization or decentralization automatically exists
and it is more a matter of finding the "optimum degree for the particular concern".
9. Scalar Chain: He looks upon the scalar chain as "a chain of superiors ranging from the
ultimate authority to the lowest ranks". Thus the line of authority is routed via every link
in the chain by all communications which commence from or reach the ultimate authority.
This path is "disastrously lengthy in large concerns, notably In governmental ones". One
should not depart needlessly from the line of authority but it is even a greater error to stick
to it when detrimental to the business.
10. Order: The formula given here is "a place for everything and everything in its place" (for
material things) and "a place for everyone and everyone in his place" (for human order). It
is a principle of organization for arrangement of material things and human beings. It is a
must for both material order and social order.
11. Equity: "He feels that the head of the business must strive to instill a sense of equity
throughout all levels of the scholar chain". To evoke devotion and royalty from the
personnel, it is necessary to treat them with kindness. Equity results from kindliness and
justice.
12. Stability of Tenure of Personnel: He feels that instability of tenure constitutes the cause
and effect of bad management. Time is required for an employee to succeed in his new
work assuming he possesses these requisite qualities. He opines that often "a mediocre
manager who stays is infinitely preferable to outstanding managers who merely come and
go."

13. Initiative: He stresses the need to encourage and develop to the fullest extent initiative or
the "power of thinking out and executing". He advocates that the manager should even
"sacrifice some personal vanity" to provide this satisfaction to his subordinates.
14. Esprit de Corps: As "union is strength", harmony and union among the personnel
constitute the great strength of a concern. The dangers to be avoided are a misguided
interpretation of the motto "divide and rule" and misunderstandings caused through poor
communication.
Functions of Management
The basic aim of managing is to achieve certain objectives and goals. The manager must be sure of
the objectives he is willing to attain. The desired goals is attained by performing certain
fundamental management functions which are as follows1.
2.
3.
4.
5.
6.
7.
8.

Forecasting
Planning
Organising
Staffing
Directing
Coordinating
Controlling
Decision making

Forecasting- It involves estimation of the future work, as production, purchase, sales, etc. It begins
with sales forecasting and is followed by finance, purchase, production, profit, loss etc.
Planning- It is the basic function of management. It deals with chalking out a future course of
action & deciding in advance the most appropriate course of actions for achievement of predetermined goals. According to KOONTZ, Planning is deciding in advance - what to do, when to
do & how to do. It bridges the gap from where we are & where we want to be. A plan is a future
course of actions. It is an exercise in problem solving & decision making. Planning is determination
of courses of action to achieve desired goals. Thus, planning is a systematic thinking about ways
& means for accomplishment of pre-determined goals. Planning is necessary to ensure proper
utilization of human & non-human resources. It is all pervasive, it is an intellectual activity and it
also helps in avoiding confusion, uncertainties, risks, wastages etc.
Organizing- It is the process of bringing together physical, financial and human resources and
developing productive relationship amongst them for achievement of organizational goals.
According to Henry Fayol, To organize a business is to provide it with everything useful or its
functioning i.e. raw material, tools, capital and personnels. To organize a business involves
determining & providing human and non-human resources to the organizational structure.
Organizing as a process involves:

Identification of activities.
Classification of grouping of activities.

Assignment of duties.
Delegation of authority and creation of responsibility.
Coordinating authority and responsibility relationships.

Staffing- It is the function of manning the organization structure and keeping it manned. Staffing
has assumed greater importance in the recent years due to advancement of technology, increase in
size of business, complexity of human behavior etc. The main purpose of staffing is to put right
man on right job i.e. square pegs in square holes and round pegs in round holes. According to Kootz
& ODonell, Managerial function of staffing involves manning the organization structure through
proper and effective selection, appraisal & development of personnel to fill the roles designed un
the structure. Staffing involves:
Manpower Planning (estimating man power in terms of searching, choose the person and
giving the right place).
Recruitment, Selection & Placement.
Training & Development.
Remuneration.
Performance Appraisal.
Promotions & Transfer.
Directing- It is that part of managerial function which actuates the organizational methods to work
efficiently for achievement of organizational purposes. It is considered life-spark of the enterprise
which sets it in motion the action of people because planning, organizing and staffing are the mere
preparations for doing the work. Direction is that inert-personnel aspect of management which
deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement
of organizational goals. Direction has following elements:
Supervision
Motivation
Leadership
Communication
Supervision- implies overseeing the work of subordinates by their superiors. It is the act of
watching & directing work & workers.
Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work.
Positive, negative, monetary, non-monetary incentives may be used for this purpose.
Leadership- may be defined as a process by which manager guides and influences the work of
subordinates in desired direction.
Communications- is the process of passing information, experience, opinion etc from one person
to another. It is a bridge of understanding.
Controlling- It implies measurement of accomplishment against the standards and correction of
deviation if any to ensure achievement of organizational goals. The purpose of controlling is to
ensure that everything occurs in conformities with the standards. An efficient system of control
helps to predict deviations before they actually occur. According to Theo Haimann, Controlling
is the process of checking whether or not proper progress is being made towards the objectives and
goals and acting if necessary, to correct any deviation. According to Koontz & ODonell
Controlling is the measurement & correction of performance activities of subordinates in order to

make sure that the enterprise objectives and plans desired to obtain them as being accomplished.
Therefore controlling has following steps:
Establishment of standard performance.
Measurement of actual performance.
Comparison of actual performance with the standards and finding out deviation if any.
Corrective action.
Coordinating- Organizations have different people and departments working together. Achieving
harmony among different people and departments to reach the company goals by proper
understanding, cooperation and plans is called Coordination.
Decision making- It involves choosing a course of action regarding some important matters. A
good manager should make sound and logic decisions, so as to carry out the activities smoothly.
Modern Management Techniques
The important modern management techniques constitute a part of scientific management. The
important techniques are:
1. Management by objectives
2. Management of change
3. Management by exception
4. Management of conflict
5. Budgeting
6. Cost accounting
7. PERT
8. CPM

MEANING AND DEFINITIONS OF ORGANIZING

Organization is the foundation upon which the whole organization is built. Without efficient
organization, no management can perform its function smoothly. Sound organization contributes
greatly to the continuity and the success of organization. A poor organization structure makes good
performance impossible, no matter how good the individuals are.
The term organization connotes different things to different people. For example to the sociologists,
organization means a study of interactions of people, classes or hierarchy of an enterprise. To the
psychologists organization means an attempt to explain, predict and influence the behaviour of
individuals in an enterprise. The word organization is also used widely to connote a group of
people and the structure of relationships. In order to understand the meaning and characteristics of
organization, we shall study it under the following heads:
Organization as a group of persons.
Organization as a structure of relationship.

Organization as a function of management.

Organization as a process.
Organization as a group of persons: Organization is viewed as a group of people contributing
their efforts towards certain goal. The concept of organizing began at the early stages of human
civilization when two or more persons began to cooperate and combine together for fulfilling
their basic needs of food, clothing, shelter and protection of life. Organization begins when
people combine efforts for some common purpose. Chester I Barnard defined organization as
an identifiable group of people contributing their efforts. An organization comes into existence
when there are a number of persons in communication and relationship to each other and are
willing to contribute towards a common Endeavour. The group of people lay down rules and
regulations and the formal structure or relationship among themselves.
Organization as a structure of relationships: Some people view organization as a structure of
relationship. Organization sets up the scope of activities of the enterprise by laying down the
structure of relationships. If organization is merely recognized as structure, it will be viewed
as a static thing used to explain formal relationships. But an organization is a dynamic entity
consisting of individuals, means, objectives and relationships among the individuals. However,
the use of the term structure to denote organization is not used independently, but is combined
with the term organization either in the form of organization structure or structure of
organization.
Organization as a function of management: Organization is one of the basic functions of
management. It involves determination and provision of various resources for the achievement
of predetermined goal. Thus, organization is defined as a process of integrating and
coordinating the efforts of human, financial and other resources for the accomplishment of
certain objectives. Like planning, organizing is also applied in every aspect of management,
For example organization is necessary for planning, development, for formulation of plans and
policies.
Organization as a process: Organization is the process of establishing relationship among the
members of the organization. Using this process organization structure is crated. The
relationships are created in terms of authority and responsibility. Each person in the
organization is assigned specific responsibility or duty to perform and is granted the
corresponding authority to perform his duty.
According to Louise A Allen, Organization involves identification and grouping of activities to
be performed and dividing them among the individuals and creating authority and responsibility
relationship among them for the accomplishment of organizational objectives. Organizing being
process, consists of departmentalization, linking of departments, defining authority and
responsibility and prescribing authority relationships. The organization structure is the result of this
process.

STEPS IN ORGANIZING
While organizing, a manager differentiates and integrates the activities of his organization. By
differentiation is meant the process of departmentalization or segmentation of activities on the basis
of some homogeneity. Integration is the process of achieving unity of effort among various
departments, segments or subsystems.
Organization involves the following interrelated steps:
Consideration of objectives: The first step in organizing is to know the objectives of the
enterprise. Objectives determine resources and the various activities which need to be
performed and the type of organization which needs to be built for this purpose.
Objectives also serve as guidelines for the management and workers. They bring about
unity of direction in the organization.
Identification and grouping of activities: If the members of the group are to pool their
efforts effectively, there must be proper division of the major activities. Each job should
be properly classified and grouped. This will enable the people to know what is expected
of them as members of the group and will help in avoiding duplication of efforts. For
example, the total activities of an enterprise may be divided into major functions like
production, purchasing, marketing, finance etc., and such function is further subdivided
into various jobs. For example, in production department separate sections may be created
for research, industrial engineering etc. The jobs then can be classified and grouped to
ensure the effective implementation of other steps.
Assignment of duties: After classifying and grouping the activities into various jobs, they
should be allotted to the individuals for ensuring certainty of work performance. Each
individual should be given a specific job to do according to his ability and made
responsible for that.
Delegation of authority: Authority without responsibility is dangerous and responsibility
without authority is an empty vessel. Hence, corresponding to the responsibility authority
is delegated to the subordinates for enabling them to show work performance.

NATURE OF ORGANIZATION
The nature of organization can be highlighted by studying the following features:
Organization is always related to certain objectives: Whether it is organization of the
entire enterprise or part of it, organization is influenced by objectives. The operations are
divided; authority and responsibility are determined to achieve predetermined objectives.

An organization connotes a group of people: Mc Farland has defined organi-zation as

an identifiable group of people contributing their efforts towards the attainment of goals.
People form groups or organizations to accomplish common objectives and pool their
efforts by defining and dividing various activities, responsibility and authority.
Communication is the nervous system of organization: The organizational members are
able to communicate with each other and may coordinate their activities. No organization
can survive without an efficient system of communi-cation.
Organizing is a basic function of management: Organizing is done in relation to all
other functions of management, namely planning, staffing, directing and controlling and
in all the areas of business namely production, marketing, purchasing, personnel. The
organizing function is performed by all managers.
Organization is a continuous process: It is not a one step function. Managers are
continuously engaged in organizing and reorganizing.
Organization connotes a structure of relationship: The structure of relation-ship
deliberately created by the management is referred to as formal organiza-tion. An
organization may also have a network of social relationships that arise between people
working together. Such relationships are known as informal organization. In formal
organization people are able to communicate with each other, are willing to act and share
a purpose. In informal organization, people work together because of their likes and
dislikes.
Organization involves a network of authority and responsibility relationship:
Various positions are created; specific tasks are assigned to them. To perform the task, each position
is delegated adequate authority. Authority and responsibility relationships throughout the
organization must be clearly defined to achieve coordination and to avoid conflicts between
individuals and departments.

ORGANIZATION STRUCTURE
An organization structure shows the authority and responsibility relationship between the
various positions of the organization by showing who reports to whom. It is a set of
planned relationships between groups of related functions and between physical factors
and personnel required for the achievement of organizational goal. The structure of an
organization is generally shown on the organization chart or a job task pyramid. It shows
the authority and responsibility relationship between various positions in the
organization. A good organization structure should not be static but dynamic. It should
be subject to change from time to time in the light of changes in the business environment.

PURPOSE OF ORGANIZATION
Organization means a form of human association for the attainment of common objectives. An
industrial organization denotes a type of associationship of persons in relationship to some
economic activities. Obviously, the better the organization the fuller would be the achievement of
common objectives. Similarly, a loose organization implies an unhappy and dangerous state of
affairs. Organization is essential for the following purposes:
To facilitate pattern of communication: Organization structure provide pattern of
communication and coordination. By grouping activities and people, structure facilitates
communication between people centered on their job activities. People who have joint
problem often need to share information to solve the problem.
To allocate authority and responsibility: Organization structure allocates authority and
responsibility. It specifies who is to direct whom and who is accountable for what results.
The structure helps the organization members to know what his role is and how it relates
to others role.
To locate decision centers: Organization structure determines the location of decision
making in the organization. For example, a departmental store may leave pricing decision
to the lower level manager while in oil refinery pricing decision is at top level.
To create proper balance: Organization structure creates the proper balance and
emphasis of activities. Those more critical to the enterprises success might be placed
higher in the organization. For example R&D in pharmaceutical company might be
singled out for reporting to the managing director. Activity of comparable importance
might be placed at the lower level.
To stimulate creativity: Sound organization stimulates independent, creative thinking
and initiative by providing well-defined areas of work with broad attitude of the
development of new and improved ways of doing things.
To encourage growth: The organization structure provide framework within which an
enterprise functions. If the organization structure is flexible, it will help in meeting
challenges and creating opportunities for growth.
To make use of technological improvements: A sound organization structure which is
adoptable to changes can make the best possible use of latest technology. It can modify
the existing pattern of authority-responsibility relationships in the wake of technological
improvements.
PRINCIPLES OF ORGANIZATION

In order to facilitate the achievement of objectives, management thinkers have laid down certain
principles of organization. The principles are guidelines for planning organization structure.
Therefore, thorough understanding of the principles of organization is essential for good
organization. The principles of organization are discussed below:
Objectives: The objectives of the enterprise influence the organization structure. Every
part of the organization and organization as a whole should be geared to the basic
objective determined by the enterprise.
Specialization: Effective organization must promote specialization. The activities of the
enterprise should be divided according to functions and assigned to persons according to
their specialization.
Span of control: A manager can directly supervise only a limited number of executives.
Hence, it is necessary to have a proper number of subordinates answerable to a manager.
A maximum of six may be prescribed for this purpose.
Exception: This principle requires that organization structure should be so designed that
managers are required to go through the exceptional matters only. All the routine
decisions should be taken by subordinates, where as problems involving unusual matters
and policy decision should be referred to higher levels.
Scalar principle: This is also known as chain of command. There must be clear lines of
authority running from the top to the bottom. Authority is the right to decide, direct and
coordinate. Every subordinate must know who his superior is and to whom policy matters
beyond his own authority must be referred for decision.
Unity of command: Each subordinate should have only one supervisor whose command
he has to obey. Dual subordination must be avoided, for it causes uneasiness, disorder,
and indiscipline and undermine of authority.
Delegation: Proper authority should be delegated at the lower levels of the organization
also. The authority delegated must be equal to responsibility i.e., the manager should have
enough authority to accomplish the task assigned to him.
Responsibility: A superior should be held responsible for the acts of his subordinates. No
superior should be allowed to avoid responsibility by delegating authority to his
subordinates.
Authority: The authority is the tool by which a manager is able to accomplish the desired
objective. Hence, the authority of each manager must be clearly defined. The authority
and responsibility must be co-extensive in the organi-zation.

Efficiency: The organization should be able to attain the mission and objectives at the
minimum cost.
Simplicity: The organization structure should be as simple as possible with minimum
number of levels. A large number of levels of organization means difficulty of effective
communication and coordination.
Flexibility: The organization should be flexible, should be adaptable to changing
circumstances. It should permit expansion and replacement without dislocation and
disruption of the basic design. A sound organization must avoid complicated procedures,
red-tape and excessive complication of control so that it may adapt itself easily and
economically to business and technical changes.
Balance: There should be reasonable balance in the size of various depart-ments,
between centralization and decentralization. There must be balance in the formal structure
as regards to factors having conflicting claims.
Unity of direction: There must be one objective and one plan for a group of activities
having the same objective. Unity of direction facilitates unification and coordination of
activities at various levels.
Personal abilities: As organization is a formal group of people there is need for proper
selection, placement and training. Organization structure must ensure optimum use of
human resources.
DEPARTMENTATION
The horizontal differentiation of tasks or activities into discrete segments is called as
departmentalization or departmentation. Departmentation involves grouping of operating tasks into
jobs, combining of jobs into effective work group and combining of groups into divisions often
termed as departments. The aim is to take advantages of division of labour and specialization up
to a certain limit. There are several ways of Departmentation, each of which is suitable for particular
corporate sizes, strategies and purposes. The important methods of grouping activities may be
summarized as below:
Departmentation by functions: This is the simplest and most commonly used base for
Departmentation. Each major function of the enterprise is grouped into a department. For example
there may be production, finance, marketing and personnel department in an organization as shown
in fig.3.1. All functions related to production are grouped together to form production department,
similarly other departments are formed on the basis of function.

Board of Directors

Managing Director

Production
Manager

Marketing Manager

Finance Manager

Personnel Manager

Fig. Departmentation by functions

Advantages
It is simple and suitable for small organization which manufactures limited number of
products.
It promotes specialization.
It leads to improve planning and control.
Manpower and other resources of the company are effectively used.
Drawbacks
It fosters sub-goal loyalty. Department goal becomes important than organizational goal
resulting into interdepartmental conflicts.
Difficult to set up specific accountability and profit centers within functional departments
with the result that performance cannot be accurately measured.
Departmentation by product: The grouping of activity on the basis of product or product lines is
followed in multi-lines large scale organizations. All activities related to a particular product line
may be grouped together under the direction of a semi-autonomous division manager as shown in
fig
Advantages
It focuses individual attention on each product line.

It leads to specialization of physical facilities on the basis of product which results in

economy.
It is easier to evaluate and compare the performance of various product division.
It keeps problems of production isolated from others.
Board of Directors

Chief Executives

Production
Manager

Marketing Manager

Product A

Product B

Finance Manager

Personnel Manager

Product C

Fig. Departmentation by product

Departmentation by customers: This is used in the enterprises engaged in providing specialized
services to different classes of customers. Management groups the activities on the basis of
customers to cater to the requirements of clearly defined customer groups. For example, an
automobile service company may organize its departments as heavy vehicles servicing division,
car servicing division and scooter servicing division. Similarly an educational institute may have
departments for regular courses, evening and corresponding courses etc.
Departmentation by territory: Under this classification, the market area is broken up into sales
territories and a responsible executive is put in-charge of each territory. The territory may be known
as district, division or region. The field salesmen under respective regions report to their
corresponding sales supervisors, if any, who are reporting to their respective regional managers.
The fig. 3.3 is quite illuminating in this connection.

Sales Manager

Manager Northern
Region

Manager Eastern
Region

Manager Southern
Region

Manager Western
Region

Fig. Departmentation by territory

Departmentation by Process: Departmentation here, is done on the basis of several discrete process
or technologies involved in the manufacture of a product. For example, a vegetable oil company
may have separate departments for crushing, refining and finishing. A textile mill may have
departments for ginning, spinning, weaving and dyeing. A work that would otherwise be done in
several different locations in an enterprise is done in one place because of special equipments used.
TYPES OF ORGANIZATION
According to Kimball and Kimball The problem of an organization is to select and combine the
efforts of men of proper characteristics so as to produce the desired results. Nature, scale and size
of the business are the normal factors which determine forms of internal organization. The
following common types of organization find a place in the structure of internal organization.

Line, Military or Scaler Organization

Line organization is the simple and oldest type of organization and is also known of scalar or
military organization. The line organization represents the structure in a direct vertical relationship
through which authority flows. The line of authority (see fig 3.4) flows vertically downward from
top to bottom throughout the organization. The quantum of authority is highest at the top and
reduces at each successive level. Under line organization, each department is generally a complete
self-contained unit. A separate person will look after the activity of the department and has full
control over the department. The superior communicates his decision and orders to his
subordinates. The subordinates, in turn, can communicate them to those who are immediately under
them. This type of organization is followed in military.

The advantages of line organization are

Simplicity
Quick decision and speed of action.

Unity of control.
Clear division of authority and responsibility.
Discipline and better coordination
Direct communication.
Disadvantages
The organization is rigid and inflexible
Being an autocratic system, managers may become dictators and not leaders.
There is scope of favor-ism and nepotism.
Red-tape and bureaucracy.
Lack of specialization.

General Manager
GENERAL MANAGER

Production Manager

Finance Manager

Marketing Manager

Superintendent

Asst. Finance Manager

Asst.
Manager

Foreman

Accountant

Sales Supervisor

Workers

Clerks

Salesman

Fig. 3.4: Line organization

Marketing

Functional Organization
The line organization does not provide specialists in the structure. Many jobs require specialized
knowledge to perform them. In functional organization the specialists are made available in the top
positions throughout the enterprise. It confers upon the holder of a functional position, a limited
power of command over the people of various departments concerning their function. Functional
authority remains confined to functional guidance of different department.
Under functional organization, various activities of the enterprise are classified according to certain
functions like production, marketing, finance, personnel etc., and are put under the charge of
functional specialists as show in fig.3.5. A functional incharge directs the subordinates throughout
the organization in his particular area of business operation. That means that subordinates receives
orders and instructions not from one superior but from several functional specialists.
GENERAL MANAGER

Production
Director

Finance
Director

General Manager
Division X

Marketing
Director

General Manager
Division Y

Line Authority
Functional Authority
Fig. 3.5: Functional organization
The advantages of functional organization
Specialization.
Reduces the burden on the top executives.

Personal
Director

General Manager
Division Z

Offers greater scope for expansion.

A functional manager is required to have expertise in one function only. This makes it
easy for executive development.
Disadvantages
Violates principles of unity of command.
The operation of functional organization is too complicated.
It develops specialists rather than generalists.
Lack of coordination among functional executives which delays decision making.

Line and Staff Organization

In order to reap the advantages of both line organization and functional organization, a new type of
organization is developed i.e., line and staff organization. In line and staff organization, the line
authority remains the same as it does in the line organization. Authority flows from top to bottom.
In addition, the specialists are attached to line managers to advice them on important matters. These
specialists stand ready with their speciality to serve line men as and when their services are called
for to collect information and to give help which will enable the line officials to carryout their
activity better. The staff officials do not have any power of command in the organization as they
are employed to provide expert advice to the line manager. In most of the organization, staff
investigates and supplies information and recommendations to managers who takes decision.
Specialized staff positions are created to give counsel and assistance in each specialized field of
effort as show in fig 3.6.

BOARD OF DIRECTORS

Executive Committee

Managing
Director

(Staff)

Manager
Division A

Controller of Finance
(Staff)

Manager
Division B
Fig. 3.6: Line and staff organization

Manager
Division C

Advantages

Specialized knowledge

Reduction of burden on line managers.

Better decisions, as staff specialists help the line managers

Unity of command

Flexible when compared to functional organization.

Disadvantages

Allocation of duties between line and staff is not clear.

There is generally conflict between line and staff executives.

Since staff is not accountable, they may not be performing well.

Difference between orientations of line and staff. Line executives deals with in problem
in a more practical manner while staff, tend to be more theoretical.

Committee Organization
A committee is a body of persons appointed or elected to meet on an organized basis for the
consideration of matters brought before it. A committee is a group of persons performing a group
task with the object of solving certain problems. The area of operation of a committee is
determined by its constitution. A committee may formulate plans, review the performance of
certain units or may only have the power to make recommendation. Committees help in taking
corrective decision, coordinating the affairs of different departments and meeting communication
requirements in the organization. Committees can be broadly classified into advisory committees
and executive committees. Advisory committees have only a recommenders role and cannot
enforce imple-mentation of their advice or recommendation. The examples of advisory committees
are works committees, finance committees etc., Whenever committees are vested with line
authority, they are called as executive committees. Unlike advisory committee, executive
committees not only take decisions but also enforce decisions and thus perform a double role of
taking decision and ordering its executive. The board of directors of a company is an example of
an executive committee.
Advantages of Committees

Committees provide a forum for the pooling of knowledge and experience of many
persons of different skills, ages and backgrounds.
Committees are excellent means of transmitting information and ideas both upward and
downward.
Committees are impersonal in action and hence their decisions are generally unbiased
and are based on facts.
When departmental heads are members of committee, people get an opportunity to
understand each others problems and hence improve coordination.
Weaknesses of Committees
In case a wrong decision is taken by committee, no one is held responsible which may
results in irresponsibility among members.
Committees delay action
Committees are expensive form of organization.
Decisions are generally arrived at on the basis of compromise and hence they are not best
decision.
As committee consists of large number of persons, it is difficult to maintain secrecy

Chapter 2 MANAGEMENT BY OBJECTIVES [MBO]

Management by objectives or results is an important practice for accomplishing the objectives of an
enterprise in an effective way. The concept of MBO was introduced by Peter Drucker and later
developed by various experts like John Humble, Dale and George Ordiome. In recent years MBO has
become philosophy of managing in many enterprises and is recognized as most dynamic and exciting
in the area of management.
John Humble defined managing by objectives as a dynamic system which integrates the companys
need to achieve its goals for profit and growth with managers need to contribute and develop himself.
In the words of George S. Ordiome the system of MBO can be described as a process whereby the
superior and subordinate managers of an organization jointly identify its common goals, define each
individuals major areas of responsibility in terms of results expected of him, and use these measures as
guides for operating the unit and assessing the contribution of each of its members. He also stressed that
MBO is not a set of rules, a series of procedures or methods, but it is a way of thinking about
management.
Management by objectives calls for regulating the process of managing in terms of meaningful, specific
and variable objectives at different levels of management hierarchy. MBO moulds planning, directing
and controlling in a number of ways. It stimulates meaningful action of better performance and higher
accomplishment. It is closely associated with the concept of decentralization because decentralization
cannot work without the support of management by objectives.
Features of MBO
An attempt is made by the management to integrate the goals of an organization and individuals. This
will lead to effective management.
MBO emphasize not only on goals but also on effective performance.
It pays constant attention to refining, modifying and improving the goals and changing the
approaches to achieve the goals on the basis of experience.
It increases organizational capability of achieving goals at all levels.
A high degree of motivation and satisfaction is available to employees through MBO.
Recognizes the participation of employees in goal setting process.
Aims at replacing the exercise of authority with consultation.
Encourages a climate of trust, goodwill and a will to perform.
Steps in Management by Objectives
The following steps are involved in MBO
Setting of organizational objectives: The first step in MBO is defining organizational
objectives. The definition of organizational objectives states why the business is started and exists.
Long-term objectives followed by short-term objectives are framed taking into account the feasibility
of achieving them. The objectives are framed on the basis of availability of resources.
Setting departmental objectives: Objectives for each department, division and section are
framed on the basis of overall objectives of the organization. Period within which these objectives
should be achieved is also fixed. Goals or objectives are expressed in a meaningful manner.
Fixing key result areas: Key result areas are fixed on the basis of organiza-tional objectives
premises. Key result areas are arranged on the basis of priority. Key result areas indicate the strength of
an organization. The examples of key result areas are profitability, market standing, innovation etc.

Setting subordinate objectives or targets: Departmental objectives are then set by

departmental managers, and get them approved by the top management. This process of setting the
objectives is repeated at the lower levels of manage-ment. At each level, objectives are set in verifiable
unit so that performance of every department and individual may be reviewed after the end of a particular period.
Appraisal of activities: In this step, superiors periodically review the progress and the
subordinates performance is evaluated against the specified standards and initiates corrective action.
The superior should identify the reasons for failure of achieving objectives and should tackle such
problems.
Reappraisal of objectives: An organization has to operate in a dynamic world. So the top
management should review the organizations objectives to frame the objectives according to the
changing condition.
Benefits of MBO
The following are the benefits of MBO
Managers are involved in objectives setting at various levels of management under MBO and
this commitment ensures hard work to achieve them.
MBO process helps the managers to understand their role in the total organization.
MBO provides a foundation for participative management. Subordinates are also involved in
goal setting.
A department does not work at cross purpose with another department. In other words, each
departments objectives are consistent with the objectives of the whole organization.
Systematic evaluation of performance is made with the help of MBO.
MBO gives the criteria of performance. It helps to take corrective action.
MBO motivates the workers by job enrichment and makes the jobs meaningful.
The responsibility of a worker is fixed through MBO.
MANAGEMENT BY OBJECTIVES (MBO)
Meaning :
An organisation can have many objectives. The objectives of the workers may differ from that of
management. The Principles of MBO aims at co-ordinating the individual goals with that of
organisational goals. Through this principle, the management and workers work without any conflicts.
It helps to realise the organisational goals quickly without unnecessary efforts.

1
SETTING
OBJECTIVES
2
4
DEVELOPING
APPRAISING
ACTION PLANS
ANNUAL
PERFORMANCE
3
CONDUCTING
PERIODIC
REVIEWS
Fig MBO
DEFINITIONS OF MBO : Each and Every employee of an organisation works whole heartedly
towards the attainment of the objectives of an organisation is known as Management by objectives: Peter F. Drucker.
John Humble calls it a dynamic System which integrates the company need to achieve its goal for
profit and growth with managers need to contribute and develop himself.

PRINCIPLES/STEPS IN MANAGEMENT BY OBJECTIVES :

MBO comprises of the three important principles.
1. FRAMING THE OBJECTIVES :
Objectives can be framed based on the following steps.
a ) EACH AND EVERY OBJECTIVE HAS DIFFERENT GOALS.:
Objectives attained in the lower level help in the achievement of objectives at the higher level.
Each objective depends on the objective below it and helps in achievement of Upper level objectives.
These steps help in the achievement of upper level objectives by directing the members and
Departmental activities.
b ) AIMS OF MANAGEMENT BY OBJECTIVES :
Each and every activity of the organisation is directed towards satisfying the goals. This is the
last stage of the organisation. Objectives may be short and clear. The objectives must be easily
understood by persons who are involved in the activity of achieving them. Goals must agree with the
policies and procedures of the organisation. Goals must be efficiently evaluated, dependent on decision
and dependable. Goals must be reachable within a given period.

c ) CLEAR CUT AIMS :

The indivudaual goals and organisatinal goals must be clear. If the aims are not clear then
confusion arises. Goals must be fixed clearly at all management levels.
2. IMPLEMENTATION :
Managers require efficiency. Intelligence and ability inorder to attain the common objective of
the organisation. They must be properly remunerated and motivated so that they will put on best efforts
in management by objectives. Top level executives must not enforce their control through management
by objectives, otherwise it will change into control by objectives.
3. EVALUATING THE RESULTS :
The objective fixed must be evaluated with the results obtained. The managers at all levels must
have a watch on the activities of the subordinates to attain the objectives and after a specified period the
results achieved have to be evaluated.
MBO
ORGANISATION

EMPLOYEES
=

OBJECTIVE

OBJECTIVES

MBE
Fig

MBO

& MBE
MANAGER
INTERFERER ONLYWHEN
THERE IS A MISTAKE

ADVANTAGES OF MBO

It promotes better communication relationship between the superior and his

subordinates.
It gives the subordinate an opportunity to fix his own targets in consultation
with his superior.
As the subordinates have the freedom to determine their own targets, they feel
motivated.
The periodic review of the subordinates performance enables him to know
whether he is proceeding in the right direction.

DIS ADVANTAGES OF MBO

The superior and his subordinate may have to meet several times for the sake of
setting the objectives mutually.

Periodic review of the subordinates performance involves lot of time and also paper
work.

MBO has not much to do with the lower levels of management.

CONTROL BY EXCEPTION OR MANAGEMENT BY EXCEPTION (MBE)

It is a management technique by which managers concentrate only on exceptional deviations instead of
trying to correct each and every deviation. The advantage of the technique of Management by Exception
is that it allows the manager to concentrate on problems that need his attention and to avoid dealing
with those that can be well handled by the subordinates themselves.
ADVANTAGES OF MBE

It allows the manager to devote more time for important issues by letting the
subordinates deal with the issues of a routine nature.

As the manager need not bother about routine matters.

Since the manager devotes more time for vital issues, he will be able to make better decisions.

The subordinates are given authority to make decisions on certain matters without any
interference by the executives.
The management is also able to utilize the available talent at the lower levels.

LIMITATIONS OF MBE

There is no parameter available by which one can differentiate important deviations

from the unimportant ones.

Only an organisation that has a perfect system of control will be able to employ the
technique of MBE.

It may lead to dispersal of authority that has its own limitations.

ORGANIZATIONAL CHANGE AND DEVELOPMENT

Introduction
Change is a constant, a thread woven into the fabric of our personal and professional lives. Change
occurs within our world and beyond -- in national and international events, in the physical environment,
in the way organizations are structured and conduct their business, in political and socioeconomic
problems and solutions, and in societal norms and values. As the world becomes more complex and
increasingly interrelated, changes seemingly far away affect us. Thus, change may sometimes appear
to occur frequently and randomly. We are slowly becoming aware of how connected we are to one
another and to our world. Organizations must also be cognizant of their holistic nature and of the ways
their members affect one another. The incredible amount of change has forced individuals and
organizations to see the big picture and to be aware of how events affect them and vice versa.
Organizational development (OD) is a field of study that addresses change and how it affects
organizations and the individuals within those organizations. Effective organizational development can
assist organizations and individuals to cope with change. Strategies can be developed to introduce
planned change, such as team-building efforts, to improve organizational functioning. While change is
a given, there are a number of ways to deal with change -- some useful, some not. Organizational
development assists organizations in coping with the turbulent environment, both internally and
externally, frequently doing so by introducing planned change efforts.
Organizational development is a relatively new area of interest for business and the professions. While
the professional development of individuals has been accepted and fostered by a number of
organizations for some time, there is still ambiguity surrounding the term organizational development.
The basic concept of both professional development and organizational development is the same,
however, with an essential difference in focus. Professional development attempts to improve an
individuals effectiveness in practice, while organizational development focuses on ways to improve an
organizations overall productivity, human fulfillment, and responsiveness to the environment
(Cummings & Huse, 1988). These goals are accomplished through a variety of interventions aimed at
dealing with specific issues, as well as through ongoing processes.
This chapter provides an overview of both change and organizational development. Educators,
including those in the judiciary, must be familiar with the dynamics of organizational change, since all
educational activities, both at the individual and organizational level, deal with effecting change.
Organizational development and change efforts go hand-in-hand; judicial educators who are interested
in effecting change within their organizations must first thoroughly understand the dynamics of change.
They must think in terms of the court system and the judicial education apparatus as organizations for
which they may play a role as change agent. Within different parts of these systems, judicial educators
may play different roles in the change process.
Organizational development will also be discussed in this chapter. One specific OD strategy, teambuilding, will be examined in some depth. This strategy, if institutionalized effectively, can reduce the
need for outside consultants.
It is important to include a chapter on organizational change and development in this manual to address
issues within the larger frameworks that exist for most judicial educators. Change affects every

individual and every organization. Moreover, all of the components of the program planning sequence
discussed in this manual are administered within the setting of an organization, a committee or board,
or some type of team. As more and more work gets accomplished through teams, it becomes
increasingly important to learn how to translate organizational concepts to the small group environment.
The team approach is often being used to accomplish short-term projects, such as planning programs,
conducting a needs assessment, or developing a new curriculum. A teams capacity to create a shared
vision for the task at hand and work together in the midst of a turbulent environment underlies its ability
to be effective. Organizational change and development is a fitting summary chapter for this judicial
educators manual since it deals with both effecting change (underlying much of education) and
managing change.

Chapter 3 Industrial

Ownership

The different types of industrial ownership

1.
2.
3.
4.
5.

Single ownership
Partnership
Joint Stock Companies
Cooperative Organization
State and Central Government Organization

Single Ownership
In this type a single person will have the possession of the assets. He will have the right to
formulate his own policies for the growth of company; he will enjoy all profits or bear losses, if any.
A single ownership works well when the concern is small, investment is around rupees 10 lakhs,
and controllable by a single person. Examples of this type of ownership are painting press, rice mills,
small fabrication and general workshops, ancillary units etc.
Advantages
1.
2.
3.
4.
5.
6.

Easy to start and operate.

Controlling is easier, actions are faster.
Owner is free to take decisions, and can maintain secrets.
All profits are enjoyed by the owner
Minimum business and legal restrictions.
Easy to liquidate the company.

Disadvantages
1.
2.
3.
4.
5.
6.

Only one person is liable to all obligations and debts.

Availability of funds is less for growth and expansion.
If fails, personal and business properties are taken by creditors to see their claims.
Life of single ownership companies is limited.
Employees get no extra benefits.
Specialization will be normally absent.

PARTNERSHIP
If in company the number of owners is more than two and less than two such a ownership is
called partnership. Here all partners discuss together take decision on a company matters. The
investments may be up to few crore of rupees, depending on the size and machineries. All partners share
the profit equally.
Types of Partners

Active partners those partners invest and take part in management activities.
Sleeping partners those partners invest but do not take part in management activities.

Advantages
1.
2.
3.
4.
5.

Adequate capital is available for investment and expansion programme.

Responsibility can be divided among different partners and easily performed.
Because of more number of owners, tax payable on profits will be
Losses are shared by all and hence burden on each minimum.
Company activities will be more systematic.

Disadvantages
1.
2.
3.
4.
5.

Establishment requires more legal formalities to fulfill.

Possibility of misunderstandings among partners is there, affecting business.
Difficult to maintain secrets of the company
Death or lunacy of any one of the partners affects the activities.
Each partners will have unlimited liability for the company debts

Joint stock company

It is formed by the combination of individuals who invest capital as shares, and are called as
share holders. Joint stock companies are of t6wo types.

Private limited company

Public limited company

Private limited company.

It consist of share holders between 2and 50, who are the actual owners. The members invest
money equally, and they may be active or sleeping members of the company. The shares cannot be
transferred to any individual or public to start a business a private limited company need not have to
obtain any commencement certificate from the registrar of joint stock companies. It also need not have
to file any documents with the registrar. It has to get audited its annual accounts and a copy of the
statements of annual returns should be send to the registrar.
Public limited company
In this: the capital is collected from the public in the form of shares. The minimum number of
shareholders is 7 and there is no limit for the maximum. The shares can be easily transferred to any
person by sale. The share holders, the actual owners of the management aspects. Among the board of
directors, one director is elected as Managing Director. The company holds the general body meeting
every year and gives the details of the financial statements to each and every share holders the profit
earned is distributed among the share holders has dividend.
Responsibilities of Board of Directors
The main responsibilities are
1. To make policies: the board of directors of a joint stock company it to primarily formulate the
policies essential for the organization based on which company can be run.
2. To take decision: the sole responsibility of making suitable decisions on all company related
matters is with the board of directors. They can take decisions on the change of company

policies, change of product, method of manufacturing, diversification, making strategies,

employment, and finance.
3. To run the company: the board of directors is also responsible for the smooth running of the
company. This involves proper planning, administration and management of the organization.
Functions of managing director of a joint stock company
The managing director is the elected representative of the board of directors his function includes
1.
2.
3.
4.
5.
6.

To implement the policies and decisions of the board of directors.

To control the administration of the company
To take the overall control of the day to day activities
To decide on the major activities of production, planning, and sales.
To decide on the change in the product and marketing strategies.
To look into the functioning and implementation of new projects.

Incorporation of a joint stock company (public limited company)

1. The public limited company has to form a list of directors who are willing to start a new
business
2. The it has to file with the registrar of joint stock companies, the details of name of the company
to be started, the capital to be raised from the public, the type of product, along with the consent
of the directors.
3. After receiving conformation from the registrar the company has to issue a prospectus to the
public and details of shares that are offered. The share value, called the phase value may be rs
10, 20, 50 or 100. This is generally done by issuing advertisements in news papers.
4. Generally the shares are distributed to the public through commercial banks and agencies on
behalf of the companies. The shares should be allotted within 180 days from the date of issue
of prospectus.
5. After collecting the capital from the public the certificates to commence the business from the
registrar should be obtained and can start the activities.
Comparison between private and public limited company
1. In private limited company capital is collected from the private partners while in public limited
company, the capital is collected from the public by issuing shares.
2. The numbers of owners in private limited company is between 2 and 50, but in public limited
company the minimum is 7 and maximum is unlimited.
3. In private limited company, the shares are not transferable; whereas in a public limited
company, the shares can be sold
4. The private limited company requires no certificates from the registrar of joint stock company
for commencement of business; but a public limited company has to obtain certificate for the
commencement and file the documents like list of directors, capital investment, nature of
activities etc.
5. Both have to hold annual meetings about the company activities.
6. The private limited company need not have to circulate the balance sheet, profit and loss
accounts etc, among its members; while in case of a public limited company it has to send its
financial statements to the shareholders as well to the registrar of Joint Stock Company.
7. Directors are subjected to rotation in case of public limited company, and are elected by the
shareholders. But in a private limited company the owners themselves are the directors.

Advantages of joint stock company

1.
2.
3.
4.
5.

Large amount of capital can be raised

The liability is limited to each share.
Shares can be transferred.
Losses are shared by every shareholder and hence burden is minimum.
Business is more systematic, and employees are more beneficial.

Disadvantages
1.
2.
3.
4.
5.

To start with legal formalities are more

It is difficult to maintain secrecy
Highly paid officials like general managers
Management is taken over by big share holders
More possibilities of misuses exists.

Cooperative societies
These are formed with a view to help the public in their daily requirements. It provides facilities
to its members I,e. shareholders without profit. Its aim is to serve at rates less than those of the market.
Members can seek financial helps at cheaper interests, goods and services at minimum profit.
In this, shareholders elect a Board of Directors, and officials are elected or recruited. Each
member has one vote, due to which power concentration in few persons is not possible.
Advantages
1.
2.
3.
4.

Every day needs can be set at lower price

Because the societies are registered and legal, they can seek financial help from the government
The services are not profit oriented.
It brings cooperation among the society and people.

Disadvantages
1.
2.
3.
4.

Since it is not profit oriented, members may not work with interest.
Members in top position try to take advantage.
Conflicts may exist to enjoy powers.
Limited only to small and medium organizations.

State and central government organization

State and central organizations are similar to public limited joint stock companies. But here
government owns more share I,e more than fifty % and operations are controlled by the government
itself. The Directors and Managing Directors and all other officials are appointed by either direct
government or by the management with the approval of the government. Such organization are
generally large in size because of more facilities.
Advantages
1. Huge capital is available for the growth and expansions.
2. Modern techniques are feasible for applications.
3. Better employment opportunities.

4. Management is responsible for the government and hence, runs a careful administration.
5. Employees, get maximum benefits.
6. Help for the national progress.
Disadvantages
1. Generally labour problem arises because of more numbers of workers.
2. Workers may not obey orders as they are supported by their trade unions and their jobs are
more secured.
3. More possibilities for corruption and favourism at higher levels.
4. Organization may go into losses as the number of employees is more and more facilities are
provided at company costs.
5. Incompetent and non intelligent persons may occupy, higher levels because of certain policies.
Methods of raising capital
Following are the various methods of raising capitals to start an industry.
1.
2.
3.
4.
5.
6.

Partnership
Loans
Hire purchase
Share capital
Corporate bonds
Public deposits.

Partnership

Capital can be raised from some lakhs to a few crores for starting small and medium scale
industries by partnership.
Since each partner is capable of investing some lakhs, the total capital would fulfill the
requirement of the investment. Private limited company raises capital by this method.

Loans
Nowadays the best way to raise capital is by loans. The amount may be some lakhs to a few crore of
rupees. In these days, due to liberal government policies to promote Industrial Developments small
scale industries get the benefits like low interest rate subsidy etc.
Hire Purchase
In this method, instead of raising capital for starting an industry, the necessary machineries,
raw materials can be purchased on hire. The hirer has to pay the money towards machineries in number
of installments. After complete payment of the costs, plus interest charged, the hirer owns that property.
Shares
This method is suitable when huge capital of some crores is to be raised for large scale organizations
The different types of shares are

Preference share: irrespective of the amount of profit these shares are first paid the dividend if the
company goes into losses, preference share holder can exert powers and take over control from ordinary
share holder.
Ordinary share: but the dividend is declared only after declaring to the preferential shares. These shares
may not receive any dividend if the company makes no profit.
Deferred share: they receive dividend only after paying to preferences share and ordinary shares. At the
end the profit remained is shared by these share holders.
Corporate bonds
Corporate bonds or debentures
a. Debentures
b. Secured bonds
Debentures: debentures are a certificate issued by the corporation. They receive a fixed rate of interest
and repaired after stated number of years. The debentures holders have no rights in management
Debentures are unsecured bonds and have no claim on company assets I cases of losses.
Secured bonds: unlike debenture-holder, a secured bond holder claim on the assets of the organization
in the event of losses and he does not get any returns. Therefore, secured bonds and can be easily to
public, compared to debentures.
Public deposits
In this method of raising capital company accepts fixed deposits from the public, for various periods,
generally half a year to three year. They pay higher interests for the deposits of longer periods, and
lower interests for shorter periods.

Chapter 4

Personnel Management

Personnel Management
Personnel management can be defined as obtaining, using and maintaining a satisfied workforce. It is a
significant part of management concerned with employees at work and with their relationship within
the organization.
According to Flippo, Personnel management is the planning, organizing, compensation, integration
and maintenance of people for the purpose of contributing to organizational, individual and societal
goals. According to Brech, Personnel Management is that part which is primarily concerned with
human resource of organization.

Nature of Personnel Management

1. Personnel management includes the function of employment, development and compensation- These
functions are performed primarily by the personnel management in consultation with other departments.
2. Personnel management is an extension to general management. It is concerned with promoting and
stimulating competent work force to make their fullest contribution to the concern.
3. Personnel management exists to advice and assist the line managers in personnel matters. Therefore,
personnel department is a staff department of an organization.
4. Personnel management lays emphasize on action rather than making lengthy schedules, plans, work
methods. The problems and grievances of people at work can be solved more effectively through
rationale personnel policies.
5. It is based on human orientation. It tries to help the workers to develop their potential fully to the
concern.
6. It also motivates the employees through its effective incentive plans so that the employees provide
fullest co-operation.
7. Personnel management deals with human resources of a concern. In context to human resources, it
manages both individual as well as blue- collar workers.

Functions of Personnel Management

Following are the functions of Personnel Management:
1) Selection and Maintenance of Manpower
2) Education and Training of Employees

3) Maintaining Employees Relationship

4) Maintaining Employees Safety
5) Maintaining Employees Health
6) Maintaining Employees Welfare

1) Selection and Maintenance of Manpower

The primary function of function of personnel management is to select suitable candidates to the
required position in an organization. This involves advertising, interviewing, recruitment, induction,
placement and training of fresh employee. ALSO, it has to look into matters, like maintaining employee
records, merit rating, promotion, transfer, external training etc.
2) Education and Training of Employees
Depending upon the nature of duties to be performed by fresh employees, they should be given
education and practical training. Present employees may also require training when their nature of duties
are to be changed, as in the case of change of products, expansion and diversification.
3) Maintaining Employee Relationship
This function involves maintaining service records of employees, payment of wages and salaries, also
increments, handling labour problems, maintaining discipline, motivating the employees etc.
4) Maintaining Employee Safety
In an industries there are more possibilities of accidents and damages to the employees. This may be
due to improper operation, maintenance, overloading of machineries etc. Thus the personnel
management should educate the employees properly about the maintenance, operation and has to
provide safety devices for workers operating in dangerous environments.
5) Maintaining Employee Health
The personnel management should provide facilities like hospitals, first-aids, play grounds for
employees to be healthy and fresh. Also, the working environment should be hazard-less to human
health and as in cases of chemical, cement, gas and such plants proper preventive devices should be
provided.
6) Maintaining Employee Welfare
The personal management has to look after providing facilities to the employees, like group insurance,
profit sharing, pension, provident funds etc., for their future life. Also it should schools and colleges for
the education of the employees children. It should give housing facilities and arrange recreational plans
like cinema, parks etc.

Manpower Planning which is also called as Human Resource Planning consists of putting right
number of people, right kind of people at the right place, right time, doing the right things for which
they are suited for the achievement of goals of the organization. Human Resource Planning has got an
important place in the arena of industrialization. Human Resource Planning has to be a systems
approach and is carried out in a set procedure.
The procedure is as follows:
1. Analyzing the current manpower inventory 3
2. Making future manpower forecasts
3. Developing employment programmes
4. Design training programmes

Steps in Manpower Planning

1. Analyzing the current manpower inventory- Before a manager makes forecast of future manpower,
the current manpower status has to be analyzed. For this the following things have to be noted

Type of organization
Number of departments
Number and quantity of such departments
Employees in these work units

Once these factors are registered by a manager, he goes for the future forecasting.
2. Making future manpower forecasts- Once the factors affecting the future manpower forecasts are
known, planning can be done for the future manpower requirements in several work units.
The Manpower forecasting techniques commonly employed by the organizations are as follows:
i. Expert Forecasts: This includes informal decisions, formal expert surveys and Delphi technique.
ii. Trend Analysis: Manpower needs can be projected through extrapolation (projecting past trends),
indexation (using base year as basis), and statistical analysis (central tendency measure).
iii. Work Load Analysis: It is dependent upon the nature of work load in a department, in a branch or
in a division.
iv. Work Force Analysis: Whenever production and time period has to be analyzed, due allowances
have to be made for getting net manpower requirements.
v. Other methods: Several Mathematical models, with the aid of computers are used to forecast
manpower needs, like budget and planning analysis, regression, new venture analysis.
3. Developing employment programmes- Once the current inventory is compared with future
forecasts, the employment programmes can be framed and developed accordingly, which will include
recruitment, selection procedures and placement plans.

4. Design training programmes- These will be based upon extent of diversification, expansion plans,
development programmes, etc. Training programmes depend upon the extent of improvement in
technology and advancement to take place. It is also done to improve upon the skills, capabilities,
knowledge of the workers.

Recruitment:
1. Internal Recruitment is a recruitment which takes place within the concern or organization.
Internal sources of recruitment are readily available to an organization. Internal sources are primarily
three Transfers, promotions and Re-employment of ex-employees. Re-employment of ex-employees
is one of the internal sources of recruitment in which employees can be invited and appointed to fill
vacancies in the concern. There are situations when ex-employees provide unsolicited applications also.
Internal recruitment may lead to increase in employees productivity as their motivation level increases.
It also saves time, money and efforts. But a drawback of internal recruitment is that it refrains the
organization from new blood. Also, not all the manpower requirements can be met through internal
recruitment. Hiring from outside has to be done.
Internal sources are primarily 3
a. Transfers
b. Promotions (through Internal Job Postings) and
c. Re-employment of ex-employees - Re-employment of ex-employees is one of the internal sources
of recruitment in which employees can be invited and appointed to fill vacancies in the concern. There
are situations when ex-employees provide unsolicited applications also.
2. External Recruitment External sources of recruitment have to be solicited from outside the
organization. External sources are external to a concern. But it involves lot of time and money .The
external sources of recruitment include Employment at factory gate, advertisements, employment
exchanges, employment agencies, educational institutes, labour contractors, recommendations etc.

a. Employment at Factory Level This a source of external recruitment in which the applications for
vacancies are presented on bulletin boards outside the Factory or at the Gate. This kind of recruitment
is applicable generally where factory workers are to be appointed. There are people who keep on
soliciting jobs from one place to another. These applicants are called as unsolicited applicants. These
types of workers apply on their own for their job. For this kind of recruitment workers have a tendency
to shift from one factory to another and therefore they are called as badli workers.

b. Advertisement It is an external source which has got an important place in recruitment procedure.
The biggest advantage of advertisement is that it covers a wide area of market and scattered applicants
can get information from advertisements. Medium used is Newspapers and Television.
c. Employment Exchanges There are certain Employment exchanges which are run by government.
Most of the government undertakings and concerns employ people through such exchanges. Now-adays recruitment in government agencies has become compulsory through employment exchange.

d. Employment Agencies There are certain professional organizations which look towards
recruitment and employment of people, i.e. these private agencies run by private individuals supply
required manpower to needy concerns.
e. Educational Institutions There are certain professional Institutions which serve as an external
source for recruiting fresh graduates from these institutes. This kind of recruitment done through such
educational institutions is called as Campus Recruitment. They have special recruitment cells which
help in providing jobs to fresh candidates.
f. Recommendations There are certain people who have experience in a particular area. They enjoy
goodwill and a stand in the company. There are certain vacancies which are filled by recommendations
of such people. The biggest drawback of this source is that the company has to rely totally on such
people which can later on prove to be inefficient.
g. Labour Contractors These are the specialist people who supply manpower to the Factory or
Manufacturing plants. Through these contractors, workers are appointed on contract basis, i.e. for a
particular time period. Under conditions when these contractors leave the organization, such people
who are appointed have to also leave the concern.

Selection:
The Employee selection Process takes place in following order1. Preliminary Interviews- It is used to eliminate those candidates who do not meet the minimum
eligibility criteria laid down by the organization. The skills, academic and family background,
competencies and interests of the candidate are examined during preliminary interview. Preliminary
interviews are less formalized and planned than the final interviews. The candidates are given a brief
up about the company and the job profile; and it is also examined how much the candidate knows about
the company. Preliminary interviews are also called screening interviews.
2. Application blanks- The candidates who clear the preliminary interview are required to fill
application blank. It contains data record of the candidates such as details about age, qualifications,
reason for leaving previous job, experience, etc.
3. Written Tests- Various written tests conducted during selection procedure are aptitude test,
intelligence test, reasoning test, personality test, etc. These tests are used to objectively assess the
potential candidate. They should not be biased.
4. Employment Interviews- It is a one to one interaction between the interviewer and the potential
candidate. It is used to find whether the candidate is best suited for the required job or not. But such
interviews consume time and money both. Moreover the competencies of the candidate cannot be
judged. Such interviews may be biased at times. Such interviews should be conducted properly. No
distractions should be there in room. There should be an honest communication between candidate and
interviewer.
5. Medical examination- Medical tests are conducted to ensure physical fitness of the potential
employee. It will decrease chances of employee absenteeism.

6. Appointment Letter- A reference check is made about the candidate selected and then finally he is
appointed by giving a formal appointment letter.
Training:
Training is generally imparted in two ways:
1. On the job training- On the job training methods are those which are given to the employees within
the everyday working of a concern. It is a simple and cost-effective training method. The in-proficient
as well as semi- proficient employees can be well trained by using such training method. The employees
are trained in actual working scenario. The motto of such training is learning by doing. Instances of
such on-job training methods are job-rotation, coaching, temporary promotions, etc.
2. Off the job training- Off the job training methods are those in which training is provided away from
the actual working condition. It is generally used in case of new employees. Instances of off the job
training methods are workshops, seminars, conferences, etc. Such method is costly and is effective if
and only if large number of employees have to be trained within a short time period. Off the job training
is also called as vestibule training, i.e., the employees are trained in a separate area (may be a hall,
entrance, reception area, etc. known as a vestibule) where the actual working conditions are duplicated.
WAGES AND SALARY ADMINISTRATION
Indian Labour Organization (ILO) defined the term wage as the remuneration paid by the employer
for the services of hourly, daily, weekly and fortnightly employees.
Salary is defined as the remuneration paid to the clerical and managerial personnel employed on
monthly or annual basis.
Minimum Wage is the amount of remuneration which could meet the normal needs of the
average employee regarded as a human being living in a civilised society
Statutory Minimum Wage is the amount of remuneration fixed according to the provisions of the
Minimum Wages Act. 1948
This is also a major and important function of personnel management. People always work with a
motive of earning money. Wage may be defined as the remuneration (payment) given to an employee
towards the work performed by him in achieving company objectives. Wages include both financial
and non-financial benefits. Non-financial wages may be called as Fringe benefits.
Fair Wages is one paid to a worker which is sufficient to provide him the basic necessities of life.
Thus fair wage is paid to all employees irrespective of their efficiency and work.

Chapter 5 INDUSTRIAL PSYCHOLOGY AND HUMAN RELATIONS

Indusrial Psychology
Industrial psychology is concerned with people's work-related values, attitudes and behaviours, and
how these are influenced by the conditions in which they work. The term 'Industrial Psychology' is a
combination of two words 'Industrial' and 'Psychology'. Industrial is that part of social life whose
function is to provide civilized man with the material goals that his condition of life demand.
Psychology is the science of behaviour in relation to environment.
Thus industrial psychology is the systematic study of the behaviour of the people at work. It studies
how the social, industrial economic, political and other factors affect the behaviour of the people at
work.
According to C.S. Myres, The aim of industrial psychology is primarily not to obtain greater
production or output but to give the worker greater ease at his work.
According to Thomas W. Harrell, Industrial psychology may be defined as the study of people as
individuals and in groups and of the relationship between individual and group.

CHARACTERISTICS OF INDUSTRIAL PSYCHOLOGY

Systematic studyIndustrial psychology is the systematic study of human behaviour concerned with
collecting the information regarding human behaviour at work. What are the different factors which
affect the work of an individual either they are personal or related to working conditions.
ResearchIndustrial psychology is not concerned with administration. They are the part of the
research. Whatever information gathered from the work should be implemented and the personnel
administration is the application of such research.
Functional/AppliedIt is concerned with the application of information about human behaviour to the
various problems of industrial human life.
Human engineeringIt studies the varied methods of performing manual operations for the better
utilization and the least waste of effort through human engineering.

HUMAN RELATIONS
The human relations movement started as a reaction against the impersonal and mechanical behaviour
of bureaucracy and the scientific management. Money, machinery and equipment without competent
human resource are useless. To master key to productivity ultimately lies in the recognition of human
values in an industry. To a manager, human relation is the integration of people into a work situation
that motivates them to work together cooperatively, economically and with psychological satisfaction.

FEATURES OF HUMAN RELATION

1. It draws our attention to people rather than to machines or economics.
2. People are recognized as the single resource in our economy, having unlimited potential.
3. It involves motivating people towards work.
4. It emphasizes the need of cooperation in team work.
5. It stresses the significance o social or informal groups in industrial management.
6. It aims to secure maximum productivity, without sacrificing individual and social satisfaction.

MOTIVATION
A simple definition of motivation is the ability to change behaviour. It is a drive that compels one to act
because human behaviour is directed toward some goal. Motivation is intrinsic (internal); it comes from
within based on personal interests, desires, and need for fulfilment. However, extrinsic (external) factors
such as rewards, praise, and promotions also influence motivation. Motivation is the need or desire that
causes a person to act; to have initiative, spirit or be enterprising.
Motivation has been defined as: the psychological process that gives behaviour purpose and direction.
A predisposition to behave in a purposive manner to achieve specific, unmet needs. An internal drive
to satisfy an unsatisfied need.
Motivation is operationally defined as the inner force that drives individuals to accomplish personal
and organizational goals.
The processes that account for an individual's intensity, direction and persistence of effort towards
attaining a goal.

MOTIVATION THEORIES

MASLOW'S NEED HIERARCHY THEORY

Maslow's hierarchy of needs is a theory in psychology, proposed by Abraham Maslow, (a professor

at Brandeis University and a practicing psychologist) in his 1943 paper A Theory of Human
Motivation,7 which he subsequently extended to include his observations of humans' innate curiosity.
He identified a set of needs that he prioritized into a hierarchy based on two conclusions:
1. Human needs are either of an attraction/desire nature or of an
avoidance nature.
2. Because humans are "wanting" beings, when one desire is satisfied,
another desire will take its place.
The five levels of needs are the following:

Physiological: These are basic physical comfort or bodily needs: food, drink and sleep.
Security/safety: People want to feel safe, secure, and free from fear.
Belongingness and love: This is a need for friends, family, and intimacyfor social acceptance and
affection from one's peers.
Esteem: People want the esteem of others and they want to be regarded as useful, competent, and
important.
Self-actualization: This highest motivation level involves people striving to actualize their full
potential, to become more of what they are capable of being.

MOTIVATION-HYGIENE THEORY

Frederick Herzberg, a professor of psychology at Case Western Reserve University, studied the
attitudes of workers toward their jobs. Herzberg proposed that an individual will be moved to action
based on the desire to avoid deprivation. However, this motivation does not provide positive satisfaction
because it does not provide a sense of growth. Herzberg's research found that positive job attitudes were
associated with a feeling of psychological growth. He thought that people work for two reasons: for
financial reasons to avoid physical deprivation and for achievement because of the happiness and
meaning it provides. Herzberg also identified the concept of job enrichment, whereby the
responsibilities of a job are changed to provide greater growth and challenge (1985). His motivationhygiene theory includes two types of factors:

Motivation is based on the positive satisfaction that psychological growth provides. The presence of
factors such as responsibility achievement, recognition, and possibility for growth or advancement will
motivate and satisfy people.

Hygiene is based on an individual's desire to avoid deprivation and the resulting physical and emotional
discomfort. Hygiene factors include willingness to supervise; positive working conditions;
interpersonal relations with peers, subordinates, and superiors; status; job security; and salary.

THEORY X AND THEORY Y

Douglas McGregor, a professor at the Massachusetts Institute of Technology and a social psychologist,
was greatly influenced by the work of Maslow. McGregor recognized that people have needs and that
those needs are satisfied at work. He described two sets of assumptions about people that he labelled
Theory X and Theory Y:

1) The assumptions of Theory X are that most people will avoid work because they don't like
it and must be threatened or persuaded to put forth adequate effort. People have little
ambition and don't want responsibility. They want to be directed and are most interested in
job security.

2) The assumptions of Theory Y are that work is very natural to people and that most people
are self-directed to achieve objectives to which they are committed. People are ambitious
and creative. They desire responsibility and derive a sense of satisfaction from the work
itself.

EXPECTANCY THEORY

Victor Vroom developed the expectancy theory, which suggests that individuals' expectations about
their ability to accomplish something will affect their success in accomplishing it. Therefore, this theory
is based on cognitionon thought processes that individuals use.
The expectancy theory is based on an individual's effort and performance, as well as the desirability of
outcomes associated with high performance. The value of or preference for a particular outcome is
called valence. To determine valence, people will ask themselves whether or not they can accomplish
a goal, how important is the goal to them (in the immediate as well as the long term), and what course
of action will provide the greatest reward. An individual's expectation of actually achieving the outcome
is crucial to success, and many factors influence this.

The expectancy theory can be applied through incentive systems that

identify desired outcomes and give all workers the same opportunities to
achieve rewards, such as stock ownership or other recognition for
achievement.

TIPS FOR IMPROVING EMPLOYEE MOTIVATION

Create a positive environmentPromote a workplace atmosphere that makes all workers' feel
worthwhile and important. Don't play favourites with your staff. Keep office doors open and
let folks know they can always approach you with questions or concerns. A happy workplace
is a productive workplace.

Put people on the right pathMost workers' are looking for advancement opportunities within
their own factory. Work with each of them to develop a career growth plan that takes into
consideration both their current skills and future goals. If workers' become excited about what's
down the road, they will become more engaged in their present work.

Educate the massesHelp workers' to improve their skills by providing on-the-job training or
in-house career development. Allow them to attend workshops and seminars related to the
industry. Encourage them to attend adult education classes paid for by the company. Workers'
will feel you are investing in them, and this will translate into an improved job performance.

Provide incentivesOffer people incentives to perform well, either with something small like
a gift certificate or something more substantial such as a performance-based bonus or salary
increase. Give out "Employee of the Month" awards. Such tokens of appreciation will go far in
motivating employees.

Acknowledge contributionsYou can make a huge difference in employee morale simply by

taking the time to recognize each worker's contributions and accomplishments, large or small.
Be generous with praise.

Honour your promisesGetting people to give their all requires following through on
promises. If you tell an employee that he or she will be considered for a bonus if numbers
improve or productivity increases, you'd better put your money where your mouth is. Failure
to follow through on promises will result in a loss of trust not only that person's trust, but the
trust of every employee that hears the story.

Provide career coachingHelp workers' reach the next level professionally by providing onsite coaching. Bring in professionals to provide oneon- one counselling, which can help people
learn how to overcome personal or professional obstacles on their career paths.

Match tasks to talentsYou can improve employee motivation by improving employee

confidence. Assign individuals with tasks you know they will enjoy or will be particularly good
at. An employee who is successful at one thing will have the self-confidence to tackle other
projects with renewed energy and excitement.

THE NEGATIVE MOTIVATIONAL TECHNIQUES ARE AS FOLLOWS :

1) Reprimand
2) Layoff
3) Fines
4) Discharge
5) Demotion.
The use of these positive and negative techniques in promotion, so as to yield maximum efficiency,
depends on the skills of the manager.

GROUP DYNAMICS
Group exists in every organization and they affect the behaviour of their members. They not only affect
the behaviour of individuals but also influence the work performed by them which ultimately affect the
organization. Such groups are created by the organization as well as by organization members for their
own satisfaction.
A group is defined as two or more individuals, interacting and mutually dependent on each other, who
have come together to achieve particular objectives or group are consisting two or more person who
are interacting with one another in such a way that each person influence and influenced by each others.
In simple words, group means two or more individual who share common values, norms and interest.
Dynamics comes from the Greek word meaning 'force'. Hence group dynamics refers to the study of
force operating within groups. Group dynamics is concerned with the interaction and forces between
group members in social situations.

Group dynamics refers to the interactive nature of individuals within the contexts of a group. These
interactions between individuals within the group are distinctly different than in one-on-one
interactions. Group dynamics also refers to the study of the nature of groups.
GROUP FORMATION
Formal and Informal GroupsFormal groups are governed by prescribed rules and regulations of
concern organization. They are created and maintained to fulfil specific needs or task of the
organization. These groups are permanent like top management team, work units in different
departments of the organization or temporary like they made for some specific task to perform and
when such task are completed they disappear. Five members making up a counselling team are the
example of formal group.
Informal groups created on the basis of voluntary and spontaneous requirements. They give their
member a sense of social satisfaction. These groups are generally small in size, having indefinite
structure, communications flow in all direction especially horizontal, authority is given by the group
members, group member's behaviour are regulated by their own norms, values and beliefs. Three
members of different department having lunch with each other are the example of informal group.
Task and Command GroupTask group consist of those members who are from either same or
different department come and contact with each other for completing a particular task or job. They are
basically temporary in nature when that task is accomplished they get back to their departments and
position. A task group is usually formed to solve the problem or perform an activity that involves a
number of organizational units. Like problem of absenteeism is increases day by day and for solving
that problem management create a task group consisting of members (supervisor, manager, counsellor)
who are going to check the problem and give suggestion also about how this problem will be overcome.
Command group consist of those individuals who report directly to their superior or manager. It is
determined by the organization chart.
Primary and Secondary GroupPrimary Groups consist of those members who have intimate faceto-face association and co-operations. They are usually small in size and it is based on intimate
relationship. Like family, friendship groups (those brought together because they share one/more
common characteristics) or neighbourhood groups. The members of the secondary groups have not
interest in the problem and pleasure of others. It is more formal, general and isolated. There is no
continues interaction, intimacy, co-operation and association as primary group have.
WORKING OF GROUPS
For the proper functioning of the group there should be two types of specialists i each group. One of
them is the ideal man who becomes the task specialist and the other is human relation specialist. It has
been observed that groups separate more effectively with such specialists as leaders. It can be enhanced
by vesting status to the leaders. Status may be given by organization through titles and facilities or
informally acquired by training, experience and other personal qualities.
FEATURES OF GROUP
(i)

To form a group there should be at least two or more individuals involved. There is no
maximum limit of the group but if group are being so large than communication becomes
little bit difficult. Some time rules and regulations of the organization play an important
role in formal group formation and meaningful interaction among the members in the case
of informal group.

(ii)

Interaction is one of the main features of group. All the group members must be interact
either by face to face communication or by using some mechanical devices like writing,
telephone, internet, etc. It is not compulsion that all the members of the group to interact
each other simultaneously, but each member must interact at least occasionally with one or
more members of the group.

(iii)

Developing Leadership. The purpose of any group is all the members of the group must be
know each other and to complete some objective. For this reason they collectively choose
a leader among themselves and granted authority by members to make decisions, take
action and other activity which will be related to group. The criteria of selection of leader
based upon their performance and some time particular situation also help in to designate
leader.

(iv)

All the members of the group have some collective identity and they all are aware about
their membership. They must have the feeling that he or she is the part of the group.

(v)

Group Norms are rules or guidelines of accepted behaviour which are established by a
group and used to monitor the behaviour of its members. Informal group establish their
own group norm with taking consideration of each members concern. In very structured
formalized group these norms become law or operation laws. And each member should
behave according to those particular laws.

(vi)

Group Cohesiveness is a degree to which group members are attached to each others and
are motivated to reside in the group. It shows the extent of liking of each member towards
others.

(vii)

The ultimate result of group membership is satisfaction of members. If members were

satisfied they are more productive, reduce conflicts, coordinated, motivated, participative
and many more.

HAWTHORNE STUDIES
The Hawthorne plant of the General Electric Company, Chicago, faces the problem of workers'
dissatisfaction, although they provide material benefits to the workers' like pension schemes, sickness
benefits and other recreation facilities which resultant into loss of production. Now, it became necessary
a through investigation of the problem of low productivity and to find out the relationship between
production and various factors of efficiency.

To find out the relationship between productivity and working conditions a number of studies were
conducted by Professor Elton Mayo and his researcher team which was started in 1927. George Elton
Mayo (26 December 18807 September 1949) was an Australian psychologist, sociologist and
organization theorist. He lectured at the University of Queensland from 1919 to 1923 before moving to
the University of Pennsylvania, but spent most of his career at Harvard Business School (19261947),
where he was professor of industrial research.

The Hawthorne studies consist of four phases

IMPLICATION OF HAWTHORNE STUDIES

It was now clear that factory is a social system and informal group in plant equally affect human
behaviour as formal group.

A worker is not merely an economic man who is motivated only by the monetary benefits.
Non-monetary incentives are sometime more 14 Industrial Psychology important in
influencing workers' attitude to their work.

There is a possibility of conflict between company and informal group. It may be because of
incompatible objectives of the both.

Sometime, informal leaders were more important and impressive than formal in directing group
behaviour because he identifies group.

CRITICISMS OF HAWTHORNE STUDIES

Behavioural scientists believe that in this series of experiment whatever the conclusion were
drawn it lack scientific objectivity.

Some feels that there was bias and preconception on the part of the Harvard researcher.

The study has ignored the existence of trade unions. Apart from these criticism the Hawthorne
studies comes with the outcome of human relation is an important part of company. And it drew
attention to the social needs as an additional source of motivation.

COMMUNICATION

Well, communication has been defined as the act of giving, receiving or exchanging information, ideas
and opinions so that the, message is completely understood by both parties. Look at Figure 1.1 below.
The illustration shows clearly that in a communication process, there must be a sender who speaks or
sends a message, and a receiver who listens or receives the message.

The sender sends a message with a certain intention in mind. The receiver of the message tries to
understand and interpret the message sent. He then gives feedback to the original sender, who in turn
interprets the feedback. This process, repeated continuously, constitutes communication.

CHANNELS OF COMMUNICATION

The following are important channels of communication

1) Upward channels : In this flow of information from lower level to top level takes place. This
enables the management to evaluate the effectiveness with which its order have been carried
out, and thus to become basis for fresh order and directions. This also includes suggestions and
complaints from lower level.

2) Downward channels: In this, orders and informations flow from superior to subordinates.
Communications down this channel are generally directive and require actions to be initiated
by the subordinates.

3) Lateral or Diagonal channels : Sometimes communications among lower level people becomes
essential without consulting their superior. For example , communication among foreman who
come under different superior. This is called gang-plank approach.

4) The Grapevine (informal) communication : This is the informal communication channel which
spreads rumours and misleading information among workers. This can be corrected by
effective official communication.

ORAL COMMUNICATION
Oral communication is a process whereby information is transferred from a sender to receiver usually
by a verbal means which can be supported by visual aid. e.g. discussions, speeches, conversations,
questions/answers, through radio/TV/internet, telephone conversation/voice mails, VHF radios.

BASIC ORAL COMMUNICATION SKILLS

1. Asking questions
2. Listening skills
3. Providing feedback that has impact
4. Receiving feedback with grace and dignity

WRITTEN COMMUNICATION

Written communication is the sharing and exchanging of written symbols between individuals or
groups. It is also the presentation of ideas in a coherent manner in written form.

Written communication can take place via:

Letters
Faxes

 Email
Reports
Memos and
Advertisements.

THE WRITING PROCESS

Successful written communication requires careful thought and planning. It should contain
comprehensive information about a specific subject and yet be clear, correct and easy to read.
A well-written piece of work requires yo u to pay attention to the following three stages in the writing
process:
Planning
Writing and
Editing.

INDUSTRIAL FATIGUE

Fatigue of workers is a complex phenomenon resulting from various factors in technically innovated
modern industries, and it appears as a feeling of exhaustion, lowering of physiological functions,
breakdown of autonomic nervous balance, and decrease in work efficiency. On the other hand industrial
fatigue is caused by excessive workload, remarkable alteration in working posture and diurnal and
nocturnal rhythms in daily life.
Fatigue can be a symptom of a medical problem, but more commonly it is a normal physiological
reaction to exertion, lack of sleep, boredom, changes to sleep-wake schedules, or stress. Fatigue, also
known as weariness, tiredness, exhaustion, or lethargy, is generally defined as a feeling of lack of
energy. Fatigue is not the same as drowsiness, but the desire to sleep may accompany fatigue. Apathy
is a feeling of indifference that may accompany fatigue or exist independently.
TYPES OF INDUSTRIAL FATIGUE
Fatigue can be both physiological and psychological.

Physiological fatigue is the inability to continue functioning at the level of ones normal
abilities. A person with physiological fatigue cannot lift as heavy a box or walk as far as he could if not
fatigued. Muscular fatigue resulting from prolonged physical work, are the example.

Psychological, on the other hand, rather manifests in sleepiness or slowness. A person with
psychological fatigue may fall asleep, may react very slowly, or may be inattentive. With micro sleeps,

the person may be unaware that he was asleep. Sensory (degradation of sensory perception) and
cognitive fatigue, or alertness, intellectual fatigue are the examples of psychological fatigue. Fatigue
also differentiated by acute and cumulative fatigue

Acute fatigue is experienced perhaps at the end of a long day, and

Fatigue where you may still feel tired even after a nights sleep this comes under cumulative
fatigue.

FATIGUE SYMPTOMS
Some of the common fatigue symptoms are following:

Weakness, lack of energy, tiredness, exhaustion

Passing out or feeling as if you are going to pass out

Palpitations (feeling your heart beating)

Dizziness

Vertigo is the feeling that you or your environment is moving or spinning. It differs from
dizziness in that vertigo describes an illusion of movement. When you feel as if you yourself are
moving, its called subjective vertigo, and the perception that your surroundings are moving is called
objective vertigo.

Shortness of breath.

EFFECTS OF INDUSTRIAL FATIGUE

Reduced performance and productivity in the workplace.
Increase the possibility of absenteeism and turnover.
Increase the risk of accidents and injuries occurring.
Ability to think clearly.
Headache, eye strain, muscular pain etc.
Lack of concentration.
Irritability, anxiety etc.
Poor judgements.
Reduced capacity for effective interpersonal communication.
Fatigue and irregular sleeping habit disrupt circulation rhythms.
Lack of sleep cause heart disease, high blood pressure, stomach infection, diabetes, depression, asthma
and many more.
Womens reproductive health can also be affected by fatigue like increased risk of miscarriage, low
birth weigh, higher occurrence of premature birth.

CAUSES AND REMEDIES OF INDUSTRIAL FATIGUE

Industrial fatigue may be occurring by unfavourable or unsatisfactory work environment.

Unsatisfactory or unfavourable work environment include improper facility of illumination,
ventilation, humidity, temperature and problem of noise. All these factors lead to headache, eye
strain and some time irritation and weakness. For minimizing these influences on the work,
employers must take care of the factory layout.

Long working hour also gives support to industrial fatigue. Long working hours can lead to
stress or mental ill health, decreased production, rate of accident also increases. The remedy for
avoiding fatigue is simple to regulate the laws regarding working hour.

When machine are designed only taking consideration of work not worker who perform the
task on that machine. Not stress on the comfort and ease to perform the task then it leads to a
problem like workers do unnecessary work and also it leads to extra expenditure of energy or
effort. This comes out in the form of fatigue. To remove unnecessary fatigue, machines should
be constructed (improving the design of machine) in such a way that workers would feel
comfortable while doing work. One of the best method to minimize fatigue from bad design
of machine by practicing time and motion study where wrong, unnecessary and useless
movements should be avoided and productivity automatically increases.

Inadequate rest periods also cause of industrial fatigue. Most of the studies suggest that
frequent short rest intervals look like to be more effective than a few longer ones. Too long rest
intervals may create disturbance and also workers loses the continuity of the work or gets out
of the mood for it. The solution for this problem is to introduce rest periods in between working
hours should be depending upon the nature of the work.

Physical and mental health also causes the fatigue in workplace. In the case of a physically
weak worker there is quick onset of fatigue compared to healthy worker. Emotional disturbance
in work place as well as outside the work place, lack of adjustment with surrounding, domestic
problem and many more may consume a lot of energy which cause fatigue as a result of mental
illness. Therefore, employer provides free medical facilities and also ensures that their workers
are aware about the health problems and remedy for the same. For overcome the mental illness
workers should be given proper counselling and guidance for a healthy and tension free mental
life.

Chapter 6

INDUSTRIAL RELATIONS

In simple terms Industrial Relations deals with the worker employee relation in
any industry Government has attempted to make Industrial Relations more health the by enacting
Industrial Disputes Act 1947. to solve the dispute and to reduce the regency of dispute. This in turn
improves the relations.
Sydney and Webb defined a trade union as A continuous association of wage earners
organized for purpose of maintaining and improving the conditions of the working people .In general
trade union or labour union is an association of employees formed tp promote, protect and improve the
social, economic and political interests of its member.

DEVELOPMENT OF TRADE UNION

The origin and development of trade union movements, historical development of trade unions in India,
growth of employees and employers organizations, aims and objectives of trade unions, definition of
trade union and trade disputes, recognition of trade unions are discussed in this chapter.
Trade Unions play an important role in the settlement of industrial disputes. The trade unions of
employees and employers bargain collectively in solving the grievances of the industrial workers.
Before going to discuss the role of trade unions in the settlement of industrial disputes it is appropriate
to project the historical background for establishing the trade unions. Not only the workers associations,
but also employers associations are regarded as trade unions. The workers union or association as well
as employers union have to be registered their union under the Indian Trade Unions Act, 1926.
Therefore, under the existing law the expression Trade Union includes both employers and workers
organizations.

HISTORICAL DEVELOPMENT OF TRADE UNION MOVEMENT IN INDIA:

The Trade Union Movement in our country has passed through the similar conditions after the advent
of factory system in India. It would be desirable to know how the factory system came in our country,
with all its evils and problems.
The first Cotton Mill in India was established in 1851 in Bombay and the first Jute Mill in 1855 in
Bengal. This was the beginning of the modern factory system in India. After 1851 and 1855, the number
of factories began to increase both in Bombay and Bengal. The modern factory system brought in its
wake employment of women and children, long and excessive hours of work, undermining of morality,
lack of education, poor housing and an excessively high death rate. Prof. S. N. Dhyani has observed
that the year 1875 was landmark in the history of trade union movement. For the first time in India
factory workers united together for securing better working conditions in the factories. The growing
consciousness of a common cause for amelioration brought the working class closer despite several
hindrances. The Secretary of State for India was kept informed of all these evils of the modern factory
system and the first Factory Commission was appointed in Bombay in the year 1875 and the first
Factories Act was passed in 1881.

The 1881 Act proved highly inadequate and its provisions regarding protection to child labour and
absence of any regulation for women labour were highly disappointing. Consequently, another Factory
Commission was appointed in 1884. Mr. Lokhandey organised a Conference of Workers in Bombay
and drew up a Memorandum signed by some 5,300 workers to be presented to the Factory Commission.
This was the beginning of modern Trade Union Movement in India. The Memorandum submitted and
adopted at this meeting demanded a weekly rest, half an hour's recess, compensation for disablement,
payment of wages not later than 15th of the month following the one in which they were earned,
limitation on hours of work from 6.30 A.M. till sun-set.
The important Trade Union Organization which are shown below:
1) AllIndia Trade Union Congress (AITUC) 1920.
2) Indian National Trade Union Congress (INTUC) 1947
3) Hind Mazdoor Sabha (HMS) 1948
4) United Trade Union Congress (UTUC)
5) Bharatiya Mazdur Sangh (BMS)
6) Centre of Indian Trade Unions (CITU)
FUNCTIONS OF TRADE UNION

To emphasise the common interests of labourers and spread the feeling of brotherhood.

To fight for workers, regarding their wages, hours of work, holidays etc.

To safe guard the job of workers.

To help the workers to obtain the full value for their work as marginal net profits from the
employer and increasing productivity.

To maintain the conserves the advantages and privileges secured for the workers.

To increase the efficiency of labourers through public health campaigns, literary propaganda
and allied processes.

To provide legal assistance to workers.

To improve the economic status of workers.

To have voice in the management.

To provide educational recreational and other benefits from employer side for workers.

INDUSTRIAL DISPUTE :
As per section 2 (K) of industrial dispute or difference between employers and employees employers
and employers or employees and employees which is connected with the employment or non
employment or the terms of employment or with the condition of labour of any person.

There must be a dispute or difference the dispute or difference must be between employers and
employees employee and employees, employers and employers.
The dispute must be connected with employment or non employment or terms of employment or with
the conditions of labour of any person.
General causes of industrial disputes strains which results in bad industrial relations are.
1. Close mindedness of employers and employees one thinking to extract maximum work with
minimum remuneration, other thinking to avoid work and get more enhancement in pay and
wages.
2. Irrational wage, wage system and structure not mutually acceptable
3. Poor working environment, low presence of safety, hygiene conditions vitiated atmosphere for
smooth working
4. Poor human relations, and lack of dexterity on the part of management personnel
5. Lack of control over the situations erosion of discipline, which rebounds.
6. Introduction of new technology or automation mechanization, Computerization etc. without
proper consultations, preparations and discussion with workers and creating climate.
7. Nepotism, unequal work loads, disproportionate wage, and responsibilities.
8. Adoption of unfair labour practices either by employer or employees and unions.
9. Unjustifiable profit sharing, and not considering workers as a co-shares of the gains of the
industry.
10. Frequent union rivalries over membership foisting up of fake unions.
11. Strikes lock out, lay off, and resulting retrenchment due to high handedness on the part of the
concerned.
12. Throwing away the agreements and arrived settlements
13. Militancy of the unions]
14. Attitude of government and political parties who may indirectly control some the unions for
their own gains or to get a hold on the industry.

Few suggestions for the improvement of industrial relations and reduce disputes:
1. Trade unions should be strengthened democratically so that they can understand and toe with the
main stream of the national industrial activities. They can drop the some how survive attitude by
promising impossibles and consequent perpetual strain.
2. Employers should have more transparency in their dealings with workers to build confidence and
have progressive out look.
3. They should have open minded flexible collective Bargaining.

4. Workers should be allowed to participate in the management through forums, committees and
councils,
5. Sound labour policy, planning
6. Proper leadership and communication
7. Enforcement of discipline
8. Try to have union with in workers fold.
9. Equity in distribution of wealth by acknowledging workers as team members.

HANDLING OF INDIVIDUAL GRIEVANCES

For a real grievance to have occurred there must have been a violation of an employee's rights on the
job. Also, it must have been the employer or one of his/her agents -- like a supervisor or manager -who has violated these rights, directly or indirectly. If an employee makes a compliant that doesn't
involve the employer in some way, you may still have to deal with it, but it won't be a grievance.
Most grievances are "real" in the sense that we are sure the employer has violated some-one's rights;
but this doesn't mean we will always win the case. We are limited by the contract, by our skills, or by
how much union power we have. So a grievance can turn out to be no more than an "alleged violation"
or even just a complaint.
It's your job as a steward to decide which rights have been violated and so determine whether a
grievance exists. Because most employees' rights are contained in the contract, this is the first place you
look to see if there is a real grievance against the management. If the grievance is a clear-cut violation
of the contract, it will be easy to prove provided you stick to your guns. If it involves an interpretation
of the contract, it will not be so easy to prove.

FACTORS IMPACTING INDIVIDUAL GRIEVANCE HANDLING

To be an effective GH, the following skills should be cultivated and demonstrated. They could be
summed up in the following acronym, PRACLIP;
Problem solving attitude: A problem-solving attitude implies that the GH is open-minded and willing
to explore with the employee ways to resolve the grievance.
Responsible: The GH should ensure that all matters relating to the employee and the grievance
discussed at the meeting should be kept confidential. The GH should also be meticulous about followup and completing the task judiciously.
Active Listening: The GH should not be just a good listener but should practise active listening. He
should seek to understand, interpret, and evaluate what he hears. He must exercise empathy and try to
understand the feelings of dissatisfaction and distress that the aggrieved employee is experiencing.
Careful: The GH needs to be particularly careful when taking notes during the meeting. To ensure
accuracy, the GH should record and repeat pronouncements made to ensure there are no discrepancies.
Note taking is also important for follow-up work.

Light-hearted: Humour diminishes tension and brings about a congenial atmosphere during a grievance
handling session. Having a good sense of humour will be helpful to a GH.
Inclusive language: The GH should use inclusive language like we work together and our problem
to reassure the aggrieved employee. Making the grievance appear to be less of the individuals problem
helps the employee to be less defensive and more willing to speak up.
Placid: The GH should aim to be placid and unruffled throughout the meeting with or without the
presence or active involvement of the TUR. If the aggrieved employee becomes agitated, the GH should
remain placid, polite and professional.
WORK OF INTERNATIONAL LABOUR ORGANIZATION

The International Labour Organization emerged with the League of Nations from the Treaty of
Versailles in 1919. It was founded to give expression to the growing concern for social reform after
World War I, and the conviction that any reform had to be conducted at an international level.
In 1946, the ILO became the first specialized agency associated with the newly formed United Nations
Organization.The ILO has four principal strategic objectives:
To promote and realize standards, and fundamental principles and rights at work.
To create greater opportunities for women and men to secure decent employment.
To enhance the coverage and effectiveness of social protection for all.
To strengthen tripartism and social dialogue.
These objectives are realized in a number of ways:
1. Formulation of international policies and programmes to promotebasic human rights, improve
working and living conditions, and enhance employment opportunities.
2. Creation of international labour standards backed by a unique system to supervise their application
to serve as guidelines for national authorities in putting these policies into action.
3. An extensive programme of international technical cooperation, formulated and implemented in an
active partnership with constituents, to help countries in making these policies effective in practice.
4. Training, education, research, and publishing activities to help advance all of these efforts.

ILO has got its Central office at Geneva, with its branch offices in its member countries. Its governing
body includes representatives of concerned Governments, employers and employees. It arranges a
conference annuallu, to which four representatives of each member country(two from Govt, one from
employer and one from employees) participate in it.

In conference it discuss many international matters relating to social standards, labour welfare, income
and expenditure of the organization, and others. On the basis of this the member states formulate some
legislations favouring labour welfare activities

chapter 7 Factory legislation in India

With the growth of system and the increased number of industrial establishment, the
number of workers and trade unions also has increased. Consequently, conflicts between the
management and the workers, exploitation of workers also has increased. To safe guard
against all these problems government has imposed many industrial laws. The important
labour laws are discussed here.
1.
2.
3.
4.
5.
6.
7.
8.

Importance and necessity of labour legislation

Labour legislation improves employee-employer relation
It helps to pay fair wages to workers
Minimizes unrest among workers
Gives compensation to workers
Reduces conflict
Provides job security
Fixes working hours

Principles of labour legislation

The principles of labour legislation are

Social justice
Social welfare
National economy
International unity and solidarity

Social justice
It means establishment of equality in social relations. Usually there will be great
difference in economic conditions between employees and employers. So it is the principle of
social justice to equalize the status of workers with that of employers, through freedom of
association, collective bargaining and arbitration in case of an industrial conflict.
Social welfare
Conservation and development of physical and mental resources of employees
The amelioration of the moral and material conditions of workers
There are government laws according to which management should maintain healthy
atmosphere inside the factory. The state itself tries to improve the condition of the worker by
providing housing, health and recreation facilities
National economy: national economy has three fold concerns

Ensuring the normal growth of industry for the benefit of the nation as a whole
The provision for better working and living conditions

Adjustment of wage system with a view to increasing the purchase power of the
workers and creating a stable home market.

International unity and solidarity

International labour organization is an international organization working under the
guidance of the United Nations Organization ILO helps the nations to maintain international
unity and solidarity by giving guidance for the formation of labour laws and other concerned
matters.
THE FACTORIES ACT,
Objective
It regulates conditions of work in factories, employees safety, health, welfare and
leaves with wages. This act is applicable to any factory employing ten or more than ten workers
or to any kind of workshop employing twenty or more than twenty workers.
Important definitions
1) Factory: a place where in ten or more persons are working and in which a manufacturing
process is going on using electricity, oil etc
2) Manufacturing process: A process of
Making, repairing, servicing, finishing, etc
Pumping of oil, water, etc
Generating and transmission of electricity
Composing types for printing, lithography.
Construction, repair, finishing.
3) Worker: any person employed directly or through agencies whether for wages or not,
in the manufacturing process, or in cleaning any part of machinery, premises or any
other work incidental or connected with the manufacturing process.
4) Adult: A person who has completed the age of eighteen years
5) Child: A person who has not completed the age of 15 years.
6) Adolescent: A person who has completed 15 years but not yet completed eighteen
years.
7) Power: Electrical energy or any other form of energy which is mechanically transmitted
and is not generated by human or animal agency.
8) Machinery: It includes prime movers like engine, motor, etc.
Main provisions of the act
1) Health to preserve the workers health and to see that his health or body is not injured,
the act specifies the following
a) The dust and refuse from floors should be removed every day, floors should be
washed using disinfectant, proper drainage should be provided.
b) The waste and effluent should be disposed properly.

2)

3)

4)

5)

6)

7)

c) Proper ventilation and temperature should be maintained.

d) The working condition should be free from dust and fumes.
Safety to ensure workers safety the points to be followed are
a) All machineries and there working parts like gears, etc should be properly
encased.
b) Women and children should not be allowed near working machinery especially
moving tape.
c) Lifts and cranes should be maintained in good condition and examined
periodically.
d) Working area should be free from dust, fumes, smokes etc.
Welfare
a) Washing facilities: adequate and suitable facilities for washing, for storing and
drying cloths and for sitting and during hours of rest shall be provided.
b) First aid assistance: prescribed first aid appliance shall be kept at appropriate
places.
c) Canteen and rest room: in case the factory is engaging more than 250 workers
the canteen should be provided. Also, shelters, rest rooms and lunch rooms
should be provided.
d) Welfare officers: officers should be appointed to look after the welfare work in
the factory in which more than 500 workers are employed.
Working hours
a) An adult worker shall not be allowed to work more than 48 hours a week.
b) Every worker shall get 1 holiday per week and shall not be allowed to work for
10 consecutively without a holiday.
c) No workers shall be allowed to work more than 9 hours a day.
d) At least after 5 hours the workers shall get an rest of at least half an hour.
e) A female worker shall work only between 6am and 7pm.
Employment of young persons
a) Only young persons completed 14 years shall be allowed to work provided they
carry a certificate of fitness
b) Young children said above shall not be allowed to work more than 4 hours a
day and shall work between 6am to 7pm.
c) A register of child workers indicating their particulars and nature of work shall
be maintained by the manager and be available for inspections at all times
during working hours.
Annual leave with wages- A worker who has worked for 240 days or more during a
calendar year shall be entitled to a leave with wages at the rate of
a) One day for every 15 days of work by a child worker
b) One day for every 20 days of work by a adult worker
Special provisions
a) Dangerous operations: where ever the state government feels that any operation
is of serious risk of bodily injury, poisoning or disease, it may make rules
declaring the operation dangerous.

b) Accidents and diseases: the manager of the factory shall give notice of serious
accidents to the authorities concerned, which may inquire into the causes of
accidents. Similarly if any worker gets affected with some diseases, this shall
also be noticed and enquired.
8) Penalties and procedures
a. Penalty for obstructing inspector: any occupier or factory manager obstructing
an inspector to carry out his duties is punishable with imprisonment up to 6
months or fine of rs 10000 or both.
THE PAYMENT OF WAGES ACT, 1936
Objectives
It has been experienced that workers have often to suffer from withholding or delays in
payment of wages and the deductions from their wages in the form of fines etc. in-order to
check such malpractices the government of India has passes the Act.
This act applies to factories employing more than 10 workers and registered under the factory
act, 1948 and also to persons employed in the railways. However, the act applies in all the
above cases only to the payment of wages to persons receiving less than rs 1000 per month.
Important definitions
1) Factory: a place where in ten or more persons are working and in which a manufacturing
activity is going on using electricity etc.
2) Industrial establishment: any concern like
a) A motor transport service carrying passengers or goods.
b) Air and water transport services
c) Mine or oil field
d) Workshops.
3) Wages: wages include the total remunerations payable to an employee in respect of his
employees in respect of his employment. it includes over time remunerations bonus
etc.
Payment of wages
An employer shall be responsible for the payment of wages to all his employees, every
month. If the number of employees is less than 1000, wages have to be paid before the expiry
of the seventh day after the last day of the wage.
In establishments with more than 1000 workers payment shall be made before the
expiry of tenth day after the last day of the wage period. Wages shall be paid on a working day,
and shall be paid in current coins or currency notes.
Deductions from wages

The deductions as authorized by the payment of wages Act.1936 are fines absence from
the duty, damages, house and others as ordered by courts.
Enforcement of the Act
Inspectors appointed by the government are responsible for the enforcement of the
payment of wages Act. An authorized inspector may enter and search any factory and look into
the wage record. He can make enquiries both with the employees and employers to ascertain
whether the provisions of this act are being observed. The inspector can seize documents
related to wages in case he finds that the employer is guilty in implementing the act properly.
WORKMENS COMPENSATION ACT, 1923
Objectives
The chief objectives of this Act are to protect the workers from hardship arising from
accidents. The Act also forces to take preventive measure against accidents in a view to check
them which necessitates payment of compensation.
Main features
The worker can claim compensation if the injury has been caused by an accidents in
the course of employment, provided he was not under the influence of drinks or drugs and the
accident was not due to his willful disobedience of the rules.
The amount of compensation depends upon the amount of injury, and the nature of
disablement. All fatal accidents should be brought to the notice of the labour commissioner and
the employer shall deposit the amount of compensation with him, within 30 days of the
accident.

Important definitions
1) Dependent: any person or persons like widow, minor sons, unmarried daughters.
2) Minor: A person below the age of 18 years.
3) Partial disablement: the disablement of temporary nature and which reduces the earning
capacity of worker.
4) Total disablement: the disablement of temporary or permanent nature which
incapacitates a worker for all work and he cannot work at all for a period or for ever.
Employers liability for compensation
The employer is liable for compensation if :a) Injury has been caused by accident
b) During course of employment

c) And has resulted in workmans death, or partial disablement.

The employer is not liable for compensation if :a) The injury disables a workman for less than 3 days
b) Injury has been caused by accident while the workman was under the influence
of drinks or drug
c) Injury is been caused due to willful disobedience of the rules.
Amount of compensation
The amount of compensation is decided based ona) The monthly average wages of the workman and which doesnt exceed rs1000
b) The extent of injury suffered ie more than 3 days.
c) The nature of injury, death, permanent or partial disablement
The compensation to be paid under different conditions are:a) Death due to injury is equal to 40% of the monthly wages of the decrased
workmen multiplied by the relevant factor or an amount of rs 20000 whichever
is more
b) For permanent disablement an amount equal to 50% of the monthly wages of
the injured workmen multiplied by the relevant factor or an amount of rs 24000
whichever is more
c) For temporary disablement 25% of monthly wages.
Payment of compensation
If the worker dies in an accident or through injuries, the legal heir or the near relatives
who were dependent on the deceased worker are entitled to receive the amount of
compensation. The employer shall not pay the compensation to these person directly but shall
deposit it with the commissioner appointed under this Act.
Notice and claims of accidents
The injured employee should give in writing a notice to the employer, giving details of
workman, date and causes of accident. The claim for compensation should be made within 2
year of date of accident or death.
If the employer doesnt pay compensation or pays it partially or makes delay in
payment, the person or persons concerned shall appeal to the commissioner for the redress of
their grievance and shall be made within 1 year from the date of accident.

EMPLOYEES STATE INSURANCE ACT, 1948

Objectives
The main objective of this Act is to provide benefits to the workers in the event of sickness,
maternity and injury. This Act provides benefits to the workers of such items which could not
be covered under workmens compensation Act.
Under this Act a corporation is constituted incorporating a chairman, a vice-chairman, and not
more than 5 persons nominated by central government the corporation can
a)
b)
c)
d)

Sell, hold or transfer any movable or immovable property

Invest any money which is not immediately recovered
Raise loans and
Employ necessary staff for its administration.

Contribution
The principal employer has to pay both the employers contribution and employees
contribution in respect of all employees employed by him directly or indirectly.
The principal employer has been authorized to deduct from the wages for that period
specified in schedule1.
Benefits
The persons insured under this Act are eligible for the benefits stated belowa) Sickness benefit: it is in the form of a periodical payment to any insured person when
his sickness is certified by a duly appointed Medical Practitioner or by another person
having qualifications as prescribed in regulations.
b) Maternity Benefit: periodical payment to insured women will be made in case of her
confinement duly certified in the manner specified in the Act
c) Medical Benefit: An insured person whose condition demands medical treatment is
entitled to receive medical benefit for his treatment.
d) Disablement Benefit: An insured person suffering from disablement as a result of injury
or disease in course of employment is entitled for disabled benefit.
e) Dependents Benefit: when an insured person dies of employment injury, his dependents
get the benefit of an amount not more than 50% of the amount payable to the deceased
person.
Under this Act, the employer is punishable for providing false statements by way of
imprisonment for a period of up to 6 months or fine not exceeding Rs 2000 or both. For
failure to pay contributions, the imprisonment is up to 3 years or a fine up to Rs 10000 or
both.

chapter 8
INDUSTRIAL SAFETY
INTRODUCTION
Industrial Safety, area of safety engineering and public health that deals with the
protection of workers' health, through control of the work environment to reduce or
eliminate hazards. Industrial accidents and unsafe working conditions can result in temporary
or permanent injury, illness, or even death. They also take a toll in reduced efficiency and loss
of productivity.
Various external sources, such as chemical, biological, or physical hazards, can cause
work-related injury. Hazards may also result from the interaction between worker and
environment; these so-called ergonomic hazards can cause physiological or psychological
stress.
Chemical hazards can arise from the presence of poisonous or irritating gas, mist, or
dust in the workplace. Hazard elimination may require the use of alternative and less toxic
materials, improved ventilation, leakage control, or protective clothing.
Biological hazards arise from bacteria or viruses transmitted by animals or unclean
equipment and tend to occur primarily in the food-processing industry. The source of the
contamination must be eliminated or, when that is not possible, protective equipment must
be worn.
Common physical hazards include ambient heat, burns, noise, vibration, sudden
pressure changes, radiation, and electric shock. Industrial safety engineers attempt to
eliminate hazards at their source or to reduce their intensity. If this is impossible, workers are
required to wear protective equipment. Depending on the hazard, this equipment may
include safety glasses, earplugs or earmuffs, face masks, heat or radiation protection suits,
boots, gloves, and helmets. To be effective, however, the protective equipment must be
appropriate, properly maintained, and worn by the worker.
If the physical, psychological, or environmental demands on workers exceed their
capabilities, ergonomic hazards arise. This type of hazard frequently occurs in the area of
materials handling, where workers must lift or carry heavy loads. Poor working posture or
improper design of the workplace often results in muscle strains, sprains, fractures, bruises,
and back pain. These injuries account for 25 percent of all occupational injuries, and their
control requires designing the job so that workers can perform it without overexerting
themselves.

DEFINITIONS
Safety: The apposite of danger?
Hazards: A hazard is a condition with the potential of causing injury or damage.
Danger: Express the degree of exposure to a hazard
Probability: An objective mathematical term having a value between 0 and 1, where 0
represents complete impossibility and 1 represents absolute uncertainty?
Chance: Refers to the probability of an uncertain outcome of some event.
Uncertainty: Exists only in our minds; and has much the same meaning as doubt. Its opposite
is often regarded as faith.
Risk: Used for uncertain eventualities. Risk may be classified as speculative or pure.
Frequency Rate: Number of accidents per million man hours worked.
Severity Rate: Number of days lost per million man hours worked.
Minor Injury: Usually those having no permanent effects and leading to less than three days
of work lost.
Major Injury: Leading to three or more days of work lost.
ACCIDENT
An accident is any unforeseen or unexpected event that may or may not result in an
injury or damage to property or equipment. The ultimate goal in accident prevention is zero
disabling injuries and no work time lost. However, there are many barriers to achieving this
goal, the most important of which is the human attitude. Most people feel that it won't
happen to me" or "it couldn't happen here". You can do more to protect yourself and your
fellow worker by constantly thinking and practicing accident prevention than you can by
memorizing all of the rules, regulations and safeguards ever invented or written. You must
THINK before you act.
Accidents take place only by either or both of two reasons:
Unsafe conditions.
Unsafe act.

Unsafe conditions are defined as hazards built-in the environment or equipment or

machine which has potential to cause accident. These unsafe conditions in industry or most
commonly available and can be eliminated with a bit redesigning and putting up a small
additional amount of finance. These unsafe conditions are unguarded rotating machines or
machine parts, unsafe material handling equipment defective tools, unguarded opening etc
UNSAFE CONDITIONS

Unguarded rotary machines.

Unsafe material handling equipment.
Defective tools.
Unsafe electrical equipments.
High working platforms without protection rails.
Broken ladders.
Slippery floors.
Fire hazards.
Toxic gases.
Enclosed space.
High temperature.
Radio activity.

UNSAFE ACT
Unsafe act is a built-in hazard which is developed by human error, lack of knowledge,
lake of training, carelessness etc. Unsafe act on apart of operators / maintainer at plant is to
use a wrong tool or to use a tool at wrong place, may be the tool is OK but it will built-up a
potential for an accident. Unsafe act can be minimized by education of people, proper training
to do a certain job and developing safety awareness and reducing carelessness while on job.
GENERAL SAFETY RULES
Following Industrial safety rules should be observed at the work area
Use of Helmet in Helmet area is necessary
Use of Safety shoes is necessary.
Use of loose cloths should be avoided in all working areas, uniform and dungarees
should be used.
Use of gloves is necessary for work like grinding, scaffolding, welding, chemicals
handling etc.
Use of safety glasses/face shield is necessary for welding, flame cutting, grinding etc.
Use of dust filter with half mask is necessary in work area involving dust/radiation /
mist.
Chemical filter cartridge with half mask should be used in work areas, involving
hazardous fumes, Toxic vapors like, painting, chemicals.

CO2 filter cartridge shall be used in case smoke / fire

Breathing apparatus must be used inside confined space.
Use of safety belt is necessary while working at height,
Ear muffs must be used in noising areas for ear protection, like turbine hall and Diesel
Generator Rooms.
Welding, flame cutting, making of fire and grinding must not be allowed without
Industrial Hazard permit.
Electrical Exit signs boards with the instruction Exit must be available that should
be used in emergency.
Walk-ways, stairs, openings and high rise must be protected by safety railings / lids
etc.
Many special works involving potential risk like suspended loads of crane throwing of
objects from heights etc. should be marked off to protect workers. Marked ropes / masking
tapes should be used for this purpose.

Good housekeeping should be maintained through regular cleaning and removal of

refuse.
Entrances / Exists, Passages and Corridors should be kept clean clear and
unobstructed.
Proper lighting should be provided in all the working areas.
Torches and emergency light should always remain available and within reach.
Special care should be taken while passing through slippery areas caused either due
to oil spillage or water etc.
When handling object manually, consideration should be given to the weight, nature
and shape of the object to avoid slipped disc syndrome, injury etc.
Protective guards have been fixed around moving parts of machines, like grinding disk
and motor belts etc. to protect workers and avoid injury.
Gas cylinders i.e. oxygen and acetylene and for welding and flame cutting should be
handled properly. Following precaution should be taken:Should be kept in racks in upright position.
Not exposed to sunlight, and pressure above 15 psi.
Not taken inside enclosed space i.e. tanks / vessels.
Spark is not allowed to be taken near cylinders.
Cylinders should not be mixed with others.
Empty cylinder should be handled with care and stored outside the plant.
H2 cylinders should be stored in closed / separate store provided with forced
ventilation and explosion proof lights.
Machine should be operated/repaired with proper tools by qualified persons
according to procedure and operating manuals.

Nobody should be allowed to enter confined space like, tanks and vessels containing
toxic vapors or their exist oxygen deficiency, unless the atmosphere is tested.
Area where RT (Radiographic test) is being performed should be shielded and demarked to avoid exposure to radiation.
While working near electrical circuit do not wear, rings, watches, metal jewelry, metal
hand hats etc. Use rubber sole shoes / Rubber insulated gloves.
Insulated and explosion proof electrical tools should be used while working on electric
circuits and machines.
Do not hang clothes over electric panel and switchgear.
While making repair of electrical circuits and machines main power shall be switched
off.

INDUSTRIAL HAZARD PERMIT (IHP)

If you are working in an industry or an industrial environment, there will be some
industrial hazard permit that permits work involving potential safety hazards. It is necessary
to obtain Industrial Hazard Permit for every specific hazardous job.
Personal protective measures and precaution are written on the IHP for the Industrial
Hazards connected with the execution of the job. Before start of the job, protective measures
as specified may be adopted. If requirement of safety is not fulfilled, the job can be stopped
by the Industrial Safety staff.
SAFETY IN WORK AREAS
Good housekeeping is an essential part of every job. Work areas, walkways and equipment
shall be kept clear of loose materials, tools and scraps. Materials such as pipe and lumber
shall be stored in an orderly and secure manner. Spills such as grease, water or oil shall be
cleaned up as soon as possible; a delay could result in an accident to you or a fellow worker.
A safe access shall be maintained to work areas. Shortcuts should be avoided. Never block
fire exits with equipment or materials.
PROPER LIFTING
The practice of stooping over from the waist to lift, accompanied with the added
factors of uneven footing, poor balance or awkward positioning is a direct invitation to
eventual injury, because undue strain is thrown on the back and abdominal muscles. The
following rules should be followed for safe lifting:

Determine if you need help-- consider the distance and the object's weight.
Look over the pick-up and delivery area for tripping hazards, slippery spots, small
doors, sharp corners, blind spots, etc. Inspect the object for sharp corners, wet
surfaces, etc.

Place feet correctly--one foot close to the side of the object to provide stability-- and
one directly behind the object to provide lift or thrust.
Keep the object close to your body.
Get a correct grip or hold on the object by using a full grip--not just your fingers.
Keep your back straight--this does not mean vertical--just aligned from head to pelvis.
You should tuck in your chin when lifting to ensure alignment from head to pelvis.
Do the actual lifting with your legs only.
You should lower objects in the same manner as you lifted them.
The body should never be turned or twisted while under the stress of heavy weight.
Instead, you should turn your whole body if you desire to change your position after
you have made the lift.

LADDERS AND SCAFFOLDING

Although there is always a risk in working on elevated areas, it is a fact that the vast
majority of accidents involving ladders result from the failure to exercise care. Carry ladders
parallel to the ground. Whenever possible, angle out the base one-fourth of the ladder's
working length. The ladder should reach at least three feet six inches above the landing. Never
stand on the top two steps of any ladder or on the top cap of a step ladder. This could cause
you to become off-balance resulting in a fall. Always maintain at least three points of contact
with the ladder (2 feet and 1 hand, or 2 hands and 1 foot should be in contact with the ladder
at all times). Maintain ladders free of oil, grease and other hazards.
Either ladders should be properly lashed near to their upper resting place in order to
prevent sideways movement or must be secured at or near their lower end or somebody must
foot the ladder whilst it is in use. It must have firm and level footing. Scaffolding shall be used
if solid footing or a safe ladder is not available. Before erecting scaffolding it is necessary to
prepare the ground which is to be the base. The ground must be leveled off and compacted.
Sole-plates (bulk timber) acting as bearers should then be placed in position to receive the
standard (scaffolding pipes). On sole plates base plates should be placed and fixed at proper
positions. The span between standard should never be greater than 2.1m. They may be placed
closer according to the load the scaffolds have to carry.
All standard should be in vertical position. All ledgers should be horizontal and
clamped to standard with right angled couplers. Fall of persons from height can be prevented
if scaffolds and working place are properly protected by the provision of guard-rail and toe
board. Use only non-conductive side rails around live electrical equipment. Wear protective
clothing and rubber soled shoes.
It is your responsibility to keep all tools and materials away from the edges of the
scaffold and platform openings. Sufficient help shall be used to move the scaffold. A
"watcher" shall be posted for overhead obstructions as well as holes, etc. at ground level.

REQUIREMENTS OF SAFE RIGGING OPERATION

Staff shall do their best in the following:

Concentration on work.
Good communication between operator and ground.
Checking equipment prior to use.
Fastening.
Stable lifting.
Unified commanding. Rigging operation should not be allowed to start if any of the
following conditions exist:
Lifting rope is slanting.
Crane is overloaded.
Bulk is too full in container.
Lifted goods are not fastened securely.
Commanding signal is not clear.
There is no prevention measure against sharp edge of lifted goods.
There is person on the lifted goods.
Structural parts being buried under ground.
Crane is out of order.
It is too dark to see lifted goods
There is no prevention measure against strong wind.

SAFE OPERATION OF LIFTING MACHINERY AND TACKLES

Thorough examination of Cranes and lifting Tackle suspended from the Crane hook
should be performed before operation. The parts to be examined include Crane Wheels,
Crawler tracks, load hook, chains, ropes, tackle etc. All these parts should be in good working
condition. Any defect found/observed should be immediately reported to the in
charge/Supervisor for corrective action.
ELECTRIC OVER HEAD TRAVELING CRANE
The crane should be operated only by qualified persons authorized by the competent
authority. The operator should be medically fit. He should follow instruction for safe
operation of the Crane contained in the manual provided to him. Electric overhead Cranes
should only be used for making direct lifts and should not be used for dragging loads from
bays on either side of the Crane tack, this Industrial Safety 14 can cause the load ropes to
leave the hoist barrel grooves. A subject matter expert should be arranged for delivering
lecture on the safe operation of Electric overhead Crane and tackles. The codes of hand signals
recommended for operation of Electric overhead areas should be used.

Crane Operator must take signals from the person responsible for the lift and must
make no movement until such a signal is given. Only signals in accordance with the relevant
codes should be used. Over loads are forbidden except for the purpose of test and the
operator should demand a weight check on any suspected load. The slinger is responsible for
ensuring that the load is properly sling before giving instructions to the driver. Under no
circumstances must any person be allowed to ride on the load or on the empty hook.
COMPRESSED GAS CYLINDERS SAFETY
Store, handle and transport with care. Look for signs of danger; including leaks,
corrosion, cracks or burn marks, contaminated valves, worn hoses, broken gauges or
regulators. Identify the gas in the cylinder before using it. Keep steel cap on while stored.
Keep upright and secured with a safety chain. Make sure connections and regulators are in
good condition. Point outlets away from people or sources of ignition when opening cylinder.
Store empty cylinders separate from full cylinders. Store oxygen and fuel gas cylinders
separately. Rotate cylinder storage so that older stock is used first. Store oxygen at least 20
feet from flammables and combustibles, or separate them by a five-foot fire-resistant barrier.
HAZARDS OF ENTRY INTO CONFINED SPACES
Vessels, tanks, pits etc. which contains inflammable liquid or chemical or there exist
oxygen deficiency are confined spaces. No body shall be allowed to enter a tank, a vessel, a
tunnel etc. containing toxic vapors or oxygen deficiency unless the atmosphere is tested and
certified fit for working, after the vessel or tank is cleaned, washed and purged. Adequate
ventilation and protective measures should be adopted during work inside such areas. No
tank or vessel which contains or has ever contained any explosive or inflammable shall be
subject to:

Any welding, brazing or soldering operations

Any gas Cutting or grinder cutting
Any operation involving heat unless and until
Standard procedure for hot work on enclosed tanks, and vessels is followed and
isolating of tank / vessels is provided.
If vessels and tanks above ground are made to undergo hot work, the following steps
are necessary for isolation
Pump out inflammables
Remove ignition smoke
Blanking of inlet and out let lines by using bolted blanks
Open man-holes
Remove sludge
Monitor wind direction
Perform gas flammability test.

Isolation of moving part like cutters and stirrers by locking isolation switches in the
off-position.
Pasting of notice Danger, men working in tank outside the tank.
Cleaning of tanks and vessels.
Before starting of hot work, vessel or tanks shall be completely cleaned by taking the
following steps.
Washing with cold water with high pressure hose
Air blowing for removal of volatile liquid Steaming out
Where sludge is present, filling with water and agitation with paddles, compressed air
or a perforated steam pipe is usually effective.
Washing with hot detergent solution

VENTILATION OF VESSELS AND TANKS

Adequate ventilation of vessel or tank shall be provided for purging the atmosphere
before entry and should be continued throughout during work and before re-entry for further
work. Ventilation should be provided to sweep out traces of dangerous fumes or to clear out
an atmosphere which may be deficient in oxygen.
A tank or vessel with bottom out let shall easily be ventilated. A tank without bottom
out lets air shall be piped from a fan or compressor to the bottom of the tank. If a inert gas
has been used to purge the tank or vessel, this gas should be replaced with a breathable
atmosphere. One useful method is to refill the tank with water, emptying it when the inert
gas has dispersed. Use of internal combustion engine should always be avoided in vessel and
tank as it rapidly uses air in a tank and produce oxygen deficiency and also draws fumes from
outside the tank as a result of induced drought.
TESTING OF TANK OR VESSEL FOR HAZARDOUS FUMES AND OXYGEN DEFICIENCY
Testing for dangerous gases, explosive hazards and lack of oxygen is necessary. Standard
procedure shall be used for testing of confined spaces for oxygen deficiency, hazards fumes
and explosive hazard. Proper respiratory protection i.e. breathing apparatus shall be used if
there exist oxygen deficiency and hazardous fumes. Entry into confined space is not allowed
without respiratory protection until the atmosphere is tested and certified safe.
ELECTRICAL SAFETY RULES
There are ways to work with or near electrical equipment and wiring that will help keep you
safe. All workers should follow these rules, whether or not they are electricians. Clothing: Do
not wear rings, watches, or any metal jewelry or ornaments when you are working near
electrical circuits. Do not wear a metal hard-hat. Wear shoes with non conducting (rubber)
soles.

Equipment: Do not use metal ladders or un-insulated metal tools near electricity. Use only
intrinsically safe or explosion-proof tools and hand lamps. In dangerous location like metal
tanks, use 6 or 12 volts equipment. Keep electrical machinery free of dust, dirt, and oil. Do
not store lunch or anything else in switch boxes. Keep all switch doors closed. Be sure all
equipment meets the requirement of a recognized testing laboratory. Never overload a
circuit, event when all equipment is certified. Examine all electrical tools and equipment for
signs of damage. Never use faulty power tools. When tools or their cords are damaged,
replace them at once.
Wiring: Wires with damaged or deteriorating insulation should be replaced. Only in an
emergency, and for temporary use only, should a wire be wrapped with electrical tape. When
joining wires, tape the connection, cap the wires with wire nuts, or coat them with a special
potting compound. These methods prevent accidental contact with a bare wire.
Water: Water and electricity do not mix. Check your work area for puddles and wet surfaces.
Never try to put out an electrical fire with water. Use the extinguisher designed for electrical
fires.
Making Repairs: The most important rule to follow when making repairs on or near an
electrical circuit is to shut off and lock out the power. Then, to be sure, test the circuit with a
current tester or meter before you work on it. Obey the lockout rules in your plant. Industrial
Safety 18
FIRE
Jobs that involve welding, flame cutting and grinding may cause fire. Before start of
work, carry out inspection of area and remove any combustible materials from the area.
Nearby equipment and hole / opening in floor shall be covered by fire blankets. Appropriate
fire extinguishers and water buckets shall be placed near the job site. A fire fighter will
supervise the activity. The area will be watched for one hour after the activity is finished.
HAZARDS OF FALLS

Falls to a lower level

This type of fall can arise in several ways, the most common of which are:
Falls through floor openings and into pits, vessels and trenches
Falls from roofs
Falls from ladders and stains
Falls from high working places.

PRECAUTIONS

All openings in floors including doors through which a person could fall onto a lower
floor or into pit or vessel shall be properly guarded with fix barrier rails of adequate height,
which shall be firmly supported and strong enough to with stand rough usage and occasional
impacts. Safety belts shall be used while working at heights.
HAZARDS OF FALLING OBJECTS
Protection against injury from falling object shall be ensured by taking following
measures. Never work under suspended loads of cranes. Never through any object from
height. Tool box managing on hook shall be used instead of loose tools. Care shall be taken in
stacking materials.
Safety net shall be fixed below the work area so that accidentally falling objects shall
be trapped in the net. Area on ground beneath the working area shall be cordoned and
supervised by safety / security personal. Worker shall wear protective clothing, safety helmet,
safety shoe, and safety gloves.
HAZARDS OF COMPRESSED AIR
Most workshops and factories are equipped with a comprehensive system of
compressed air connections for general use. It is not always appreciated that compressed air,
at the normal factory pressure of 56 bar, can cause grievous injury to workers, whether
they are actually operating the compressed air equipment, or merely standing within a range
of up to 12 m from it. General cleaning down of machines and work surfaces, or cooling of
parts, are among the common usages of compressed air in factories.
When blowing down, the danger lies in particles of metal and swarf which, propelled
at high velocity, can get into the operators eyeswhen cleaning out a blind hole, for
example. Or, and this is common, the particles can be blown into the eyes of a person standing
nearby, whose reflexes are not conditioned to the danger.
There is danger in allowing compressed air to enter the blood stream through a cut or
abrasion on the skin. This has been known to happen, with fatal results, when a workman was
using compressed air equipment to clean his clothes after work: a highly dangerous practice
which must be strongly discouraged.
Apprentices and young factory workers not made aware of the dangers, can injure
themselves severely, and injure other people, if they are allowed to indulge in horseplay while
using compressed air equipment. They must be well and fully trained in the correct use of all
such equipment.
There is a high and sometimes dangerous noise level from compressed air jets. This
noise may occur during a cooling or drying-off operation; generated over a long period it can
cause damage to hearing. Harm can also be done to machinery. When cuttings are being

blown from a surface, for example, they may become lodged in gearing or under slides and,
if they remain unnoticed, can cause damage.
It should always be remembered that compressed air is dangerous, compressed air is
expensive, and compressed air is not a toy. Operators must be trained to recognize the
dangers en that they may work in personal safety and not endanger by-standers or machinery.
Taking precautions to reduce the accident Industrial Safety 20 risk and costs (the direct cost
of the compressed air and the indirect cost of industrial injuries) is a common sense,
managerial responsibility.

TRACKING AND PREVENTION OF ACCIDENTS

HAZARDS OF WELDING
A weld is defined as a local coalescence of metal, wherein coalescence is produced by heating
to suitable temperature, with or without the application of pressure, and with or without the
use of filler metal. The filler metal may have a melting point the same as the base metals as
in Air or Gas welding or it may have a lower melting point but above 427 OC (800 OF). This
definition includes brazing, but excludes soldering.
THERMAL CUTTING
Thermal cutting process or removal metal by local melting or by the reaction of the metal
with oxygen, sometimes with fluxes at an elevated temperatures or by a combination of both.
METHOD OF WELDING/CUTTING

Gas welding and cutting

Arc welding and cutting
Resistance welding
Electron beam welding
Friction welding
Ultrasonic welding
Explosive welding
Laser beam welding

WELDING/CUTTING HAZARDS (COMMON)

Light Rays
Arc/gas welding produce Infrared and ultra violet radiations which are harmful to eyes
and skin. Following protection shall be used. Isolation of nearby chlorinated solvents is must,
which may get vaporized and catch fire Welding or hot slag may cause fire
Precautions

Combustible material must be removed from welding area or covered with fiber glass
or steel sheets. Wooden platform must be covered with steel sheets. Cracks/holes in floor
must be covered.
WELDING FUMES AND TOXIC HAZARDS
Normally these causes flue temperature, aches and respiratory problems
Precautions
Proper fume hood and exhaust arrangement must be provided.
ARC WELDING/CUTTING HAZARDS
Although the open circuit voltage is not high (15-40 volts, current 500 A DC/AC) but even then
a hazard should not be overlooked. Worn out and loose cables may cause an accident.
Precaution
Care must be taken of worn-out cables. Welder shall get himself insulated.
HAZARDS OF GAS SHIELDING
Normally argon, helium or CO2 (Carbon Dioxide) gases are used for shielding which are
supplied in cylinders. Argon and CO2 are heavier then air and will easily displace air and cause
oxygen deficiency in pits vessel and excavations.
Precaution
The atmosphere must be well ventilated during the welding / cutting process.
GAS WELDING AND CUTTING HAZARDS
Gas welding involves use of oxygen and acetylene gas cylinders, hoses, reducers, torches and
intense flames.
Precautions
Cigarette buts or any gloving article can burst into flames in presence of oxygen. Acetylene
itself is explosive and cannot be handled safely above 15 PSI.

GAS CYLINDERS HAZARDS AND PRECAUTIONS

The handling of compressed and liquefied gas in cylinder present hazards
Precautions

Cylinders shall be used in up-right position. Cylinders shall not be taken inside tanks/vessels.
Empty cylinder shall be handled with same care as filled cylinders. Cylinder valve shall be
opened slowly. Cylinder shall not be used without gauge. Leaked cylinders shall be removed
to a safe place and shall be labeled. Shall take care not to allow a spark near cylinder. Various
gas cylinders shall not be mixed. Cylinder shall not be filled without pressure testing
HAZARDS OF WELDING TORCHES AND PREVENTIVE MEASURES
Torches made by reputed manufacturer shall only be used. Welding head, tip or nozzle
suitable for the job shall only be used. Weld heads tip or nozzle shall be screwed in properly.
Gas supply shall be first shut-off before disconnecting a torch from the hose. Pilot light or
spark shall be used for lightening of a torch and torch shall be pointed to a safe direction.
Torch shall never be put down without tuning the gas-off. Welding hose shall be protected
against sharp edges of metals.

OCCUPATIONAL DISEASES AND SAFETY DEVICES

PERSONNEL PROTECTIVE EQUIPMENT
DEFINITION
To protect against unavoidable work Hazards, special clothing and Devices are used.
These are called Personnel Protective Equipment (P.P.E).
PURPOSE
To protect workers from the risk of injury by providing a safety barrier against work place
hazards or provide barrier between the person at risk and the potential instrument of injury.
SCOPE
Protective Equipment cannot prevent accidents. It can prevent and minimize injuries to the
workers when accident happens. Potential instrument of injury: Sharp, abrasive, corrosive,
heavy, hot, irritant or harmful objects.
PROTECTION REQUIRED AT WORK PLACES:

Head Protection.
Hearing Protection
Eye and Face protection.
Respiratory Protection.
Hand protection.
Foot protection.
Fall/Falling object protection.

HEAD PROTECTION (SAFETY HELMET)

Head is the most precious/vital part of the body. It is inherently safe but requires more care
and protection.
SAFETY HELMET
To provide adequate head protection, safety helmet have an adjustable head band
and suspension webbing. These safety helmets can withstand heavy impact without denting
or breaking and resist penetration of falling objects. Safety helmet is meant mainly for head
protection from falling objects but it is also required to protect against heat, chemical
splashes and protect wears hair from contact with machinery part. Such area/places are
defined through signs and posters.
HEARING PROTECTION
The risk due to noise hazard can be defined as Excessive exposure to noise causes
injury to hearing. Continued exposure to sound levels in excess of 90 dB causes partial or
complete loss of hearing i.e. deafness. Hazard limit is 90 dB (A) (as the upper limit for habitual
exposure to noise).
Measurement: dB (A) is the unit used for measurement of sound energies which could cause
occupational deafness. Sound level meter gives a measure of the rate of flow of acoustical
energy. The A weighting refers to a filter which removes a proportion of low frequencies
and also certain high frequencies.
The given below values describe the exposure time versus sound level limit in dB (A).
Time limit (Exposure time) Limit dB(A) 08 hours 90 Industrial Safety 25 04 hours 93 02 hours
96 01 hour 99 30 minuets 102 15 minuets 105 Over 90 dB (A) with every increase of 3 dB (A)
the safe exposure time reduces by half.
Environmental Chart Sound level in (dB(A))
Examples of Industrial Noise sources.

120-150 Air fields-Jet Engine

120 Threshold of pain
110-120 Pneumatic drills
100-110 Diesel locomotives
90-100 Workshops
85-100 Power Equipment
85 Acceptable noise level limit
75-95 Average factory noise
60 Normal conversation

The purpose for hearing protection is to reduce the noise emission level to the wearer.
Reduction in Noise emission level by hearing protectors determines the protection which they

afford against noise. The protection afforded by the hearing protectors depends upon two
factors.
Attenuation (noise reducing effects)
The percentage of time during which hearing protectors is worn. Percentage of time
worn is the first and most important element for hearing protection. It is compulsory for every
worker to wear Ear plug /Ear muffs in these areas during the whole exposure time. It is the
responsibility of every one to keep his ear plug and Ear muffs in a sanitary condition.
EYES AND FACE PROTECTION
The importance of eye safety is highlighted by the vulnerability of the eye. Although
to counter act this, nature has provided the eye with a number of built in protective devices.
The bone structure acts as a shield against large objects. The muscles around the eye act as a
shock absorbers against blows. Eye brows prevent moisture running directly into eyes. Eye
lids and lashes act like safety curtains, closing rapidly with a reflex action to trap small particles
or insects or to shut out sudden glaring light.
An extra long nerve allows for some displacement without permanent damage. And,
after all this, if same thing should penetrate the defenses, the tear-ducts do their best to wash
away the offending foreign body. All these natural defenses, although efficient enough for
natural out-door surrounding, are inadequate in manmade environment where chemicals,
sharp, radiation and fast flying particles are common hazards. Eye injuries generally can be
classified as:
Burn Thermal and chemicals
Laceration Caused by any sharp piece of metal etc
Contusions Results from heavy blow may cause displacement of the lens or retina or
rupture the eye ball.
Burns to eyes are caused by chemicals splash and powerful infra-red or Ionizing radiation
from welding operation: In case of chemical splash immediately wash eyes with plain water
continuously for 15 minutes because if any delay occurs it will sock in the tissues and the
process cannot be stopped easily which could damage the eye severely.

HAND PROTECTION
Use of appropriate/suitable gloves is necessary when there exist hazard to protect against
contact with following hazards:

Sharp
Abrasive
Corrosive

Hot and irritant substances or particles.

So, suitable gloves should be used, when performing jobs such as welding, flame cutting,
handling hazardous chemicals, handling Hot and cold objects or danger of cut, burns,
laceration, abrasion and puncture persists. Similarly Insulation gloves should be used when
working on energized electrical conductors or equipment. The usual types of gloves used for
the protection of Hands from various job hazards are given below:
Cotton gloves simple gloves used for general work.
PVC doted gloves to protect Hand, from cut, puncture, abrasion, splinter etc
PVC chemical splash gloves to avoid contact with hand/skin to prevent irritation and
burn.
Ordinary Rubber gloves to avoid contact with liquids, oils, lubricants etc
Electrically insulated Rubber gloves use for work on energized electrical conductors
or equipment.
Leather gloves Use for handling hot surfaces/objects.
FOOT PROTECTION
More than 10% of all disabling injuries to Industrial workers involve feet and toes. Such
injuries can be reduced or even eliminated by wearing safety shoes. Steel toe cap protect the
toe against falling object and striking against sharp/projected edges. The sole is anti-slip,
chemical resistant, oil resistant and electrically insulated. Rubber boats or PVC over shoes
must be used when handling chemicals.
BODY PROTECTION
Protective clothing is used to protect against dirt, chemicals, oils, heat or contact with
general articles which could cause physical damages. Dungarees are used for general purpose.
Chemical resistant suits along with rubber gloves and face shield are used for
handling/maintenance of equipment involving chemicals.

RESPIRATORY PROTECTION
Respiratory Protection for workers against Toxic and Hazardous suspended particles
or gases present in the ambient atmosphere is required when a worker is exposed or may be
exposed to harmful concentration of contaminated air or when a deficiency of Oxygen exist
or might exist.
TYPES OF RESPIRATORY HAZARD

Dust

Fumes Organic or inorganic gases/vapors

Air born radioactive contamination
Smoke
Lack of Oxygen

FILTER CARTRIDGES AND CANISTER/ FILER RESPIRATORS

A fitter respirator is a respiratory protection device dependent on ambient
atmosphere where the respirator covers nose and mouth which when inhaling occurs, filters
the ambient atmosphere (Air) in order to clear it sufficiently from Industrial Safety 28
unwanted particles to prevent restriction of the normal functioning of the respiratory organs
and sickness or death through inhaling of polluted air and the exhaled air is returned to the
atmosphere through a non-return v/v. the device consists of:
Face piece and
One or several filters
PRECAUTION IN USE OF FILTERS
Filter respirators cannot overcome lack of oxygen. These shall not be used where
ambient atmosphere contains less than 17% oxygen. These cannot be used in containers and
in narrow space / rooms. These cannot be used in unknown or in such ambient air conditions
where the composure of the ambient atmosphere could change for the worse.
TYPE OF FILTERS

Gas filters
Particle filters
Combined filters

FIRST AID HINTS

BROKEN NECK OR BACK
If the victim cannot move his fingers or if there is tingling or numbness around his
shoulders, his neck may be broken. If he can move his fingers but not his feet or toes, or if he
cant move his back or neck, his back may be broken.
First aid
Loosen clothing around victims neck and waist. Cover him and summon a doctor or
ambulance. Dont move him or let him try to move. Dont lift his head to give him water.
CHEMICAL BURNS
First aid

Flush the burned area with water for at least five minutes to dilute any chemical. If an
eye is burned by a chemical, especially by an acid, flush gently but thoroughly with water and
call the doctor.
CARBON MONOXIDE POISONING
It is a colorless and odourless gas that kills without warning. Its symptoms are:
Headache, dizziness, weakness, laboured breathing, possible vomiting followed by
unconsciousness. Skin, fingernails may be cherry red.
First Aid
Get the victim into open air, or open all windows or doors, cover him with blankets to
give him warmth. Begin artificial respiration.
FAINTING
First Aid
A- Place the patient on his back, with his head low. Make sure that his airway is clear and he
is breathing properly. Loosen tight clothing, apply cold cloths to his face. If the fainting
lasts for more than two minutes, cover him and call ambulance.
B- B- Seat a person who feels faint. Fan face or sponge with cool water. Lower head to knees
to encourage blood flow. If he faints, lay him down, turn head to the side, and wave
smelling, salts or spirits of ammonia under the nose. If the faint lasts more than a few
minutes, call a doctor; if person regains consciousness, keep him quite and lying down
for 15 minutes.
ELECTRIC SHOCK
The fist and foremost thing to do is to switch off the electricity from the main system.
If this is not possible then do the following: Remove the contact of victims body from source
of electric current, using a tree branch, a dry rope or dry clothing. Do not touch the victim
until contact with current has been broken. Check to see if victim is breathing and has a pulse.
If necessary apply mouth to mouth breathing and send for medical aid at once.
FIRST AID FOR SHOCK VICTIMS
The most important things to know about first aid for shock victims are:

Never touch a victim of shock who is still in contact with the source of electricity.
Act swiftly.
Send for medical assistance.

If you touch someone who is still in contact with the electrical source, you will also
become part of the circuit. Then there will be two victims instead of one. If the person is

frozen to the energized conductor, the first thing to do is shut off the electricity. If control is
very far away, drag or push the victim away from the electricity with a piece of nonconductive
material. Make sure the material you use is dry. If live wires are lying on or near the victim,
use a nonconductive material to move them away.
Start first aid as soon as it is safe to do so. If the heart has stopped breathing, start heart
massage and mouth-to-mouth resuscitation immediately. If you do not act within four
minutes, the victim will suffer permanent brain damage. If the heart is beating, lay the victim
flat and raise the leg by placing something under them. Keep the victim warm. Do not give
fluids if the victim is unconscious or nauseous. If the victim is burned, cut away loose clothing
and immerse the burned area in cold water or cover with cold, wet compresses.
APPENDIX PAIN
Symptoms
Nausea, vomiting, severe pain in the stomach, fever, the right side of the abdomen becomes
hard, tense and is sore or painful to touch.
FIRST AID
Do not let him eat or drink anything. Do not give the patient any laxative. Take his
temperature and take the patient to the Hospital at once.
BLEEDING AND WOUNDS
To stop bleeding, firmly squeeze the sides of the wound together or apply pressure
with the thumbs at the sides of the wound. Cleanse around and away Industrial Safety 33
from the wound, taking care not to disturb any blood clot. Apply and maintain pressure to
bleeding part with dressing, cover with pad and bandage firmly. If bleeding is not controlled,
apply more pads and increase pressure with the hand or additional bandages. Immobilize the
injured part and treat for shock.
SHOCKS
Symptoms are pale; cold skin; rapid pulse; shallow breathing; weakness; Sock itself
can be fatal, Reassure the casualty and lay him down at absolute rest. Loosen any tight
clothing, Wrap in blanket or coat but DO NOT OVERHEAT, apply artificial heat, or rub. Get
casualty to hospital as soon as possible.
BURNS OR SCALDS
To alleviate pain, immerse part in Ice water if possible. DO NOT remove burned
clothing break blisters or apply ointments or oils. Cover burned area with dry quaze or some
clean fabric and attach with bandages. If burn is sever, treat for shock and take patient to
hospital without delay.

BROKEN BONES
Fractures should be moved as little as possible. Immobilize and support the injured
part at once. Upper limbs may be gently secured to the body in the most comfortable
position. When a leg is fractured leave casualty lying in a position as comfortable as possible
and call a doctor or ambulance. If transport is essential the injured limb may be secured to
the sound one. Industrial Safety 34
POISON
If patient is unconscious do not attempt to treat except with artificial respiration, if
needed. Conscious casualties of corrosive poison (which destroy tissue, e.g. acids should be
given large quantities of milk to drink. With narcotics (e.g. sleeping pills) the casualty should
be made to vomit by touching the back of his throat or given him two tablespoons of salt in
a glass of warm water to drink.
FROSTBITE
Warm frozen part in water (102-105 F). Do not use heat lamp or hot water bottle. Do not rub.
SUNSTROKE
Sponge body with cool water or rub with alcohol.
HEAT EXCHAUSION
Give victim slips of salt water (1 teaspoon of salt per glass glass every 15 minutes
for one hour). Loosen clothing and apply cool wet cloth. Keep lying down with feet elevated.
Take to the hospital.
INSECT BITES AND STINGS
Attempts to remove stinger. Cover area with paste of baking soda; calamine lotion ma be
helpful later to reduce itching. If victim faints, collapses, or if body swells call physician
immediately.
EXHALED AIR RESUSCITATION
The exhaled air (mouth to mouth, or mouth to nose) method of artificial respiration
is strongly recommended and should be learned by everyone. Lay patient on his back. Tilt
the head and chin away from the chest to clear airway, making sure that it is not obstructed
by the tongue or foreign matter. Open your mouth and take a deep breath. Pinch the
casualtys nostrils together, then seal your lips around mouth. Blow into his lungs until the
chest rises, then remove your mouth and watch the chest deflate. Repeat, giving the first
four inflation as rapidly as possible. Lung inflation can be carried out through the nose. The
casualtys mouth should be sealed with the thumb holding the lower jaw.

HEART ATTACKS
The American Heart Association says that these are the usual warnings of heart
attack, although symptoms vary. Prolonged, oppressive pain or unusual discomfort in
the center of the chest, behind the breast bone pain may radiate to shoulder, arm,
neck or jaw. The pain or discomfort is often accompanied by seating, nauseas,
vomiting and shortness of breath may also occur. Sometime these symptoms subside
and then return. Industrial Safety 35 Minutes count when heart attack strikes Act
promptly. Call a doctor and carefully describe the symptoms. If no doctor is
immediately available, get the victim to a hospital emergency at once

Chapter 9

Work Study

Work Study
Definition: Work study may be defined as the analysis of a job for the purpose of finding the preferred
method of doing it and also determining the standard time to perform it by the preferred (or given)
method. Work study, therefore, comprises of two areas of study: method study (motion study) and time
study (work measurement).
Role of Work Study in Improving Productivity
In order to understand the role of work study, we need to understand the role of method study and that
of time study.
Method study (also sometimes called Work Method Design) is mostly used to improve the method of
doing work. It is equally applicable to new jobs. When applied to existing jobs and existing jobs, method
study aims to find better methods of doing the jobs that are economical and safe, require less human
effort, and need shorter make-ready / put-away time. The better method involves the optimum use of
best materials and appropriate manpower so that work is performed in well-organized manner leading
to increased resource utilization, better quality and lower costs.
It can therefore be stated that through method study we have a systematic way of developing human
resource effectiveness, providing high machine and equipment utilization, and making economical use
of materials.
Time study, on the other hand, provides the standard time, that is the time needed by worker to complete
a job by the standard method. Standard times for different jobs are necessary for proper estimation of

manpower, machinery and equipment requirements

daily, weekly or monthly requirement of materials
production cost per unit as an input to better make or buy decision
labour budgets
Workers efficiency and make incentive wage payments.

By the application of method study and time study in any organization, we can thus achieve greater
output at less cost and of better quality, and hence achieve higher productivity.
Work Study and Ergonomics
The work study and the ergonomics are the two areas of study having the same objective: design the
work system so that for the operator it is safe, and the work is less fatiguing and less time taking.
Historical Developments
The Work of Taylor

Frederick W. Taylor is generally considered to be the founder of modern method and time study,
although time studies were conducted in Europe many years before Taylors time. In 1760, Jean
Rudolph Perronet, a French engineer, made extensive time studies on the manufacture of No. 6 common
pins.
Taylor began his time study work in 1881 while associated with the Midvale Steel Company in U.S.A.
He evolved a system based on the task, and proposed that the work of each employee be planned out
by the management in advance. Each job was to have a standard time, deter mined by time studies made
by experts. In the timing process, Taylor advocated dividing the work into small divisions of effort
known as "elements." Experts were to time these individually and use their collective values to
determine the allowed time for the task.
Early presentations of Taylors findings were received with little enthusiasm, because many interpreted
his findings to be somewhat new piece-rate system rather than a technique for analysing work and
improving methods. Both management and employees were sceptical of piece rates, because many
standards were earlier typically based on the supervisor's guess or even sometimes inflated by bosses
to protect the performance of their departments.
In June 1903, at the American Society of Mechanical Engineers meeting, Taylor presented his famous
paper, "Shop Management," which included the elements of scientific management: time study,
standardization of all tools and tasks, use of a planning department, use of slide rule and similar
timesaving implements, instruction cards for workers, bonuses for successful performance, differential
rates, mnemonic systems for classifying products, routing systems, and modern cost systems. Taylors
techniques were well received by many factory managers, and by 1917, of 113 plants that had installed
"scientific management," 59 considered their installations completely successful, 20 partly successful,
and 34 failures.
In 1898, while at the Bethlehem Steel Company, Taylor carried out the pig-iron experiment that became
the most celebrated demonstrations of his principles. He established the correct method, along with
financial incentives, and workers carrying 92-pound pigs of iron up a ramp onto a freight car were able
to increase their productivity from an average of 12.5 tons per day to between 47 and 48 tons per day.
This work was performed with an increase in the daily rate of $1.15 to $1.85. Taylor claimed that
workmen per formed at the higher rate "without bringing on a strike among the men, without any quarrel
with the men and were happier and better contented."
Another of Taylors Bethlehem Steel studies that became famous was on shovelling work. Workers
who shovelled at Bethlehem would use the same shovel for any joblifting heavy iron ore to lifting
light rice coal. Taylor designed shovels to fit the different loads: short- handled shovels for iron ore,
long-handled scoops for light rice coal, and showed their usefulness in improving productivity.
Not as well-known as his engineering contributions is the fact that in 1881, he was a U.S. tennis doubles
champion. Here he used an odd-looking racket he had designed with a spoon curved handle.
The Work of Gilbreths
Frank and Lilian Gilbreth are considered as the founders of the modern motion study technique, which
may be defined as the study of the body motions used in performing an operation, for the purpose of
improving the operation by eliminating unnecessary motions, simplifying necessary motions, and then

establishing the most favourable motion sequence for maximum efficiency. Frank Gilbreth originally
implemented ideas into the bricklayer's trade in which he was employed. After introducing methods
improvements through motion study, including an adjustable scaffold that he had invented, as well as
operator training, he was able to increase the average number of bricks laid from 120 to 350 per worker
per hour.
More than anyone else, the Gilbreths were responsible for industry's recognition of the importance of a
detailed study of body motions to arrive at the best method of performing an operation that would
increase production, reduce operator fatigue. They developed the technique of filming motions for
study, known as micro motion study.
The Gilbreths also developed the cyclegraphic and chronocyclegraphic analysis techniques for studying
the motion paths made by an operator. The cycle- graphic method involves fixing small electric light
bulb to the finger or part of the body being studied and then photographing the motion while the operator
is performing the operation. The resulting picture gives a permanent record of the motion pattern
employed and can be analysed for possible improvement. The Chrono- cyclograph is similar to the
cyclograph, but its electric circuit is interrupted regularly, causing the light to flash. Instead of showing
solid lines of the motion patterns, the resulting photograph shows short dashes of light spaced in
proportion to the speed of the body motion being photographed. Consequently, with the
chronocyclegraph it is possible to determine direction and compute velocity, acceleration, and
deceleration, in addition to study of body motions.
The Work of Others
Carl G. Barth, an associate of Frederick W. Taylor, developed a production slide rule for estimating the
most efficient combinations of speeds and feeds for cutting metals of various hardnesss, considering
the depth of cut, size of tool, and life of the tool. He is also known for his work on estimation of
allowances by establishing the number of foot-pounds of work a worker could do in a day. He developed
a relationship in which a certain push or pull on a worker's arms was equated with the amount or weight
that worker could handle for a certain percentage of the day.
Harrington Emerson applied scientific methods to work on the Santa Fe Railroad and wrote a
book, Twelve Principles of Efficiency, in which he made an attempt to lay down procedures for efficient
operation. He reorganized the company, integrated its shop procedures, installed standard costs and a
bonus plan, and introduced Hollerith tabulating machines for the accounting work. This effort resulted
in annual saving of $ 1.5 million and recognition of his approach, called efficiency engineering.
In 1917, Henry Laurence Gantt developed simple graph that would present performance while visually
showing projected schedules. This production control tool was adopted by the shipbuilding industry
during World War I. For the first time, this tool demonstrated the possibility of comparing actual
performance against the original plan, and to adjust daily schedules in accordance with capacity, back
log, and customer requirements. Gantt is also known for his wage payment system that rewarded
workers for above-standard performance, eliminated any penalty for failure, and offered the boss a
bonus for every worker who per formed above .standard. Gantt advocated human relations and
promoted scientific management in the back drop of an inhuman "speedup" of labour.
Motion and time study received added stimulus during World War II when Franklin D. Roosevelt,
through the U.S. Department of Labour, attempted to establish standards for increasing production. The

stated policy advocated greater pay for greater output but without an increase in unit labour costs,
incentive schemes to be collectively bargained between labour and management, and the use of time
study for setting production standards.

Chapter 10
Method Study
Method Study
Method study, aims to achieve the better method of doing work, and for this reason method study is
sometimes called Work Method Design.
Definition: Method study can be defined as the procedure for systematic recording, analysis and critical
examination of existing or proposed method of doing work for the purpose of development and
application of easier and more effective method.
Method Study Procedure
The following general steps describe the procedure for making a method study.
1. Select the job on which method study is to be applied.
2. Obtain information and record.
3. Examine the information critically.
4. Develop the most practical, economical and effective method by considering real limitations of
the situation.
5. Install the new method as standard practice.
6. Maintain the standard practice by regular follow up.
Let us consider these steps in some detail.
Selection of Job for Method Study
Practically, any activity or a job is a potential project for improvement but as the work study engineer
is to sell his ideas and maintain his existence in the organisation, he should always attempt to select
those jobs for improvement which are unpopular among employees or are considered dirty by them.
By improving such jobs, he would earn goodwill from the employees as well as the management, and
can expect their full cooperation for other studies in the future.
Considerations may be given to the following factors while selecting a job for method study
Economic Factors
Technical Factors
Human Factors
Economic Factors:
If the economic importance of a job is small, it is not wise to start or continue a long study. Priorities
should be given to those types of job which offer greater potential for cost reduction. Such jobs are
easily identifiable, as they have
High labour content, i.e. they consume more time
Excessive machine or man idleness
Higher frequency of occurrence, i.e. they have large demand
Bottlenecks in production line
Higher proportion of accidents
Movement of material or men over long distance
High scrap and reprocessing costs
High payment of overtime bills.
Technical Factors: The method study engineer must have the necessary technical knowledge about the
job to be studied. Only surface knowledge about the subject may not lead to the right solution to the
real problem. To illustrate, consider that a particular machine tool in proving bottleneck. The output
from this machine is not reaching the assembly line in the required quantity. Through a preliminary
study, it is found that it is running at lower speed and feed than that recommended for the pair of work
and tool material used. Just increase in speed or feed may not be the solution of this problem. It may be
possible that the machine itself is not rigid enough to operate at higher speeds or take a deeper cut. Just
increase in speed may increase the output but the quality of job may be seriously affected. Technical
expertise in machine tools and metal cutting process would be essential to solve problem of this kind.

Human Factors: Emotional reaction of the workers to the method study and changes in method are
important considerations. If the study of a particular job is suspected to cause unrest or ill feeling, it
should not be undertaken, however useful it may be from the economic point of view. It is always better
to take up first those jobs which are considered dirty', unsafe, unpleasant, boring, or highly fatiguing,
and improvements brought about as a result of method study. This would possibly ensure cooperative
from the workers for the other jobs as well.
After it is recognized that a problem exists, the first step is to properly formulate it. From the general
statements like Costs are too high, Increase the production, Reduce shop floor accidents, it is
necessary to determine just what the real problem is. After it is ascertained that the problem merits
consideration, it is decided whether this is the proper time to solve it, and how much time can be spent
in solving it. The problem may then be defined broadly giving minimum constraints at this stage, as it
will permit the use of imagination a ND creativity in finding a solution. It may sometimes be desirable
to divide the complete problem into a couple of small problems and solve them.

Chapter 11

Work Measurement

Work Measurement
Work measurement refers to the estimation of standard time for an activity that is the time allowed for
completing one piece of job by using the prescribed method. Standard time can be defined as the time
taken by an average experienced worker for the job with provisions for delays beyond the worker's
control.
There are several techniques used for estimation of standard time in industry. These include time study,
work sampling, standard data, and predetermined motion time system.
Applications:
Standard times for operations are useful for several applications in industry, like
Estimating material, machinery, and equipment requirements.
Estimating production cost per unit as an input to
Preparation of budgets
Determination of selling price
Make or buy decision
Estimating manpower requirements.
Estimating delivery schedules and planning the work
Balancing the work of operators working in a group.
Estimating performance of workers and using that as the basis for incentive payment to those direct
and indirect labour who show greater productivity.
We will study some of the popular techniques of work measurement.
TIME STUDY. It is the most versatile and the most widely used technique of work measurement.
Definition:
Time study is a technique to estimate the time to be allowed to a qualified and well-trained worker
working at a normal pace to complete a specified task by using specified method.
This technique is based on measuring the work content of the task when performed by the prescribed
method, with the allowance for fatigue and for personal and unavoidable delays.
Time Study Procedure:
The procedure for time study can best be described step-wise, which are self-explanatory.
Step 1: Define objective of the study. This involves statement of the use of the result, the precision
desired, and the required level of confidence in the estimated time standards.
Step 2: Verify that the standard method and conditions exist for the operation and the operator is
properly trained. If need is felt for method study or further training of operator, the same may be
completed before starting the time study.
Step 3: Select operator to be studied if there are more than one operator doing the same task.
Step 4: Record information about the standard method, operation, operator, product, equipment, and
conditions on the Time Study observation sheet.
Step 5: Divide the operation into reasonably small elements, and record them on the Time Study
observation sheet.
Step 6: Time the operator for each of the elements. Record the data for a few number of cycles on the
Time Study observation sheet. Use the data to estimate the total number of observations to be taken.
Step 7: Collect and record the data of required number of cycles by timing and rating the operator.
Step 8: Calculate the representative watch time for each element of operation. Multiply it by the rating
factor to get normal time.
Normal time = Observed time x Rating factor
Calculate the normal time for the whole operation by adding the normal time of its various elements.

Step 9: Determine allowances for fatigue and various delays.

Step 10: Determine standard time of operation.
Standard time = Normal time + allowances
Selection of job for Time Study
Time Study is conducted on a job
Which has not been previously time-studied.
For which method change has taken place recently.
For which worker(s) might have complained as having tight time standards.
Selection of Worker for Time Study
The selection of worker for time study is a very important factor in the success of the study. If there is
only one person on the job, as usually is, then there is no choice. But if more than one person is
performing the same operation, the time study man may time one or more of the workers. If all the
workers are using the same method for doing the job and there is different in the rate of their doing it,
it is necessary to select a suitable worker for the study. The worker on which time study should be
conducted must
Have necessary skill for the job.
Have sufficient experience with the given method on the job (that is, he should have crossed
the learning stage).
Be an average' worker as regards the speed of working.
Be temperamentally suited to the study (those who can't work in normal fashion when watched,
are not suitable for the study).
Have knowledge about the purpose of study.
Time Study Equipment
The following equipment is needed for time study work.
Timing device
Time study observation sheet
Time study observation board
Other equipment
Timing Device. The stop watch is the most widely used timing device used for time study, although
electronic timer is also sometimes used. The two perform the same function with the difference that
electronic timer can measure time to the second or third decimal of a second and can keep a large
volume of time data in memory.
Time Study Observation Sheet. It is a printed form with spaces provided for noting down the
necessary information about the operation being studied, like name of operation, drawing number, and
name of the worker, name of time study person, and the date and place of study. Spaces are provided in
the form for writing detailed description of the process (element-wise), recorded time or stop-watch
readings for each element of the process, performance rating(s) of operator, and computation. Figure 1
shows a typical time study observation sheet.
Time Study Board. It is a light -weight board used for holding the observation sheet and stopwatch in
position. It is of size slightly larger than that of observation sheet used. Generally, the watch is mounted
at the centre of the top edge or near the upper right-hand corner of the board. The board has a clamp to
hold the observation sheet. During the time study, the board is held against the body and the upper left
arm by the time study person in such a way that the watch could be operated by the thumb/index finger
of the left hand. Watch readings are recorded on the observation sheet by the right hand.
Other Equipment. This includes pencil, eraser, device like tachometer for checking the speed, etc.
Dividing Work into Short Elements

Timing a complete task as one

element
is
generally
not
satisfactory. For the purpose of time
study the task is normally
broken into short elements and each
element is timed separately, for the
following
reasons:
Figure 1
(1) To separate unproductive part
of task from the productive one.
(2) To improve accuracy in rating.
The worker may not work at the
same speed throughout the cycle.
He may perform some elements
faster
and
some slower. Breaking of task into
short elements permits rating of
each
element separately which is more
realistic than just rating once for the
complete
cycle.
(3) To identify elements causing
high fatigue. Breaking of task into
short elements permits giving
appropriate rest allowances to different elements.
(4) To have detailed job specifications. This helps in detection of any variation in the method that may
occur after the time standard is established.
(5) To prepare standard data for repeatedly occurring elements.
The following guidelines should be kept in mind while dividing a task into elements.
(1) The elements should be of as short duration as can be accurately timed. (This in turn, depends on
the skill of the time study man, method of timing and recording, and many other factors. Generally,
with the stop watch, elements of duration less than 0.03 to 0.05 minute are difficult to time accurately.
The elements should not normally be longer than 0.40 min.).
(2) Manually performed elements should be separated from machine paced elements. (Time for machine
paced elements can be determined by calculation). Machine elements are not rated against a normal.
This rule also helps in recognition of delays.
(3)
Constant
elements
should
be
separated
from
variable
elements.
(Constant elements are those elements which are independent of the size, weight,
length, or shape of the work piece. For example, the time to pick screw driver
from its place and bring it to the head of a screw is constant, whereas the time
to tighten or loosen the screw is a variable, depending upon the length and
size of the screw).
(4) The beginnings and endings of elements should be easily distinguishable. These should preferably
be associated with some kind of sound.

(5) Irregular elements, those not repeated in every cycle, should be separated from regular elements.
For example, if the jig is cleaned off after every ten parts produced, "cleaning" is an irregular element,
and its time should be spread over ten cycles.
(6) Unnecessary motions and activities should be separated from those considered essential.
(7) Foreign or accidental elements should be listed separately. Such elements are generally of nonrepetitive type.
Number of cycles to be timed.
The following general principles govern the number of cycles to get the representative average cycle
time.
(1) Greater the accuracy desired in the results, larger should be the number of cycles observed.
(2) The study should be continued through sufficient number of cycles so that occasional elements such
as setting-up machine, cleaning of machine or sharpening of tool are observed for a good number of
times.
(3) Where more than one operator is doing the same job, short study (say 10 to 15 cycles) should be
conducted on each of the several operators than one long study on a single operator.
It is important that enough cycles are timed so that reliable average is obtained.
Following techniques are used to determine the number of cycles to be timed.
(I) Use of Tables: On the consideration of the cost of obtaining the data and the desired accuracy in
results, most companies have prepared their own tables for the use of time study people, which indicate
the number of cycles to be timed as a function of the cycle time and the frequency of occurrence of the
job in the company. For example, one Company uses the Table-1 for such purposes.
(ii) Statistical methods: On the basis of the requirements of the particular situation
involved, accuracy and confidence level are decided (An accuracy of a confidence level of 95% is
considered reasonable in most cases). A preliminary study is conducted in which some (say N) cycles
are timed. Standard deviation o of these (N) observations is calculated as

(iii) Mundel Method: In this method the following steps are followed.
Step 1. Take a few good watch readings of the work cycle. (Generally, 10 readings are taken if cycle
time is less than 2 minutes, otherwise 5 readings).
Step 2. Find the ratio
, where H and L are respectively the highest and the lowest value of the
leading.
Step 3. Corresponding to the value of the ratio, determine the number of observations from the Table
1.

Table: 1 No. of Observations, (Mundel Method)

The number of observations for 5% precision and 95% confidence level. If 10% precision and 95%
confidence level is to be used, divide the number of observations given in this table by 4.
Number of observations required 5% precision and 95% confidence level
0.06 0.08 0.10 0.12 0.14 0.16 0.18 0.20 0.22 0.24 0.26 0.28
Sample 5 4
Sample 10 2

8
4

12
7

17
10

23
13

30
17

38
22

47
27

27
33

68
39

80
46

93
53

0.30 0.32 0.34 0.36 0.38 0.40 0.42 0.44 0.46 0.48 0.50
Sample 5 107 121 137 154 171 190 210 230 250 273 296
Sample 10 61 69 78 88 98 108 120 132 144 156 170
Normal Performance
There is no universal concept of Normal Performance. However, it is generally defined as the working
rate of an average qualified worker working under capable supervision but not under any incentive wage
payment scheme. This rate of working is characterized by the fairly steady exertion of reasonable effort,
and can be maintained day after day without undue physical or mental fatigue.
The level of normal performance differs considerably from one company to another. What company a
calls 100 percent performance, company B may call 80 percent, and company C may call 125 percent
and so on. It is important to understand that the level that a company selects for normal performance is
not critical but maintaining that level uniform among time study persons and constant with the passage
of time within the company is extremely important.
There are, of course, some universally accepted benchmark examples of normal performance, like
dealing 52 cards in four piles in 0.5 minute, and walking at 3 miles per hour (4.83 km/hr). In order to
make use of these benchmarks, it is important that a complete description about these be fully
understood, like in the case of card dealing, what is the distance of each pile with respect to the dealer,
technique of grasping, moving and disposal of the cards.
Some companies make use of video films or motion pictures for establishing what they consider as
normal speed or normal rate of movement of body members. Such films are made of typical factory
jobs with the operator working at the desired normal pace. These films are found to be useful in
demonstrating the level of performance expected from the operators and also for training of time study
staff.
Work Sampling
Work Sampling (also sometimes called ratio delay study) is a technique of getting facts about utilization
of machines or human beings through a large number of instantaneous observations taken at random
time intervals. The ratio of observations of a given activity to the total observations approximates the
percentage of time that the process is in that state of activity. For example, if 500 instantaneous
observations taken at random intervals over a few weeks show that a lathe operator was doing
productive work in 365 observations and in the remaining 135 observations he was found 'idle' for
miscellaneous reasons, then it can be reliably taken that the operator remains idle (135/500) x 100 = 27
% 0f the time. Obviously, the accuracy of the result depends on the number of observations. However,
in most applications there is usually a limit beyond which greater accuracy of data is not economically
worthwhile.
Use of Work Sampling for Standard Time Determination

Work sampling can be very useful for establishing time standards on both direct and indirect labour
jobs. The procedure for conducting work sampling study for determining standard time of a job can be
described step-wise.
Step 1. Define the problem.
Describe the job for which the standard time is to be determined.
Unambiguously state and discriminate between the two classes of activities of operator on the job:
what are the activities of job that would entitle him to be in 'working" state.
This would imply that when operator will be found engaged in any activity other than those would
entitle him to be in "Not Working" state.
Step 2. Design the sampling plan.
Estimate satisfactory number of observations to be made.
Decide on the period of study, e.g. two days, one week, etc.
Prepare detailed plan for taking the observations.
This will include observation schedule, exact method of observing, design of observation sheet, route
to be followed, particular person to be observed at the observation time, etc.
Step 3. Contact the persons concerned and take them in confidence regarding conduct of the study.
Step 4. Make the observations at the pre-decided random times about the working / not working state
of the operator. When operator is in working state, determine his performance rating. Record both on
the observation sheet.
Step 5. Obtain and record other information. This includes operator's starting time and quitting time of
the day and total number of parts of acceptable quality produced during the day.
Step 6. Calculate the standard time per piece.
We will now briefly discuss some important issues involved in the procedure.
Number of Observations
As we know, results of study based on larger number of observations are more accurate, but taking
more and more observations consumes time and thus is costly. A cost-benefit trade-off has thus to be
struck. In practice, the following methods are used for estimation of the number of observations to be
made.
(I) based on judgment. The study person can decide the necessary number of observations based on his
judgment. The correctness of the number may be in doubt but estimate is often quick and in many cases
adequate.
(ii) Using cumulative plot of results. As the study progresses the results of the proportion of time
devoted to the given state or activity, i.e. Pi from the cumulative number of observations are plotted at
the end of each shift or day. A typical plot is shown in Figure 2. Since the accuracy of the result
improves with increasing number of observations, the study can be continued until the cumulative Pi
appears to stabilize and collection of further data seems to have negligible effect on the value of Pi.
(iii) Use of statistics. In this method, by considering the importance of the decision to be based on the
results of study, a maximum tolerable sampling error in terms of confidence level and desired accuracy
in the results is specified. A pilot study is then made in which a few observations are taken to obtain a
preliminary estimate of Pi. The number of observations N necessary are then calculated using the
following expression.
The number of observations estimated from the above relation using a value of Pi obtained from a
preliminary study would be only a first estimate. In actual practice, as the work sampling study

proceeds, say at the end of each day, a

new calculation should be made by
Figure 2
using increasingly reliable value of Pi
obtained from the cumulative number of
observations made.
Determination
of
Observation
Schedule
The
number
of
instantaneous
observations to be made each day
mainly depends upon the nature of
operation. For example, for nonrepetitive operations or for operations in
which some elements occur infrequently, it is advisable to take
observations more frequently so that the
chance of obtaining all the facts
improves. It also depends on the
availability of time with the person making the study. In general, about 50 observations per day is a
good figure. The actual random schedule of the observations is prepared by using random number table
or any other technique.
Design of Observation Sheet
A sample observation sheet for recording the data with respect to whether at the pre-decided time, the
specified worker on job is in 'working' state or 'non-working' state is shown. It contains the relevant
information about the job, the operators on job, etc. At the end of each day, calculation can be done to
estimate the percent of time workers on the job (on an average) spend on activities, which are considered
as part of the job.
Conducting Work Sampling Study
At the predecided times of study, the study person appears at the work site and observes the specific
worker (already randomly decided) to find out what is he doing. If he is doing activity which is part of
the job, he is ticked under the column 'Working' and his performance rating is estimated and recorded.
If he is found engaged in an activity which is not a part of job, he is ticked under the column 'Not
Working'. At the end of day, the number of ticks in 'Working' column is totaled and average
performance rating is determined.
The observed time (OT) for a given job is estimated as

The normal time (NT) is found by multiplying the observed time by the average performing index
(rating factor).

Where =

is average rating factor to be determined as

The standard time is determined by adding allowances to the normal time.

Advantages and Disadvantages of Work Sampling in Comparison with Time Study.
Advantages
Economical
Many operators or activities which are difficult or uneconomical to measure by time study can readily
be measured by work sampling.
Two or more studies can be simultaneously made of several operators or machines by a single study
person. Ordinarily a work study engineer can study only one operator at a time when continuous time
study is made.
It usually requires fewer man-hours to make a work sampling study than to make a continuous time
study. The cost may also be about a third of the cost of a continuous time study.
No stopwatch or other time measuring device is needed for work sampling studies.
It usually requires less time to calculate the results of work sampling study. Mark sensing cards may
be used which can be fed directly to the computing machines to obtain the results just instantaneously.
Flexible
6. A work sampling study may be interrupted at any time without affecting the results.
7. Operators are not closely watched for long period of time. This decreases the chance of getting
erroneous results for when a worker is observed continuously for a long period, it is probable that he
will not follow his usual routine exactly during that period.
Less Erroneous
8. Observations may be taken over a period of days or weeks. This decreases the chance of day-to-day
or week-to-week variations that may affect the results.
Operators like It
9. Work sampling studies are preferred to continuous time study by the operators being studied. Some
people do not like to be observed continuously for long periods of time.
Observers like It
10. Work sampling studies are less fatiguing and less tedious to make on the part of time study engineer.
Disadvantages
Work sampling is not economical for the study of a single operator or operation or machine. Also,
work-sampling study may be uneconomical for studying operators or machines located over wide areas.
Work sampling study does not provide elemental time data.
The operator may change his work pattern when he sees the study person. For instance, he may try to
look productive and make the results of study erroneous.
No record is usually made of the method being used by the operator. Therefore, a new study has to be
made when a method change occurs in any element of operation.
Compared to stop watch time study, the statistical approach of work sampling study is difficult to
understand by workers.
Computerized Work Sampling
Use of a computer can save as much as 30 to 40 percent of the total work sampling study cost. This is
because too much clerical effort is involved in summarizing work sampling data, e.g. in determining
the number of observations required, determining the daily observations required, determining the
number of trips to the area being studied per day, determining the time of each observation, calculating
the accuracy of results, plotting data on control charts and like that. Computers can be used for
mechanization of the repetitive calculations, display of control charts and calculation of daily as well
as cumulative results.

Chapter 12

Value Engineering

Definition of Value Engineering and Value Analysis

It is a systematic method to improve the "value" of goods or products and services by using an
examination of function. Value, as defined, is the ratio of function to cost. Value can therefore be
increased by either improving the function or reducing the cost. It is a primary tenet of value engineering
that basic functions be preserved and not be reduced as a consequence of pursuing value improvements.
Value engineering uses rational logic (a unique "how" - "why" questioning technique) and the analysis
of function to identify relationships that increase value. It is considered a quantitative method similar
to the scientific method, which focuses on hypothesis-conclusion approaches to test relationships, and
operations research, which uses model building to identify predictive relationships
Value Analysis (VA);
It is an orderly and creative method to increase the value of an item. This item" can be a product, a
system, a process, a procedure, a plan, a machine, equipment, tool, a service or a method of working.
Value Analysis, also called Functional Analysis was created by L.D. Miles. The value of an item is how
well the item does its function divided by the cost of the item (In value analysis value is not just another
word for cost):
Value of an item = performance of its function / cost
An item that does its function better than another, has more value. Between two items that perform their
function equally well, the one that costs less is more valuable. The "performance of its function" could
include that it is beautiful (where needed). Do not be surprised if as a result of value analysis the cost
of an item is less than half of its previous cost.
VA &The function of a product;
Since, the value analysis technique supported cost reduction activities by relating the cost of
components to their function contributions.
Value analysis defines:
A "basic function" It is anything that makes the product work or sells. A function that is defined
as "basic" cannot change.
Secondary functions it is also called "supporting functions", described the manner in which the
basic function(s) were implemented. Secondary functions could be modified or eliminated to
reduce product cost.
Identify and prioritize functions
Identify the item to be analysed and the customers for whom it is produced.
List the basic functions (the things for which the customer is paying). Note that there are usually
very few basic functions.
Identify the secondary functions by asking How is this achieved? or What other functions
support the basic functions?
Determine the relative importance of each function, preferably by asking a representative
sample of customers (who will always surprise you with what they prefer).

Analyse contributing functions

Find the components of the item being analysed that are used to provide the key functions.
Again, the question How can come in very useful here.
Measure the cost of each component as accurately as possible, including all material and
production costs.
Seek improvements
Eliminate or reduce the cost of components that add little value, especially high-cost
components.
Enhance the value added by components that contribute significantly to functions that are
particularly important to customers.
VALUE ANALYSIS PROCESS

Define the problem and its scope as the first step in the value analysis process.

Then, derive the functions of the product and its items. These functions are classified into
"basic" and "secondary" functions.

Prepare a Cost Function Matrix or Value Analysis Matrix to identify the cost of providing
each function by associating the function with a mechanism or component part of a product.

a. Identify Product functions with a high cost-function ratio as opportunities for further
investigation and improvement. Improvement opportunities are then brainstormed,
analysed, and selected.
b. Use the objective of the Function Cost Matrix approach to draw the attention of the
analysts away from the cost of components and focus their attention on the cost
contribution of the functions.
c. The Function Cost Matrix displays the components of the product, and the cost of those
components, along the left vertical side of the graph. The top horizontal legend contains
the functions performed by those components. Each component is then examined to
determine how many functions that component performs, and the cost contributions of
those functions.
d. Estimate detailed cost as it becomes more important following function analysis, when
evaluating value improvement proposals. The total cost and percent contribution of the
functions of the item under study will guide the team, or analyst, in selecting which
functions to select for value improvement analysis.
A variation of the Function-Cost Matrix is the Value Analysis Matrix. This matrix was
derived from the Quality Function Deployment (QFD) methodology. It is more powerful in two
ways.
a. First, it associates functions back to customer needs or requirements. In doing this,
it carries forward an importance rating to associate with these functions based on the
original customer needs or requirements.
b. Functions are then related to mechanisms, the same as with the Function-Cost Matrix.
Mechanisms are related to functions as either strongly, moderately or weakly
supporting the given function. This relationship is noted with the standard QFD

relationship symbols. The associated weighting factor is multiplied by customer or

function importance and each columns value is added. These totals are normalized to
calculate each mechanism's relative weight in satisfying the designated functions.
c. This is where the second difference with the Function-Cost Matrix arises. This
mechanism weight can then be used as the basis to allocate the overall item or
product cost. The mechanism target costs can be compared with the actual or estimated
costs to see where costs are out of line with the value of that mechanism as derived
from customer requirements and function analysis.

Chapter 13

Purchasing

INTRODUCTION
Purchasing Is a Challenging Never Ending Job with a Significant Financial Gain for Effective Work
Purchasing function is described as the business activity directed to securing the materials, supplies and
equipment required in the operations of an organisation. It has a long range objective of ensuring
continuity of cost effective supplies of materials and services.
Purchasing function operates within a framework determined by the management. No other function
has greater inter-relationships not only within the organisation but also with outside supplier
organisations. It is a managerial activity that includes planning and policy activities covering a very
wide range of related and complimentary activities such as:

Market research for new materials and development of new sources of supply.
Follow up to ensure proper delivery
Inspection of materials for quality and compliance with specifications.
Development of proper systems and procedures to enable the purchase function to be carried
out efficiently.
Coordination with other activities within the materials department like transportation,
receiving, storekeeping, inventory control, accounting, disposal of scrap and surplus etc.

Considering that the purchasing rupee forms a significant percent of total expenses, the importance of
the purchasing function need not be overemphasized in today s economic environment.
PURPOSE
To provide a framework for managing the purchasing function in an ethical, effective
And uniform manner by:
Defining the Objectives and Scope of the purchasing function.
Establishing the Purchasing Policies.
Describing the Procedures to be followed in the implementation of the policies.
Issuing Authority Level / Limits / and Guidelines to purchasing officials
OBJECTIVES

To maintain uninterrupted flow of materials to support the development schedules.

To procure materials economically at a cost consistent with the quality and service required.
However, generally all purchases may be attempted at the lowest cost.
To provide the necessary expertise, advice, information to the Curators and Education Officers
with regard to the best quality of material available in the market, suppliers capability and
performance etc.
To develop and maintain good buyer-seller relationship.
To promote source development.
To maintain reputation and credibility in the market by fair dealings and prompt payments.

FUNCTIONS:

The main functions of the Purchase Department are defined as follows:

Procurement of stores through indigenous and foreign sources as required in accordance with
the rules in force.
Checking of requisitions/purchase indents.
Selection of suppliers for issue of enquiries.
Issuing enquiries/tenders and obtaining quotations.
Analysing quotations and bids etc., and preparation of comparative statement (quotation
charts).
Consultation with the Indenter for selection and approval of quotations and with Accounts
Officer for pre-audit.
Negotiating contracts.
Checking legal conditions of contracts.
Issue of Purchase Orders.
Follow-up of purchase orders for delivery in due time
Verification and passing of suppliers bills to see that payments are made promptly.
Correspondence and dealing with suppliers, carriers etc., regarding shortages, rejections etc.,
reported by the Stores Department.
Maintenance of purchase records.
Maintenance of progressive expenditure statement, sub-head wise.
Maintenance of vendor performance records/data.
Arrangement for Insurance Surveys, as and when necessary.
Clearance of foreign consignments.
Keeping various Departments/Divisions informed of the progress of their indents in case of
delay in obtaining supplies.
Serving as an information center on the materials knowledge i.e. their prices, source of supply,
specification and other allied matters.
Development of reliable and alternate sources of supply.
It shall be particularly ensured:
a. That all purchase are made against properly authorized requisitions, and valid
sanctions, showing the correct and detailed end-use.
b. That all the materials requisitioned are duly ordered from the right source after full
enquiries on most competitive price taking into account the trade discounts and tax
benefits etc.
c. That the right quantity of the goods consistent with the quality and the specification
required is bought.
d. That the deliveries of all goods are received within the stipulated period.
e. That claims due to shortages or any other discrepancies are settled promptly.
f. That cordial and harmonious relations with all sections/divisions are maintained for
becoming an efficient service unit in the museum/center.
While receiving the planned requirement of the indentors, it should be prevailed upon the
Indentors to certify clearly that the quantities indicated are definitely required for the project
and specify the period within which the quantities indented will be consumed. It is the duty of
the purchase section to check purchase indents against needs and suggest modification of
quantities wherever necessary.

CHAPTER 14
FUNCTION OF SALES MANAGEMENT
INTRODUCTION
Selling is a universal activity; everybody sells something. In a modern market
economy, selling is an important and sophisticated activity. In less advanced societies, selling
is low level, often amounting to simple barter. In this chapter we examine the important role
of the sales force in overall marketing activities, and the relationship between marketing and
sales functions. Selling is a process to make a sale, but personal selling is more than this.
Selling can be done remotely through mail-shots or advertisements; personal selling is done
face-to-face which demands interpersonal skills and training and it is a highly professional
activity. We examine the key steps in managing the sales force from recruitment and training
to territory design, sales call planning, and control and remuneration as well as the steps in
personal selling and considerations in managing these effectively as well as examining
emerging trends in selling and sales management.
MARKET RESEARCH
ROLE OF THE SALES FORCE
Depending on the type of organization, a sales force may consist of a few salespeople
with infrequent contact with customers, or many salespeople operating in a highly organized
system with regular and frequent contact. The latter would apply to companies selling
consumer goods like confectionery where it is necessary to have a regular, day-to-day
contact. A company that constructs bridges needs fewer salespeople as there are fewer
customers and it is more appropriate to have technical sales- persons to negotiate contracts
and resolve problems that customers may face during the construction process. The sales
force provides a flow of information to the company which needs to know what is happening
in the field to keep up with changes in demand or fashion. Personal selling is an integral part
of the firms communication mix which is made up of non personal communication tools.
Generally, personal selling is more important in organizational settings. As much as 80 per
cent of the total marketing budget is spent on selling because of the necessity of a one-toone relationship.
This is because of:
The technical complexity of products; n the commercial complexity of sales
negotiations;
The degree of commercial interdependence and interaction between the buying and
selling organizations.

These factors are not present in many consumer marketing situations. Personal selling is
less critical and more of the budget is spent on non-personal communications like advertising
which features strongly for products such as lager, coffee and detergents. Consumer
advertising attempts to pull these goods through the distribution channel. Personal, faceto-face selling, attempts to push goods through the channel. Selling is the main task of the
sales force, although are other tasks include:
obtaining information;
maintaining and creating goodwill;
Building business for the future.
TYPES OF SALES FORCE
A variety of different types of sales force take account of different sales situations:
Selling consumer goods to members of the channel where regular contact must be
maintained. Personal relationships are important; typically used for FMCGs and consumer
durables. Salespersons must be well organized to provide regular coverage. Selling to
retailers requires a large sales force to call on customers at pre-determined intervals (termed
the sales journey cycle). Large sales forces can be split into regions with regional sales
managers, and regions are split into areas with an area manager in charge of individual
representatives. Channel members (retailers and wholesalers) are business customers, so
processes and considerations pertaining to organizational buyers apply as they are
professional purchasers using systematic buying processes and purchase in large lots.
Industrial goods selling where products are often made to individual specification, so
customer needs have to be satisfied on an individual basis. Products range from machinery
to component parts to raw materials and services such as the provision of IT products and
systems on behalf of clients. Much time is spent finding prospective customers. Often,
products are sold at such infrequent intervals that when the customer is ready to re-order,
specifications have been modified substantially. Salespeople tend to be well qualified and
can discuss customer technical problems and offer solutions so cementing relationships with
industrial buyers.
Retail selling: Despite the ubiquitous nature of self-service, considerable selling
activity takes place in this setting. These activities are not confined to durable products or
services like cars, televisions or holidays, but also relate to lower value items like shoes and
clothing, and even non-durables like foodstuffs and meals. Think back to the last time you
purchased shoes in a retail outlet. How helpful was the person who served you? Did they
have any influence over whether you bought or not? Did they suggest a particular pair of
shoes? Did they get you to spend more than you intended? Did they get you to purchase
another item like shoe polish with the shoes? Will you ever return and buy again from the
same retailer? Shoe retailers are aware of the importance of sales activities to customers.

Staff training involves how to sell to customers including encouraging them to trade up and
extend their purchasing.
ROLE OF SELLING WITHIN MARKETING
Selling is one of a number of tactical activities within marketing such as pricing and
advertising. Co-coordinating these is essential for effective marketing. Differences in
importance depend on the companies and industries involved. A successful sale depends on
whether or not the product concerned fulfils the customer requirements and results in
satisfied customers.
Relationship with marketing research
Marketing research finds out what people want and why they want it. Information
might result in changes in the product. Such information is fed to the sales department and
can be used by them to counter competition. Cowan5 argues that in the past market research
has often failed to identify significant changes in markets or new innovatory products.
Because of close contact with customers and markets however, the sales force in particular
can be used to provide market intelligence information that feeds into the Marketing
Information System (MkIS) and helps shape marketing strategy.
Relationship with other elements of the promotional programme
The relationship of the sales force to the other aspects of promotion should be one of
mutual co-operation, e.g. the sales force can obtain agreement from customers for the
company to use a retail customers window for displaying promotional materials. The
Integrated Marketing Communications (IMC), introduced in Chapter 7, suggests that all
elements in an organizations communications mix have a specific part to play. Malcolm et
al.6 explain why integrated marketing communications is so important but essentially each
component of the communications mix has a key role to play. Non-personal communication,
in the form of advertising, public relations and sales promotions, aims to push customers
who were previously unaware of the firms products into buying them. It is the role of
personal selling to capitalize on preceding communications and close the sale. Personal
selling and other communications tools should contribute to an overall communications
strategy. To achieve this requires sales to be managed effectively in terms of recruitment,
selection, training and planning and control. This is critical and it is to this area and the
elements within it that we now turn our attention.
RECRUITMENT AND SELECTION OF SALESPEOPLE
Salespersons vary in accordance with the product/service to be sold and the nature of the
selling situation. We set out four key elements in a typical sales job description:
1. Responsibility: The representative is responsible directly to the sales manager.

2. Objective: To achieve the annual sales target across the product range in the area for
which the salesperson is responsible as economically as possible and within the limits of
company policy.
3. Planning: To be familiar with company policy plus the ability to plan and achieve defined
objectives within the limits of that policy. To submit a periodic plan for a specific territory to
higher management.
4. Implementation: To act as a link between customer and head office; organize travel
itinerary effectively; develop skill in selling; maintain and submit accurate records; gather
market intelligence and report this to head office; assess potential of sales territory in terms
of time available for visits, outlets for company products and activity of the opposition;
protect and promote the company image; protect the companys business by avoiding
unnecessary expense; be a good team member, and set a good example by maintaining
loyalty towards superiors.

SALES PROMOTION AND DISTRIBUTION

TRAINING
The saying: salespeople are born and not made can lead to a neglect of training. New
recruits need to undergo training as learning by observing the skilled performance of an
experienced salesperson is not enough. A training programme should be devised that sets
out to achieve the objectives of giving knowledge and developing selling skills. Training
should not be restricted to a companys own sales force, but where appropriate should be
extended to an organizations intermediaries.
Training curricula
Knowledge goals should relate to matters like learning company history and
background. At the end of training, the salesperson should have achieved defined knowledge
goals such as being able to name six major benefits of a particular product and explain how
these benefits are derived from relevant product features. Goals should reflect a statement
in the job description like: The salespeople must be knowledgeable about company products
and their applications or The salesperson must ensure that the companys products are well
displayed where the knowledge goal would be in terms of learning merchandising
techniques and in-store promotion schemes.
Methods of training
Lectures, demonstrations, case studies, videos and seminars help, but the salesperson
will derive greater benefit from participation in sales situations or simulations. This is more
effective if feedback is provided quickly. Ideally, this should be by video where scenarios are
acted out and replayed by the trainer to trainees in a constructive manner. The SPIN model
of selling developed by the Huthwaite Research Group and described by Rackham10

emphasizes the importance of questioning skills in identifying customer requirements in the

selling process, and hence the overall need for strong communication skills on the part of the
salesperson and indeed this company specializes in sales training.
Field performance assessment
There should be a set of standards against which a salespersons performance in the
field can be evaluated. The job description plus related knowledge and skill requirements
should provide the necessary criteria. The sales manager should sometimes accompany the
salesperson on a normal days work and should observe, but not interfere. After the period
of observation, the manager and salesperson should meet to discuss the latters
performance. Evaluation can be formalized through use of an appraisal form that will include
product knowledge, selling methods, work habits and organization, mental attitude,
development needs and general commitments. Figure 8.2 shows a typical appraisal form.
The salesperson, when being appraised, is given marks or a letter rating. There is a section
for the last grade awarded to see if there has been an improvement, no change, or a decline
since the last appraisal. The salesperson should be allowed to see comments and together
with the manager, should sign the form. An advantage of the appraisal form is that it acts as
a record of abilities. It can also be compared with the previous years results to see whether
progress has been made and act as a basis for quantifying qualitative attributes.
THE SALES SEQUENCE: THE SEVEN STEPS MODEL
Planning is essential for personal selling time to be maximized, so one must adopt a
general sales sequence and a specific plan for each individual interview. The sales process or
sequence is a basic framework that must be flexible and adaptable, as each individual sales
situation is different and presents its own problems. The one that follows is widely used to
distinguish the key steps in the sales sequence and for obvious reason is often referred to as
the seven steps model.
1. Preparation where the salesperson should have a good general knowledge of:

the company its systems, procedures, prices and terms;

the product especially new products and/or uses for existing products;
market knowledge;
customer knowledge and maintenance of a good customer records;
equipment, samples and sales aids ensuring that the right equipment, including
order books and trade directories is carried;
journey planning an organized journey plan giving details of appointments covering
existing customers and time for generating new business or prospecting;
Personal preparation i.e. personal grooming and dress.
2. First impressions A sales meeting should start in a pleasant yet businesslike way. Time is
important, but so is being polite. Likewise, good personal selling involves listening as well as

asking questions. It is also about being accommodating. If a buyer sets a time limit, this should
be respected, although an offer to stay longer is often necessary and can be useful. Mention
should also be made at this early stage of other business to be dealt with, such as expediting
invoices due for payment. Such matters should be discussed and settled at the beginning of
the meeting in the knowledge that it will then be simpler to discuss the real business on hand.
3. Preparation and demonstration Salespersons should a list major selling points relating to
the products or services they are selling. The most important of these will be points that give
some advantage over competitors products. In the presentation and demonstration the
salesperson should concentrate on the unique sales propositions (USPs) that are appropriate
to that particular customers needs and interests. In a sales situation involving the need for
a sales presentation or a demonstration, the salesperson should be prepared for this and
secure the potential customers active involvement. What should be avoided is running both
the demonstration and presentation together, as this can be confusing. The salesperson
should use terms at a degree of technical detail that the customer can understand. During
the presentation the salesperson should ask questions and listen to the answers to probe the
customers interests further. Some products are impossible to demonstrate and here the
salesperson should use models or audiovisual aids. A salesperson should avoid being too
long-winded or sales might be lost. Selling signals as simple as the buyer looking at his or
her watch should be sought and attempts then made to close the sale as over-presentation
often loses a sale.
4. Negotiation The principal role for the salesperson is to know the limits of acceptance and
nonacceptance. The salesperson may negotiate with the customer aspects like price,
discounts, credit and selling rights. Often the final margin of negotiation is retained by the
sales manager. The salesperson should obtain as much information as possible about the
buyers needs and level of potential business and assess its potential worth. Concessions
should be held back as long as possible. If not, they cease to be concessions. Negotiation is a
key element of major sales activities.
5. Overcoming objections These might be commercial objections that relate to matters like
price, credit or delivery. These are common and salespersons should be trained in techniques
for handling them. An objection on commercial grounds could be a disguise for a real
objection or even simply be a buying ploy e.g. a buyer might argue that a competitive product
has a better finish, but not fully explain how the quality of finish is better. When it is a
disguise, or excuse, it is up to the salesperson to discover, by shrewd questioning, the real
objection. A skilled salesperson can use customer objections to close a sale by suggesting
that if the objection is answered, will this result in a sale. However organizational buyers are
experienced enough to recognize when salespeople are using objections as a closing
technique, and will be skilled enough to be able to pose an apt reply.

6. Closing the sale The objective of most sales interviews is to obtain a sale, although others
might be to discuss matters like service provision. There are a variety of closing techniques,
which the salesperson can use:

Basic close: when the salesperson thinks there is a sale and starts filling in the order
form;
Alternative choice: offer a choice as a trial close, e.g. Do you want grey or black?
Summary questions: from a prepared list, ask the buyer questions like: Is this a
problem? Here an answer of no might represent a step towards closing a sale;
Closing on a final objection: if a final objection still exists, identify it and then offer to
do something about it. The customer cannot then object any more.
7. Follow-up is needed to avoid loss of contact or to bring about repeat business. After
closing a sale it is important that the salesperson ties up loose ends such as delivery times.
To this end a follow-up call should be made, and if unforeseen problems occur, the
salesperson can rectify them and not lose the sale or future business.