HUMAN RESOURCE MANAGEMENT
Human Resource Management is defined as the people who staff and manage organization. It comprises of the functions and principles that are applied to retaining, training, developing, and compensating the employees in organization.
Scope of HRM without a doubt is vast. All the activities of employee, from the time of his entry into an organization until he leaves, come under the horizon of HRM.
The divisions included in HRM are Recruitment, Payroll, Performance Management, Training and Development, Retention, Industrial Relation, etc. Out of all these divisions, one such important division is training and development.TRAINING AND DEVELOPMENT is a subsystem of an organization. It ensures that randomness is reduced and learning or behavioral change takes place in structured format.
TRAINING DEFINEDIt is a learning process that involves the acquisition of knowledge, sharpening of skills, concepts, rules, or changing of attitudes and behaviours to enhance the performance of employees. Training is activity leading to skilled behavior.• It’s not what you want in life, but it’s knowing how to reach it• It’s not where you want to go, but it’s knowing how to get there• It’s not how high you want to rise, but it’s knowing how to take off
• It may not be quite the outcome you were aiming for, but it will be an outcome• It’s not what you dream of doing, but it’s having the knowledge to do it• It's not a set of goals, but it’s more like a vision• It’s not the goal you set, but it’s what you need to achieve itTraining is about knowing where you stand (no matter how good or bad the current situation looks) at present, and where you will be after some point of time.Training is about the acquisition of knowledge, skills, and abilities (KSA) through professional development.ROLE OF TRAINING
TRADITIONAL AND MODERN APPROACH OF TRAINING AND DEVLOPMENTTraditional Approach – Most of the organizations before never used to believe in training. They were holding the traditional view that managers are born and not made. There were also some views that training is a very costly affair and not worth. Organizations used to believe more in executive pinching. But now the scenario seems to be changing. The modern approach of training and development is that Indian Organizations have realized the importance of corporate training. Training is now considered as more of retention tool than a cost. The training system in Indian Industry has been changed to create a smarter workforce and yield the best resultsTRAINING AND DEVELOPMENT OBJECTIVESThe principal objective of training and development division is to make sure the availability of a skilled and willing workforce to an organization. In addition to that, there are four other objectives: Individual, Organizational, Functional, and Societal.Individual Objectives – help employees in achieving their personal goals, which in turn, enhances the individual contribution to an organization.Organizational Objectives – assist the organization with its primary objective by bringing individual effectiveness.Functional Objectives – maintain the department’s contribution at a level suitable to the organization’s needs.Societal Objectives – ensure that an organization is ethically and socially responsible to the needs and challenges of the society.
Importance Of Training and Development
Optimum Utilization of Human Resources – Training and Development helps in optimizing the utilization of human resource that further helps the employee to achieve the organizational goals as well as their individual goals.• Development of Human Resources – Training and Development helps to provide an opportunity and broad structure for the development of human resources’ technical and behavioral skills in an organization. It also helps the employees in attaining personal growth.• Development of skills of employees – Training and Development helps in increasing the job knowledge and skills of employees at each level. It helps to expand the horizons of human intellect and an overall personality of the employees. • Productivity – Training and Development helps in increasing the productivity of the employees that helps the organization further to achieve its long-term goal.• Team spirit – Training and Development helps in inculcating the sense of team work, team spirit, and inter-team collaborations. It helps in inculcating the zeal to learn within the employees.• Organization Culture – Training and Development helps to develop and improve the organizational health culture and effectiveness. It helps in creating the learning culture within the organization. • Organization Climate – Training and Development helps building the positive perception and feeling about the organization. The employees get these feelings from leaders, subordinates, and peers.• Quality – Training and Development helps in improving upon the quality of work and work-life. • Healthy work-environment – Training and Development helps in creating the healthy working environment. It helps to build good employee, relationship so that individual goals aligns with organizational goal.• Health and Safety – Training and Development helps in improving the health and safety of the organization thus preventing obsolescence.• Morale – Training and Development helps in improving the morale of the work force.• Image – Training and Development helps in creating a better corporate image.• Profitability – Training and Development leads to improved profitability and more positive attitudes towards profit orientation.• Training and Development aids in organizational development i.e. Organization gets more effective decision making and problem solving. It helps in understanding and carrying out organisational policies• Training and Development helps in developing leadership skills, motivation, loyalty, better attitudes, and other aspects that successful workers and managers usually display.
Training objective – Important part
Training objective is one of the most important parts of training program. While some people think of training objective as a waste of valuable time. The counter argument here is that resources are always limited and the training objectives actually lead the design of training. It provides the clear guidelines and develops the training program in less time because objectives focus specifically on needs. It helps in adhering to a plan. Training objectives tell the trainee that what is expected out of him at the end of the training program. Training objectives are of great significance from a number of stakeholder perspectives,1. Trainer 2. Trainee 3. Designer 4. Evaluator
Trainer – The training objective is also beneficial to trainer because it helps the trainer to measure the progress of trainees and make the required adjustments. Also, trainer comes in a position to establish a relationship between objectives and particular segments of training.
Trainee – The training objective is beneficial to the trainee because it helps in reducing the anxiety of the trainee up to some extent. Not knowing anything or going to a place which is unknown creates anxiety that can negatively affect learning. Therefore, it is important to keep the participants aware of the happenings, rather than keeping it surprise.Secondly, it helps in increase in concentration, which is the crucial factor to make the training successful. The objectives create an image of the training program in trainee’s mind that actually helps in gaining attention.
Thirdly, if the goal is set to be challenging and motivating, then the likelihood of achieving those goals is much higher than the situation in which no goal is set. Therefore, training objectives helps in increasing the probability that the participants will be successful in training.Designer – The training objective is beneficial to the training designer because if the designer is aware what is to be achieved in the end then he’ll buy the training package according to that only. The training designer would then look for the training methods, training equipments, and training content accordingly to achieve those objectives. Furthermore, planning always helps in dealing effectively in an unexpected situation. Evaluator – It becomes easy for the training evaluator to measure the progress of the trainees because the objectives define the expected performance of trainees. Training objective is an important to tool to judge the performance of participants.
Methods of Training
There are various methods of training, which can be divided in to cognitive and behavioral methods. Trainers need to understand the pros and cons of each method, also its impact on trainees keeping their background and skills in mind before giving training.Cognitive methods are more of giving theoretical training to the trainees. The various methods under Cognitive approach provide the rules for how to do something, written or verbal information, demonstrate relationships among concepts, etc. These methods are associated with changes in knowledge and attitude by stimulating learning.
The various methods that come under Cognitive approach are:
LECTURES
DEMONSTRATIONS
DISCUSSIONS
COMPUTER BASED TRAINING (CBT)
INTELLEGENT TUTORIAL SYSTEM(ITS)
PROGRAMMED INSTRUCTION (PI)
VIRTUAL REALITY
Behavioral methods are more of giving practical training to the trainees. The various methods under Behavioral approach allow the trainee to behavior in a real fashion. These methods are best used for skill development.The various methods that come under Behavioral approach are:
GAMES AND SIMULATIONS
BEHAVIOR-MODELING
BUSINESS GAMES
CASE STUDIES
EQUIPMENT STIMULATORS
IN-BASKET TECHNIQUE
ROLE PLAYS
Both the methods can be used effectively to change attitudes, but through different means.Another Method is MANAGEMENT DEVELOPMENT METHOD –MANAGEMENT DEVELOPMENT – The more future oriented method and more concerned with education of the employees. To become a better performer by education implies that management development activities attempt to instill sound reasoning processes.Management development method is further divided into two parts:ON THE JOB TRAINING – The development of a manager’s abilities can take place on the job. The four techniques for on-the job development are:
COACHING
MENTORING
JOB ROTATION
JOB INSTRUCTION TECHNIQUE (JIT)
OFF THE JOB TRAINING – There are many management development techniques that an employee can take in off the job. The few popular methods are:
SENSITIVITY TRAINING
TRANSACTIONAL ANALYSIS
STRAIGHT LECTURES/ LECTURES
SIMULATION EXERCISES
Wednesday, April 29, 2009
ESI (Employees’ State Insurance Scheme)
E.S.I. SCHEME
UNDER LABOUR AND EMPLOYEMENT DEPARTMENT
Introduction:
The ESI Act.1948 envisages an integrated social insurance scheme to provide social security to the industrial workers in certain contingencies such as sickness, maternity, temporary or permanent physical disablement and death due to employment injury resulting in loss of wages or earning capacity. The act also guarantees full medical care to the workers and their dependent family members.
The act was first implemented at Kanpur and Delhi on 24.2.1952 and in the mean time it has been implemented in all States and Union Territories of India.
Coverage under the ESI Act.
All non seasonal factories using power and employing 10 or more persons and non-power using factories employing 20 or more persons are coverable under the ESI Act. The Act. has also been extended to establishments like shops, hotels, restaurants, cinema halls, road motor transport agencies and news paper establishment employing 20 or more persons. All employees in such factories and establishments getting wage upto Rs.6500/-P.M. are coverable under the Act.
Benefits under the Act:
The following benefits are provided to the insured persons(I.Ps.)and their family members under the provisions of ESI Act.
1) Medical Benefit.
2) Sickness Benefit
3) Maternity Benefit
4) Disablement Benefit.
5) Dependant’s Benefit.
6) Funeral benefit.
The First benefit i.e medical Benefit is provided by the State Government through the ESI Scheme and the remaining five benefits, which are cash benefits are provided by the ESI Corporation directly.
ESI scheme of india
THE FUNDAMENTALS
1. What is E.S.I. Scheme ?
* In addition to necessities of food, clothing, housing etc., man needs security in times of physical and economic distress consequent upon sickness, disablement etc. The Employees’ State Insurance Scheme is an integrated measure of Social Insurance embodied in the Employees’ State Insurance Act and is designed to accomplish the task of protecting ‘employees’ as defined in the Employees’ State Insurance Act against the hazards of sickness, maternity, disablement and death due to employment injury and to provide medical care to insured persons and their families. The Scheme covers employees of non-seasonal power-using factories employing 10 or more persons. There is, however, a built-in provision for its extension to other establishments or classes of establishments, industrial, commercial, agricultural or otherwise. The Scheme has been progressively extended to cover employees in non-power using factories employing 20 or more persons and to commercial establishments.
2. How does the Employees’ State Insurance Scheme assist you?
* The dependence of an individual on cash income is a characteristic feature of modern economy. An interruption of money income even for a small period is, therefore, a hardship; a prolonged loss of income is indeed a catastrophe. By coming forward to provide health protection and income maintenance in a series of oft-experienced contingencies like sickness, maternity, disablement and death due to employment injury, the Employees’ State Insurance Scheme tends to ameliorate your economic anxiety and to be a friend in need and distress.
3. Why is it called a Health Insurance Scheme?
* The Employees’ State Insurance Scheme performs a dual role; by providing assistance in kind (medical care) it tries to restore your health and working capacity and by assistance in cash (cash benefit) it tries to sustain you when your income is interrupted. With a better and facile health protection, greater vitality, and assurance of income-maintenance in times of need, it makes you every inch a better, a healthier, secure worker and therefore, a happier man. The assistance comes to you not as an act of benevolence but in virtue of an acquired right.
4. Who administers the Employees’ State Insurance Scheme?
* The Employees’ State Insurance Scheme is administered by a corporate body called the Employees’ State Insurance Corporation (ESIC), which has members representing Employees, Employers, the Central Government, State Governments, Medical Profession and the Parliament. The Director General is the Chief Executive Officer of the Corporation and is also an ex-officio member of the Corporation. The other bodies at the national level are the Standing Committee (a representative body of the Corporation) and the Medical Benefit Council, a specialised body which advises the Corporation on administration of Medical Benefit. At the Regional and Local levels, the Regional Boards and Local Committees have been constituted. There is, thus, an association of interests and interest groups at all levels.
ESIC is the trustee of the interests of the insured persons. It discharges its obligations and duties through a net-work of Regional Offices and Local Offices, Hospitals and Dispensaries spread over the entire country.
5. Whom does the Scheme protect?
* The Scheme protects all “employees” engaged on a monthly remuneration not exceeding Rs. 6500/- in a factory/establishment to which the Act applies. Persons employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or purchase of raw materials, or distribution or sale of the product of a factory or establishment are also covered. Mines, Railway Running Sheds, Naval, Military and Air Force Workshops and specified seasonal factories are excluded. The scheme also provides full medical cover to the dependants of insured persons. In the event of death of an insured person due to employment injury dependants become eligible to cash benefit.
6. Where do Employees’ State Insurance Funds come from?
* The Employees’ State Insurance Funds are primarily built out of employers contribution and employees contribution payable monthly as a fixed percentage of wages.
allied provisions
7. How are the employees registered under the Scheme?
* Simultaneously with his/her entry into employment in a covered factory or establishment, an employee is required to fill in a Declaration Form. The employee is then allotted a Registration Number, which distinguishes and identifies the person for the purposes of the Scheme. A person is registered once and once only upon his entry in insurable employment.
8. What is an Identity Card?
* On registration every insured person is provided with a “Temporary Identification Certificate” which is valid ordinarily for a period of 3 months but may be extended, if necessary, for a further period of 3 months. Within this period, the Insured Person is given a permanent “family photo Identity Card” in exchange for the Certificate. The Identity Card serves as a means of identification and has to be produced at the time of claiming medical care at the dispensary/clinic and cash benefit at the Local Office of the Corporation. In the event of change of employment, it should be produced before the new employer as evidence of registration under the Scheme to prevent any duplicate registration. The Identity Card bears the signatures/thumb impression of the insured person.
Since medical benefit is also available to the families of insured persons, the particulars of family members entitled to Medical Benefit are also given in the Identity Card affixed with a postcard size family photo.
If you lose your Identity Card before it has run its normal life, a duplicate card is issued on payment as prescribed.
9. What are the rates of contribution?
* Contributions payable in respect of an employee comprise of employer’s contribution and employee’s contribution prescribed in Schedule I of the Act.
An employee covered under the scheme has to contribute 1.75% of the wages whereas, an employer contributes 4.75% of the wages payable to an employee. The total contribution in respect of an employee thus works out to 6.50% of the wages payable.
10. Who is exempted from payment of contribution?
* Employees earning less than Rs 40/- a day are exempted from payment of contribution. The employers share of contribution is, however, payable.
11. How are the Contributions collected?
* The Contribution is deposited by the Employer in cash or by cheque at the designated branches of some nationalised banks. The responsibility for payment of all contributions is that of the employer with a right to deduct the Employees’ share of contributions from employees’ wages relating to the period in respect of which the Contribution is payable.
12. What are ‘Contribution Periods’ and ‘Benefit Periods?
* Workers, covered under the ESI Act, are required to pay contribution towards the scheme on a monthly basis. A contribution period means a six-month time span from 1st April to 30th September and 1st October to 31st March. Thus, in a financial year there are two contribution periods of six months duration.
Cash benefits under the scheme are generally linked with contributions paid. The benefit period starts three months after the closure of a contribution period. The two types of periods are illucidated below:–
Contribution Period Corresponding Benefit period
1st April to 30th September 1st January to 30th June of the following year
1st October to 31st March 1st July to 31st December
13. What is a Local Office?
* A net-work of Local Offices has been established by the Corporation in all implemented areas to disburse all claims for sickness, maternity, disablement and dependents’ benefit. The Local Office also answers all doubts and enquiries and assists otherwise in filling in claim forms and completing other action necessary in connection with the settlement of claims. These offices also interact with the employers of the area. The Local Offices are managed by a Manager and work under the direction and control of the Regional Offices.
SOCIAL SECURITY BENEFITS
sickness benefit
14. What does ‘Sickness Benefit’ mean?
* Sickness signifies a state of health necessitating medical treatment and attendance and abstention from work on medical grounds. Financial support extended by the Corporation is such a contingency is called Sickness Benefit.
15. What are the Contributory Conditions?
* The contribution condition required to be fulfilled for admissibility of sickness benefit during any benefit period is that contributions should have been paid in respect of an insured person in the corresponding contribution period for not less than 78 days.
16. How much is the Standard Benefit Rate?
* The daily rate of Sickness Benefit during any benefit period is the “standard benefit rate” this rate corresponds to the average daily wage of an insured person during the corresponding contribution period and is roughly half of the daily wage rate. Benefit is paid for Sundays also. 28 wage groups have been evolved for working out the daily rate of Standard Sickness Benefit.
17. What is the duration of Sickness Benefit?
* Sickness benefit is payable for a maximum period of 91 days in any two consecutive benefit periods. Benefit is not paid for an initial waiting period of 2 days unless the insured person is certified sick within 15 days of the last spell in which Sickness Benefit was paid.
EXTENDED SICKNESS BENEFIT:
18. What is Extended Sickness Benefit?
* Extended Sickness Benefit is a Cash Benefit paid for prolonged illness due to any of the 34 specified diseases as mentioned below.
Diseases
1. Tuberculosis
2. Leprosy
3. Chronic Empyema
4. Bronchiectasis
5. Interstitial Lung disease
6. AIDS
7. Malignant Diseases
8. Diabetes Mellitus-with proliferative retinopathy/diabetic foot/ nephropathy.
9. Monoplegia
10. Hemiplegia
11. Paraplegia
12. Hemiparesis
13. Intracranial space occupying lesion
14. Spinal Cord Compression
15. Parkinson’s disease
16. Myasthenia Gravis/Neuromuscular Dystrophies
17. Immature Cataract with vision 6/60 or less
18. Detachment of Retina
19. Glaucoma
20. Coronary Artery Diseases
21. Congestive Heart Failure-Left, Right
22. Cardiac valvular Diseases with failure/complications
23. Cardiomyopathies
24. Heat disease with surgical intervention alongwith complications
25. Chronic Obstructive Long diseases (COPD) with congestive heart failure (Cor Pulmonale)
26. Cirrhosis of liver with ascitis/chronic active hepatitis (“CAH”)
27. Dislocation of vertebra/prolapse of intervertebral disc
28. Non union or delayed union of fracture
29. Post Traumatic surgical amputation of lower extremity
30. Compound fracture with chronic osteomyelitis
31. (a) Schizophrenia
(b) Endogenous depression
(c) Maniac Depressive Psychosis (MDP)
(d) Dementia
32. More than 20% Burns with infection/complication
33. Chronic Renal Failure
34. Reynaud’s disease/Burger’s disease.
In addition, extended sickness benefit may also be sanctioned by the prescribed authority, in case of any rare disease or special circumstances on the recommendation of the specified authority.
19. What are the Contributory Conditions?
* Except in case of disability from administration of drugs/injections, the insured person should have been in continuous employment for a period of 2 years and should have contributed for atleast 156 days in 4 preceding contribution periods.
20. How much is the Benefit rate?
* The daily rate of Extended Sickness Benefit is 40% more than the Standard Sickness Benefit rate admissible.
21. How long is the Benefit available?
* After exhausting Sickness Benefit payable for 91 days the ESB is payable upto a further period of 124/309 days that can be extended upto 2 years in special circumstances. Thus, together with the Sickness Benefit for 91 days, it puts a claimant on benefit for an aggregate period 400 days for all specified diseases and 2 years in chronic suitable cases on recommendation of competent authority.
enhanced sickness benefit
22. What is Enhanced Sickness Benefit?
* Enhanced Sickness Benefit is cash benefit for the insured persons undergoing sterlisation operation of vasectomy/tubectomy for family planning.
22a. What are the contributory conditions?
* The contributory conditions are the same as for claiming sickness benefit.
22b. How much is the benefit rate?
* The daily rate of this benefit is double the standard benefit rate. Say, not less than the daily wage.
22c. How Long is the benefit available?
* The benefit is available upto 7 days for vasectomy and upto 14 days for tubectomy operations. This period can however be extended in cases of post operative complications or sickness arising out of these sterlisation operations. Its duration is not counted towards the total number of 91 days for which the sickness benefit is available during any two consecutive benefit periods.
22d. How to claim Sickness Benefit?
* A claim for Sickness Benefit should be supported by a Medical Certificate issued by an Insurance Medical Officer/Insurance Medical Practitioner in the appropriate Form. Medical Certificates are issued at intervals of not more than seven days, except in cases of prolonged sickness, where Special Intermediate Certificates may be issued at longer intervals not exceeding 4 weeks. On the back of each certificate, except the Special Intermediate Certificate, a Claim Form is printed. The Claim Form is essentially a declaration in regard to abstention of the claimant from work during the period of claim. Separate Claim Forms are also available.
The Claim Form should bear signatures/thumb impression of the claimant and should be submitted to the Local Office personally, by post, through a messenger or by deposit in certificate boxes, wherever provided. All claims should preferably to submitted to the Local Office within three days. The Receptionist at the Local Office renders all assistance in filling in the claim on your behalf.
disablement benefit
23. What is ‘Disablement’?
* Disablement is a condition resulting from employment injury which may be :–
(a) temporary i.e. rendering an insured person incapable of work temporarily and necessitating medical treatment;
(b) permanent partial i.e. reducing the earning capacity of the insured person generally for every employment;
(c) permanent total i.e. totally depriving the insured person of the power to do all work.
24. What constitutes an “Employment Injury?”
* Employment injury means a personal injury caused to an employee by an accident or occupational disease arising out of and in course of his employment in a factory or establishment covered under the Employees’ State Insurance Act.
The law relating to Employment injury has been liberalised. Now, an accident arising in the course of employment is presumed also to have arisen out of his employment if there is no evidence to the contrary. Further, an accident brought about by wilful disobedience, negligence or breach of regulations etc. or an accident happening while travelling in a transport provided by the employer or while meeting an emergency is accepted subject to certain conditions, to have arisen in the course of and out of employment. Injuries suffered while under the influence of drinks and drugs take away the right of the employee to this benefit.
Roadside accident caused while commuting between place of residence and workplace is also treated as notional extension of employment for purpose of death or disablement benefit.
25. What are ‘Occupational Diseases’?
* Occupational Diseases are such diseases as are susceptible of being traced back to their occupational origin. These are specified under Schedule III of the Employees’ State Insurance Act, which enumerates the compensable Occupational Diseases and the corresponding industrial processes involving exposure to the diseases are thus recognised without any further evidence.
26. What are the Benefits granted?
* Temporary Disablement Benefit is paid periodically in arrears as the evidence of incapacity (medical certificate) is produced. Permanent total disablement and permanent partial disablement benefits are paid in the form of pensions. Current employment for wages or engagement in any gainful activities is no bar to payment of permanent disablement benefits. An insured person suffering from an occupationd disease is also entitled to full medical care.
27. How much is the Benefit Rate?
* The daily benefit rate for permanent total disablement and temporary disablement is 40% more than the Standard Sickness Benefit rate and is roughly equivalent to about 70% of the wage rate. For permanent partial disablement, the rate of benefit is proportionate to the percentage of loss of earning capacity. The benefit is paid for Sundays also.
28. What are the Contributory Conditions?
* There are no qualifying conditions as to the length of employment or the number of contributions paid. Protection accrues from the very moment of entry into insurable employment.
29. What is the duration of Benefit?
* Temporary Disablement Benefit is paid as long as disablement lasts. There is a waiting period of 3 days (excluding the day of accident), but if incapacity exceeds this period, benefit is paid from the very first day. The permanent disablement benefit is paid for the life-time of the beneficiary.
30. How is Permanent Disablement assessed?
* There is indeed no way of adequately compensating a permanently disabled employee and yet some method of determining whether an employment injury has resulted in permanent disablement and of assessing the extent of permanent damage caused by that employment injury has to be adopted for the purpose of determining the scale of compensation for the loss of earnings. This is done by evaluating loss of earning capacity with reference to general disability for all work. The evaluation is done by a Medical Board whose decision can be appealed against to a Medical Appeal Tribunal presided over by a judicial officer, with a further right of appeal to Employees’ Insurance Court or directly to Employees’ Insurance Court. Pending an appeal, payment for permanent loss of earning capacity as recommended by the Medical Board is made, subject to adjustment later. Loss of wages and expenditure on conveyance occasioned by attendance before the Medical Board are compensated by the Corporation in accordance with rates framed for the purpose.
Where the assessment of loss of earning capacity by the Medical Board is not of a final character, the beneficiary is required to appear again before the Medical Board for a review of the assessment.
31. Can the decisions of Medical Board or of Medical Appeal Tribunal be reviewed?
* Yes. If the Medial Board or the Medical Appeal Tribunal is satisfied by fresh evidence that a decision was given because of non-disclosure or mis-representation of a material fact, it can review its earlier decision at any time. A Medical Board can also review its earlier assessment of extent of disablement, if it is satisfied that there has been substantial and unforeseen aggravation of the results of the relevant injury and substantial injustice would be done by not reviewing it. Such review, however, cannot be made earlier than 5 years or in the case of the provisional assessment, earlier than 6 months of the date of assessment to be reviewed.
32. Is lumpsum Benefit allowed in place of Pension?
* Yes. At the option of the beneficiary, permanent disablement pension, where the daily rate payable is not significant, can be commuted for a lumpsum payment subject to the fulfilment of the following two conditions :–
(i) that the permanent disablement has been assessed as final, and
(ii) the daily rate of permanent disablement does not exceed Rs 5/- and the total commuted value does not exceed Rs 30,000/- (effective from April–03).
33. How to claim ‘Disablement Benefit’?
(a) Temporary Disablement:
(i) Notice of the injury should be given either orally or in writing personally or through an agent, to the employer/foreman/duty supervisor or particulars of the injury should be entered in the Accident Book kept in the factory, personally or through an agent.
(ii) A medical certificate of incapacity should be obtained from the Insurance Medical Officer/Insurance Medical Practitioner.
(iii) The claim form printed on the back of the medical certificate should be filled in and submitted promptly to Local Office along with the medical certificate.
(iv) A final certificate should be obtained from the Insurance Medical Officer/Insurance Medical Practitioner and submitted to the Local Office before resumption of duty.
(b) Permanent Disablement:
(i) If suffering from permanent effects of employment injury, the insured person should make an application to the Regional Office of the Corporation for reference of his case to the Medical Board (reference to the Medical Board is made otherwise also by the Regional Office).
(ii) Where loss of earning capacity has been assessed and communicated to the insured person, he should submit a claim in the appropriate form to the Local Office.
(iii) After the claim has been admitted, the beneficiary should submit at six-monthly intervals (with the claim for June and December every year) a life certificate in appropriate form duly attested by the prescribed authority.
34. Is there any provision for physical rehabilitation?
* Yes. Insured Persons who suffer physical disablement due to employment injury are provided artificial appliances or other physical aids such as wheel chairs, crutches, dentures and spectacles etc.
35. What about vocational rehabilitation?
* The Corporation at its cost arranges for the vocational rehabilitation of disabled insured persons provided the disability has been assessed at above 40 percent and the beneficiary is not over 45 years of age. The training is provided at vacational rehabilitation centres run by the Govt. of India etc. The fee, travelling expenses etc are borne by the Corporation.
dependents’ benefit
36. What is ‘Dependents’ Benefit’?
* Dependents Benefit is a monthly pension payable to the eligible dependents of an insured person who dies as a result of an Employment Injury or occupational disease.
37. Who are the Beneficiaries and how long is the Benefit available?
* Dependants entitled to the benefit could be :–
(a) Widow/Widows during life or until remarriage:
(b) Legitimate or adopted son until age 18 or if legitimate son is infirm, till infirmity lasts;
(c) Legitimate or adopted unmarried daughter until age 18 or until marriage, whichever is earlier, or if infirm, till infirmity lasts and she continues to be unmarried.
In the absence of any widow or legitimate child, the benefit is payable to a parent or grandparent for life, to any other male dependant until age 18 or to an unmarried or widowed female dependant until age 18.
38. How much is the Benefit for each Beneficiary?
* The total divisible benefit is equivalent to the temporary disablement benefit rate (roughly 70% of the wage rate). The widow/widows share 3/5th of the benefit and the legitimate or adopted son and daughter 2/5th each of the benefit. If the total benefit so divided exceeds the full rate, there is a proportionate reduction in the respective shares of the beneficiaries.
39. How to claim ‘Dependants’ Benefit’?
* To establish title to Dependant’ Benefit, the following documents should be submitted at the Local Office:–
(a) Claim in the appropriate form;
(b) Evidence of death being due to employment injury;
(c) Proof of relationship to the deceased supporting eligibility of the claimant as a “dependant”;
(d) Evidence of age of the claimant(s) (certified copy of official record of birth, Baptismal register, school records, original horoscope etc;
(e) Certificate of infirmity from Medical Referee or any other prescribed authority in case of legitimate infirm son or legitimate or adopted unmarried infirm daughter.
After the claim to Dependant’s Benefit has been admitted, the beneficiary should submit at six-monthly intervals (with the claim for June and December), a declaration that he/she is alive and has not married/remarried, attained the prescribed age/continues to be infirm, as the case may be duly attested by the prescribed authority.
40. Can Dependant’s Benefit be reviewed?
* Yes. Dependant’s Benefit once awarded can be reviewed by the Corporation at any time if it is satisfied on fresh evidence that the earlier decision was due to non-disclosure or misrepresentation of material facts. It can also be reviewed on birth, death, marriage, re-marriage and attainment of age 18, by a claimant. The benefit can be continued, increased, reduced or discontinued.
maternity benefit
41. What is Maternity Benefit?
* Maternity Benefit is cash payable to an insured woman for the specified period of abstention from work for confinement or miscarriage or for sickness arising out of pregnancy, confinement, premature birth of child or miscarriage. “Confinement” connotes labour resulting in the delivery of a living child or labour after 26 weeks of pregnancy whether the resultant issue is alive or dead. “Miscarriage” means expulsion of the contents of a pregnant uterus at any period prior to or during 26th week of pregnancy. Criminal abortion or miscarriage does not, however, entitle to benefit.
42. What are the Contributory Conditions?
* The contribution condition is the same as for Sickness Benefit.
43. How much is the Benefit?
* The daily benefit rate is double the Sickness Benefit rate and is thus roughly equivalent to the full wages. Benefit is paid for Sundays also.
44. What is the duration of the Benefit?
* The Benefit is paid as follows:–
(a) For confinement :–
For a total period or 12 weeks beginning not more than 6 weeks before the expected date of child birth. If the insured woman dies during confinement or within 6 weeks thereafter, leaving behind the living child, the benefit continues to be payable for the whole of the period. But if the child also die during that period, the benefit will be paid upto and including the day of death of the child.
(b) For Miscarriage:–
For a period of 6 weeks following the date of miscarriage.
(c) For Sickness arising out of pregnancy, confinement, premature birth of child or miscarriage:–
For an additional period of upto four week.
In all the cases, the benefit is paid only if the insured woman does not work for remuneration during the period for which benefit is claimed. There is no waiting period.
45. How to claim Maternity Benefit?
* Where an insured woman wishes to claim Maternity Benefit after confinement or for miscarriage, she should obtain from the Insurance Medical Officer/Insurance Medical Practitioner, a certificate of confinement or miscarriage and submit it to her Local Office personally or by post alongwith a claim for Maternity Benefit. The claim form also contains a declaration of abstention from work.
If Benefit is desired before confinement, a Notice and Certificate of Pregnancy and a Certificate of Expected Confinement obtained from the Insurance medical Officer/Insurance Medical Practitioner are also required to be submitted.
For claiming Benefit in the event of death of an insured woman leaving behind a child, her nominee and if there is no such nominee, her legal representative should submit personally or by post to the Local Office of the deceased insured woman, a claim for the Benefit together with a certificate of death of the insured woman.
An insured woman claiming Maternity Benefit for Sickness arising out of pregnancy, confinement, premature birth of child or miscarriage should submit her claim in the manner as for sickness benefit.
Where a claim to Maternity Benefit is not submitted alongwith prescribed certificates referred to above, the Corporation has the discretion to accept other evidence in lieu thereof.
46. What is Medical Bonus?
* Medical Bonus is lump sum payment made to an insured woman or the wife of an insured person in case she does not avail medical facility from an ESI hospital at the time of delivery of a child. This bonus of Rs. 250/- has been increased to Rs. 1000/- from 1st April 2003.
medical benefit
47. What is Medical Benefit?
* Medical Benefit means medical care of insured persons and their families, wherever covered for medical benefit.
48. What does Medical Benefit consist of?
* The standard medical care consists of out-door treatment, in-patient treatment, all necessary drugs and dressings, pathological and radiological specialist consultation and care, ante-natal and post natal care, emergency treatment etc.
49. Where are ‘out-patient’ services provided?
* Out-door medical care is provided at State Insurance Dispensaries or Mobile Dispensaries manned by full-time doctors (‘Service’ system) or at the private clinics of Insurance Medical Practitioners (‘Panel” system). The scope of medical services also includes simple ante-natal and post-natal care for women, family welfare planning services and immunisation against the common infectious diseases.
The Scheme provides at the sole cost of the Corporation, artificial limbs to insured persons who lose their limbs due to employment injury or in certain circumstances otherwise also, dentures, spectacles and hearing-aids where the loss of teeth, impairment of eye-sight or hearing respectively is due to employment injury.
50. How and where are ‘in – patient’ Services Provided?
* ESIC has a network of 141 hospitals countrywide. Majority of these hospitals are administered by the State Govts. In – patient and diagnostic services in basic specialities are available at these hospitals. State schemes have also tie-up arrangements with a number of Medical colleges, major state hospitals, as well as, private hospitals for advanced treatment for malignant diseases and complicated surgical interventions.
51. What about Preventive health care services?
* ESI Scheme provides preventive health care services through the network of its dispensaries and hospitals. These include immunisation against some killer diseases, pulse polio vaccination and family welfare services etc. The scheme also participates in all major national preventive health service campaigns.
52. How long is Medical Benefit available?
* Insured worker and the members of his family are eligible for medical care from the very first day of the worker coming under ESI Scheme. The medical care includes primary medical care, diagnostic services, specialist consultations and indoor medical care. Whenever the patient is not able to travel by himself/herself, ambulance services are also provided. The I.P. or his family members are not required to pay for any of the services.
A worker who is covered under the Scheme for the first time is eligible for medical care for a period of three months. If he/she continues in insurable employment for three months or more the medical care is available to him/her till the start of the first benefit period. If he/she contributes atleast for 78 days in a contribution period the eligibility is there upto the end of the corresponding benefit period.
A worker is also eligible for extended sickness benefit when he/she is suffering from any one of the long term 34 diseases listed in the Act. This is admissible after the worker has been under ESI coverage for atleast 2 years during which he/she should have contributed atleast for 156 days. When these conditions are satisfied medical benefit is admissible for a maximum period of 730 days for the I.P. and his/her family.
funeral expenses
53. What are Funeral expenses?
* This component consists of a lump sum payment towards the expenditure on the funeral of the deceased insured person.
54. What is the amount payable?
* The lump sum amount of this benefit is equal to the actual expenditure, not exceeding Rs. 2500/- towards the funeral of the deceased insured person.
55. Are there any Contribution Conditions?
* No contribution condition is required for this Benefit. The only condition for admissibility of this Benefit is that the deceased person should have been an insured person at the time of his death. The Funeral expenses are thus payable in respect of an insured person in receipt of Permanent Disablement Benefit even if he may not be employed at the time of his death in a factory or establishment covered under the ESI Act.
56. To whom are the Funeral expenses payable?
* The expenses are payable to the eldest surviving member of the family of the deceased insured person. If the insured person did not have a family or if he was not living with his family at the time of his death, the benefit is payable to the person who actually incurs the expenditure on the funeral of the deceased insured person.
57. How to claim the Funeral expenses?
* To claim the expenses, the claimant should submit his/her claim personally or by post to the Local Office of the deceased insured person within three months, together with the following documents:–
(a) Death certificate as proof of death of the insured person issued by the Insurance Medical Officer/Insurance Medical Practitioner or such other Medical Officer of a hospital or other institution who attended the insured person at the time of death or examined the body after the death; (Death certificate issued by cremation/burial ground or by Municipal authorities or certified copy of village etc. death records may also be accepted as evidence of death);
(b) a declaration of the claimant, either
(i) that he is the eldest surviving member of the family of the deceased insured person and incurred expenditure on the funeral of the deceased. or
(ii) in case the claimant is other than the eldest surviving member of the family, that the deceased insured person did not have a family or was not living with his family at the time of his death and that the claimant actually incurred expenditure on the funeral of the deceased insured person. The declaration should be countersigned by a competent authority.
some miscellaneous provisions
u Disqualification for benefits in certain cases:
A person who works and receives wages on any day is not entitled to sickness benefit or maternity benefit or temporary disablement benefit in respect of that day.
A recipient of sickness benefit or temporary disablement benefit must remain under medical treatment and obey the instruction given by his Insurance Medical Officer. He should not leave the area of treatment without the permission of his medical officer and should present himself for examination by the medical officer or any other person authorised by the Corporation.
u Safeguarding the right to Benefit:
Cash benefits payable under the Employees’ State Insurance Act are not liable to attachment or sale in execution of any court decree or order. Also, the right to receive any benefit is not transferable or assignable.
u Protection from Dismissal, discharge or other Punishments:
An employee is protected against dismissal, discharge, or other punishments during the following periods:–
(1) a period of 6 months in case of a recipient of disablement benefit;
(2) a period of 6 months in case an employee is under medical treatment for sickness or certified illness due to pregnancy or confinement;
(3) a period of 12 months in case an employee is under medical treatment for T.B. Leprosy, Mental, Malignant or any of the 34 specified diseases.
u Remittance of Cash Benefit at the cost of the Corporation:
At the option of the beneficiary, cash benefits under the Employees’ State Insurance Act are remitted by Money Orders at the cost of the Corporation, irrespective of the amount involved.
u Adjudication Machinery:
To make the right of claimants effective, every claimant has a right of raising a dispute in the Employees’ Insurance Court. It consists of a judicial officer appointed by the State Government. The jurisdiction of a Civil Court is barred in all such cases.
u Repayment and recovery of Benefit payments:
If a person receives any benefit to which he is not legally entitled, he is liable to repay the value of any such benefit to the Corporation.
u Punishment for false statement etc.:
Any false statement or false representation made or caused to be made for the purpose of obtaining benefit wrongfully etc. constitutes an offence under the Employees’ State Insurance Act, punishable with imprisonment upto three months or with fine upto five hundred rupees or both.
u Treatment at outstation
In case an insured worker leaves his station on duty or otherwise he/she is eligible for treatment at any ESI medical unit, subject to production of identity card and a certificate from Employer in Form 105.
UNDER LABOUR AND EMPLOYEMENT DEPARTMENT
Introduction:
The ESI Act.1948 envisages an integrated social insurance scheme to provide social security to the industrial workers in certain contingencies such as sickness, maternity, temporary or permanent physical disablement and death due to employment injury resulting in loss of wages or earning capacity. The act also guarantees full medical care to the workers and their dependent family members.
The act was first implemented at Kanpur and Delhi on 24.2.1952 and in the mean time it has been implemented in all States and Union Territories of India.
Coverage under the ESI Act.
All non seasonal factories using power and employing 10 or more persons and non-power using factories employing 20 or more persons are coverable under the ESI Act. The Act. has also been extended to establishments like shops, hotels, restaurants, cinema halls, road motor transport agencies and news paper establishment employing 20 or more persons. All employees in such factories and establishments getting wage upto Rs.6500/-P.M. are coverable under the Act.
Benefits under the Act:
The following benefits are provided to the insured persons(I.Ps.)and their family members under the provisions of ESI Act.
1) Medical Benefit.
2) Sickness Benefit
3) Maternity Benefit
4) Disablement Benefit.
5) Dependant’s Benefit.
6) Funeral benefit.
The First benefit i.e medical Benefit is provided by the State Government through the ESI Scheme and the remaining five benefits, which are cash benefits are provided by the ESI Corporation directly.
ESI scheme of india
THE FUNDAMENTALS
1. What is E.S.I. Scheme ?
* In addition to necessities of food, clothing, housing etc., man needs security in times of physical and economic distress consequent upon sickness, disablement etc. The Employees’ State Insurance Scheme is an integrated measure of Social Insurance embodied in the Employees’ State Insurance Act and is designed to accomplish the task of protecting ‘employees’ as defined in the Employees’ State Insurance Act against the hazards of sickness, maternity, disablement and death due to employment injury and to provide medical care to insured persons and their families. The Scheme covers employees of non-seasonal power-using factories employing 10 or more persons. There is, however, a built-in provision for its extension to other establishments or classes of establishments, industrial, commercial, agricultural or otherwise. The Scheme has been progressively extended to cover employees in non-power using factories employing 20 or more persons and to commercial establishments.
2. How does the Employees’ State Insurance Scheme assist you?
* The dependence of an individual on cash income is a characteristic feature of modern economy. An interruption of money income even for a small period is, therefore, a hardship; a prolonged loss of income is indeed a catastrophe. By coming forward to provide health protection and income maintenance in a series of oft-experienced contingencies like sickness, maternity, disablement and death due to employment injury, the Employees’ State Insurance Scheme tends to ameliorate your economic anxiety and to be a friend in need and distress.
3. Why is it called a Health Insurance Scheme?
* The Employees’ State Insurance Scheme performs a dual role; by providing assistance in kind (medical care) it tries to restore your health and working capacity and by assistance in cash (cash benefit) it tries to sustain you when your income is interrupted. With a better and facile health protection, greater vitality, and assurance of income-maintenance in times of need, it makes you every inch a better, a healthier, secure worker and therefore, a happier man. The assistance comes to you not as an act of benevolence but in virtue of an acquired right.
4. Who administers the Employees’ State Insurance Scheme?
* The Employees’ State Insurance Scheme is administered by a corporate body called the Employees’ State Insurance Corporation (ESIC), which has members representing Employees, Employers, the Central Government, State Governments, Medical Profession and the Parliament. The Director General is the Chief Executive Officer of the Corporation and is also an ex-officio member of the Corporation. The other bodies at the national level are the Standing Committee (a representative body of the Corporation) and the Medical Benefit Council, a specialised body which advises the Corporation on administration of Medical Benefit. At the Regional and Local levels, the Regional Boards and Local Committees have been constituted. There is, thus, an association of interests and interest groups at all levels.
ESIC is the trustee of the interests of the insured persons. It discharges its obligations and duties through a net-work of Regional Offices and Local Offices, Hospitals and Dispensaries spread over the entire country.
5. Whom does the Scheme protect?
* The Scheme protects all “employees” engaged on a monthly remuneration not exceeding Rs. 6500/- in a factory/establishment to which the Act applies. Persons employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or purchase of raw materials, or distribution or sale of the product of a factory or establishment are also covered. Mines, Railway Running Sheds, Naval, Military and Air Force Workshops and specified seasonal factories are excluded. The scheme also provides full medical cover to the dependants of insured persons. In the event of death of an insured person due to employment injury dependants become eligible to cash benefit.
6. Where do Employees’ State Insurance Funds come from?
* The Employees’ State Insurance Funds are primarily built out of employers contribution and employees contribution payable monthly as a fixed percentage of wages.
allied provisions
7. How are the employees registered under the Scheme?
* Simultaneously with his/her entry into employment in a covered factory or establishment, an employee is required to fill in a Declaration Form. The employee is then allotted a Registration Number, which distinguishes and identifies the person for the purposes of the Scheme. A person is registered once and once only upon his entry in insurable employment.
8. What is an Identity Card?
* On registration every insured person is provided with a “Temporary Identification Certificate” which is valid ordinarily for a period of 3 months but may be extended, if necessary, for a further period of 3 months. Within this period, the Insured Person is given a permanent “family photo Identity Card” in exchange for the Certificate. The Identity Card serves as a means of identification and has to be produced at the time of claiming medical care at the dispensary/clinic and cash benefit at the Local Office of the Corporation. In the event of change of employment, it should be produced before the new employer as evidence of registration under the Scheme to prevent any duplicate registration. The Identity Card bears the signatures/thumb impression of the insured person.
Since medical benefit is also available to the families of insured persons, the particulars of family members entitled to Medical Benefit are also given in the Identity Card affixed with a postcard size family photo.
If you lose your Identity Card before it has run its normal life, a duplicate card is issued on payment as prescribed.
9. What are the rates of contribution?
* Contributions payable in respect of an employee comprise of employer’s contribution and employee’s contribution prescribed in Schedule I of the Act.
An employee covered under the scheme has to contribute 1.75% of the wages whereas, an employer contributes 4.75% of the wages payable to an employee. The total contribution in respect of an employee thus works out to 6.50% of the wages payable.
10. Who is exempted from payment of contribution?
* Employees earning less than Rs 40/- a day are exempted from payment of contribution. The employers share of contribution is, however, payable.
11. How are the Contributions collected?
* The Contribution is deposited by the Employer in cash or by cheque at the designated branches of some nationalised banks. The responsibility for payment of all contributions is that of the employer with a right to deduct the Employees’ share of contributions from employees’ wages relating to the period in respect of which the Contribution is payable.
12. What are ‘Contribution Periods’ and ‘Benefit Periods?
* Workers, covered under the ESI Act, are required to pay contribution towards the scheme on a monthly basis. A contribution period means a six-month time span from 1st April to 30th September and 1st October to 31st March. Thus, in a financial year there are two contribution periods of six months duration.
Cash benefits under the scheme are generally linked with contributions paid. The benefit period starts three months after the closure of a contribution period. The two types of periods are illucidated below:–
Contribution Period Corresponding Benefit period
1st April to 30th September 1st January to 30th June of the following year
1st October to 31st March 1st July to 31st December
13. What is a Local Office?
* A net-work of Local Offices has been established by the Corporation in all implemented areas to disburse all claims for sickness, maternity, disablement and dependents’ benefit. The Local Office also answers all doubts and enquiries and assists otherwise in filling in claim forms and completing other action necessary in connection with the settlement of claims. These offices also interact with the employers of the area. The Local Offices are managed by a Manager and work under the direction and control of the Regional Offices.
SOCIAL SECURITY BENEFITS
sickness benefit
14. What does ‘Sickness Benefit’ mean?
* Sickness signifies a state of health necessitating medical treatment and attendance and abstention from work on medical grounds. Financial support extended by the Corporation is such a contingency is called Sickness Benefit.
15. What are the Contributory Conditions?
* The contribution condition required to be fulfilled for admissibility of sickness benefit during any benefit period is that contributions should have been paid in respect of an insured person in the corresponding contribution period for not less than 78 days.
16. How much is the Standard Benefit Rate?
* The daily rate of Sickness Benefit during any benefit period is the “standard benefit rate” this rate corresponds to the average daily wage of an insured person during the corresponding contribution period and is roughly half of the daily wage rate. Benefit is paid for Sundays also. 28 wage groups have been evolved for working out the daily rate of Standard Sickness Benefit.
17. What is the duration of Sickness Benefit?
* Sickness benefit is payable for a maximum period of 91 days in any two consecutive benefit periods. Benefit is not paid for an initial waiting period of 2 days unless the insured person is certified sick within 15 days of the last spell in which Sickness Benefit was paid.
EXTENDED SICKNESS BENEFIT:
18. What is Extended Sickness Benefit?
* Extended Sickness Benefit is a Cash Benefit paid for prolonged illness due to any of the 34 specified diseases as mentioned below.
Diseases
1. Tuberculosis
2. Leprosy
3. Chronic Empyema
4. Bronchiectasis
5. Interstitial Lung disease
6. AIDS
7. Malignant Diseases
8. Diabetes Mellitus-with proliferative retinopathy/diabetic foot/ nephropathy.
9. Monoplegia
10. Hemiplegia
11. Paraplegia
12. Hemiparesis
13. Intracranial space occupying lesion
14. Spinal Cord Compression
15. Parkinson’s disease
16. Myasthenia Gravis/Neuromuscular Dystrophies
17. Immature Cataract with vision 6/60 or less
18. Detachment of Retina
19. Glaucoma
20. Coronary Artery Diseases
21. Congestive Heart Failure-Left, Right
22. Cardiac valvular Diseases with failure/complications
23. Cardiomyopathies
24. Heat disease with surgical intervention alongwith complications
25. Chronic Obstructive Long diseases (COPD) with congestive heart failure (Cor Pulmonale)
26. Cirrhosis of liver with ascitis/chronic active hepatitis (“CAH”)
27. Dislocation of vertebra/prolapse of intervertebral disc
28. Non union or delayed union of fracture
29. Post Traumatic surgical amputation of lower extremity
30. Compound fracture with chronic osteomyelitis
31. (a) Schizophrenia
(b) Endogenous depression
(c) Maniac Depressive Psychosis (MDP)
(d) Dementia
32. More than 20% Burns with infection/complication
33. Chronic Renal Failure
34. Reynaud’s disease/Burger’s disease.
In addition, extended sickness benefit may also be sanctioned by the prescribed authority, in case of any rare disease or special circumstances on the recommendation of the specified authority.
19. What are the Contributory Conditions?
* Except in case of disability from administration of drugs/injections, the insured person should have been in continuous employment for a period of 2 years and should have contributed for atleast 156 days in 4 preceding contribution periods.
20. How much is the Benefit rate?
* The daily rate of Extended Sickness Benefit is 40% more than the Standard Sickness Benefit rate admissible.
21. How long is the Benefit available?
* After exhausting Sickness Benefit payable for 91 days the ESB is payable upto a further period of 124/309 days that can be extended upto 2 years in special circumstances. Thus, together with the Sickness Benefit for 91 days, it puts a claimant on benefit for an aggregate period 400 days for all specified diseases and 2 years in chronic suitable cases on recommendation of competent authority.
enhanced sickness benefit
22. What is Enhanced Sickness Benefit?
* Enhanced Sickness Benefit is cash benefit for the insured persons undergoing sterlisation operation of vasectomy/tubectomy for family planning.
22a. What are the contributory conditions?
* The contributory conditions are the same as for claiming sickness benefit.
22b. How much is the benefit rate?
* The daily rate of this benefit is double the standard benefit rate. Say, not less than the daily wage.
22c. How Long is the benefit available?
* The benefit is available upto 7 days for vasectomy and upto 14 days for tubectomy operations. This period can however be extended in cases of post operative complications or sickness arising out of these sterlisation operations. Its duration is not counted towards the total number of 91 days for which the sickness benefit is available during any two consecutive benefit periods.
22d. How to claim Sickness Benefit?
* A claim for Sickness Benefit should be supported by a Medical Certificate issued by an Insurance Medical Officer/Insurance Medical Practitioner in the appropriate Form. Medical Certificates are issued at intervals of not more than seven days, except in cases of prolonged sickness, where Special Intermediate Certificates may be issued at longer intervals not exceeding 4 weeks. On the back of each certificate, except the Special Intermediate Certificate, a Claim Form is printed. The Claim Form is essentially a declaration in regard to abstention of the claimant from work during the period of claim. Separate Claim Forms are also available.
The Claim Form should bear signatures/thumb impression of the claimant and should be submitted to the Local Office personally, by post, through a messenger or by deposit in certificate boxes, wherever provided. All claims should preferably to submitted to the Local Office within three days. The Receptionist at the Local Office renders all assistance in filling in the claim on your behalf.
disablement benefit
23. What is ‘Disablement’?
* Disablement is a condition resulting from employment injury which may be :–
(a) temporary i.e. rendering an insured person incapable of work temporarily and necessitating medical treatment;
(b) permanent partial i.e. reducing the earning capacity of the insured person generally for every employment;
(c) permanent total i.e. totally depriving the insured person of the power to do all work.
24. What constitutes an “Employment Injury?”
* Employment injury means a personal injury caused to an employee by an accident or occupational disease arising out of and in course of his employment in a factory or establishment covered under the Employees’ State Insurance Act.
The law relating to Employment injury has been liberalised. Now, an accident arising in the course of employment is presumed also to have arisen out of his employment if there is no evidence to the contrary. Further, an accident brought about by wilful disobedience, negligence or breach of regulations etc. or an accident happening while travelling in a transport provided by the employer or while meeting an emergency is accepted subject to certain conditions, to have arisen in the course of and out of employment. Injuries suffered while under the influence of drinks and drugs take away the right of the employee to this benefit.
Roadside accident caused while commuting between place of residence and workplace is also treated as notional extension of employment for purpose of death or disablement benefit.
25. What are ‘Occupational Diseases’?
* Occupational Diseases are such diseases as are susceptible of being traced back to their occupational origin. These are specified under Schedule III of the Employees’ State Insurance Act, which enumerates the compensable Occupational Diseases and the corresponding industrial processes involving exposure to the diseases are thus recognised without any further evidence.
26. What are the Benefits granted?
* Temporary Disablement Benefit is paid periodically in arrears as the evidence of incapacity (medical certificate) is produced. Permanent total disablement and permanent partial disablement benefits are paid in the form of pensions. Current employment for wages or engagement in any gainful activities is no bar to payment of permanent disablement benefits. An insured person suffering from an occupationd disease is also entitled to full medical care.
27. How much is the Benefit Rate?
* The daily benefit rate for permanent total disablement and temporary disablement is 40% more than the Standard Sickness Benefit rate and is roughly equivalent to about 70% of the wage rate. For permanent partial disablement, the rate of benefit is proportionate to the percentage of loss of earning capacity. The benefit is paid for Sundays also.
28. What are the Contributory Conditions?
* There are no qualifying conditions as to the length of employment or the number of contributions paid. Protection accrues from the very moment of entry into insurable employment.
29. What is the duration of Benefit?
* Temporary Disablement Benefit is paid as long as disablement lasts. There is a waiting period of 3 days (excluding the day of accident), but if incapacity exceeds this period, benefit is paid from the very first day. The permanent disablement benefit is paid for the life-time of the beneficiary.
30. How is Permanent Disablement assessed?
* There is indeed no way of adequately compensating a permanently disabled employee and yet some method of determining whether an employment injury has resulted in permanent disablement and of assessing the extent of permanent damage caused by that employment injury has to be adopted for the purpose of determining the scale of compensation for the loss of earnings. This is done by evaluating loss of earning capacity with reference to general disability for all work. The evaluation is done by a Medical Board whose decision can be appealed against to a Medical Appeal Tribunal presided over by a judicial officer, with a further right of appeal to Employees’ Insurance Court or directly to Employees’ Insurance Court. Pending an appeal, payment for permanent loss of earning capacity as recommended by the Medical Board is made, subject to adjustment later. Loss of wages and expenditure on conveyance occasioned by attendance before the Medical Board are compensated by the Corporation in accordance with rates framed for the purpose.
Where the assessment of loss of earning capacity by the Medical Board is not of a final character, the beneficiary is required to appear again before the Medical Board for a review of the assessment.
31. Can the decisions of Medical Board or of Medical Appeal Tribunal be reviewed?
* Yes. If the Medial Board or the Medical Appeal Tribunal is satisfied by fresh evidence that a decision was given because of non-disclosure or mis-representation of a material fact, it can review its earlier decision at any time. A Medical Board can also review its earlier assessment of extent of disablement, if it is satisfied that there has been substantial and unforeseen aggravation of the results of the relevant injury and substantial injustice would be done by not reviewing it. Such review, however, cannot be made earlier than 5 years or in the case of the provisional assessment, earlier than 6 months of the date of assessment to be reviewed.
32. Is lumpsum Benefit allowed in place of Pension?
* Yes. At the option of the beneficiary, permanent disablement pension, where the daily rate payable is not significant, can be commuted for a lumpsum payment subject to the fulfilment of the following two conditions :–
(i) that the permanent disablement has been assessed as final, and
(ii) the daily rate of permanent disablement does not exceed Rs 5/- and the total commuted value does not exceed Rs 30,000/- (effective from April–03).
33. How to claim ‘Disablement Benefit’?
(a) Temporary Disablement:
(i) Notice of the injury should be given either orally or in writing personally or through an agent, to the employer/foreman/duty supervisor or particulars of the injury should be entered in the Accident Book kept in the factory, personally or through an agent.
(ii) A medical certificate of incapacity should be obtained from the Insurance Medical Officer/Insurance Medical Practitioner.
(iii) The claim form printed on the back of the medical certificate should be filled in and submitted promptly to Local Office along with the medical certificate.
(iv) A final certificate should be obtained from the Insurance Medical Officer/Insurance Medical Practitioner and submitted to the Local Office before resumption of duty.
(b) Permanent Disablement:
(i) If suffering from permanent effects of employment injury, the insured person should make an application to the Regional Office of the Corporation for reference of his case to the Medical Board (reference to the Medical Board is made otherwise also by the Regional Office).
(ii) Where loss of earning capacity has been assessed and communicated to the insured person, he should submit a claim in the appropriate form to the Local Office.
(iii) After the claim has been admitted, the beneficiary should submit at six-monthly intervals (with the claim for June and December every year) a life certificate in appropriate form duly attested by the prescribed authority.
34. Is there any provision for physical rehabilitation?
* Yes. Insured Persons who suffer physical disablement due to employment injury are provided artificial appliances or other physical aids such as wheel chairs, crutches, dentures and spectacles etc.
35. What about vocational rehabilitation?
* The Corporation at its cost arranges for the vocational rehabilitation of disabled insured persons provided the disability has been assessed at above 40 percent and the beneficiary is not over 45 years of age. The training is provided at vacational rehabilitation centres run by the Govt. of India etc. The fee, travelling expenses etc are borne by the Corporation.
dependents’ benefit
36. What is ‘Dependents’ Benefit’?
* Dependents Benefit is a monthly pension payable to the eligible dependents of an insured person who dies as a result of an Employment Injury or occupational disease.
37. Who are the Beneficiaries and how long is the Benefit available?
* Dependants entitled to the benefit could be :–
(a) Widow/Widows during life or until remarriage:
(b) Legitimate or adopted son until age 18 or if legitimate son is infirm, till infirmity lasts;
(c) Legitimate or adopted unmarried daughter until age 18 or until marriage, whichever is earlier, or if infirm, till infirmity lasts and she continues to be unmarried.
In the absence of any widow or legitimate child, the benefit is payable to a parent or grandparent for life, to any other male dependant until age 18 or to an unmarried or widowed female dependant until age 18.
38. How much is the Benefit for each Beneficiary?
* The total divisible benefit is equivalent to the temporary disablement benefit rate (roughly 70% of the wage rate). The widow/widows share 3/5th of the benefit and the legitimate or adopted son and daughter 2/5th each of the benefit. If the total benefit so divided exceeds the full rate, there is a proportionate reduction in the respective shares of the beneficiaries.
39. How to claim ‘Dependants’ Benefit’?
* To establish title to Dependant’ Benefit, the following documents should be submitted at the Local Office:–
(a) Claim in the appropriate form;
(b) Evidence of death being due to employment injury;
(c) Proof of relationship to the deceased supporting eligibility of the claimant as a “dependant”;
(d) Evidence of age of the claimant(s) (certified copy of official record of birth, Baptismal register, school records, original horoscope etc;
(e) Certificate of infirmity from Medical Referee or any other prescribed authority in case of legitimate infirm son or legitimate or adopted unmarried infirm daughter.
After the claim to Dependant’s Benefit has been admitted, the beneficiary should submit at six-monthly intervals (with the claim for June and December), a declaration that he/she is alive and has not married/remarried, attained the prescribed age/continues to be infirm, as the case may be duly attested by the prescribed authority.
40. Can Dependant’s Benefit be reviewed?
* Yes. Dependant’s Benefit once awarded can be reviewed by the Corporation at any time if it is satisfied on fresh evidence that the earlier decision was due to non-disclosure or misrepresentation of material facts. It can also be reviewed on birth, death, marriage, re-marriage and attainment of age 18, by a claimant. The benefit can be continued, increased, reduced or discontinued.
maternity benefit
41. What is Maternity Benefit?
* Maternity Benefit is cash payable to an insured woman for the specified period of abstention from work for confinement or miscarriage or for sickness arising out of pregnancy, confinement, premature birth of child or miscarriage. “Confinement” connotes labour resulting in the delivery of a living child or labour after 26 weeks of pregnancy whether the resultant issue is alive or dead. “Miscarriage” means expulsion of the contents of a pregnant uterus at any period prior to or during 26th week of pregnancy. Criminal abortion or miscarriage does not, however, entitle to benefit.
42. What are the Contributory Conditions?
* The contribution condition is the same as for Sickness Benefit.
43. How much is the Benefit?
* The daily benefit rate is double the Sickness Benefit rate and is thus roughly equivalent to the full wages. Benefit is paid for Sundays also.
44. What is the duration of the Benefit?
* The Benefit is paid as follows:–
(a) For confinement :–
For a total period or 12 weeks beginning not more than 6 weeks before the expected date of child birth. If the insured woman dies during confinement or within 6 weeks thereafter, leaving behind the living child, the benefit continues to be payable for the whole of the period. But if the child also die during that period, the benefit will be paid upto and including the day of death of the child.
(b) For Miscarriage:–
For a period of 6 weeks following the date of miscarriage.
(c) For Sickness arising out of pregnancy, confinement, premature birth of child or miscarriage:–
For an additional period of upto four week.
In all the cases, the benefit is paid only if the insured woman does not work for remuneration during the period for which benefit is claimed. There is no waiting period.
45. How to claim Maternity Benefit?
* Where an insured woman wishes to claim Maternity Benefit after confinement or for miscarriage, she should obtain from the Insurance Medical Officer/Insurance Medical Practitioner, a certificate of confinement or miscarriage and submit it to her Local Office personally or by post alongwith a claim for Maternity Benefit. The claim form also contains a declaration of abstention from work.
If Benefit is desired before confinement, a Notice and Certificate of Pregnancy and a Certificate of Expected Confinement obtained from the Insurance medical Officer/Insurance Medical Practitioner are also required to be submitted.
For claiming Benefit in the event of death of an insured woman leaving behind a child, her nominee and if there is no such nominee, her legal representative should submit personally or by post to the Local Office of the deceased insured woman, a claim for the Benefit together with a certificate of death of the insured woman.
An insured woman claiming Maternity Benefit for Sickness arising out of pregnancy, confinement, premature birth of child or miscarriage should submit her claim in the manner as for sickness benefit.
Where a claim to Maternity Benefit is not submitted alongwith prescribed certificates referred to above, the Corporation has the discretion to accept other evidence in lieu thereof.
46. What is Medical Bonus?
* Medical Bonus is lump sum payment made to an insured woman or the wife of an insured person in case she does not avail medical facility from an ESI hospital at the time of delivery of a child. This bonus of Rs. 250/- has been increased to Rs. 1000/- from 1st April 2003.
medical benefit
47. What is Medical Benefit?
* Medical Benefit means medical care of insured persons and their families, wherever covered for medical benefit.
48. What does Medical Benefit consist of?
* The standard medical care consists of out-door treatment, in-patient treatment, all necessary drugs and dressings, pathological and radiological specialist consultation and care, ante-natal and post natal care, emergency treatment etc.
49. Where are ‘out-patient’ services provided?
* Out-door medical care is provided at State Insurance Dispensaries or Mobile Dispensaries manned by full-time doctors (‘Service’ system) or at the private clinics of Insurance Medical Practitioners (‘Panel” system). The scope of medical services also includes simple ante-natal and post-natal care for women, family welfare planning services and immunisation against the common infectious diseases.
The Scheme provides at the sole cost of the Corporation, artificial limbs to insured persons who lose their limbs due to employment injury or in certain circumstances otherwise also, dentures, spectacles and hearing-aids where the loss of teeth, impairment of eye-sight or hearing respectively is due to employment injury.
50. How and where are ‘in – patient’ Services Provided?
* ESIC has a network of 141 hospitals countrywide. Majority of these hospitals are administered by the State Govts. In – patient and diagnostic services in basic specialities are available at these hospitals. State schemes have also tie-up arrangements with a number of Medical colleges, major state hospitals, as well as, private hospitals for advanced treatment for malignant diseases and complicated surgical interventions.
51. What about Preventive health care services?
* ESI Scheme provides preventive health care services through the network of its dispensaries and hospitals. These include immunisation against some killer diseases, pulse polio vaccination and family welfare services etc. The scheme also participates in all major national preventive health service campaigns.
52. How long is Medical Benefit available?
* Insured worker and the members of his family are eligible for medical care from the very first day of the worker coming under ESI Scheme. The medical care includes primary medical care, diagnostic services, specialist consultations and indoor medical care. Whenever the patient is not able to travel by himself/herself, ambulance services are also provided. The I.P. or his family members are not required to pay for any of the services.
A worker who is covered under the Scheme for the first time is eligible for medical care for a period of three months. If he/she continues in insurable employment for three months or more the medical care is available to him/her till the start of the first benefit period. If he/she contributes atleast for 78 days in a contribution period the eligibility is there upto the end of the corresponding benefit period.
A worker is also eligible for extended sickness benefit when he/she is suffering from any one of the long term 34 diseases listed in the Act. This is admissible after the worker has been under ESI coverage for atleast 2 years during which he/she should have contributed atleast for 156 days. When these conditions are satisfied medical benefit is admissible for a maximum period of 730 days for the I.P. and his/her family.
funeral expenses
53. What are Funeral expenses?
* This component consists of a lump sum payment towards the expenditure on the funeral of the deceased insured person.
54. What is the amount payable?
* The lump sum amount of this benefit is equal to the actual expenditure, not exceeding Rs. 2500/- towards the funeral of the deceased insured person.
55. Are there any Contribution Conditions?
* No contribution condition is required for this Benefit. The only condition for admissibility of this Benefit is that the deceased person should have been an insured person at the time of his death. The Funeral expenses are thus payable in respect of an insured person in receipt of Permanent Disablement Benefit even if he may not be employed at the time of his death in a factory or establishment covered under the ESI Act.
56. To whom are the Funeral expenses payable?
* The expenses are payable to the eldest surviving member of the family of the deceased insured person. If the insured person did not have a family or if he was not living with his family at the time of his death, the benefit is payable to the person who actually incurs the expenditure on the funeral of the deceased insured person.
57. How to claim the Funeral expenses?
* To claim the expenses, the claimant should submit his/her claim personally or by post to the Local Office of the deceased insured person within three months, together with the following documents:–
(a) Death certificate as proof of death of the insured person issued by the Insurance Medical Officer/Insurance Medical Practitioner or such other Medical Officer of a hospital or other institution who attended the insured person at the time of death or examined the body after the death; (Death certificate issued by cremation/burial ground or by Municipal authorities or certified copy of village etc. death records may also be accepted as evidence of death);
(b) a declaration of the claimant, either
(i) that he is the eldest surviving member of the family of the deceased insured person and incurred expenditure on the funeral of the deceased. or
(ii) in case the claimant is other than the eldest surviving member of the family, that the deceased insured person did not have a family or was not living with his family at the time of his death and that the claimant actually incurred expenditure on the funeral of the deceased insured person. The declaration should be countersigned by a competent authority.
some miscellaneous provisions
u Disqualification for benefits in certain cases:
A person who works and receives wages on any day is not entitled to sickness benefit or maternity benefit or temporary disablement benefit in respect of that day.
A recipient of sickness benefit or temporary disablement benefit must remain under medical treatment and obey the instruction given by his Insurance Medical Officer. He should not leave the area of treatment without the permission of his medical officer and should present himself for examination by the medical officer or any other person authorised by the Corporation.
u Safeguarding the right to Benefit:
Cash benefits payable under the Employees’ State Insurance Act are not liable to attachment or sale in execution of any court decree or order. Also, the right to receive any benefit is not transferable or assignable.
u Protection from Dismissal, discharge or other Punishments:
An employee is protected against dismissal, discharge, or other punishments during the following periods:–
(1) a period of 6 months in case of a recipient of disablement benefit;
(2) a period of 6 months in case an employee is under medical treatment for sickness or certified illness due to pregnancy or confinement;
(3) a period of 12 months in case an employee is under medical treatment for T.B. Leprosy, Mental, Malignant or any of the 34 specified diseases.
u Remittance of Cash Benefit at the cost of the Corporation:
At the option of the beneficiary, cash benefits under the Employees’ State Insurance Act are remitted by Money Orders at the cost of the Corporation, irrespective of the amount involved.
u Adjudication Machinery:
To make the right of claimants effective, every claimant has a right of raising a dispute in the Employees’ Insurance Court. It consists of a judicial officer appointed by the State Government. The jurisdiction of a Civil Court is barred in all such cases.
u Repayment and recovery of Benefit payments:
If a person receives any benefit to which he is not legally entitled, he is liable to repay the value of any such benefit to the Corporation.
u Punishment for false statement etc.:
Any false statement or false representation made or caused to be made for the purpose of obtaining benefit wrongfully etc. constitutes an offence under the Employees’ State Insurance Act, punishable with imprisonment upto three months or with fine upto five hundred rupees or both.
u Treatment at outstation
In case an insured worker leaves his station on duty or otherwise he/she is eligible for treatment at any ESI medical unit, subject to production of identity card and a certificate from Employer in Form 105.
Monday, April 27, 2009
recruitment And Selection
Recruitment And Selection
According to Edwin B. Flippo, “Recruitment is the process of searching the candidates for employment and stimulating them to apply for jobs in the organisation”. Recruitment is the activity that links the employers and the job seekers.
A few definitions of recruitment are:
· A process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applications from which new employees are selected.
· It is the process to discover sources of manpower to meet the requirement of staffing schedule and to employ effective measures for attracting that manpower in adequate numbers to facilitate effective selection of an efficient working force.
Recruitment of candidates is the function preceding the selection, which helps create a pool of prospective employees for the organisation so that the management can select the right candidate for the right job from this pool.
The main objective of the recruitment process is to expedite the selection process.
Recruitment is a continuous process whereby the firm attempts to develop a pool of qualified applicants for the future human resources needs even though specific vacancies do not exist. Usually, the recruitment process starts when a manger initiates an employee requisition for a specific vacancy or an anticipated vacancy.
RECRUITMENT NEEDS ARE OF THREE TYPES
· PLANNEDi.e. the needs arising from changes in organization and retirement policy.
· ANTICIPATEDAnticipated needs are those movements in personnel, which an organization can predict by studying trends in internal and external environment.
· UNEXPECTEDResignation, deaths, accidents, illness give rise to unexpected needs.
Importance of Recruitment -
Attract and encourage more and more candidates to apply in the organisation.
· Create a talent pool of candidates to enable the selection of best candidates for the organisation.
· Determine present and future requirements of the organization in conjunction with its personnel planning and job analysis activities.
· Recruitment is the process which links the employers with the employees.
· Increase the pool of job candidates at minimum cost.
· Help increase the success rate of selection process by decreasing number of visibly under qualified or overqualified job applicants.
· Help reduce the probability that job applicants once recruited and selected will leave the organization only after a short period of time.
· Meet the organizations legal and social obligations regarding the composition of its workforce.
· Begin identifying and preparing potential job applicants who will be appropriate candidates.
· Increase organization and individual effectiveness of various recruiting techniques and sources for all types of job applicants
Recruitment and Selection
The recruitment and selection is the major function of the human resource department and recruitment process is the first step towards creating the competitive strength and the strategic advantage for the organisations. Recruitment process involves a systematic procedure from sourcing the candidates to arranging and conducting the interviews and requires many resources and time.
A general recruitment process is as follows:
· Identifying the vacancy: The recruitment process begins with the human resource department receiving requisitions for recruitment from any department of the company. These contain:
• Posts to be filled• Number of persons• Duties to be performed• Qualifications required
Preparing the job description and person specification.
Locating and developing the sources of required number and type of employees (Advertising etc).
. Short-listing and identifying the prospective employee with required characteristics.
. Arranging the interviews with the selected candidates.
. Conducting the interview and decision making
1. Identify vacancy
2. Prepare job description and person specification
3. Advertising the vacancy
4. Managing the response
5. Short-listing
6. Arrange interviews
7. Conducting interview and decision making
The recruitment process is immediately followed by the selection process i.e. the final interviews and the decision making, conveying the decision and the appointment formalities.
SOURCES OF RECRUITMENT
Recruitment v/s Selection
Both recruitment and selection are the two phases of the employment process.
The differences between the two are:
1. Recruitment is the process of searching the candidates for employment and stimulating them to apply for jobs in the organisation WHEREAS selection involves the series of steps by which the candidates are screened for choosing the most suitable persons for vacant posts.
2. The basic purpose of recruitments is to create a talent pool of candidates to enable the selection of best candidates for the organisation, by attracting more and more employees to apply in the organisation WHEREAS the basic purpose of selection process is to choose the right candidate to fill the various positions in the organisation.
3. Recruitment is a positive process i.e. encouraging more and more employees to apply WHEREAS selection is a negative process as it involves rejection of the unsuitable candidates.
4. Recruitment is concerned with tapping the sources of human resources WHEREAS selection is concerned with selecting the most suitable candidate through various interviews and tests.
5. There is no contract of recruitment established in recruitment WHEREAS selection results in a contract of service between the employer and the selected employee.
Recent trends of Recruitment –
The following trends are being seen in recruitment:
· OUTSOURCING
In India, the HR processes are being outsourced from more than a decade now. A company may draw required personnel from outsourcing firms. The outsourcing firms help the organisation by the initial screening of the candidates according to the needs of the organisation and creating a suitable pool of talent for the final selection by the organisation. Outsourcing firms develop their human resource pool by employing people for them and make available personnel to various companies as per their needs. In turn, the outsourcing firms or the intermediaries charge the organisations for their services.
Advantages of outsourcing are:
1. Company need not plan for human resources much in advance.
2. Value creation, operational flexibility and competitive advantage
3. turning the management's focus to strategic level processes of HRM
4. Company is free from salary negotiations, weeding the unsuitable resumes/candidates.
5. Company can save a lot of its resources and time
POACHING/RAIDING
“Buying talent” (rather than developing it) is the latest mantra being followed by the organisations today. Poaching means employing a competent and experienced person already working with another reputed company in the same or different industry; the organisation might be a competitor in the industry. A company can attract talent from another firm by offering attractive pay packages and other terms and conditions, better than the current employer of the candidate. But it is seen as an unethical practice and not openly talked about. Indian software and the retail sector are the sectors facing the most severe brunt of poaching today. It has become a challenge for human resource managers to face and tackle poaching, as it weakens the competitive strength of the firm.
E-RECRUITMENT
Many big organizations use Internet as a source of recruitment. E- recruitment is the use of technology to assist the recruitment process. They advertise job vacancies through worldwide web. The job seekers send their applications or curriculum vitae i.e. CV through e mail using the Internet. Alternatively job seekers place their CV’s in worldwide web, which can be drawn by prospective employees depending upon their requirements.
Advantages of recruitment are:
Low cost.
No intermediaries
Reduction in time for recruitment.
Recruitment of right type of people.
Efficiency of recruitment process.
HR challenges in recruitment
Recruitment is a function that requires business perspective, expertise, ability to find and match the best potential candidate for the organisation, diplomacy, marketing skills (as to sell the position to the candidate) and wisdom to align the recruitment processes for the benefit of the organisation. The HR professionals – handling the recruitment function of the organisation- are constantly facing new challenges. The biggest challenge for such professionals is to source or recruit the best people or potential candidate for the organisation.In the last few years, the job market has undergone some fundamental changes in terms of technologies, sources of recruitment, competition in the market etc. In an already saturated job market, where the practices like poaching and raiding are gaining momentum, HR professionals are constantly facing new challenges in one of their most important function- recruitment. They have to face and conquer various challenges to find the best candidates for their organisations.
The major challenges faced by the HR in recruitment are:
Adaptability to globalization –
The HR professionals are expected and required to keep in tune with the changing times, i.e. the changes taking place across the globe. HR should maintain the timeliness of the process
Lack of motivation –
Recruitment is considered to be a thankless job. Even if the organisation is achieving results, HR department or professionals are not thanked for recruiting the right employees and performers.
Process analysis –
The immediacy and speed of the recruitment process are the main concerns of the HR in recruitment. The process should be flexible, adaptive and responsive to the immediate requirements. The recruitment process should also be cost effective.
Strategic prioritization – The emerging new systems are both an opportunity as well as a challenge for the HR professionals. Therefore, reviewing staffing needs and prioritizing the tasks to meet the changes in the market has become a challenge for the recruitment professionals.
According to Edwin B. Flippo, “Recruitment is the process of searching the candidates for employment and stimulating them to apply for jobs in the organisation”. Recruitment is the activity that links the employers and the job seekers.
A few definitions of recruitment are:
· A process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applications from which new employees are selected.
· It is the process to discover sources of manpower to meet the requirement of staffing schedule and to employ effective measures for attracting that manpower in adequate numbers to facilitate effective selection of an efficient working force.
Recruitment of candidates is the function preceding the selection, which helps create a pool of prospective employees for the organisation so that the management can select the right candidate for the right job from this pool.
The main objective of the recruitment process is to expedite the selection process.
Recruitment is a continuous process whereby the firm attempts to develop a pool of qualified applicants for the future human resources needs even though specific vacancies do not exist. Usually, the recruitment process starts when a manger initiates an employee requisition for a specific vacancy or an anticipated vacancy.
RECRUITMENT NEEDS ARE OF THREE TYPES
· PLANNEDi.e. the needs arising from changes in organization and retirement policy.
· ANTICIPATEDAnticipated needs are those movements in personnel, which an organization can predict by studying trends in internal and external environment.
· UNEXPECTEDResignation, deaths, accidents, illness give rise to unexpected needs.
Importance of Recruitment -
Attract and encourage more and more candidates to apply in the organisation.
· Create a talent pool of candidates to enable the selection of best candidates for the organisation.
· Determine present and future requirements of the organization in conjunction with its personnel planning and job analysis activities.
· Recruitment is the process which links the employers with the employees.
· Increase the pool of job candidates at minimum cost.
· Help increase the success rate of selection process by decreasing number of visibly under qualified or overqualified job applicants.
· Help reduce the probability that job applicants once recruited and selected will leave the organization only after a short period of time.
· Meet the organizations legal and social obligations regarding the composition of its workforce.
· Begin identifying and preparing potential job applicants who will be appropriate candidates.
· Increase organization and individual effectiveness of various recruiting techniques and sources for all types of job applicants
Recruitment and Selection
The recruitment and selection is the major function of the human resource department and recruitment process is the first step towards creating the competitive strength and the strategic advantage for the organisations. Recruitment process involves a systematic procedure from sourcing the candidates to arranging and conducting the interviews and requires many resources and time.
A general recruitment process is as follows:
· Identifying the vacancy: The recruitment process begins with the human resource department receiving requisitions for recruitment from any department of the company. These contain:
• Posts to be filled• Number of persons• Duties to be performed• Qualifications required
Preparing the job description and person specification.
Locating and developing the sources of required number and type of employees (Advertising etc).
. Short-listing and identifying the prospective employee with required characteristics.
. Arranging the interviews with the selected candidates.
. Conducting the interview and decision making
1. Identify vacancy
2. Prepare job description and person specification
3. Advertising the vacancy
4. Managing the response
5. Short-listing
6. Arrange interviews
7. Conducting interview and decision making
The recruitment process is immediately followed by the selection process i.e. the final interviews and the decision making, conveying the decision and the appointment formalities.
SOURCES OF RECRUITMENT
Recruitment v/s Selection
Both recruitment and selection are the two phases of the employment process.
The differences between the two are:
1. Recruitment is the process of searching the candidates for employment and stimulating them to apply for jobs in the organisation WHEREAS selection involves the series of steps by which the candidates are screened for choosing the most suitable persons for vacant posts.
2. The basic purpose of recruitments is to create a talent pool of candidates to enable the selection of best candidates for the organisation, by attracting more and more employees to apply in the organisation WHEREAS the basic purpose of selection process is to choose the right candidate to fill the various positions in the organisation.
3. Recruitment is a positive process i.e. encouraging more and more employees to apply WHEREAS selection is a negative process as it involves rejection of the unsuitable candidates.
4. Recruitment is concerned with tapping the sources of human resources WHEREAS selection is concerned with selecting the most suitable candidate through various interviews and tests.
5. There is no contract of recruitment established in recruitment WHEREAS selection results in a contract of service between the employer and the selected employee.
Recent trends of Recruitment –
The following trends are being seen in recruitment:
· OUTSOURCING
In India, the HR processes are being outsourced from more than a decade now. A company may draw required personnel from outsourcing firms. The outsourcing firms help the organisation by the initial screening of the candidates according to the needs of the organisation and creating a suitable pool of talent for the final selection by the organisation. Outsourcing firms develop their human resource pool by employing people for them and make available personnel to various companies as per their needs. In turn, the outsourcing firms or the intermediaries charge the organisations for their services.
Advantages of outsourcing are:
1. Company need not plan for human resources much in advance.
2. Value creation, operational flexibility and competitive advantage
3. turning the management's focus to strategic level processes of HRM
4. Company is free from salary negotiations, weeding the unsuitable resumes/candidates.
5. Company can save a lot of its resources and time
POACHING/RAIDING
“Buying talent” (rather than developing it) is the latest mantra being followed by the organisations today. Poaching means employing a competent and experienced person already working with another reputed company in the same or different industry; the organisation might be a competitor in the industry. A company can attract talent from another firm by offering attractive pay packages and other terms and conditions, better than the current employer of the candidate. But it is seen as an unethical practice and not openly talked about. Indian software and the retail sector are the sectors facing the most severe brunt of poaching today. It has become a challenge for human resource managers to face and tackle poaching, as it weakens the competitive strength of the firm.
E-RECRUITMENT
Many big organizations use Internet as a source of recruitment. E- recruitment is the use of technology to assist the recruitment process. They advertise job vacancies through worldwide web. The job seekers send their applications or curriculum vitae i.e. CV through e mail using the Internet. Alternatively job seekers place their CV’s in worldwide web, which can be drawn by prospective employees depending upon their requirements.
Advantages of recruitment are:
Low cost.
No intermediaries
Reduction in time for recruitment.
Recruitment of right type of people.
Efficiency of recruitment process.
HR challenges in recruitment
Recruitment is a function that requires business perspective, expertise, ability to find and match the best potential candidate for the organisation, diplomacy, marketing skills (as to sell the position to the candidate) and wisdom to align the recruitment processes for the benefit of the organisation. The HR professionals – handling the recruitment function of the organisation- are constantly facing new challenges. The biggest challenge for such professionals is to source or recruit the best people or potential candidate for the organisation.In the last few years, the job market has undergone some fundamental changes in terms of technologies, sources of recruitment, competition in the market etc. In an already saturated job market, where the practices like poaching and raiding are gaining momentum, HR professionals are constantly facing new challenges in one of their most important function- recruitment. They have to face and conquer various challenges to find the best candidates for their organisations.
The major challenges faced by the HR in recruitment are:
Adaptability to globalization –
The HR professionals are expected and required to keep in tune with the changing times, i.e. the changes taking place across the globe. HR should maintain the timeliness of the process
Lack of motivation –
Recruitment is considered to be a thankless job. Even if the organisation is achieving results, HR department or professionals are not thanked for recruiting the right employees and performers.
Process analysis –
The immediacy and speed of the recruitment process are the main concerns of the HR in recruitment. The process should be flexible, adaptive and responsive to the immediate requirements. The recruitment process should also be cost effective.
Strategic prioritization – The emerging new systems are both an opportunity as well as a challenge for the HR professionals. Therefore, reviewing staffing needs and prioritizing the tasks to meet the changes in the market has become a challenge for the recruitment professionals.
Friday, April 24, 2009
Compensation
Compensation includes topics in regard to wage and/or salary programs and structures, for example, salary ranges for job descriptions, merit-based programs, bonus-based programs, commission-based programs, etc.
Compensation can refer to:
Financial compensation
Remuneration, such as a wage or salary to pay people for their work
Executive compensation
Deferred compensation
Damages - legal term referring to the financial compensation recoverable by reason of another's breach of duty; the money paid or awarded to a plaintiff
Workers' compensation, to protect employees who have incurred work-related injuries. Example is the Radiation Exposure Compensation Act.
Nationalization compensation, compensation paid in the event of nationalization of property
Defence mechanism, as in psychology
Compensation (psychology)
Compensation (engineering)
Compensation (chess), various advantages a player has in exchange for a disadvantage
Biological compensation, the characteristic pattern of bending of the plant or mushroom stem after turning from the normal vertical position.
Employee benefits typically refers to retirement plans, health life insurance, life insurance, disability insurance, vacation, employee stock ownership plans, etc. Benefits are increasingly expensive for businesses to provide to employees, so the range and options of benefits are changing rapidly to include, for example, flexible benefit plans.
Compensation management
Human Resource is the most vital resource for any organization. It is responsible for each and every decision taken, each and every work done and each and every result. Employees should be managed properly and motivated by providing best remuneration and compensation as per the industry standards. The lucrative compensation will also serve the need for attracting and retaining the best employees.
Compensation is the remuneration received by an employee in return for his/her contribution to the organization. It is an organized practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees.
Compensation is an integral part of human resource management which helps in motivating the employees and improving organizational effectiveness.
Components of Compensation System
Compensation systems are designed keeping in minds the strategic goals and business objectives. Compensation system is designed on the basis of certain factors after analyzing the job work and responsibilities.
Components of a compensation system are as follows:
Types of Compensation
Compensation provided to employees can direct in the form of monetary benefits and/or indirect in the form of non-monetary benefits known as perks, time off, etc. Compensation does not include only salary but it is the sum total of all rewards and allowances provided to the employees in return for their services. If the compensation offered is effectively managed, it contributes to high organizational productivity.
Direct Compensation
Indirect Compensation
Need of Compensation Management
A good compensation package is important to motivate the employees to increase the organizational productivity.
Unless compensation is provided no one will come and work for the organization. Thus, compensation helps in running an organization effectively and accomplishing its goals.
Salary is just a part of the compensation system, the employees have other psychological and self-actualization needs to fulfill. Thus, compensation serves the purpose.
The most competitive compensation will help the organization to attract and sustain the best talent. The compensation package should be as per industry standards.
Strategic Compensation
Strategic compensation is determining and providing the compensation packages to the employees that are aligned with the business goals and objectives. In today’s competitive scenario organizations have to take special measures regarding compensation of the employees so that the organizations retain the valuable employees. The compensation systems have changed from traditional ones to strategic compensation systems.
Compensation and Reward system
Compensation and Reward system plays vital role in a business organization. Since, among four Ms, i.e. Men, Material, Machine and Money, Men has been most important factor, it is impossible to imagine a business process without Men. Every factor contributes to the process of production/business. It expects return from the business process such as rent is the return expected by the landlord, capitalist expects interest and organizer i.e. entrepreneur expects profits. Similarly the labour expects wages from the process.
Labour plays vital role in bringing about the process of production/business in motion. The other factors being human, has expectations, emotions, ambitions and egos.
Labour therefore expects to have fair share in the business/production process. Therefore a fair compensation system is a must for every business organization.
The fair compensation system will help in the following:
An ideal compensation system will have positive impact on the efficiency and results produced by employees. It will encourage the employees to perform better and achieve the standards fixed.
It will enhance the process of job evaluation. It will also help in setting up an ideal job evaluation and the set standards would be more realistic and achievable.
Such a system should be well defined and uniform. It will be apply to all the levels of the organization as a general system.
The system should be simple and flexible so that every employee would be able to compute his own compensation receivable.
It should be easy to implement, should not result in exploitation of workers.
It will raise the morale, efficiency and cooperation among the workers. It, being just and fair would provide satisfaction to the workers.
Such system would help management in complying with the various labor acts.
Such system should also solve disputes between the employee union and management.
The system should follow the management principle of equal pay.
It should motivate and encouragement those who perform better and should provide opportunities for those who wish to excel.
Sound Compensation/Reward System brings peace in the relationship of employer and employees.
It aims at creating a healthy competition among them and encourages employees to work hard and efficiently.
The system provides growth and advancement opportunities to the deserving employees.
The perfect compensation system provides platform for happy and satisfied workforce. This minimizes the labour turnover. The organization enjoys the stability.
The organization is able to retain the best talent by providing them adequate compensation thereby stopping them from switching over to another job.
The business organization can think of expansion and growth if it has the support of skillful, talented and happy workforce.
refer
The sound compensation system is hallmark of organization’s success and prosperity. The success and stability of organization is measured with pay-package it provides to its employees.
Types of compensation
Direct compensation
Direct compensation refers to monetary benefits offered and provided to employees in return of the services they provide to the organization. The monetary benefits include basic salary, house rent allowance, conveyance, leave travel allowance, medical reimbursements, special allowances, bonus, Pf/Gratuity, etc. They are given at a regular interval at a definite time.
Basic Salary
Salary is the amount received by the employee in lieu of the work done by him/her for a certain period say a day, a week, a month, etc. It is the money an employee receives from his/her employer by rendering his/her services.
House Rent Allowance
Organizations either provide accommodations to its employees who are from different state or country or they provide house rent allowances to its employees. This is done to provide them social security and motivate them to work.
Conveyance
Organizations provide for cab facilities to their employees. Few organizations also provide vehicles and petrol allowances to their employees to motivate them.
Leave Travel Allowance
These allowances are provided to retain the best talent in the organization. The employees are given allowances to visit any place they wish with their families. The allowances are scaled as per the position of employee in the organization.
Medical Reimbursement
Organizations also look after the health conditions of their employees. The employees are provided with medi-claims for them and their family members. These medi-claims include health-insurances and treatment bills reimbursements.
Bonus
Bonus is paid to the employees during festive seasons to motivate them and provide them the social security. The bonus amount usually amounts to one month’s salary of the employee.
Special Allowance
Special allowance such as overtime, mobile allowances, meals, commissions, travel expenses, reduced interest loans; insurance, club memberships, etc are provided to employees to provide them social security and motivate them which improve the organizational productivity.
Indirect compensation
Indirect compensation refers to non-monetary benefits offered and provided to employees in lieu of the services provided by them to the organization. They include Leave Policy, Overtime Policy, Car policy, Hospitalization, Insurance, Leave travel Assistance Limits, Retirement Benefits, Holiday Homes.
Leave Policy
It is the right of employee to get adequate number of leave while working with the organization. The organizations provide for paid leaves such as, casual leaves, medical leaves (sick leave), and maternity leaves, statutory pay, etc.
Overtime Policy
Employees should be provided with the adequate allowances and facilities during their overtime, if they happened to do so, such as transport facilities, overtime pay, etc.
Hospitalization
The employees should be provided allowances to get their regular check-ups, say at an interval of one year. Even their dependents should be eligible for the medi-claims that provide them emotional and social security.
Insurance
Organizations also provide for accidental insurance and life insurance for employees. This gives them the emotional security and they feel themselves valued in the organization.
Leave Travel
The employees are provided with leaves and travel allowances to go for holiday with their families. Some organizations arrange for a tour for the employees of the organization. This is usually done to make the employees stress free.
Retirement Benefits
Organizations provide for pension plans and other benefits for their employees which benefits them after they retire from the organization at the prescribed age.
Holiday Homes
Organizations provide for holiday homes and guest house for their employees at different locations. These holiday homes are usually located in hill station and other most wanted holiday spots. The organizations make sure that the employees do not face any kind of difficulties during their stay in the guest house.
Flexible Timings
Organizations provide for flexible timings to the employees who cannot come to work during normal shifts due to their personal problems and valid reasons.
Compensation can refer to:
Financial compensation
Remuneration, such as a wage or salary to pay people for their work
Executive compensation
Deferred compensation
Damages - legal term referring to the financial compensation recoverable by reason of another's breach of duty; the money paid or awarded to a plaintiff
Workers' compensation, to protect employees who have incurred work-related injuries. Example is the Radiation Exposure Compensation Act.
Nationalization compensation, compensation paid in the event of nationalization of property
Defence mechanism, as in psychology
Compensation (psychology)
Compensation (engineering)
Compensation (chess), various advantages a player has in exchange for a disadvantage
Biological compensation, the characteristic pattern of bending of the plant or mushroom stem after turning from the normal vertical position.
Employee benefits typically refers to retirement plans, health life insurance, life insurance, disability insurance, vacation, employee stock ownership plans, etc. Benefits are increasingly expensive for businesses to provide to employees, so the range and options of benefits are changing rapidly to include, for example, flexible benefit plans.
Compensation management
Human Resource is the most vital resource for any organization. It is responsible for each and every decision taken, each and every work done and each and every result. Employees should be managed properly and motivated by providing best remuneration and compensation as per the industry standards. The lucrative compensation will also serve the need for attracting and retaining the best employees.
Compensation is the remuneration received by an employee in return for his/her contribution to the organization. It is an organized practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees.
Compensation is an integral part of human resource management which helps in motivating the employees and improving organizational effectiveness.
Components of Compensation System
Compensation systems are designed keeping in minds the strategic goals and business objectives. Compensation system is designed on the basis of certain factors after analyzing the job work and responsibilities.
Components of a compensation system are as follows:
Types of Compensation
Compensation provided to employees can direct in the form of monetary benefits and/or indirect in the form of non-monetary benefits known as perks, time off, etc. Compensation does not include only salary but it is the sum total of all rewards and allowances provided to the employees in return for their services. If the compensation offered is effectively managed, it contributes to high organizational productivity.
Direct Compensation
Indirect Compensation
Need of Compensation Management
A good compensation package is important to motivate the employees to increase the organizational productivity.
Unless compensation is provided no one will come and work for the organization. Thus, compensation helps in running an organization effectively and accomplishing its goals.
Salary is just a part of the compensation system, the employees have other psychological and self-actualization needs to fulfill. Thus, compensation serves the purpose.
The most competitive compensation will help the organization to attract and sustain the best talent. The compensation package should be as per industry standards.
Strategic Compensation
Strategic compensation is determining and providing the compensation packages to the employees that are aligned with the business goals and objectives. In today’s competitive scenario organizations have to take special measures regarding compensation of the employees so that the organizations retain the valuable employees. The compensation systems have changed from traditional ones to strategic compensation systems.
Compensation and Reward system
Compensation and Reward system plays vital role in a business organization. Since, among four Ms, i.e. Men, Material, Machine and Money, Men has been most important factor, it is impossible to imagine a business process without Men. Every factor contributes to the process of production/business. It expects return from the business process such as rent is the return expected by the landlord, capitalist expects interest and organizer i.e. entrepreneur expects profits. Similarly the labour expects wages from the process.
Labour plays vital role in bringing about the process of production/business in motion. The other factors being human, has expectations, emotions, ambitions and egos.
Labour therefore expects to have fair share in the business/production process. Therefore a fair compensation system is a must for every business organization.
The fair compensation system will help in the following:
An ideal compensation system will have positive impact on the efficiency and results produced by employees. It will encourage the employees to perform better and achieve the standards fixed.
It will enhance the process of job evaluation. It will also help in setting up an ideal job evaluation and the set standards would be more realistic and achievable.
Such a system should be well defined and uniform. It will be apply to all the levels of the organization as a general system.
The system should be simple and flexible so that every employee would be able to compute his own compensation receivable.
It should be easy to implement, should not result in exploitation of workers.
It will raise the morale, efficiency and cooperation among the workers. It, being just and fair would provide satisfaction to the workers.
Such system would help management in complying with the various labor acts.
Such system should also solve disputes between the employee union and management.
The system should follow the management principle of equal pay.
It should motivate and encouragement those who perform better and should provide opportunities for those who wish to excel.
Sound Compensation/Reward System brings peace in the relationship of employer and employees.
It aims at creating a healthy competition among them and encourages employees to work hard and efficiently.
The system provides growth and advancement opportunities to the deserving employees.
The perfect compensation system provides platform for happy and satisfied workforce. This minimizes the labour turnover. The organization enjoys the stability.
The organization is able to retain the best talent by providing them adequate compensation thereby stopping them from switching over to another job.
The business organization can think of expansion and growth if it has the support of skillful, talented and happy workforce.
refer
The sound compensation system is hallmark of organization’s success and prosperity. The success and stability of organization is measured with pay-package it provides to its employees.
Types of compensation
Direct compensation
Direct compensation refers to monetary benefits offered and provided to employees in return of the services they provide to the organization. The monetary benefits include basic salary, house rent allowance, conveyance, leave travel allowance, medical reimbursements, special allowances, bonus, Pf/Gratuity, etc. They are given at a regular interval at a definite time.
Basic Salary
Salary is the amount received by the employee in lieu of the work done by him/her for a certain period say a day, a week, a month, etc. It is the money an employee receives from his/her employer by rendering his/her services.
House Rent Allowance
Organizations either provide accommodations to its employees who are from different state or country or they provide house rent allowances to its employees. This is done to provide them social security and motivate them to work.
Conveyance
Organizations provide for cab facilities to their employees. Few organizations also provide vehicles and petrol allowances to their employees to motivate them.
Leave Travel Allowance
These allowances are provided to retain the best talent in the organization. The employees are given allowances to visit any place they wish with their families. The allowances are scaled as per the position of employee in the organization.
Medical Reimbursement
Organizations also look after the health conditions of their employees. The employees are provided with medi-claims for them and their family members. These medi-claims include health-insurances and treatment bills reimbursements.
Bonus
Bonus is paid to the employees during festive seasons to motivate them and provide them the social security. The bonus amount usually amounts to one month’s salary of the employee.
Special Allowance
Special allowance such as overtime, mobile allowances, meals, commissions, travel expenses, reduced interest loans; insurance, club memberships, etc are provided to employees to provide them social security and motivate them which improve the organizational productivity.
Indirect compensation
Indirect compensation refers to non-monetary benefits offered and provided to employees in lieu of the services provided by them to the organization. They include Leave Policy, Overtime Policy, Car policy, Hospitalization, Insurance, Leave travel Assistance Limits, Retirement Benefits, Holiday Homes.
Leave Policy
It is the right of employee to get adequate number of leave while working with the organization. The organizations provide for paid leaves such as, casual leaves, medical leaves (sick leave), and maternity leaves, statutory pay, etc.
Overtime Policy
Employees should be provided with the adequate allowances and facilities during their overtime, if they happened to do so, such as transport facilities, overtime pay, etc.
Hospitalization
The employees should be provided allowances to get their regular check-ups, say at an interval of one year. Even their dependents should be eligible for the medi-claims that provide them emotional and social security.
Insurance
Organizations also provide for accidental insurance and life insurance for employees. This gives them the emotional security and they feel themselves valued in the organization.
Leave Travel
The employees are provided with leaves and travel allowances to go for holiday with their families. Some organizations arrange for a tour for the employees of the organization. This is usually done to make the employees stress free.
Retirement Benefits
Organizations provide for pension plans and other benefits for their employees which benefits them after they retire from the organization at the prescribed age.
Holiday Homes
Organizations provide for holiday homes and guest house for their employees at different locations. These holiday homes are usually located in hill station and other most wanted holiday spots. The organizations make sure that the employees do not face any kind of difficulties during their stay in the guest house.
Flexible Timings
Organizations provide for flexible timings to the employees who cannot come to work during normal shifts due to their personal problems and valid reasons.
Thursday, April 23, 2009
Performance Appraisal
Performance appraisal, also known as employee appraisal, is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost and time). Performance appraisal is a part of career development.
Performance appraisals are regular reviews of employee performance within organizations
Performance appraisal
Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does.According to Flippo, a prominent personality in the field of Human resources, “performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in the matters pertaining to his present job and his potential for a better job." Performance appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future.It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals.By focusing the attention on performance, performance appraisal goes to the heart of personnel management and reflects the management’s interest in the progress of the employees.
OBJECTIVES of Performance Appraisal
To review the performance of the employees over a given period of time.
To judge the gap between the actual and the desired performance.
To help the management in exercising organizational control.
Helps to strengthen the relationship and communication between superior – subordinates and management – employees.
To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future.
To provide feedback to the employees regarding their past performance.
Provide information to assist in the other personal decisions in the organization.
Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.
To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.
To reduce the grievances of the employees.
Generally, the aims of a performance appraisal are to:
Give feedback on performance to employees.
Identify employee training needs.
Document criteria used to allocate organizational rewards.
Form a basis for personnel decisions: salary increases, promotions, disciplinary actions, etc.
Provide the opportunity for organizational diagnosis and development.
Facilitate communication between employee and administrator.
Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements.
Purpose Of Performance Appraisal
Performance Appraisal is being practiced in 90% of the organisations worldwide. Self-appraisal and potential appraisal also form a part of the performance appraisal processes. Typically, Performance Appraisal is aimed at:
· To review the performance of the employees over a given period of time.
· To judge the gap between the actual and the desired performance.
· To help the management in exercising organizational control.
To diagnose the training and development needs of the future.Provide information to assist in the HR decisions like promotions, transfers etc.
Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.
To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.
To reduce the grievances of the employees.
Helps to strengthen the relationship and communication between superior – subordinates and management – employees.
Common approach to assessing performance -
A common approach to assessing performance is to use a numerical or scalar rating system whereby managers are asked to score an individual against a number of objectives/attributes. In some companies, employees receive assessments from their manager, peers, subordinates and customers while also performing a self assessment. This is known as 360° appraisal.
The most popular methods that are being used as performance appraisal process are:
Management by objectives
360 degree appraisal
Behavioral Observation Scale
Behaviorally Anchored Rating Scale
Management by Objectives (MBO)
It is a process of agreeing upon objectives within an organization so that management and employees agree to the objectives and understand what they are in the organization.
Essence of MBO
The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities.
Unique features and advantage of MBO
The principle behind Management by Objectives (MBO) is to create empowered employees who have clarity of the roles and responsibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals.
Some of the important features and advantages of MBO are:
Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment, increases employee job satisfaction and commitment.
Better communication and Coordination – Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period.
Clarity of goals – With MBO, came the concept of SMART goals i.e. goals that are:
Specific
Measurable
Achievable
Realistic, and
Time bound.
The goals thus set are clear, motivating and there is a linkage between organizational goals and performance targets of the employees.
The focus is on future rather than on past. Goals and standards are set for the performance for the future with periodic reviews and feedback.
Some objectives are collective, for a whole department or the whole company, others can be individualized.
Limitations
There are several limitations to the assumptive base underlying the impact of managing by objectives, including:
1. It over-emphasizes the setting of goals over the working of a plan as a driver of outcomes.
2. It underemphasizes the importance of the environment or context in which the goals are set.
3. Companies evaluated their employees by comparing them with the "ideal" employee. Trait appraisal only looks at what employees should be, not at what they should do.
4. It did not address the importance of successfully responding to obstacles and constraints as essential to reaching a goal.
360-degree feedback
In human resources or industrial/organizational psychology, 360-degree feedback, also known as "multi-rater feedback," "multisource feedback," or "multisource assessment," is feedback that comes from all around an employee.
"360" refers to the 360 degrees in a circle, with an individual figuratively in the center of the circle. Feedback is provided by subordinates, peers, and supervisors. It also includes a self-assessment and, in some cases, feedback from external sources such as customers and suppliers or other interested stakeholders. It may be contrasted with "upward feedback," where managers are given feedback by their direct reports, or a "traditional performance appraisal," where the employees are most often reviewed only by their managers.
The results from 360-degree feedback are often used by the person receiving the feedback to plan their training and development. Results are also used by some organizations in making administrative decisions, such as pay or promotion. When this is the case, the 360 assessment is for evaluation purposes, and is sometimes called a "360-degree review." However, there is a great deal of controversy as to whether 360-degree feedback should be used exclusively for development purposes, or should be used for appraisal purposes as well. There is also contraversy regarding whether 360-degree feedback improves employee performance, and it has even been suggested that it may decrease shareholder value
Current Global Trends In Performance Appraisal Program
The performance appraisal process has become the heart of the human resource management system in the organisation. Performance appraisal defines and measures the performance of the employees and the organisation as a whole. It is a tool for accessing the performance of the organisation.The important issues and points concerning performance appraisal in the present world are:
The focus of the performance appraisals is turning towards career development relying on the dialogues and discussions with the superiors.
Performance measuring, rating and review systems have become more detailed, structured and person specific than before.
Performance related pay is being incorporated in the strategies used by the organisation.
Trend towards a 360-degree feedback system
The problems in the implementation of the performance appraisal processes are being anticipated and efforts are being made to overcome them.
In India, the performance appraisal processes are faced with a lot of obstacles, the most prominent being the lack of quantifiable indicators of the performance.
GLOBAL TRENDS
The emergence of following concepts and the following trends related to Performance appraisal can be seen in the global scenario:
360 Degree Appraisal
360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees’ performance comes from all the sources that come in contact with the employee on his job. Organisation are increasingly using feedback from various sources such as peer input, customer feedback, and input from superiors. Different forms with different formats are being used to obtain the information regarding the employee performance.
Team Performance AppraisalWith the number of teams increasing in the organisation, it becomes difficult to measure and appraise the performance of the team. The question is how to separate the performance of the team from the performance of the employees. A solution to this problem that is being adopted by the companies is to measure both the individual and the team performance. Sometimes, team based objectives are also included in the individual performance plans.
Rank and Yank Strategy Also known as the “Up or out policy”, the rank and yank strategy refers to the performance appraisal model in which best-to-worst ranking methods are used to identify and separate the poor performers from the good performers. Then the action plans and the improvement opportunities of the poor performers are discussed and they are given to improve their performance in a given time period, after which the appropriate HR decisions are taken. Some of the organisation following this strategy are Ford, Microsoft and Sun Microsystems.
Challenges Of Performance Appraisal
In order to make a performance appraisal system effective and successful, an organization comes across various challenges and problems. The main challenges involved in the performance appraisal process are:
Determining the evaluation criteriaIdentification of the appraisal criteria is one of the biggest problems faced by the top management. The performance data to be considered for evaluation should be carefully selected. For the purpose of evaluation, the criteria selected should be in quantifiable or measurable terms
Create a rating instrument The purpose of the Performance appraisal process is to judge the performance of the employees rather than the employee. The focus of the system should be on the development of the employees of the organization.
Lack of competence Top management should choose the raters or the evaluators carefully. They should have the required expertise and the knowledge to decide the criteria accurately. They should have the experience and the necessary training to carry out the appraisal process objectively.
Errors in rating and evaluation Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the evaluator’s rating for all other traits) etc. may creep in the appraisal process. Therefore the rater should exercise objectivity and fairness in evaluating and rating the performance of the employees
ResistanceThe appraisal process may face resistance from the employees and the trade unions for the fear of negative ratings. Therefore, the employees should be communicated and clearly explained the purpose as well the process of appraisal. The standards should be clearly communicated and every employee should be made aware that what exactly is expected from him/her.
Performance appraisals are regular reviews of employee performance within organizations
Performance appraisal
Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does.According to Flippo, a prominent personality in the field of Human resources, “performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in the matters pertaining to his present job and his potential for a better job." Performance appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future.It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals.By focusing the attention on performance, performance appraisal goes to the heart of personnel management and reflects the management’s interest in the progress of the employees.
OBJECTIVES of Performance Appraisal
To review the performance of the employees over a given period of time.
To judge the gap between the actual and the desired performance.
To help the management in exercising organizational control.
Helps to strengthen the relationship and communication between superior – subordinates and management – employees.
To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future.
To provide feedback to the employees regarding their past performance.
Provide information to assist in the other personal decisions in the organization.
Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.
To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.
To reduce the grievances of the employees.
Generally, the aims of a performance appraisal are to:
Give feedback on performance to employees.
Identify employee training needs.
Document criteria used to allocate organizational rewards.
Form a basis for personnel decisions: salary increases, promotions, disciplinary actions, etc.
Provide the opportunity for organizational diagnosis and development.
Facilitate communication between employee and administrator.
Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements.
Purpose Of Performance Appraisal
Performance Appraisal is being practiced in 90% of the organisations worldwide. Self-appraisal and potential appraisal also form a part of the performance appraisal processes. Typically, Performance Appraisal is aimed at:
· To review the performance of the employees over a given period of time.
· To judge the gap between the actual and the desired performance.
· To help the management in exercising organizational control.
To diagnose the training and development needs of the future.Provide information to assist in the HR decisions like promotions, transfers etc.
Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.
To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.
To reduce the grievances of the employees.
Helps to strengthen the relationship and communication between superior – subordinates and management – employees.
Common approach to assessing performance -
A common approach to assessing performance is to use a numerical or scalar rating system whereby managers are asked to score an individual against a number of objectives/attributes. In some companies, employees receive assessments from their manager, peers, subordinates and customers while also performing a self assessment. This is known as 360° appraisal.
The most popular methods that are being used as performance appraisal process are:
Management by objectives
360 degree appraisal
Behavioral Observation Scale
Behaviorally Anchored Rating Scale
Management by Objectives (MBO)
It is a process of agreeing upon objectives within an organization so that management and employees agree to the objectives and understand what they are in the organization.
Essence of MBO
The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities.
Unique features and advantage of MBO
The principle behind Management by Objectives (MBO) is to create empowered employees who have clarity of the roles and responsibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals.
Some of the important features and advantages of MBO are:
Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment, increases employee job satisfaction and commitment.
Better communication and Coordination – Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period.
Clarity of goals – With MBO, came the concept of SMART goals i.e. goals that are:
Specific
Measurable
Achievable
Realistic, and
Time bound.
The goals thus set are clear, motivating and there is a linkage between organizational goals and performance targets of the employees.
The focus is on future rather than on past. Goals and standards are set for the performance for the future with periodic reviews and feedback.
Some objectives are collective, for a whole department or the whole company, others can be individualized.
Limitations
There are several limitations to the assumptive base underlying the impact of managing by objectives, including:
1. It over-emphasizes the setting of goals over the working of a plan as a driver of outcomes.
2. It underemphasizes the importance of the environment or context in which the goals are set.
3. Companies evaluated their employees by comparing them with the "ideal" employee. Trait appraisal only looks at what employees should be, not at what they should do.
4. It did not address the importance of successfully responding to obstacles and constraints as essential to reaching a goal.
360-degree feedback
In human resources or industrial/organizational psychology, 360-degree feedback, also known as "multi-rater feedback," "multisource feedback," or "multisource assessment," is feedback that comes from all around an employee.
"360" refers to the 360 degrees in a circle, with an individual figuratively in the center of the circle. Feedback is provided by subordinates, peers, and supervisors. It also includes a self-assessment and, in some cases, feedback from external sources such as customers and suppliers or other interested stakeholders. It may be contrasted with "upward feedback," where managers are given feedback by their direct reports, or a "traditional performance appraisal," where the employees are most often reviewed only by their managers.
The results from 360-degree feedback are often used by the person receiving the feedback to plan their training and development. Results are also used by some organizations in making administrative decisions, such as pay or promotion. When this is the case, the 360 assessment is for evaluation purposes, and is sometimes called a "360-degree review." However, there is a great deal of controversy as to whether 360-degree feedback should be used exclusively for development purposes, or should be used for appraisal purposes as well. There is also contraversy regarding whether 360-degree feedback improves employee performance, and it has even been suggested that it may decrease shareholder value
Current Global Trends In Performance Appraisal Program
The performance appraisal process has become the heart of the human resource management system in the organisation. Performance appraisal defines and measures the performance of the employees and the organisation as a whole. It is a tool for accessing the performance of the organisation.The important issues and points concerning performance appraisal in the present world are:
The focus of the performance appraisals is turning towards career development relying on the dialogues and discussions with the superiors.
Performance measuring, rating and review systems have become more detailed, structured and person specific than before.
Performance related pay is being incorporated in the strategies used by the organisation.
Trend towards a 360-degree feedback system
The problems in the implementation of the performance appraisal processes are being anticipated and efforts are being made to overcome them.
In India, the performance appraisal processes are faced with a lot of obstacles, the most prominent being the lack of quantifiable indicators of the performance.
GLOBAL TRENDS
The emergence of following concepts and the following trends related to Performance appraisal can be seen in the global scenario:
360 Degree Appraisal
360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees’ performance comes from all the sources that come in contact with the employee on his job. Organisation are increasingly using feedback from various sources such as peer input, customer feedback, and input from superiors. Different forms with different formats are being used to obtain the information regarding the employee performance.
Team Performance AppraisalWith the number of teams increasing in the organisation, it becomes difficult to measure and appraise the performance of the team. The question is how to separate the performance of the team from the performance of the employees. A solution to this problem that is being adopted by the companies is to measure both the individual and the team performance. Sometimes, team based objectives are also included in the individual performance plans.
Rank and Yank Strategy Also known as the “Up or out policy”, the rank and yank strategy refers to the performance appraisal model in which best-to-worst ranking methods are used to identify and separate the poor performers from the good performers. Then the action plans and the improvement opportunities of the poor performers are discussed and they are given to improve their performance in a given time period, after which the appropriate HR decisions are taken. Some of the organisation following this strategy are Ford, Microsoft and Sun Microsystems.
Challenges Of Performance Appraisal
In order to make a performance appraisal system effective and successful, an organization comes across various challenges and problems. The main challenges involved in the performance appraisal process are:
Determining the evaluation criteriaIdentification of the appraisal criteria is one of the biggest problems faced by the top management. The performance data to be considered for evaluation should be carefully selected. For the purpose of evaluation, the criteria selected should be in quantifiable or measurable terms
Create a rating instrument The purpose of the Performance appraisal process is to judge the performance of the employees rather than the employee. The focus of the system should be on the development of the employees of the organization.
Lack of competence Top management should choose the raters or the evaluators carefully. They should have the required expertise and the knowledge to decide the criteria accurately. They should have the experience and the necessary training to carry out the appraisal process objectively.
Errors in rating and evaluation Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the evaluator’s rating for all other traits) etc. may creep in the appraisal process. Therefore the rater should exercise objectivity and fairness in evaluating and rating the performance of the employees
ResistanceThe appraisal process may face resistance from the employees and the trade unions for the fear of negative ratings. Therefore, the employees should be communicated and clearly explained the purpose as well the process of appraisal. The standards should be clearly communicated and every employee should be made aware that what exactly is expected from him/her.
http://www.4shared.com/file/102778595/99f3ec10/performance_evaluation.html
Tuesday, April 21, 2009
Industrial Relation
Industrial Relation
Industrial relations has become one of the most delicate and complex problems of modern industrial society. Industrial progress is impossible without cooperation of labors and harmonious relationships. Therefore, it is in the interest of all to create and maintain good relations between employees (labor) and employers (management).Concept of Industrial Relations:The term ‘Industrial Relations’ comprises of two terms: ‘Industry’ and ‘Relations’. “Industry” refers to “any productive activity in which an individual (or a group of individuals) is (are) engaged”. By “relations” we mean “the relationships that exist within the industry between the employer and his workmen.”
industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union. Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated.
industrial relations also includes the processes through which these relationships are expressed (such as, collective bargaining, workers’ participation in decision-making, and grievance and dispute settlement), and the management of conflict between employers, workers and trade unions, when it arises.
Actors in the IR system:
The term industrial relations explains the relationship between employees and management which stem directly or indirectly from union-employer relationship.
Three main parties are directly involved in industrial relations:
Employers:
Employers possess certain rights vis-à-vis labors. They have the right to hire and fire them. Management can also affect workers’ interests by exercising their right to relocate, close or merge the factory or to introduce technological changes.
Employees: Workers seek to improve the terms and conditions of their employment. They exchange views with management and voice their grievances. They also want to share decision making powers of management. Workers generally unite to form unions against the management and get support from these unions.
Government: The central and state government influences and regulates industrial relations through laws, rules, agreements, awards of court ad the like. It also includes third parties and labor and tribunal courts.
SCOPE:
The concept of industrial relations has a very wide meaning and connotation. In the narrow sense, it means that the employer, employee relationship confines itself to the relationship that emerges out of the day to day association of the management and the labor. In its wider sense, industrial relations include the relationship between an employee and an employer in the course of the running of an industry and may project it to spheres, which may transgress to the areas of quality control, marketing, price fixation and disposition of profits among others.
The scope of industrial relations is quite vast. The main issues involved here include the following:
Collective bargaining
Machinery for settlement of industrial disputes
Standing orders
Workers participation in management
Unfair labor practices
Labor market: The market in which workers compete for jobs and employers compete for workers. It acts as the external source from which organizations attract employees. These markets occur because different conditions characterize different geographical areas, industries, occupations, and professions at any given time.
Significance of Industrial Relation
The healthy industrial relations are key to the progress and success. Their significance may be discussed as under –
Uninterrupted production – The most important benefit of industrial relations is that this ensures continuity of production. This means, continuous employment for all from manager to workers. The resources are fully utilized, resulting in the maximum possible production. There is uninterrupted flow of income for all.
Reduction in Industrial Disputes – Good industrial relations reduce the industrial disputes. Disputes are reflections of the failure of basic human urges or motivations to secure adequate satisfaction or expression which are fully cured by good industrial relations. Strikes, lockouts, go-slow tactics, gherao and grievances are some of the reflections of industrial unrest which do not spring up in an atmosphere of industrial peace. It helps promoting co-operation and increasing production.
High morale – Good industrial relations improve the morale of the employees. Employees work with great zeal with the feeling in mind that the interest of employer and employees is one and the same, i.e. to increase production. Every worker feels that he is a co-owner of the gains of industry. In other words, complete unity of thought and action is the main achievement of industrial peace. It increases the place of workers in the society and their ego is satisfied. It naturally affects production because mighty co-operative efforts alone can produce great results.
Mental Revolution – The main object of industrial relation is a complete mental revolution of workers and employees. The industrial peace lies ultimately in a transformed outlook on the part of both. Both should think themselves as partners of the industry and the role of workers in such a partnership should be recognized. It will naturally have impact on production because they recognize the interest of each other.
Reduced Wastage – Good industrial relations are maintained on the basis of cooperation and recognition of each other. It will help increase production. Wastages of man, material and machines are reduced to the minimum and thus national interest is protected.Thus, it is evident that good industrial relations is the basis of higher production with minimum cost and higher profits. It also results in increased efficiency of workers. New and new projects may be introduced for the welfare of the workers and to promote the morale of the people at work. An economy organized for planned production and distribution, aiming at the realization of social justice and welfare of the massage can function effectively only in an atmosphere of industrial peace. If the twin objectives of rapid national development and increased social justice are to be achieved, there must be harmonious relationship between management and labor.
The main objectives of industrial relations system are:-
To safeguard the interest of labor and management by securing the highest level of mutual understanding and good-will among all those sections in the industry which participate in the process of production.
To avoid industrial conflict or strife and develop harmonious relations, which are an essential factor in the productivity of workers and the industrial progress of a country.
To raise productivity and growth to a higher level in an era of full employment by lessening the tendency to high turnover and frequency absenteeism.
To eliminate or minimize the number of strikes, lockouts and gheraos by providing reasonable wages, improved living and working conditions, said fringe benefits.
To improve the economic conditions of workers in the existing state of industrial managements and political government.
Socialization of industries by making the state itself a major employer
Vesting of a proprietary interest of the workers in the industries in which they are employed.
Industrial Relation is A Social Sub – System
One of the significant theories of industrial labor relations was put forth by John Dunlop in the 1950s. According to Dunlop industrial relations system consists of three agents – management organizations, workers and formal/informal ways they are organized and government agencies. These actors and their organizations are located within an environment – defined in terms of technology, labor and product markets, and the distribution of power in wider society as it impacts upon individuals and workplace. Within this environment, actors interact with each other, negotiate and use economic/political power in process of determining rules that constitute the output of the industrial relations system. He proposed that three parties—employers, labor unions, and government-- are the key actors in a modern industrial relations system. He also argued that none of these institutions could act in an autonomous or independent fashion. Instead they were shaped, at least to some extent, by their market, technological and political contexts.Thus it can be said that industrial relations is a social sub system subject to three environmental constraints- the markets, distribution of power in society and technology.
Dunlop's model
Dunlop's model identifies three key factors to be considered in conducting an analysis of the management-labor relationship:
1. Environmental or external economic, technological, political, legal and social forces that impact employment relationships.
2. Characteristics and interaction of the key actors in the employment relationship: labor, management, and government.
3. Rules that are derived from these interactions that govern the employment relationship.
Dunlop emphasizes the core idea of systems by saying that the arrangements in the field of industrial relations may be regarded as a system in the sense that each of them more or less intimately affects each of the others so that they constitute a group of arrangements for dealing with certain matters and are collectively responsible for certain results”.In effect - Industrial relations is the system which produces the rules of the workplace. Such rules are the product of interaction between three key “actors” – workers/unions, employers and associated organizations and governmentThe Dunlop’s model gives great significance to external or environmental forces. In other words, management, labor, and the government possess a shared ideology that defines their roles within the relationship and provides stability to the system.
Industrial relations has become one of the most delicate and complex problems of modern industrial society. Industrial progress is impossible without cooperation of labors and harmonious relationships. Therefore, it is in the interest of all to create and maintain good relations between employees (labor) and employers (management).Concept of Industrial Relations:The term ‘Industrial Relations’ comprises of two terms: ‘Industry’ and ‘Relations’. “Industry” refers to “any productive activity in which an individual (or a group of individuals) is (are) engaged”. By “relations” we mean “the relationships that exist within the industry between the employer and his workmen.”
industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union. Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated.
industrial relations also includes the processes through which these relationships are expressed (such as, collective bargaining, workers’ participation in decision-making, and grievance and dispute settlement), and the management of conflict between employers, workers and trade unions, when it arises.
Actors in the IR system:
The term industrial relations explains the relationship between employees and management which stem directly or indirectly from union-employer relationship.
Three main parties are directly involved in industrial relations:
Employers:
Employers possess certain rights vis-à-vis labors. They have the right to hire and fire them. Management can also affect workers’ interests by exercising their right to relocate, close or merge the factory or to introduce technological changes.
Employees: Workers seek to improve the terms and conditions of their employment. They exchange views with management and voice their grievances. They also want to share decision making powers of management. Workers generally unite to form unions against the management and get support from these unions.
Government: The central and state government influences and regulates industrial relations through laws, rules, agreements, awards of court ad the like. It also includes third parties and labor and tribunal courts.
SCOPE:
The concept of industrial relations has a very wide meaning and connotation. In the narrow sense, it means that the employer, employee relationship confines itself to the relationship that emerges out of the day to day association of the management and the labor. In its wider sense, industrial relations include the relationship between an employee and an employer in the course of the running of an industry and may project it to spheres, which may transgress to the areas of quality control, marketing, price fixation and disposition of profits among others.
The scope of industrial relations is quite vast. The main issues involved here include the following:
Collective bargaining
Machinery for settlement of industrial disputes
Standing orders
Workers participation in management
Unfair labor practices
Labor market: The market in which workers compete for jobs and employers compete for workers. It acts as the external source from which organizations attract employees. These markets occur because different conditions characterize different geographical areas, industries, occupations, and professions at any given time.
Significance of Industrial Relation
The healthy industrial relations are key to the progress and success. Their significance may be discussed as under –
Uninterrupted production – The most important benefit of industrial relations is that this ensures continuity of production. This means, continuous employment for all from manager to workers. The resources are fully utilized, resulting in the maximum possible production. There is uninterrupted flow of income for all.
Reduction in Industrial Disputes – Good industrial relations reduce the industrial disputes. Disputes are reflections of the failure of basic human urges or motivations to secure adequate satisfaction or expression which are fully cured by good industrial relations. Strikes, lockouts, go-slow tactics, gherao and grievances are some of the reflections of industrial unrest which do not spring up in an atmosphere of industrial peace. It helps promoting co-operation and increasing production.
High morale – Good industrial relations improve the morale of the employees. Employees work with great zeal with the feeling in mind that the interest of employer and employees is one and the same, i.e. to increase production. Every worker feels that he is a co-owner of the gains of industry. In other words, complete unity of thought and action is the main achievement of industrial peace. It increases the place of workers in the society and their ego is satisfied. It naturally affects production because mighty co-operative efforts alone can produce great results.
Mental Revolution – The main object of industrial relation is a complete mental revolution of workers and employees. The industrial peace lies ultimately in a transformed outlook on the part of both. Both should think themselves as partners of the industry and the role of workers in such a partnership should be recognized. It will naturally have impact on production because they recognize the interest of each other.
Reduced Wastage – Good industrial relations are maintained on the basis of cooperation and recognition of each other. It will help increase production. Wastages of man, material and machines are reduced to the minimum and thus national interest is protected.Thus, it is evident that good industrial relations is the basis of higher production with minimum cost and higher profits. It also results in increased efficiency of workers. New and new projects may be introduced for the welfare of the workers and to promote the morale of the people at work. An economy organized for planned production and distribution, aiming at the realization of social justice and welfare of the massage can function effectively only in an atmosphere of industrial peace. If the twin objectives of rapid national development and increased social justice are to be achieved, there must be harmonious relationship between management and labor.
The main objectives of industrial relations system are:-
To safeguard the interest of labor and management by securing the highest level of mutual understanding and good-will among all those sections in the industry which participate in the process of production.
To avoid industrial conflict or strife and develop harmonious relations, which are an essential factor in the productivity of workers and the industrial progress of a country.
To raise productivity and growth to a higher level in an era of full employment by lessening the tendency to high turnover and frequency absenteeism.
To eliminate or minimize the number of strikes, lockouts and gheraos by providing reasonable wages, improved living and working conditions, said fringe benefits.
To improve the economic conditions of workers in the existing state of industrial managements and political government.
Socialization of industries by making the state itself a major employer
Vesting of a proprietary interest of the workers in the industries in which they are employed.
Industrial Relation is A Social Sub – System
One of the significant theories of industrial labor relations was put forth by John Dunlop in the 1950s. According to Dunlop industrial relations system consists of three agents – management organizations, workers and formal/informal ways they are organized and government agencies. These actors and their organizations are located within an environment – defined in terms of technology, labor and product markets, and the distribution of power in wider society as it impacts upon individuals and workplace. Within this environment, actors interact with each other, negotiate and use economic/political power in process of determining rules that constitute the output of the industrial relations system. He proposed that three parties—employers, labor unions, and government-- are the key actors in a modern industrial relations system. He also argued that none of these institutions could act in an autonomous or independent fashion. Instead they were shaped, at least to some extent, by their market, technological and political contexts.Thus it can be said that industrial relations is a social sub system subject to three environmental constraints- the markets, distribution of power in society and technology.
Dunlop's model
Dunlop's model identifies three key factors to be considered in conducting an analysis of the management-labor relationship:
1. Environmental or external economic, technological, political, legal and social forces that impact employment relationships.
2. Characteristics and interaction of the key actors in the employment relationship: labor, management, and government.
3. Rules that are derived from these interactions that govern the employment relationship.
Dunlop emphasizes the core idea of systems by saying that the arrangements in the field of industrial relations may be regarded as a system in the sense that each of them more or less intimately affects each of the others so that they constitute a group of arrangements for dealing with certain matters and are collectively responsible for certain results”.In effect - Industrial relations is the system which produces the rules of the workplace. Such rules are the product of interaction between three key “actors” – workers/unions, employers and associated organizations and governmentThe Dunlop’s model gives great significance to external or environmental forces. In other words, management, labor, and the government possess a shared ideology that defines their roles within the relationship and provides stability to the system.
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