DHR11 Wage & Salary Administration

Assignment I Assignment Code: 2013DHR11A1

Last Date of Submission : 15th May 2013 (for ACM) Maximum Marks: 100

Attempt the questions given at the end of the case. All questions are compulsory and carry equal marks. Case Panda International
Mohan Panda, a bright young M.B.A., fresh from Affinity Management Institute, one of the top management institutes, took over his father's responsibilities as president of Panda International, a manufacturing unit in Orissa. The company which is situated at Rourkela is a major industrial unit which manufactures electrical equipments. The company employed approximately one thousand people in the production division. It had never laced with a demand for collective bargaining. So far as was known, none of its employees were union members. The company enjoyed wide reputation for its product quality, customer dealings, distribution networks and above all its people friendly approach. Majority of employees were highly satisfied with companys HR policy as well as wages and benefits offered to them. The wages offered by the company was so far best in the locality. The working condition was conducive for employees which had earned laurels for the company. Recently two major players in the electrical equipment segment started two major units at Rourkela and offered better wages to employees including prospective employees from Panda International. Some of the existing employees also joined in those units. The new president, after three years of climbing the ladder to his position, had a conference with three longterm employees, who explained that they and their associates had been discussing the desirability of bargaining collectively. They gained through such formal representation. The employees had not voiced any strong criticism of management, but they had held several meetings and had invited representatives of a national union to talk with them. They concluded that they ought to try collective bargaining and for this purpose formed a union and enlisted a majority of workshop employees as members. The three representatives had been elected to the bargaining committee in order to present a written memorandum to the president with a request for collective bargaining agreement. A series of issues carefully spelled out by the union were handed over to the president by the three representatives.

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The young executive received them cordially and listened carefully. He accepted their memorandum and suggested that he would like to have time to study it carefully. He proposed a meeting with them for Tuesday of the following week. When the committee members returned, the president reminded them that the company had been careful to maintain wages and working conditions at least on a par with those in unionised companies in the same industry and region. He expressed the opinion that the specific proposals they had presented seemed to him quite reasonable and appropriate. The president however expected the employees to maintain standard and raise productivity in order to overcome competition from other industries and maintain wage parity. He had been thinking of any of the same changes and would probably have made them without their request. He was pleased to hand them their memorandum with a notation indicating his acceptance. The members left, quite satisfied with the effectiveness of their negotiations and promising to report back to him as soon as possible One week later, the president found the same group of representatives waiting to see him. They appeared somewhat crestfallen and embarrassed. They reported that they had gone back to the membership, presented a full report of their discussions with him, explained. Is favourable attitude, and recommended formal ratification of the memorandum as a new collective bargaining agreement. After extensive discussion, when the motion for ratification came up for a vote, a majority of the membership voted against ratification. Questions: (a) (b) (c) What are the problems in this case? Why did the members refuse to ratify the agreement? In a situation like the one above, how can the union and management play an effective role in fixing and revising wages and benefits through the process of collective bargaining? (d) What measures do you suggest to maintain wage equilibrium and how?

pa_flaash@yahoo.co.in

mm4all@ymail.com

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ped.mit@manipal.edu

DHR11 Wage & Salary Administration

Assignment II
Assignment Code: 2013DHR11A2 Last Date of Submission: 15th May 2013 (for ACM) Maximum Marks: 100

Attempt the questions given at the end of the case. All questions are compulsory and carry equal marks. .
CASE STUDY Asian Polymers Ltd

Asian Polymers Ltd. reached an agreement with the Union on a production incentive scheme to increase production. The company had an unprecedented demand for its goods and the Union agreed for the incentive scheme. The management was pleased with the assurance of the Union leader to personally undertake the task of implementing the scheme. The management promised to give him a free hand if he could assist in increasing production.

The Union did increase production to almost double the original level. As a result, the Union gained importance. Any problem could be sorted out by the Union by its direct access to the Chief Executive. The incentive scheme benefited primarily the Union members. The scheme was inequitable some workers got disproportionately large incentives, some low and some no incentive at all. The second feature was that as the incentive was linked to the Consumer Price Index (CPI), the distortion got further accentuated. However, when the Union tried to misuse its new found powers, the management struck back one day by taking disciplinary actions against all the leaders and the Union found all of a sudden that it was without a leader.

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Another Union arrived on the scene and the leader had established a rapport with the Chief Executive, and this new Union faithfully followed the tenets of the management but as a price extracted some benefits for its members exclusively. The Union saw to it that production became its exclusive responsibility and it had a hotline with CEO for any problem solution. As the years passed, the Union started agitating for improvement in the wage scales. Because of the incentive scheme, the company found that any improvement in the basic wage would pose greater problems and the primary question before the management was to delink the CPI from the incentive scheme. The Union refused to delink the CPI from the incentive scheme as some of its members were earning an amount equal to, if not more than the salary, as an incentive itself. At the same time workmen with no incentive and being grade barred began to lose. And this resulted in discontentment amongst the workmen. But the dilemma could not be resolved and this led to an explosive situation.

A third union emerged on the scene and this led to intense inter-union rivalry resulting in indiscipline, loss of production, and violence within the factory premises, as a result of which the company declared a lockout. When the plant reopened after four months, the Union in power lost its credibility and the new Union had the complete support of the workmen. The new Union leader could develop a rapport not only with the workmen but also with the management and expected the management to solve the problem of not having revised the wage scales for a long period. But this was not an easy task as there were a lot of inequalities that the management wanted to set right.

The union, though agreeing with the management, would not agree for a cut in the wage in any manner to set right the inequalities. The Union not only wanted to cling to the beneficial aspects of the incentive scheme but also insisted that the management somehow give an increase in the basic wages. The management was being drawn into a vicious circle of the incentive scheme being inequitable but when the Union's attention was being brought to the high incentive categories, it reverted to the low basic wage theme. The management remained in a quandary as regards how to convince the workmen, to win over the constituency of workmen and make managers effective and regain supremacy in production. Questions: (a) Identify the problems and their causes in this case.

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(b) (c)

Under the given situation, how are the problems to be remedied? Suggest various principles and strategies the management has to keep in mind while formulating a wage incentive scheme for the employees.

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