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Compensation Management – Concepts and Components-Job Evaluation-

Incentives and Benefits.

Human Resource is the most vital resource for any organization. It is responsible for each and everydecision 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 industrystandards. 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 theorganization. It is an organized practice that involves balancing the work-employee relation byproviding monetary and non-monetary benefits to employees. Compensation is an integral part of human resource management which helps in motivating the employees and improving organizationaleffectiveness.

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 andresponsibilities. 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 theform of non-monetary benefits known as perks, time off, etc. Compensation does not include onlysalary but it is the sum total of all rewards and allowances provided to the employees in return for theirservices. If the compensation offered is effectively managed, it contributes to high organizational

productivity.

Need of Compensation Management 

  A good compensation package is important to motivate the employees to increase theorganizational productivity.

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  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.

7. Productivity Management-Concepts-TQM-Kaizen-Quality Circles

Total Quality Management is a management approach that originated in the 1950's and has steadilybecome more popular since the early 1980's. Total Quality is a description of the culture, attitude andorganization of a company that strives to provide customers with products and services that satisfy their needs. The culture requires quality in all aspects of the company's operations, with processes being done

right the first time and defects and waste eradicated from operations. 

Total Quality Management, TQM, is a method by which management and employees can becomeinvolved in the continuous improvement of the production of goods and services. It is a combination of quality and management tools aimed at increasing business and reducing losses due to wastefulpractices.

Some of the companies who have implemented TQM include Ford Motor Company, PhillipsSemiconductor, SGL Carbon, Motorola and Toyota Motor Company.

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TQM Defined  TQM is a management philosophy that seeks to integrate all organizational functions (marketing, finance,design, engineering, and production, customer service, etc.) to focus on meeting customer needs andorganizational objectives.

TQM views an organization as a collection of processes. It maintains that organizations must strive tocontinuously improve these processes by incorporating the knowledge and experiences of workers. Thesimple objective of TQM is "Do the right things, right the first time, every time". TQM is infinitely variableand adaptable. Although originally applied to manufacturing operations, and for a number of years onlyused in that area, TQM is now becoming recognized as a generic management tool, just as applicable inservice and public sector organizations. There are a number of evolutionary strands, with different sectorscreating their own versions from the common ancestor. TQM is the foundation for activities, hich include:

Commitment by senior management and all employees

Meeting customer requirements

Reducing development cycle times

Just In Time/Demand Flow Manufacturing

Improvement teams Reducing product and service costs

Systems to facilitate improvement

Line Management ownership

Employee involvement and empowerment

Recognition and celebration

Challenging quantified goals and benchmarking

Focus on processes / improvement plans

Specific incorporation in strategic planning

This shows that TQM must be practiced in all activities, by all personnel, in Manufacturing, Marketing,Engineering, R&D, Sales, Purchasing, HR, etc.

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The core of TQM is the customer-supplier interfaces, both externally and internally, and at each interfacelie a number of processes. This core must be surrounded by commitment to quality, communication of thequality message, and recognition of the need to change the culture of the organization to create totalquality. These are the foundations of TQM, and they are supported by the key management functions of 

people, processes and systems in the organization.

The key principles of TQM are as following:

Management Commitment

1. Plan (drive, direct)2. Do (deploy, support, participate)3. Check (review)4. Act (recognizes, communicate, revise)

Employee Empowerment

1. Training2. Suggestion scheme3. Measurement and recognition4. Excellence teams

Fact Based Decision Making

1. SPC (statistical process control)2. DOE, FMEA3. The 7 statistical tools

4. TOPS (FORD 8D - Team Oriented Problem Solving)

Continuous Improvement

1. Systematic measurement and focus on CONQ2. Excellence teams3. Cross-functional process management4. Attain, maintain, improve standards

Customer Focus

1. Supplier partnership

2. Service relationship with internal customers3. Never compromise quality4. Customer driven standards

The Concept of Continuous Improvement by TQM 

TQM is mainly concerned with continuous improvement in all work, from high level strategic planning anddecision-making, to detailed execution of work elements on the shop floor. It stems from the belief that

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mistakes can be avoided and defects can be prevented. It leads to continuously improving results, in allaspects of work, as a result of continuously improving capabilities, people, processes, and technologyand machine capabilities.

Continuous improvement must deal not only with improving results, but more importantly with improvingcapabilities to produce better results in the future. The five major areas of focus for capability

improvement are demand generation, supply generation, technology, operations and people capability.

 A central principle of TQM is that mistakes may be made by people, but most of them are caused, or atleast permitted, by faulty systems and processes. This means that the root cause of such mistakes canbe identified and eliminated, and repetition can be prevented by changing the process.

There are three major mechanisms of prevention:

1. Preventing mistakes (defects) from occurring (Mistake - proofing or Poka-Yoke).2. Where mistakes can't be absolutely prevented, detecting them early to prevent them being

passed down the value added chain (Inspection at source or by the next operation).3. Where mistakes recur, stopping production until the process can be corrected, to prevent the

production of more defects. (Stop in time).

The basis for TQM implementation is the establishment of a quality management system which involvesthe organizational structure, responsibilities, procedures and processes. The most frequently usedguidelines for quality management systems are the ISO 9000 international standards, which emphasizethe establishment of a well- documented, standardized quality system. The role of the ISO 9000standards within the TQM circle of continuous improvement is presented in the following figure.

Continuous improvement is a circular process that links the diagnostic, planning, implementation andevaluation phases. Within this circular process, the ISO 9000 standards are commonly applied in theimplementation phase. An ISO 9000 quality system also requires the establishment of procedures thatstandardize the way an organization handles the diagnostic and evaluation phases. However, the ISO9000 standards do not prescribe particular quality management techniques or quality-control methods.Because it is a generic organizational standard, ISO 9000 does not define quality or provide anyspecifications of products or processes. ISO 9000 certification only assures that the organization has in

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place a well-operated quality system that conforms to the ISO 9000 standards. Consequently, anorganization may be certified but still manufacture poor-quality products.

The building blocks of TQM

KaizenKaizen, Japanese for "improvement", or "change for the better" refers to

 philosophy or practices that focus upon continuous improvement of processes in

manufacturing, engineering, and business management. It has been applied in

healthcare,[1] psychotherapy, life-coaching, government, banking, and other 

industries. When used in the business sense and applied to the workplace, kaizen

refers to activities that continually improve all functions, and involves all

employees from the CEO to the assembly line workers. It also applies to processes,

such as purchasing and logistics, that cross organizational boundaries into

the supply chain. By improving standardized activities and processes, kaizen aims

to eliminate waste (see lean manufacturing). Kaizen was first implemented in

several Japanese businesses after the Second World War, influenced in part by

American business and quality management teachers who visited the country. It

has since spread throughout the world and is now being implemented in many

other venues besides just business and productivity.

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The Japanese word "kaizen" simply means "good change", with no inherent

meaning of either "continuous" or "philosophy" in Japanese dictionaries or ineveryday use. The word refers to any improvement, one-time or continuous, large

or small, in the same sense as the English word "improvement". However, given

the common practice in Japan of labeling industrial or business improvementtechniques with the word "kaizen" (for lack of a specific Japanese word meaning

"continuous improvement" or "philosophy of improvement"), especially in the caseof oft-emulated practices spearheaded by Toyota, the word Kaizen in English is

typically applied to measures for implementing continuous improvement, or eventaken to mean a "Japanese philosophy" thereof. The discussion below focuses on

such interpretations of the word, as frequently used in the context of modern

management discussions.

Kaizen is a daily process, the purpose of which goes beyond simple productivity

improvement. It is also a process that, when done correctly, humanizes theworkplace, eliminates overly hard work ("muri"), and teaches people how to

 perform experiments on their work using the scientific method and how to learn tospot and eliminate waste in business processes. In all, the process suggests a

humanized approach to workers and to increasing productivity: "The idea is tonurture the company's human resources as much as it is to praise and encourage

 participation in kaizen activities." Successful implementation requires "the participation of workers in the improvement." People at all levels of an

organization participate in kaizen, from the CEO down to janitorial staff, as well asexternal stakeholders when applicable. The format for kaizen can be individual,

suggestion system, small group, or large group. At Toyota, it is usually a localimprovement within a workstation or local area and involves a small group in

improving their own work environment and productivity. This group is oftenguided through the kaizen process by a line supervisor; sometimes this is the line

supervisor's key role. Kaizen on a broad, cross-departmental scale in companies,generates total quality management, and frees human efforts through improving

 productivity using machines and computing power.

While kaizen (at Toyota) usually delivers small improvements, the culture of 

continual aligned small improvements and standardization yields large results in

the form of compound productivity improvement. This philosophy differs from the"command and control" improvement programs of the mid-twentieth century.Kaizen methodology includes making changes and monitoring results, then

adjusting. Large-scale pre-planning and extensive project scheduling are replaced

 by smaller experiments, which can be rapidly adapted as new improvements are

suggested.

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In modern usage, it is designed to address a particular issue over the course of a

week and is referred to as a "kaizen blitz" or "kaizen event". These are limited inscope, and issues that arise from them are typically used in later blitzes.

The Toyota Production System is known for kaizen, where all line personnel are

expected to stop their moving production line in case of any abnormality and,

along with their supervisor, suggest an improvement to resolve the abnormality

which may initiate a kaizen.

The cycle of kaizen activity can be defined as:

  Standardize an operation and activities.

  Measure the operation (find cycle time and amount of in-process inventory)

  Gauge measurements against requirements  Innovate to meet requirements and increase productivity

  Standardize the new, improved operations

  Continue cycle ad infinitum 

This is also known as the Shewhart cycle, Deming cycle, or PDCA. Other 

techniques used in conjunction with PDCA include 5 Whys, which is a form of 

root cause analysis in which the user asks "why" to a problem and finds an answer 

five successive times. There are normally a series of root causes stemming fromone problem, and they can be visualized using fishbone diagrams or tables.

Masaaki Imai made the term famous in his book  Kaizen: The Key to Japan'sCompetitive Success.

Apart from business applications of the method, both Anthony Robbins and RobertMaurer have popularized the kaizen principles into personal development

 principles. In the book One Small Step Can Change your life: The Kaizen Way, andCD set The Kaizen Way to Success, Maurer looks at how individuals can take a

kaizen approach in both their personal and professional lives.

In the Toyota Way Fieldbook , Liker and Meier discuss the kaizen blitz and kaizen

 burst (or kaizen event) approaches to continuous improvement. A kaizen blitz, or rapid improvement, is a focused activity on a particular process or activity. The

 basic concept is to identify and quickly remove waste. Another approach is that of 

the kaizen burst, a specific kaizen activity on a particular process in the valuestream. 

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 The five main elements of kaizen

  Management teamwork 

  Increased labor responsibilities

  Increased management morale  Quality circles

  Management suggestions for labor improvement

Quality circle

A quality circle is a volunteer group composed of workers (or even students),usually under the leadership of their supervisor (or an elected team leader), who

are trained to identify, analyze and solve work-related problems and present their 

solutions to management in order to improve the performance of the organization,and motivate and enrich the work of employees. When matured, true quality circles become self-managing, having gained the confidence of management.

Quality circles are an alternative to the rigid concept of division of labor, where

workers operate in a more narrow scope and compartmentalized functions. Typicaltopics are improving occupational safety and health, improving product design, 

and improvement in the workplace and manufacturing processes. The term quality

circles derives from the concept of PDCA (Plan, Do, Check, Act) circles

developed by Dr. W. Edwards Deming. 

Quality circles are typically more formal groups. They meet regularly on companytime and are trained by competent persons (usually designated as facilitators) whomay be personnel and industrial relations specialists trained in human factors and

the basic skills of problem identification, information gathering and analysis, basicstatistics, and solution generation.[1] Quality circles are generally free to select any

topic they wish (other than those related to salary and terms and conditions of 

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work, as there are other channels through which these issues are usually

considered).

The concept behind quality circles is widely believed to have been developed in

Japan in 1962 by Kaoru Ishikawa as a method to improve quality, though it is also

argued that the practice started with the United States Army soon after 1945, whilstrestoring the war torn nation, and the Japanese adopted and adapted the concept

and its application.

A quality circle is a volunteer group of employees from the same work area who

meet together to discuss workplace improvement. The circle is empowered to

 promote and bring quality improvements through to fruition. Though quality

circles are not the silver bullet solution for quality improvement, with the right top

end management commitment, resources, and organization, they can support

continuous quality improvement at shop floor level.

Because of the social focus of a Quality Circle group, they can not only improve

the performance or an organisation, but also motivate and enrich the work lives of 

fellow employees. A typical Quality Circle group will display a good approach to:

- Analysing the context of a problems and its situation

- Define exactly what the problem is and the relationship between its component

 parts

- Identify and verify that the causes are indeed causes, ensuring that solutionsaddress the real problem

- Define, quantify and measure the impact of a given problem

- Understand the quality objectives

- Create a solution to a given problem

Quality Circle groups generally address issues such as improving safety, improving

 product design, and improving manufacturing process. Because Quality Circle

groups remain intact from project to project they have the advantage of 

consistency, though they retain the option to call in expertise or request trainingwhen needed.

Techniques used by a Quality Circle group will usually consist of process

capability flow charts, lot sampling, brainstorming, cause and effect analysis,

reverse engineering, value analysis, and pareto analysis.

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Japanese Quality Circles demonstrated the effectiveness of worker teams in

identifying and solving process problems in their own work areas. However the

more serious quality problems from non-manufacturing organisations often arise in

activities that span more than one department or function.

There are different quality circle tools, namely:

The Ishikawa diagram –  which shows hierarchies of causes contributing to a

 problem

The Pareto Chart – which analyses different causes by frequency to illustrate the

vital cause

The PDCA-Deming wheel –  Plan, Do, Check, Act, as described by W. Edwards

Deming

8. Industrial relations-Grievance Procedure-collective Bargaining-Settlement

of Disputes.

Industrial relations

Industrial relations is a multidisciplinary field that studies the employment relationship.[1][2] Industrial

relations is increasingly being called employment relations or employee relations because of the

importance of non-industrial employment relationships;[3]

 this move is sometimes seen as further 

broadening of the human resource management trend.[4]

 Indeed, some authors now define human

resource management as synonymous with employee relations.[5]

 Other authors see employee relations

as dealing only with non-unionized workers, whereas labor relations is seen as dealing with unionized

workers.[6]

 Industrial relations studies examine various employment situations, not just ones with a

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unionized workforce. However, according to Bruce E. Kaufman "To a large degree, most scholars regard

trade unionism, collective bargaining and labor-management relations, and the national labor policy and

labor law within which they are embedded, as the core subjects of the field."[7]

 

Initiated in the United States at end of the 19th century, it took off as a field in conjunction with the New

Deal. However, it is generally a separate field of study only in English-speaking countries, having no

direct equivalent in continental Europe.[1] In recent times, industrial relations has been in decline as a

field, in correlation with the decline in importance of trade unions,[7]

 and also with the increasing

preference of business schools for the human resource management paradigm.[8]

 

Grievance Procedure

Grievance procedure is a formal communication between an employee and the management

designed for the settlement of a grievance. The grievance procedures differ from organization to

organization.

1.Opendoorpolicy

2.Step-ladderpolicy

Open door policy: Under this policy, the aggrieved employee is free to meet the top executives

of the organization and get his grievances redressed. Such a policy works well only in small

organizations. However, in bigger organizations, top management executives are usually busy

with other concerned matters of the company. Moreover, it is believed that open door

policy is suitable for executives; operational employees may feel shy to go to top management.

Step ladder policy: Under this policy, the aggrieved employee has to follow a step by step

procedure for getting his grievance redressed. In this procedure, whenever an employee is

confronted with a grievance, he presents his problem to his immediate supervisor. If the

employee is not satisfied with superior’s decision, then he discusses his grievance with the

departmental head. The departmental head discusses the problem with joint grievance

committees to find a solution. However, if the committee also fails to redress the grievance, then

it may be referred to chief executive. If the chief executive also fails to redress the grievance,

then such a grievance is referred to voluntary arbitration where the award of arbitrator is binding

onboththeparties.

GRIEVANCE PROCEDURE IN INDIAN INDUSTRY

The 15th session of Indian Labor Conference held in 1957 emphasized the need of an established

grievance procedure for the country which would be acceptable to unions as well as tomanagement. In the 16th session of Indian Labor Conference, a model for grievance procedure

was drawn up. This model helps in creation of grievance machinery. According to it, workers’ 

representatives are to be elected for a department or their union is to nominate them.

Management has to specify the persons in each department who are to be approached first and

the departmental heads who are supposed to be approached in the second step.

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The Model Grievance Procedure specifies the details of all the steps that are to be followed while

redressing grievances. These steps are:

STEP 1: In the first step the grievance is to be submitted to departmental representative, who is a

representative of management. He has to give his answer within 48 hours.

STEP 2: If the departmental representative fails to provide a solution, the aggrieved employee can

take his grievance to head of the department, who has to give his decision within 3 days.

STEP 3: If the aggrieved employee is not satisfied with the decision of departmental head, he can take

the grievance to Grievance Committee. The Grievance Committee makes its recommendations to the

manager within 7 days in the form of a report. The final decision of the management on the report of 

Grievance Committee must be communicated to the aggrieved employee within three days of the

receipt of report. An appeal for revision of final decision can be made by the worker if he is notsatisfied with it. The management must communicate its decision to the worker within 7 days.

STEP 4: If the grievance still remains unsettled, the case may be referred to voluntary arbitration.

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Industrial Relations Disputes

An Industrial Relations Dispute is a difference of opinion resulting in a dispute

 between employers or an association of employers with workers or trade unionsdue to a disagreement on rights, conflicting interests, a dispute over termination of 

employment, or a dispute among trade unions within one enterprise that could be

caused by differences in implementation or interpretation concerning the laws and

regulations, work agreements, company regulations, or the collective bargaining

agreement.

In general, any dispute mentioned above can be handed to the Industrial RelationsCourt. However, before taking the cases to the Court, some preliminary steps or 

alternative solutions should be taken at and through: bipartite negotiation,mediation, conciliation. Another method of settlement is through arbitration whichdecision is final and binding.

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Resolving Disputes Through Bipartite Negotiations

During bipartite negotiations, minutes of meeting should be taken as an evidenceand at least containing:

  full names and addresses of the parties;

  date and venue of the negotiation;

  main issue or reason for the dispute;

  the opinion of each party;

  conclusions or results of negotiations; and

  date and signatures of the negotiating parties.If within 30 days, the parties cannot negotiate a settlement or one party refuses to

continue negotiations, one or both of the parties can refer the dispute to thedesignated Manpower Office, with proof that the negotiations have failed.

Role of the Ministry of Manpower and Transmigration and Related InstitutionsIf bipartite negotiations have failed, the Ministry of Manpower and Transmigrationor the designated Manpower Office will offer settlement through:

  Arbitration: the resolution of a dispute over interests, and disputes between

trade unions within an enterprise. It is outside the Industrial Relations Courtthrough a written agreement from the parties in dispute who agree to submit

the settlement of the dispute to an arbiter whose decision is binding on the parties involved and is final; or 

  Conciliation: the settlement of disputes over interests, disagreements over 

termination of work relationships, or disputes between trade unions within onecompany only. It is done through deliberations mediated by one or moreneutral conciliators.

  If neither of the above options is selected by the parties within 7 days, thedispute will be settled through a mediation: the settlement of disputes over 

rights, conflict over interests, disputes over termination of the work relationship, and disputes between worker/trade unions within one company

only through deliberations that are mediated by one or more neutral mediatorsthat is a governmental officials.

The Ministry of Manpower and Transmigration or the designated Manpower Office should maintain a list of arbitrators, conciliators and mediators to deal withlocal industrial disputes.

Resolving Disputes Through Mediation and Conciliation

Mediators as well as conciliators have seven working days from the time theyreceive a request to settle a dispute to investigate the case. Immediately after the

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investigation, a hearing session must be held no later than by the eighth workingday after the request is received.

The mediator or conciliator may summon witnesses to attend hearings and provideevidence.

If an agreement to settle the dispute is reached, the parties must draw up and sign a

Collective Agreement, which is witnessed by the mediator or conciliator andregistered at the Industrial Relations Court in order to receive a registration deed.

If no agreement is reached, the mediator or conciliator will issue writtenrecommendations within ten days after the first hearing. The parties must provide a

written answer stating whether they accept or reject the recommendation within tendays of receiving it. No response is considered a rejection.

If the parties accept the recommendation, within three working days of their acceptance, the mediator or conciliator must assist the parties to draw up aCollective Agreement and register it at the Industrial Relations Court to obtain aregistration deed.

If one or both of the parties reject the recommendation, they may take the disputeto the local Industrial Relations Court.

The mediator or conciliator must complete their duties within 30 days from thetime they are requested to resolve a dispute.

Settlement of Disputes Through Arbitration

Disputes over interests and disputes among workers or unions in an enterprise may be settled through arbitration.

The settlement of an industrial relations dispute through an arbitrator is performedon the basis of a written by the disputing parties agreement in three identical copiesof arbitration letter of agreement that consist of:

  full names and addresses or domicile of the disputing parties;

  main issues underlying the dispute to be handed over to arbitration for 

settlement;

  number of arbiters agreed upon;

  a statement of the disputing parties to comply with and implement the

arbitration decision; and

  the place and date of drawing up the agreement and signatures of the disputing parties.

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Once the parties sign the arbitration agreement, they can choose an arbitrator from

a list of arbitrators determined by the Minister. The parties may choose a singlearbitrator or a panel of arbitrators. A panel must contain an odd number of 

arbitrators (minimum 3). If the parties cannot agree on the arbitrator(s), the Headof the Court will appoint them.

Arbitration is conducted in private unless otherwise preferred by the disputing parties. Each party may be represented by their authorized representatives if theygrant authority to those representatives in a special letter of authorization.

The arbitration proceedings should begin with an effort to settle the dispute. If the

 parties reach a settlement, the agreement should be reflected in a settlement deed,which should be registered with the local Industrial Relations Court.

When considering an issue in dispute, arbitrators give the parties an opportunity to

explain their opinions and submit evidence. Arbitrators also may summonwitnesses to give information.

Arbitrators are required to settle disputes within 30 days, which may be extendedfor a further 14 days if the parties agree.

Arbitration decisions are binding and final. Disputes that have been settled througharbitration may not be re-filed in the Industrial Relations Court. However, parties

may file a request to the Industrial Relations Court for an order to implement thedecision if the other party fails to do so.

Industrial Relations Court

The Industrial Relations Court is a special court established within the scope of the

district court that has the authority to investigate, judge and provide a verdictconcerning an industrial relations dispute.

Judges must provide a verdict within 50 working days of the first court session.

Lock Out

Employers have the right to refuse to allow workers to work as a result of failed

negotiations and must be in accordance with the law.

However, employers cannot lock out their workers as a countermeasure to workersand/or union normative demands.

At least 7 days before the lockout, the employer must notify the local manpower office and the workers of the time, duration and reason for the lockout.

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9. Retirement/Separation-Superannuation-Voluntary Retirement Schemes-

Resignation-Discharge-Dismissal-Suspension-Layoff.

Voluntary Retirement Schemes

India is a large country with large population. She is facing many problems at the

same time. One of its biggest problems, which India is facing, is that of 

Unemployment. It demands an immediate solution because it threatens the peace, prosperity and stability of free India.

VRS or voluntary retirement schemes are being implanted across al most allsectors in India to prevent the situation of Unemployment. The employees in banks

and public sector undertakings have been given the option to retire with handsome

 benefits. It is also known as "Golden handshake". The Nationalized banks took thelead and the bank officers grabbed the opportunity. They got 12 to 20 lakhs cash tostart life afresh. A tough estimate of the number of VRS separations in the year 

2001 is in excess of the two lakh. The scheme enabled to over-staffed units to getrid of surplus hands and thus to make long-term gains. It was designed to improve

their competitiveness and efficiency.

As the scheme is implemented to prevent the unemployment but in fact VRS has

actually increased the problem of unemployment. After getting the voluntaryretirement they could not sit idle for long period. After all it is difficult for 

anybody to sit idle. A large number of skilled workers from VRS separation havecreated a new set of problems. The workers who have retired at an early age are

still good enough to work. They accept jobs in private sector not for monetary gainso much as for keeping themselves busy. As a result, they have snatched the

employment opportunities of the fresh job seekers. Secondly, the old hands agreeto work for a smaller pay packet, which suits the employer.

Unemployment means forced idleness, it a young man or woman willing to work 

for his living is denied a job, he is unemployed. In the capitalist system there is

very little scope for the working class. They kept them at starvation level. Nowwith the wide use of computers, they have been able to cut down the workforce bynearly 80 percent. What is the future of millions of jobless young men and women

in such a situation? The unemployed have come to realize that only thing worse'than being exploited is the state of being idle and penniless.

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Employment opportunities in India today are almost nil. Even the Government,

which used to be the largest employer, has stopped all recruitments, Industrialgrowth also has been negative over the last several years. As a result the

unemployment rate is increased to 7.3 percent of the working population is thehighest of the last decade.

A major cause of growing unemployment is global recession or the economic slowdown all over the world. Information Technology sector no more offers a bright

career. There is general slump. The invasion of cheap Chinese goods in Indianmarket is another deathblow to Indian industries.

One of our richest resources is human being, which is means as-well-as end of the production. Therefore this manpower should be utilized in proper way so that it

 becomes productive. It is a well-known fact that the very institution of democracy becomes weak if the number of unemployed people abnormally increases in a

country. Apart from it if the manpower in our country is not utilized there are nochances of developing the economy of India. Unemployment cannot be moredisastrous to any other country than to ours.

What is therefore required is a growth strategy that seeks to get the bulk of 

additional agricultural output from the states, which have yet to benefit from GreenRevolution. They account 80% of the poor and 70% of the unemployed. Further 

more, if employment is to become the primary objective of developmental

 planning, a major part of additional output is the nineties and thereafter will have

to be derived from the village and smalls scale industry sector which account 80%of industrial employment. A shift in the pattern of investment, the sources of 

employment generation and the development strategy all over will be required toavoid the payment of dole. So the way to tackle the problem of unemployment is tocurb the causes behind it.

EMPLOYEE SEPERATION

Definition:

Employee separation is any action, which permanently severs the employer 

employee relationship and it includes resignation, retirement, discharge and

dismissal.

1. Resignation - Voluntary action taken by employee to separate from the

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employer.

2. Retirement ¡V It is the cession of employer-employee relationship on reaching

the age of retirement.

3. Discharge ¡V It is the termination of employer-employee relation by the

Company by signing notice or salary in lieu of notice for the period stipulated inthe appointment letter.

4. Dismissal ¡V It is the termination of the employment by the Company without

notice for acts of omissions and commissions on the part of the employee, which

amounts to misconduct.

Exit procedure:

The objective of this procedure ensures smooth and mutually agreed exit of 

employee. The Company sets forth a healthy procedure to maintain excellentemployer employee relationship.

Resignations:

- Resignation letter should be submitted by the employee in duplicate to the HOD.

- HOD should discuss with the employee and make an attempt to retain him if he

is a critical person on the project or is an asset to the organization.

- After accepting the resignation letter, the HOD signs the same with his remarks :

¡§the resignation is duly accepted and Mr/Ms¡K¡K¡K can be relieved on¡K..¡¨.

- The reliving date of the employee will be as per the terms and conditions

mentioned in the appointment letter and the standard notice period of 30 days.

- However in special cases HOD is authorized to waive the notice period and

relieve the employee at an earlier date, subject to proper handing over procedure

set forth in process.

- The HOD should forward the same to HR Head after his comments.

- HR Head shall keep the Director and the concerned authorities informed on the

resignation accepted.

- The employee shall be issued a reliving letter on his last day of work or the day

agreed and will be relieved from the services on the close of the working hours of 

the day mentioned in the reliving letter subject to his getting the clearance from the

departments mentioned in the No Objection Certificate Form and handing over the

charge and property in his possession to the person assigned.

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Handing Over Procedure

- After the acceptance of the resignation letter, HOD shall advise the employee tohandover his charge/duties to the assigned/nominated employee.

- The takeover report will be prepared by HOD. Also, certain immediate steps will

 be initiated by HOD especially in respect of disabling the email ID and server 

 password.

- The employee shall handover the keys of the drawer/cupboards, CD¡¦s, make a

list of his personal belongings which are to be verified by HOD and allowed to be

taken out by the concerned employee on the date of resignation.

Exit Interview

HR Head / Manager conduct the exit interview.

The exit interview form is duly filled.

The information on exit interviews is presented to the core committee once in

every month and corrective measures are taken to reduce the attrition rate.

SPECIAL NOTES

- No Privilege Leave can be availed by the employee during the notice period.

- No employee can quit/resign services of the company while on Privilege Leave or 

any other kind of leave.

Dismissal

Dismissal is where the employer chooses to require the employee to leave,

generally for a reason which is the fault of the employee. The most common

colloquial term for dismissal in America is "getting fired" whereas in Britain the

term "getting the sack" or "getting sacked" is also used.

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Layoff 

A less severe form of involuntary termination is often referred to as

a layoff (also redundancy or being made redundant in British English). A layoff isusually not strictly related to personal performance, but instead due

to economic cycles or the company's need to restructure itself, the firm itself goingout of business or a change in the function of the employer (for example, a certain

type of product or service is no longer offered by the company and therefore jobsrelated to that product or service are no longer needed). One type of layoff is the

aggressive layoff , in such a situation; the employee is laid off, but not replaced asthe job is eliminated.

In a postmodern risk economy, such as that of the United States, a large proportion

of workers may be laid off at some time in their life, and often for reasons

unrelated to performance or ethics. However, employment termination can also

result from a probational period, in which both the employee and the employer reach an agreement that the employer is allowed to lay off the employee if the

 probational period is not satisfied.

Often, layoffs occur as a result of "downsizing", "reduction in force" or 

"redundancy". These are not technically classified as firings; laid-off employees'

 positions are terminated and not refilled, because either the company wishes to

reduce its size or operations or otherwise lacks the economic stability to retain the position. In some cases, a laid-off employee may eventually be offered their old

 position again by his/her respective company, though by this time he or she may

have found a new job.Some companies resort to attrition (voluntary redundancy in British English) as a

means to reduce their workforce. Under such a plan, no employees are forced to

leave their jobs. However, those who do depart voluntarily are not replaced.Additionally, employees are given the option to resign in exchange for a fixed

amount of money, frequently a few years of their salary. Such plans have beencarried out by the United States Federal Government under President Bill

Clinton during the 1990s, and by the Ford Motor Company in 2005.

However, "layoff" may be specifically addressed and defined differently in the

articles of a contract in the case of unionised work.

Employee suspension

Employers often reserve the right in employment contracts to suspend an employee

when a disciplinary process is contemplated. There are clear legal issues that

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employers need to consider to ensure that they act within the boundaries of 

employment law because, ironically, getting a suspension wrong could cost anemployer more dearly than getting a dismissal wrong.

A recent Court of Appeal case found that even where serious misconduct was

suspected involving the alleged mistreatment by nurses of a patient, the response

from the employer should not be a "knee-jerk" reaction to suspend them. In thiscase the employer was successfully sued for unfair dismissal due to procedural

unfairness. The Court also criticised the employer's unwarranted referral of thematter to the police in circumstances where there appeared to be some justification

for the treatment of the patient concerned. It commented that an employer should

not refer allegations of misconduct to the police unless it has "a genuine andreasonable belief" that the allegations, if established, could be properly classed as

criminal.

So what does "suspending" an employee mean? Effectively the employer is tellingthe employee to stay away from his/her place of work for a limited period of time

usually whilst a disciplinary investigation is carried out. No assumptions should bemade about the outcome of the investigation and so suspension should be on full

 pay (although in some cases the contract of employment may limit this to basic pay). Note that the somewhat old-fashioned practice of suspending an employee as

a form of disciplinary sanction (rather than to facilitate a disciplinary investigation)is risky and could well be a breach of contract by the employer unless the contract

clearly provides for it.

Even for a disciplinary investigation, an employee should not simply be suspended

"as a matter of course" when faced with allegations of gross misconduct and/or 

 potential risks to vulnerable individuals. Care should be taken in each situation togauge whether or not suspension is appropriate and if there is an alternative.

Factors such as the employee's disciplinary record; risks to the safety of theemployer's property/other staff/clients etc; the risk of the alleged misconduct being

repeated; the possibility of interference with disciplinary investigations; and

whether or not there are suitable alternatives to suspension available will all be

relevant.

Effective alternatives to suspension include the temporary transfer of the employeeto another department/division or temporarily allowing the employee to work 

different hours or undertake revised duties to avoid contact with a client/colleaguewho has raised allegations against them. A record should be kept as to the

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alternatives considered and why these were found not to be suitable in the

circumstances.

So how should you go about placing an employee on a period of suspension?Ideally this will be done in a face-to-face meeting followed up with a letter. It

should be made clear that the suspension is not a disciplinary sanction and that it

does not indicate that the employer has made any decision regarding theallegations made against the employee. It should be confirmed how long the

employer anticipates the suspension will last, the employee's rights and obligationsand who their point of contact will be during the period of suspension.

A period of suspension should be for the shortest time possible to allow an

investigation to take place unimpeded. If the investigation establishes that

disciplinary proceedings are warranted then the employee should be invited to a

disciplinary meeting as soon as possible. If, following investigation it is felt that nofurther action is required then the employee should be formally invited back towork and informed that no further action will be taken.

There are a number of additional pitfalls associated with suspending employees.

For example, if an employee earns variable pay based on commission, shift work 

or overtime then arguably he/she should not be disadvantaged by the suspension,

otherwise the employer could face a claim for breach of contract and/or unlawfuldeduction from wages. Similarly those employees who may become "de-skilled" as

a result of being kept out of the workplace (for example, if they need to keep

abreast of market developments in order to carry out their role properly) then thereis a risk that they could seek to bring a breach of contract/constructive unfair 

dismissal claim. Another "side effect" of suspending an employee is that it may

suggest to the employee that the employer already considers them to be guilty of the allegations made and irreparable damage may therefore be sustained to the

ongoing relationship. Suspension can be, understandably, demoralising for theemployee affected and can even lead to mental illness  –  one employee who

suffered clinical depression as a result of an unjustified "knee jerk" suspension

successfully sued her employer for personal injury. Ironically, in such cases the

employer could have to pay more in compensation that it would have done if it hadsimply dismissed the employee, because unfair dismissal compensation is subject

to a statutory cap.

In summary, if an employer considers that it may have good grounds to suspend anemployee then it should carefully document how and why it has arrived at that

decision and why alternatives to suspension were not appropriate. Furthermore,

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any period of suspension should be kept as brief as possible and kept under 

constant review to ensure that it continues to be justified. In any event, werecommend that you seek advice from one of our team of solicitors before any

such action is taken due to the potential consequences of getting it wrong.