In this ISSUE www.businessmanager.

in

Cover Feature
The Performance
dialogue is here to stay
By Prashant Sharma

First, bring change in

philosophy & mindset
By Rajesh Padmanabhan

Towards stamping out

unconscious bias
By Dr. Sanjay Muthal

For an effective,
transparent,
measurable and
motivating PMS
By Simin Askari

Death of the annual

appraisal : Tread
caution

FUTURE of
By Raghav Garg

A hell of a Bell to
manage

PERFORMANCE By Hamsaz Vasunia

Making PMS
relevant

MANAGEMENT By Dr. Bhupendra Kaushal

Alignment of body with
mind
By Deepanita Dutta Mazumder
22-38
In every ISSUE INTERVIEW
Response 03
05 with Ashish
Chauhan
From the Editors Desk 04 Ride on technology
wave to lead
Guest Column by Prof. Arup Varma 40 business
by Vinayshil
Gautam.

The 2017 HR
10 Competency Study & What
It Means For You
In this round we collected over 32,000 worldwide surveys
rating the competencies and performance of more than
4,000 HR professionals from more than 1,200 organization
units.The results simultaneously build upon insights from
prior rounds and generate new insights for HR
competencies. An article by Dave Ulrich.
12 2017 Disruptions-
Disrupting talent stars
Why don't organizations invest in learning processes and
development programs that enable their leaders to keep
their talent? Doesn't it make sense that better managers
will yield better employee retention? An article by
Dr. Ganesh Shermon.

APRIL 2017 1 BUSINESS MANAGER

 www.businessmanager.in

The Minimalist HR
16 Minimal HR is bare bone practice of HR Management. It is
39 Can Indian organisations
adopt holacracy?
stark and simple based on compassion and is need based.
Bombarding the organization with too many initiatives is An article by Nikhil Abhishek Mishra
just like giving a chemo for a sniffle.You don't need to nuke
Concept of Pay Parity-
your organization with all that the HR universe has to offer.
The dosage needs to be just right for the organization. What
works for a multi locational large organization may not hold
56 Front and Center
relevance for a small sized firm. An article by Inna Jolly. The SC judgment has ignited a hot debate as to whether the
temporarily engaged employees including daily wage
Looking at compensation
18 model again
earners adhoc appointees and casual and contractual
employees would be entitled to regular pay scale along with
dearness allowance on account of their performing same
duties which are performed by those engaged on regular
New pay requires a decision on the component of variable basis against sanctioned post. An article by
pay in the compensation package.This is to align individual S.M.Jain & P.C. Chaturvedi.
goals with organizational goals.The employee's
compensation is at risk just as business is subject to risk.
The determination of performance standards, team based
or individual based performance pay and the ratio of
variable pay to total pay require understanding of business
requirements, employee behaviour and the application of
theories of motivation. An article by Hari Parmeshwar.

Ardhnarishvar inspired
20 gender parity
In a professional work environment, Ardhnarishvar
manifests as the representation of men and women in the
helpLINE 41
organization. It also depicts how men and women work
together balancing energies that they bring forward to
collaborate and take business forward. An article by
Mridula Sankhyayan.

43-51
21 Drop the labels, please!
An article by Aparna Sharma.

Employee under EPF Act from the COURT ROOM

54 needs to be redefined Recent Important Labour Judgments

Government Notifications
The definition of 'employee' under the employees' Funds
act are very wide. They include not only persons employed
directly by the employer but also persons employed
52 Maternity Leaves increased to 26 weeks in E.S.I.
through a contractor. Under the statutory definition even if Workers wages to be paid through banks
a person is not wholly employed, he would be a person Revised Minimum Wages in Shops &
within the meaning of the term 'employee'. An article by Establishments of West Bengal
H.L. Kumar. Revised Minimum Wages in Haryana
Revised Minimum Wages in Delhi

58 Case STUDY
Change for better but how?
The Maternity Benefit (Amendment) Bill, 2016

By Dr. Kavita Singh 62 Book Learning

The Ambitious Executive
Author : Rakesh Seth
Case Analysis
59 To bring change, reinforce trust
COMMENTARIES ON Factories Act, 1948
Authors : V.K. Kharbanda & Vipul Kharbanda
COMMENTARIES ON Payment of Gratuity Act, 1972
among employees Authors : V.K. Kharbanda & Vipul Kharbanda
By Mihir Gosalia

60 To change, first understand the HR NEWS

63-64

business and people dynamics CMD HLL LifeCare: None out of 13 could make it
By Bhaskar Dhariwal Tata Motors kicks off VRS
HC confirms lifers for 2 trade union leaders
HR lost the game, not
61 Devanshu!
By Bhaskar Dhariwal
Behavioural safety conference held at New Delhi
Wheel of law completes circle, 13 Maruti Employees
get life imprisonment

APRIL 2017 2 BUSINESS MANAGER

 Visit us on: www.businessmanager.in

Response https://www.facebook.com/businessmanagerhrmagazine

Thoughtful
Well thought editorial - stress is a major
concern - not only in employee
productivity matrix but also on the effect
in their physical & mental health. Did you
know that there are proven tools &
techniques, of visual whole brain learning,
that can help REDUCE STRESS easily?
Maneesh Johari
Articulated
Refer to Anyuta Dhir article thoughtful
and well articulated. I liked you lines:
"Human Resource needs to rethink its
bell curves, talent pools, career
progressions & succession plans. Much
like Arjun who saw nothing but only the
bird's eye, the Humanity Quotient can be
a point of focus".
Jageshwar Tripathi
Difficult
Arjun saw fish's eye not bird's eye....
moreover it's easy for anyone to write so
many good things but difficult to follow
even one from them.....bitter but true.
Vivek Kumar Singh
March 2017 ISSUE
Practical
Aman Attree in is article has rightly
identified the ways to reduce workplace
stress. Very practical and true.
Rajpal Singh
BUSINESS MANAGER VALUES YOUR
FEEDBACK. WRITE TO US WITH YOUR Interesting
SUGGESTIONS AND IDEAS AT Anil Malik case study is equally interesting
and present simple tricks to understand
info@businessmanager.in
and remove stress among employees.
Varsha Verma
Excellent
I read the March issue of
Business Manage covering
work place stress & burnout.
Excellent views by the various
authors.
However, I feel that stress isn't
always bad. A little bit of
stress can help you stay
focused, energetic, and able
to meet new challenges in the
workplace. We cannot enjoy
the "Cola": without the "Fizz",
in a similar way we cannot
enjoy with the stress. It's what
keeps you on your toes
during a presentation or alert
to prevent accidents or costly
mistakes. But in today's hectic
world, the workplace too
often seems like an emotional
roller coaster. Long hours,
tight deadlines, and ever
increasing demands can leave
you feeling worried,
uncertain, and overwhelmed.
And when stress exceeds your
ability to cope, it stops being
helpful and starts causing
damage to your mind and
body-as well as your job
satisfaction.
If stress on the job is
interfering with your ability to
work, care for yourself, or
manage your personal life, it's
time to take action. No matter
what you do for a living or
how stressful your job is, there
are plenty of things you can
do to reduce your overall
stress levels and regain a
sense of control at work.
M. M. Pande

Chief Editor Associate Editor Hon'y Editorial Board

ANIL KAUSHIK ANJANA ANIL Dr. T.V. Rao Dr. Vinayshil Gautam Dr. Rajen Mehrotra H. L. Kumar

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The views expressed in the articles published in Business Manager
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Publisher/Editor.
While every effort is made to have no mistake in the magazine, errors
do occur. Publishers do not own any responsibility for the losses or
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APRIL 2017 3 BUSINESS MANAGER

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From the Editors Desk

April 2017
Vol. 19, No. 10

Purposeful PMS
There has been a sort of noise going around in corridors of business world about necessity of
moving away from present established different performance management systems and to adopt
certain new processes. Few organizations have also done it. They have stopped applying forced
rating system and annual appraisal feedback process. Results of adopting new/improved/
corrected processes are yet to be formally assessed and declared but it is set to change the way
organizations do their performance appraisals. The idea is triggered because of changing nature of
business in this new knowledge economy. Technology driven and mainly service/consulting
organizations have gone for revamping PMS.
HR professionals without jumping on changes in PMS or switching on to new system should first
analyse that what your performance management system needs most. I think if your system is
capable of encouraging better communication , team work and collaboration among employees, it
should be taken as purposeful HR intervention, because, its effectiveness keeps employees
motivating. At this point, it is also to be understood and appreciated that any such system having
elements of process and people should have equal strengths and capabilities in respect of both
components. The biggest cause of dissatisfaction about PMS has been due to the reason of weak
people element. While process part is quite strong, people implementing the process many times
do not possess those required skills to carry the process to logical end.
The question is, if moving away from present systems, what would be the future PMS? The
changes, organizations have identified in the current system, which are to be made, are parting
from annual goal setting exercise to periodic with more frequent meetings with employees for
setting expectations and rating employees on absolute performance. Whatever elements are
added or revised or removed, the objectives of any such future PMS should be that the whole
system should be transparent, must have element of continuous feedback, reduce time
consumption in completing the process, use information technology and big data. The present
systems which are based on assessing past performance should move to fueling the performance
in future. The crux of any future system has to be where manager will not point out as to what he
thinks about the employee but he has to spell what he can achieve with him in the organization. It
has to be more realistic in terms of action rather that opinion formation tool. HR should not forget
that that whatever system they may develop for meeting the challenges, it has to taken down by
managers. Their skills in assessing the performance have to be continuously honed.
This time cover story is all about finding the issues involved in PMS for making it more purposeful,
possible ingredients of any good PMS and what is going to be the future PMS. Industry HR captains
sitting at helm of affairs and other experts have shared their thoughts. Their innovative ideas are
going to fuel the power of genuineness that will help readers to take balanced approach.
If you like it let us know. If not, well, let us know that too.
Happy Reading!

Anil Kaushik

@ tdanil
anilkaushik
anilkaushik

APRIL 2017 4 BUSINESS MANAGER

 by VINAYSHIL GAUTAM
Internationally acclaimed management
expert. Chairman, DKIF

Dr. Vinayshil Gautam as

noted in his monograph
"Enterprise and Society"
v iew (1978), has been
r
IwnithteH CHAUHA
N associated with the
Science and Technology
IS Entrepreneurship Park
ASH movement from its
inception. Subsequently
he has been one of the
prime movers of the
entrepreneurship and
start up movement in
India. His book
"International Finance
revisited" (2013)
reinforced his position in
the world of finance in
India, which he has
earned through his
various contributions,
including, membership of
Boards of firms such as
UTI AMC or Exim Bank.
His conversation with
ASHISH CHAUHAN,
MD & CEO, Bombay
Stock Exchange is of
seminal importance for
many reasons. Chauhan
ranks among the best of
home grown intellectuals
and practitioners in the
domain of Finance. With
Ride on technology an IIT and IIM orientation
he has carved out a
unique place for himself
wave to lead business without the usual
prefix/suffix of western
educational institutions.
His contributions to the
VG: You have an image of a successful, result oriented and charming institution
professional. Many who have heard of you have shown an interest in building of
knowing of your social and professional grooming and journey stock
through your educational and family life to get you where you are.
Could you briefly cover the key elements, thereof?
exchange
processes are
enormous.
AC: When I look back, there have been several influences. Coming from a small Here below is
town of India is one of them. I was brought up in Ahmedabad. The city
had a milieu of high unemployment in 1970s and perpetual draughts
the excerpt of
interspersed with social movements and riots. This was a unique conversation:

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Ride on technology wave to lead business
The idea of
Entrepreneurship
was still on and we
started another
company while
working. It was
funded by my family
from my income but
run by my
colleagues. The
company became
large and a choice
was to be made
between selling the
company or running
it full time.
background for any child to grow up in.
Gujarat was very religious and that rubbed
off on me too. As an individual, I have
always thought of life as something to be
lived for others. Studying in Gujarati
medium school till class 12 was another
major influence. While helping to focus, it
reduced choices of what one could read. It
continued as a factor even after my
joining IIT-B. Learning English along with
problem solving and managing people
proved a major challenge. Computer
programming and understanding of real
time high speed data capture from the
field was also an interesting aspect of
learning at IIT which helped me set up IT
and Networks for NSE later on. Studying at
IIM -C created comfort in finance and
working with IDBI set the career in
finance.
Setting of NSE when I was 25 was perhaps
the most important influence in a short
career then. I and team managed
something which was unheard of in India
till 1994. It was a new liberalizing India
and my successful efforts at setting up
screen based trading, first commercial
satellite network, nifty index and modern
financial derivatives gave me confidence
that things can be done in India even for a
person with no influence and no backing
other than education. Of course, all these
projects became technology
demonstrators and influenced choices of
technology and rapid implementation of
satellite TV channels, bank ATM networks,
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computerization of banks, governments etc. India became truly
a single nation and came closer using this technology. Later on,
I worked on e-commerce as an entrepreneur from 2000
onwards. The failed venture was a huge lesson in business and
survival. It was also humbling and a moment of truth for me.
Within a year, from a young achiever, I had become a pauper in
2001 with dim future. Working on mobile telephony at Reliance
as CIO and later on as Group CIO, I got exposure in various
businesses like refining, petrochemicals, oil and gas, organized
retail, IPL cricket, public relations, schools, colleges etc.
The idea of Entrepreneurship was still on and we started
another company while working. It was funded by my family
from my income but run by my colleagues. The company
became large and a choice was to be made between selling the
company or running it full time. I decided to sell the company.
However, providence wanted me to come back to stock market.
As a part of the agreement while selling the company to BSE, I
had to work with BSE for a year. I came to BSE for one year as
the Deputy CEO and stayed back. It was a difficult organization
during this time. Everyone had lost hope in it including the
brokers. We developed a good team and today, BSE is on the
path of revival.
VG: Your contributions in BSE covering the activities like an
incubator and its related inputs are testimonies to how you
have transformed this key organization into an instrument
of an economic power engine. Could you brief us on the
kind of support systems you have designed for young
entrepreneurs; bonds for companies and the volume of
funds that came through those routes? Concurrently a
reference to demographic concerns and coupling up with
technology are important dimensions of the effort.
AC: I have a belief that markets can do much to make India more
equal in addition to the social schemes each government
makes. Markets are inherently democratic and at the same time
meritocratic. In the long run, markets don't give importance to
pedigree, education, gender, religion, language, caste, creed
etc. Markets treat everyone equally in the long run - based on
returns and governance. I have always pondered over how we
can use markets for promoting equality of opportunities. Yet
another strong belief I have, is that technology is a key change
that takes place in the world. Society adjusts to newer
technologies. Technology comes in waves. Of late, technology
waves are coming faster and faster. What used to take centuries
in terms of technology and societal changes now happens in
time span of a few decades or years. When you project this
trend in the future, there is likelihood of faster generation of
wealth using technology.
My hypothesis is that over next 30 to 40 years, more wealth will
be created than what has been created in last 10,000 years. It
will be a time of great chaos in wealth rebalancing. The
question to tackle is: can India take its rightful place in the
forthcoming technology revolution? India has many things
going for it. The coming into prominence (by accidental
coincidences?) of few entrepreneurs, over last 25 years is one
significant factor. They became extremely rich using their brains
and not using devious means or from past family riches or
6 BUSINESS MANAGER
Ride on technology wave to lead business
BSE has also
helped promote an
incubator operated
by Ryerson
university of
Canada and BSE
Institute, at BSE
building for over
3 years. This has
a grant from
Department of
Science and
Technology.
political connections. These entrepreneurs
have become role models. "If they can do
it, coming from nowhere, I can do it too" is
the driving thought.Second, India has the
largest youthful population in the world--
33%. Young people can learn newer things
including newer technology. Third, our
young population is also technology savvy
and is hungry for higher quality of life.
Fourth, Indians experiencing 25 years of
liberalization have significant exposure to
the world. There is huge confidence. Fifth,
the new technology revolution allows
people to make huge wealth with high
mental abilities and very little initial
investment worth. Earlier, for making large
amount of money, one had to invest large
capital, which was difficult to come by.
Much of it has changed, giving strategic
leverage to the talent that Indians have.
BSE is a nationally important public utility
entrusted to run fair, efficient and
transparent markets. Main purpose of the
markets is to raise funds from savers in the
Indian economy and abroad and provide
the same to companies in India who
create jobs and wealth. Investors need to
have confidence that the companies will
behave as per rules and regulations and
they will get appropriate returns on their
investments. In that context, I have been
trying to implement some ideas in terms
of getting SME companies, funds so that
they can grow and create more jobs. Over
last 5 years, BSE SME platform has raised
funds for 166 companies in excess of Rs
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1250 crore. Market capitalization of these companies has
exceeded Rs 15,000 cr. If our entrepreneurs can use BSE SME
well, over next 40 years more than 2 lakh companies in India
can list on BSE SME platform alone and try to grow not only in
India but also abroad. Job creation will be a natural outcome of
the SME company's growth. To promote hi tech businesses, BSE
has also started hi tech platform on which even high tech
companies with no track record of profitability can raise funds.
BSE has also helped promote an incubator operated by Ryerson
university of Canada and BSE Institute, at BSE building for over 3
years. This has a grant from Department of Science and
Technology. They have raised several hundred millions over
these three years from India and abroad. The BSE incubator with
more than 100 success stories is perhaps the most successful
incubator in India today. Surprisingly, over last one year,
without a vibrant derivatives market in bonds or with very
illiquid secondary markets in bond, primary market grew up
manifold. BSE alone raised more than Rs 1,80,000cr funds from
primary markets from April 1,2016 till March 10, 2017. It is a
phenomenal progress which has been largely ignored by the
government, media, market experts and punters. In
comparison, Rs 11,000 crore collected by Masala bonds on
London stock exchange has created much more noise. We as a
market, as a society are in disbelief at the fruition of our
achievements, aspired for all these years. We should be taking
appropriate actions to further promote such efforts and make
them more robust and safe for investors.
Mutual funds distribution is another activity that has been
completely revolutionized by BSE over last 5 years. Today, BSE
Star MF platform is the largest distribution platform of Mutual
fund distribution in India with more than 7,00,000 orders being
sent to MFs every month. More than Rs 7,000 crore worth funds
are being sent to mutual funds using this platform. Every
month several hundred mutual fund distributors are joining this
platform. This is a unique achievement. Nowhere, else, in the
world actively managed funds are distributed through
exchanges on retail basis. India has taken a leadership in this
and provided extremely low cost, high tech distribution
platform for MFs. BSE star MF platform is growing at more than
100% year on year for last 5 years, enhancing participation in
mutual funds across the country. BSE has undertaken several
such path breaking activities. Setting up e-IPO framework will
help India list IPO companies in a day or two as compared to
the earlier need for 30 plus days. Recent inauguration of India
International Exchange by Honb'le Prime Minister Shri Narendra
Modi on January 9,2017 at Gandhinagar gift city is a venture to
bring Indian capital markets on the world map. This exchange
will trade in dollars only and will compete with Dubai,
Singapore, Hong Kong, London and New York in time to come.
India is poised to become the pace setter.
VG: Clearly there is a technology spectrum from low end to high
end. In India many generations of technology co-exists.
How would you enmesh the contextual realties? How could
this be linked up with your notions of 'waves of
technologies'? Permit me to-for sake of space-add to it
other distinct variables of demography, age, technology.
These are elements which vary from one region of the world
to another. In India the bulge is in the youthful phase. In
7 BUSINESS MANAGER
Ride on technology wave to lead business
India is a bottom
up economy. It is a
laissez faire
economy. In India,
usually, long term
change takes place
out of volition of
people, not out of
government
mandate. People
adopt a new
technology, only if
they see much
larger benefits.
Japan, the bulge is in the bracket of
60yearsand above. Variations in
country experiences can be multiplied.
There are no general stereotypes of
universal applicability of 'age 'as a
factor. There is, however, a
differentiation between how much time
is a 30 year old is likely to spend on this
planet and how much time a 60 year old
is likely to spend on this planet. How
would you integrate issues of
healthcare support to this? Clearly as
per present patterns: heart disease,
blood pressure and even cancer are not
the preserve of old age!
AC: India is a bottom up economy. It is a
laissez faire economy. In India, usually,
long term change takes place out of
volition of people, not out of government
mandate. People adopt a new technology,
only if they see much larger benefits.
Given the rapid pace of change that is
expected over next 30 to 40 years, there
will be much faster changes. However,
people will continue to use older
technologies. Let me give a simile of the 3
types of "technology-trains" in India,
which will continue to operate for some
time. The first train is what I will call
passenger train. It includes old technology
going back millenniums. As a society, we
are rightfully proud of our past and have
created a lot of positive myths around the
old way of life. That incorporates old style
of life, old style of thinking. This train
moves at much slower pace. A large part
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of India is in this passenger train. The second train is what I
called Shatabdi train. It includes more modern technology and
thinking going back a few hundred years. This includes English
speaking, western style life style. It collides with passenger
trains at many places, invisibly, especially in urban frameworks.
It has also taken several generations to seep into society and
hence it looks as if it has been always there. There is a lot of
opposition from the passenger train customers once in a while,
but it has slowly become more powerful. Rapid urbanization
areas, modern health care, etc have ensured that older ideas
relating to gender, caste, creed, language, religion are colliding
every day. Change was slow over last 250 years but now more
people seem to move from passenger train to Shatabdi train.
They perhaps know that they will improve their lives faster if
they get in to this train vis-a-vis passenger train. Third train
which I call Bullet train. This is a new train. Not many people are
aware of it. Some of the Indians are already traveling in this
bullet train. It is the new high tech train. Newer technologies of
robotics, 3 d printing, artificial intelligence, bio tech, big data,
drones, holo- grams, inside body computers, virtual reality,
genetically modified agriculture, animals and humans etc. will
change life fundamentally and transformationally. It is
happening now. It is up to us as individuals to get in to a
specific train. Most of us, unwittingly, travel in all three trains, in
turns.
My understanding is that passenger train economy will give us
3% per annum growth over next 40 years. Shatabdi train
economy will give us additional 3% per annum growth over
next 40 years. India can chug along at 6% growth for very long
period without even doing much. However, if we can get more
people on the bullet train economy, we will perhaps get
additional 5% to 6% growth or even more. Perhaps 10%
additional growth could happen, taking annual growth rate to
15% to 16%. It is possible for several years in next 40 years. It
requires many of us to move to bullet train economy for large
part of our lives.
VG: I have always wondered how much more imaginatively we
could use the "blessings of Andaman & Nicobar". For
example we could have created an entrepo' port there. I
have mentioned it across cabinets to some of the powers
that be. They all concur and yet nothing moves. To optimize
on the use of these islands, any thoughts on using it as a
health resort?
AC: Post independence, our world view was simple. We will not
trade and interact with rest of the world. Foreigners came to
trade with us 300 years back, subjugated us and hence our
lesson learnt was:'never trade'. We went in for self-sufficiency
framework for everything. Import substitution was the
buzzword. Despite our avowed objectives, we had to trade with
other countries. We had issues in balance of trade and
payments. We had often, limited, foreign exchange. Some
action was needed. We opened up for trade under duress. We
have done better since then. It has also given our youngsters
international exposure, more confidence, more understanding
of technology and International business. In the meantime,
many other countries improved their economy using export
oriented strategy. South East Asian countries and subsequently
China, took advantage of the labour cost arbitrage vis--vis
8 BUSINESS MANAGER
Ride on technology wave to lead business
We also need to
give comfort to
each and every
student about the
technology, in a
hands-on-way.
Can we set up
tinkering labs in
each district,
each tehsil, and
each school?
Europe and US. They became centers of
manufacturing over last 3 decades.
Andaman Nicobar is an ideal 'port', India
has at the entrance of that region. In fact,
it is closer to Indonesia than any Indian
port. In addition it has reach for New
Zealand and Australia. We have currently
used it as a small time tourist spot. We
must use it for improving trade and create
a special economic zone to ensure India
becomes a large player in the eco system
of manufacturing in South China Sea and
other regions. We must continue to
experiment with newer models, to ensure
we use all our strategic assets in different
areas, continually, to increase our
leverage.
VG: It is said "catch them young and bring
them up right "is the best way of
creating generations of talent. Your
thoughts on a tuning children to
technology would be interesting.
AC: If India has to take leadership in the new
and upcoming technology revolution, it
has to equip its young population to learn
newer and newer technologies. The
technology waves will be faster and faster.
Earlier changes took place over
generations and centuries. Newer
generation will see many such changes -
perhaps every 5 years. Therefore, new
generation may not always be able to
learn from the older generation about
how to cope with the newer rapidly
changing life every two to five years. They
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will have to anticipate and ride on those tech waves.
Can we use mobile phone and Wi-Fi to provide the best
teachers to students across the country? There are several
portals which give detailed understanding from some of the
best teachers at the time and place of your choice. The videos
provided by them can be used any time anywhere. Learning
can now be fun at customized, time, place and pace of the
learner. Entire knowledge of mankind which is growing rapidly
is more or less available freely on internet. We need to make our
students use this and learn from best teachers.
We also need to give comfort to each and every student about
the technology, in a hands-on-way. Can we set up tinkering labs
in each district, each tehsil, and each school? If we can provide
learning by doing in drones, robots, artificial intelligence,
rockets, wearable computers, 3 D printing to every student, it
will go a long way in creating a generation that will be used to
exploring technologies. This could well be a self-learning
generation. That generation will be world beater.
VG: It is estimated, in 30 years 70% of the job designs in work
organizations would have changed drastically. Indeed a
large part of them would be unknown in preceding era of
organizations. How do we prepare our fresh entrants to
firms for facing such an eventuality?
AC: If the technology progress continues at the pace it is expected
to, my hypothesis is that over next 30 years, 70% jobs will be
such that we have not even thought about them today.
Many do not believe that such rapid changes are possible.
However, the technology is changing rapidly. Many traditional
and even newer jobs will disappear to robotics, artificial
intelligence etc. Newer jobs will come up. Will our new
generation and some of us who will live much longer due to the
onward march of medical sciences and bio technology, be able
to also learn newer technologies, newer jobs,? If we don't
learn, we will remain behind. We will become irrelevant. Our
new generations will become irrelevant. We have to ensure that
the new generation and others learn newer and newer things.
We have to train them in ways to tinker and feel confident with
newer technologies.
It happened to BSE. Earlier the trading used to take place on
physical floor-a large hall. People used to talk to each other and
write down trades in their note books. From 1994 to 1995
(within 1 year) the entire generation of people who were
dependent on floor to trade and had acquired wealth over 120
years of BSE's existence (since 1875), disappeared. Those who
had learnt new computerized ways of doing things, survived.
Most traders disappeared. BSE itself had an existential crisis. It
had to reinvent itself over last few years.
BSE will continue to help fund new India, with a hope that in a
small way, it will be the catalyst for this change. We hope the
nation supports this emerging world beating generation to
create companies, jobs and wealth for themselves and India.
The risk of our inability to do so may be that the wealth created
by Indian brains will be going to investor from other countries
who may be willing to support and fund them. That eventuality
may not be the best! BM
9 BUSINESS MANAGER

The 2017 HR Competency Study
& What It Means For You
Dave Ulrich, Speaker,Author,Professor,HR & Leadership Guru,USA
This article is drawn from the book Victory
Through Organization by Dave Ulrich, David
Kryscynski, Michael Ulrich, Wayne
Brockbank.
S
ponsored by the Ross School at the
University of Michigan and The RBL
Group along with 22 regional partners
around the world, we are delighted to
present the results of the 7th (2016)
round of the HR Competency Study (HRCS).
These results are presented in more detail in
Victory through Organization. For almost 30
years the HRCS has empirically defined the
competencies of HR professionals and how
those competencies impact personal
effectiveness and business performance. In
this round we collected over 32,000
worldwide surveys rating the competencies
and performance of more than 4,000 HR
professionals from more than 1,200
organization units. The results
simultaneously build upon insights from
prior rounds and generate new insights for
HR competencies.
Having researched and published on HR
competencies for 30 years, we have identified 4
In this round we principles of defining the right HR competencies.
collected over
1. HR competence definition is NOT the goal,
32,000 worldwide
defining HR competencies that create positive
surveys rating the outcomes IS the goal. Most competency models
ask the question, "What are the competencies of
competencies and
performance of HR professionals?" This is the wrong question.
The question should be "What are the
more than 4,000 HR competencies of HR professionals that have
professionals from greatest impact on important outcomes?" We
more than 1,200 have shown that different HR competencies
organization units. have differential impact on three outcomes:
The results personal effectiveness of the HR professional,
simultaneously impact on key stakeholders, and business
results. HR is not about HR and HR
build upon insights
competencies are not about the competencies,
from prior rounds
but about how they deliver key outcomes.
and generate new
insights for HR 2. HR competencies are determined less by self-
report and more by how those competencies are
competencies. perceived by others. HR competencies should
be assessed not only by the HR professional but
by those who observe the HR professional.
People generally judge themselves by their
intent; others judge them by their behavior, so
it is important to evaluate both intent and
behavior.
3. Global HR competencies exist, but they also
may vary by geography, industry, size of
organization, level in the organization, role in
the organization, gender, time in role, and so
forth. We empirically show that 50 to 60% of HR
APRIL 2017 10
www.businessmanager.in
competences are essential to all circumstances,
then 40 to 50% vary by setting.
4. Key HR competencies change over time. Having
done 7 rounds of major studies over 30 years
with over total 100,000 respondents, we can say
with some certainty that every 4 to 5 years , 30 to
40% of HR competencies evolve. For example,
in recent rounds of our research, we have seen
a rise in the importance of HR technology and
HR analytics.
What are the competencies
of HR professionals?
In collaboration with 22 outstanding regional
thought HR partners, we examined 123 specific
items of what HR professionals should be, know,
or do. We performed scores of factor analyses on
these items to determine consistent domains of
HR competence. Figure 1 portrays the nine
competencies we identified for HR professionals.
Based on the findings, three of these competencies
were core drivers of key outcomes:
Strategic positioner: Able to position a
business to win in its market.
Credible activist: Able to build relationships
of trust by having a proactive point of view.
Paradox navigator: Able to manage tensions
inherent in businesses (e.g., be both long and
short term, be both top down and bottom up).
We also found three domains of HR competence
that are organization enablers, helping position
HR to deliver strategic value:
Culture and change champion: Able to make
change happen and manage organizational
culture.
Human capital curator: Able to manage the
flow of talent by developing people and leaders,
driving individual performance, and building
technical talent.
Total reward steward: Able to manage
employee wellbeing through financial and non-
financial rewards.
We found three other delivery enablers that
focused on managing the tactical or foundational
elements of HR:
Technology and media integrator: Able to
use technology and social media to drive create
high performing organizations.
Analytics designer and interpreter: Able to
use analytics to improve decision making.
Compliance manager: Able to manage the
processes related to compliance by following
regulatory guidelines.
Each of these HR competencies are important
for the performance of HR professionals.
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The 2017 HR Competency Study & What It Means For You www.businessmanager.in

known for their personal credibility and their

compliance roles. We should note that we use 0.15 as
a threshold for meaningful differences.
The results by columns are quite interesting. HR
professionals self assessment (Column 2) are
somewhat higher than supervisor ratings (Column
3), but lower than ratings by HR Associates (Column
4) and lower more than ratings by non-HR
Associates (Column 5). Supervisors who observe HR
professionals doing their work may expect them to
live up to higher expectations. HR associates see
their HR colleagues as having more skills than the
HR professionals themselves, and non-HR associates
have even higher ratings of HR professionals.
Perhaps HR professionals (Column 2) recognize
their limitations more than those who rate them,
perhaps they have limited self confidence in their
How do HR professionals rate own skills versus how others see them, or perhaps
themselves and others rate them on these Associate raters assume that HR professionals can
competencies? do more. We tend towards the third explanation and
see these findings as a license for HR professionals
Table 1 below shows the mean (1=low to 5=high) to do more in these nine competency domains.
scores for each of the nine HR competence domains Their HR and non-HR associates already observe
by different respondent groups. The nine them as better than they rate themselves. HR
competence domains represent the rows and the professionals sometimes lament how they are
five columns represent different respondent groups perceived by their peers, but their self-image and
to the 360 degree exercise. The pattern among the self- confidence may be a larger liability to their
nine competence domains are quite similar (see effectiveness.
scores in each column). As the data show, HR
Table 1
Round 7 Competency Domain Averages by Rater Type
1 2 3 4 5
All Raters * Self-Rating Supervisor Ratings HR Associate Ratings Non-HR Associate Ratings
Number of raters 27904 3964 3738 13168 10998
Strategic Positioner 4.13 4.05 3.94 4.13 4.21
Credible Activist 4.33 4.35 4.27 4.29 4.42
Paradox Navigator 3.99 3.87 3.86 3.98 4.08
Culture and Change 4.03 3.96 3.88 4.02 4.11
Champion
Human Capital Curator 4.01 3.90 3.88 4.01 4.08
Analytics Designer and 4.01 3.89 3.78 4.04 4.06
Interpreter
Total Rewards Steward 3.88 3.76 3.81 3.86 3.95
Technology and Media 3.92 3.77 3.78 3.93 3.96
Integrator
Compliance Manager 4.32 4.34 4.31 4.30 4.38
Overall Averages 4.07 3.99 3.94 4.06 4.14
*Non-Self ratings

professionals are seen by all raters (in Column 1) as

having more competence as Credible Activists
(4.33/5) and Compliance Manager (4.32/5) and less
competence in Total Rewards Steward (3.88/5) and
Technology and Media Integrator (3.92/5). This
same pattern holds regardless of who is rating the
HR professional (self rating, Column 2; supervisor
rating Column 3; HR associate Column 4; and non
HR associate Column 5). These results make sense
in that HR professionals have traditionally been
Conclusion and implications
In this research, we have identified what
individual HR professionals should be, know, and
do. In future essays, I/we will show how these
competencies affect three outcomes: [1] personal
effectiveness, [2] stakeholder value, and [3] business
results. We are confident that these findings and the
subsequent implications for developing HR
professionals and creating HR departments will
enable HR to continue to add value. BM

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 www.businessmanager.in

Why don't organizations invest in learning processes and

development programs that enable their leaders to keep their
talent? Doesn't it make sense that better managers will yield
better employee retention?

importantly, this competition for skills is expected to

2017 Disruptions- intensify and become even more competitive when the
Baby Boomers begin to retire (2012). Another issue is a
mismatch between the skills and education young people
are acquiring in their postsecondary educations and what's

Disrupting needed in the work force. The search for talent has become
increasingly competitive over the past several years. Talent
plays a significant role in leading organizations.

talent stars Digital organizations use leadership centers widely to

Dr. Ganesh Shermon
is a Managing Partner for "RforC Talent Management Solutions" (KPMG North
America) & earlier Partner,Country Head and Global Steercom (P & C) - KPMG LLP
ensure that they have a significant leadership pipeline.
(Shermon and Shermon 2016). For example, in a
Partnership consulting firm there is a never ending need
for a large supply of partners to handle clients and balance
sheet requirements, for example every balance sheet needs
to be signed by a Partner as per the Institute of Chartered
Association.
Clients in the consulting world also expect that mature
leaders who understand the challenges and issues of the
organization should handle their assignments. Experts
from the consulting firms believe that this need for
leadership center is built into their HR policies and is a
frequent program.

The findings indicate that for organizations with less

than 1000 employees, 82.5% of the organizations assess

"S
tars are less than 100 employees, 13.4 % organizations assess
beautiful, but between 100 to 300 employees and 4.1 % of the
they must not organizations assess greater than 300 employees.
take an active
For organizations with 1000 employees, 50.9 % of the
part in
anything, they must just look organizations assess less than 100 employees, 31.5 % of
on forever. It is a punishment organizations assess between 100 to 300 employees,
put on them for something 17.6% of the organizations assess more than 300
they did so long ago that no employees.
star now knows what it
was."- J.M. Barrie. Yet Stars For large organizations with greater than 5000
form the core of an employees, 49.4 % organizations assess less than 1000
organizational success. What employees, 30 % assess 100 to 300 employees and 20.6 %
makes these stars closer to of the organizations assess greater than 300 employees.
ground so very different.
Perhaps disruption! Stars did not become stars just like that. There was an
institutional emphasis that made them the stars, there was
an individual effort that prompted them to become stars
People and there was a drive and desire that could not have been
Disruption - fulfilled for them unless they became and made their
institutions stars.
Rise of Stars
Skills & Stars became stars because of people who were willing
to make the time and effort to make these people stars. I
Competencies have come across a powerful and a silent group of people
who were making it their business to make stars for their
Competition for skills and corporations or for whatever purpose they were involved
talent is increasing. More in. They made stars out of people who met with them.
They were into careers for others.

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2017 Disruptions- Disrupting talent stars
People
disruption-
The talent wave
"It has never been as good
for people in the corporate
sector as it has been now".
Demands ranging from
"double my compensation,
offer my spouse employment,
provide me flexi time, I need
to fly to Singapore once every
fortnight to see my children
studying in a boarding
school, to I need to bring
along three of my colleagues
as team members" are but a
select few of the promises
being made to bring talent
into organizations. That
talent wave is here to stay is
no doubt but is the solution
to this problem promising
what is not sustainable is not
the answer. In fact research
is beginning to indicate that
time has now come to call the
talent shortage bluff. Any
examination of
organizational retention
needs to transcend an
examination of "why people
leave.
"People don't leave
companies, they leave
managers." Is an oft repeated
phrase in retention strategy
conversation? "And the
APRIL 2017
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Letting "a thousand flowers bloom"
often means that leadership gets
ignored in some corners of a company
and that others reinvent the wheel
too often.
problem is not about getting talent - Employees who resign
from one company join another". If that is true, then why
don't organizations invest in learning processes and
development programs that enable their leaders to keep
their talent? Doesn't it make sense that better managers
will yield better employee retention? In a consulting firm's
focus group research, over 80% of respondents indicated
difficulty in retaining talent rather than constraints in
attracting talent; about 25% of the participants indicated
they have strategies in place to deal with skill shortages, as
and when they arise; but over 90% of the organizations
were at a loss to identify concrete issues within their
organizations that hindered employee retention. Common
place issues were all available, like difficulties with the
immediate manager, lack of enriched job, not so
competitive compensation, absence of developmental
opportunities and poor systems for learning.
Talent stability - Substantively speaking, what we are
facing today is a multi-dimensional talent problem that in
turn requires a multi-pronged approach to address. And at
the heart of this challenge is a large bulge of people on the
verge who transit from one company to another primarily
on account of an inability to cope with business, job and
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2017 Disruptions- Disrupting talent stars
growth challenges. There is a
critical mass of incompetent
people who do not know how
to contribute and sustain
growth in an economy which
is growing despite people
and their direct
contribution. It is all about
managing employees who
lack capabilities to deliver,
staff who have not been
trained to follow processes,
leaders who cannot lead and
technocrats who are unable
to resolve issues. An
organization that is lumped
with an employee mass that
consists of volume rather
than value is facing a
combination of attraction &
retention issues and not
always is the issue resolved
in fixing an internal problem
to help employees stay for
longer periods. And the
solution lies in deploying
talent structures that are
tight and robust with
planned tight headcounts
based on employee typology,
qualified competence rather
than hiring in loads that are
pulling down an overall
performance.
Talent skeptics - 2013. Ellen R. Auster and Trish Ruebottom continue to
"Engage influential positive
and negative skeptics.
Skeptics can either offer
tremendous value to a
change process or turn a
minor hurdle into a major
roadblock. Although change
leaders may often believe
that the concerns of skeptics
will naturally dissolve,
working with skeptics early
in the process is time well
invested. Positive skeptics
may offer important
perspectives and insights
about the vulnerabilities of
proposed changes. For
example, positive skeptics in
the sustainability initiative
may include production floor
stewards who have heard
rumors that an
environmental overhaul of
their processing plant is in
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If leaders do not have time to address
skeptics' concerns directly, they may choose
to recruit influential sponsors and promoters
to help. However, they should ensure that
two-way communication channels are in
place.
the works but no one has yet communicated the specifics.
They may grow resentful that no one is soliciting their
input. Bringing them into the process by asking for their
ideas and exploring their underlying reasons for
opposition invariably will uncover challenges and risks
that are better dealt with preemptively. Better yet, a
representative from this stakeholder group could be asked
to help shape the initiative from the start. Equally
important is working directly with influential negative
skeptics. Sometimes consciously, sometimes unwittingly,
these cynics may kindle underground resistance that could
derail the change if their concerns are not addressed.
Returning to the sustainability example, many baby-
boomer employees might fear they lack the skills needed to
succeed in the new environment.
They may worry that they will be replaced by younger
employees trained to work with the newer,
environmentally friendly technologies and processes.
Being transparent and up-front about the consequences of
the changes, and delineating what opportunities will exist
for training and/or outplacement support and exit
packages if there are layoffs, would help alleviate some of
the anxiety" say the authors (Ellen R Auster Et All) in SMR
emphasize on this need. "Positive or negative, skeptics
should be embraced and their concerns heard.
Developing action steps to address issues raised by
positive skeptics early is important in order to prevent
resistance from escalating. Listening carefully to the
concerns of negative skeptics is also critical. Addressing
their concerns honestly sends a clear message that their
perspective is important, that the change will not be force-
fed to them and that transparency and openness are valued.
This will not only promote success in this change, but it
will also build receptivity for future changes that are
inevitably around the corner.
If leaders do not have time to address skeptics' concerns
directly, they may choose to recruit influential sponsors
and promoters to help. However, they should ensure that
two-way communication channels are in place. This will
ensure that shortcomings of the change highlighted by
positive skeptics are not overlooked and will contribute to
strategies that alleviate some of the anxieties of negative
skeptics. A talent mindset is the deep-seated belief that
having better talent at all levels is how you out perform
your competitors. It is gained by identifying talent who fit
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2017 Disruptions- Disrupting talent stars
in effectively with an
organizational knowledge
needs built around a
capability profile that
sustains its competitiveness
and is definitely not driven
by hiring a critical mass to
meet with a quarter to
quarter wall street analysts
thirst for valuation
information. One should
accept that organizational
knowledge is socially
constructed and that
deconstructing this
knowledge will permit new
insight".
Talent mate - Neel
Gandhi and
Hancockin McKinsey
Quarterly 2015, write on
"Getting beyond bureaucracy
in human resources". "Many
l e a d e r s h i p - d eve l o p m e n t
efforts don't achieve their
goals, because they ignore
the business context and
offer insufficient
opportunities for personal
reflection
individualization. While it
would be easy to conclude
that corporate HR can add
little value to leadership
development, the reality is
more complicated. Letting "a
thousand flowers bloom"
often means that leadership
gets ignored in some corners
of a company and that others
reinvent the wheel too often.
An assertive HR department
clarifies expectations for
leadership development
across the company, provides
a baseline backbone of
proven tools
methodologies, and flags
priorities to adapt them to
the needs of businesses and
individuals.
HR and business-unit
leaders then collaborate to
fine-tune programs.
Managers must lead, and HR
must help them to do so. But
the well-founded inclination
to swing the HR-process
pendulum away from
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www.businessmanager.in
bureaucracy and toward a freer hand for management
should not lead organizations to veer from "ditch to ditch".
Shifting too drastically is plainly a bad idea; in many cases,
a complete HR overhaul is unnecessary. At all events, HR
has opportunities to assert its expertise and strategic
Bryan thinking in a low-profile, nonintrusive way. That requires
both rigor and restraint-but, we've found, provides the sort
of insights about talent, leadership, and performance
management that all companies need, regardless of their
There is no size".
doubt that Emerging talent reward trends - There is no doubt
motivation is that motivation is the crux for good performance, but there
is no clear-cut answer to the question of how to motivate.
the crux for The previous pages gave a glimpse of the answer through
good various theories and practices. While, there are several
and theories on motivation and practices, but there is no
performance, getting away from money. Money is a factor in motivating
but there is no people and this section concentrates on this.
clear-cut For talent, money is important! This is, perhaps,
answer to the saying the obvious. But it still needs to be said, for a
perusal of the previous section may give the impression to
question of how the contrary, at least judging from MASLOW'S concept.
to motivate. Refreshing as it is, if the theory was completely valid then,
at least in affluent countries, economic incentives should
have lost all their force. Even dedicated footballers do not
think of playing for a country, they merely pay 'lip service'
to it.
Cricketers and rugby players no longer play for their
own country but opt for the 'highest bidder'. Professional
tennis players have refused to play at Wimbledon, the
and 'Vatican' of lawn tennis, because the rewards were not
attractive. It is no different in the industrial world. Strikes
for better salary and rewards do still occur. All this despite
the claim of psychologists that security is the prime need
of a person, as indicated in the previous section. Has the
sense of values changed with time? But we are not
concerned here with the philosophical angle, but with hard
facts of life in a commercial world. Self-motivation can go
only so far and it needs to be constantly reinforced by
rewards. In particular, merit must be measured and
rewarded regularly, if it is to be encouraged and sustained.
Give People an Experience, to avoid them from straying
and being lost in the SKY as a STAR! BM
15 BUSINESS MANAGER
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Minimalist
Inna Jolly, Founder and CEO,VouchDog,Noida

I
have been practicing methodology or approach can be taxing, intimidating and
minimalism past 3 often confusing. It can turn out to be a never ending maze,
years and discovered that begins innocuously small, and eventually snowballs
many hidden treasures into a process that becomes time and resource consuming
and gems along the with aforesaid results nowhere in sight.
way of minimalism. It is hard to forget my experience with a top class
Minimalism is a conscious business house in my early days as a management trainee.
effort directed towards less. The business house had engaged a big four consulting firm
It is the practice of self- in order to develop an HR strategy to stay competitive. I
restraint, it is the practice of was over awed by the sheer presence of this big four firm,
travelling light, it is a and counted my blessings as I got an opportunity to work
practice of owning less, along with it. To say the least, a whopping fee was paid to
doing less, reducing, the consulting firm. The amount was a king's ransom to my
recycling and simplicity. I mind. As luck would have it, I was privy to the drafting of
deliberately inject the the HR strategy, its implementation and execution. I ran
concept to all areas of my life over and over again the reams of paper with flow charts
and observe the unfolding of and documentation of roll-out of the HR plan. The final HR
events. The results have been plan flow was a time tested, simple and elegant piece of
immensely gratifying.

Minimal HR is bare bone practice of HR Management. It is stark and

simple based on compassion and is need based. Bombarding the
organization with too many initiatives is just like giving a chemo for a
sniffle. You don't need to nuke your organization with all that the HR
universe has to offer. The dosage needs to be just right for the
organization. What works for a multi locational large organization may
not hold relevance for a small sized firm.

I have now coined and work. It surprised me that it was not rocket science and no
promote the concept of complex jargon populated the HR plan. I could not
minimal HR management. reconcile to the obscene amount of fee paid for an HR plan
Minimal HR is bare bone that, I too could have very well come up with. Now, I would
practice of HR Management. wish the reader to stay with this thought. I will address this
It is stark and simple based oxymoron of high fee for simple solutions in my
on compassion and is need concluding para. For the best part of the roll-out of the
based. There is an plan I wholeheartedly threw myself into implementation
overwhelming amount of and execution. It was an enjoyable stint, until I moved onto
management literature, each a new assignment.
one extolling values of a In the next few years that I worked in HR management,
concept. Selecting any one many a new processes and practices crossed my path. I

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The Minimalist HR www.businessmanager.in

A well- defined metric of progress within a time

frame serves the purpose better of achieving the goal of
bettering the HR management.

learnt and picked up the steady ground. Acceptance to any people's initiative
best, implemented a few, takes time. Unfreezing and then freezing mindsets isn't
some concepts saw the light overnight. Bring that comfort and ease in introducing a
of the day; some began with new process in the organization.
much gusto and ended up as 4) Core Values: No process, no methodology or no HR
wasted paper in the bin. In program can outdo the virtues to compassion, honesty,
my 20 years, I can respect and trust. For any management to be successful
confidently share the secret the key ingredient to success is being consistent in their
of the greatest HR Strategies approach to people when it comes to respect, trust,
of all: compassion and honesty. Credibility of the management
1) Keep things Simple: Yes, plays a vital role in the progress of its human resource.
keep it very simple. Just 5) Having a time frame metric: A well- defined metric of
like the big consulting progress within a time frame serves the purpose better
firm. Any lay person in of achieving the goal of bettering the HR management.
the organization should
be able to understand and 6) Knowing what is needed: This is both science and
identify with what the intuition. Too much analytics, numbers, data capture
management is trying to and jargon can be misleading. The trick is to read
achieve. Making it between the lines, and use the information to establish
comprehensible makes it what your gut tells you.
easier for people to adapt 7) Practice Detachment: Just throw out of the window
freely. that does not work. Never over invest and attach
2) Less is more: A thing or yourself to anything that isn't looking healthy. Never
two at a time. Bombarding impose it on your people. It could work in the short
the organization with too term, but the long term prospects are questionable.
many initiatives is just Keep the good things going, make them stronger and
like giving a chemo for a reinforce what works best. The rest are just fillers, you
sniffle. You don't need to might just do away with time fillers.
nuke your organization By now the reader, would be curious and even a bit
with all that the HR skeptical, about two things. First, the reader might ask, so
universe has to offer. The Doctor HR, why must I pay you a bombshell for the
dosage needs to be just simplicity extolled by you. If it is this easy, we could do it
right for the organization. ourselves. Well, you are correct, but let me answer this by
What works for a multi going back to the big four consulting experience of mine.
locational, large In my later years of experience I discovered that the
organization may not hold likelihood of success was always with the simpler concepts
relevance for a small sized which were easier to understand and execute. However, the
firm. An organization of trick was in the discerning, in what would be the correct
100 people gets enough diagnosis, then the correct prognosis and finally choosing
face time with its the best possible approach to address the situation. And it
management/ promoters is the choices in the approach that the price is paid for.
and thus heavy HR The second query, about the time frame, a good
intervention may not be consultant is one that concludes in a defined time frame,
required. Good eye enabling the internal HR teams to execute successfully, and
contact, a pat on the back not depending on an external factor. I love to narrate a little
and an open dialogue may story about my grandfather a medical doctor and surgeon
be all that is required. with the British Government, who retired pre- maturely
Self-restraint is the key due to blindness in both the eyes. Even as a blind person he
while shopping and ran a successful clinic in Ludhiana and always had a string
surfing for management of patients waiting for him. Should the patient ever err
concepts. into asking him about his next appointment for a review,
3) Go slow and steady: my Grandfather would fly off into a rage, and using
There is a certain charm choicest expletives ask the bewildered patient, "Do you not
in slowness. The slowness trust my treatment, that you need to visit me again?" A
offers us to dig deeper, good HR advisor need not return, unless the needs, the size
build stronger and structure of the organization changes.
foundation, take a To the core of my kind HR practice is minimal HR, it is
measured approach and zen, it is compassionate, it is stress free, it is natural and
then march forward on a yes it works 9 out of 10 times. BM

APRIL 2017 17 BUSINESS MANAGER

 www.businessmanager.in

Looking at
compensation
model again
New pay requires a decision on the component of variable pay in the
compensation package. This is to align individual goals with organizational
goals. The employee's compensation is at risk just as business is subject to
risk. The determination of performance standards, team based or individual
based performance pay and the ratio of variable pay to total pay require
understanding of business requirements, employee behaviour and the
application of theories of motivation.

Hari Parmeshwar, Advisor (Human Resources ) CBRE for ITDC disinvestment,Delhi

T
he textbook model Naturally by itself this internal alignment would be
to determine meaningless unless aligned with the compensation being
compensation is provided in the industry and so benchmarking
more precise than compensation with not only the rest of the industry but
the real world also across industries for senior talent requiring
experience. Theory would leadership roles is the next step. This would require a
tell you to first align internal compensation survey carefully capturing the similarities
relativities between jobs/ and differences between various companies within the
roles in terms of industry and across industries for executive talent. A fine
compensable factors, skills grip on statistical concepts and networking skills with
and competencies. This other HR professionals is the required skill in this
would require job evaluation segment.
to be done in which HR New pay requires a decision on the component of
would require to carefully variable pay in the compensation package. This is to align
balance management individual goals with organizational goals. The employee's
constraints with employee compensation is at risk just as business is subject to risk.
expectations. While The determination of performance standards, team based
determining factors/skills or individual based performance pay and the ratio of
and competencies can be variable pay to total pay require understanding of business
taught the specifics of each requirements, employee behaviour and the application of
company and its precarious theories of motivation.
balance cannot be taught and
requires an HR professional Lastly the role of benefits and work life balance and the
to be intuitively sensitive to opportunity to grow and learn in the job, besides job
people, power and security give credence to the concept of total pay in a
institutions around him in millennial dominated workplace. And since as always there
the organization. is one more thing to do which is to ensure that the

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Looking at compensation model again
compensation cost is
adequately budgeted for and
covered by revenues. That is
the product market
economics will override the
labour market economics.
The ever changing macro
economic situation is the
final arbiter of this interplay.
So globalisation or
protectionism or government
policies on minimum wages,
MNREGA will require the
employer to hire a National Minimum
compensation and benefits
manager in order to ensure
that the company continues to
attract, retain and motivate
talent.
The declining role of trade
unions has made the task
somewhat easier and also the
helpful courts which frown on
employers hiring on casual,
contract, fixed term basis but
have legitimised labour
hiring through contractors
unless it is a sham or
specifically prohibited by the
appropriate government. The
head of one such major
contractor or third party
vendor has been recently
appointed as a Director of the
RBI. Such is their relevance.
Hence the student of HR
would need to be sound on the
principles enunciated in
Figure 1.
The real world is however
a little paradoxical.
Statistics,
networking,
business
knowledge skills
Job Evaluation
HR Compensable Factors
Skills Skills, Competencies
Behavioural
Motivation Theories
Knowledge
Expectancy, Equity,
Hygiene, Self Actualization
Knowledge
of Labour
Laws
APRIL 2017
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The proposal Determination of minimum
wages and loopholes in
to introduce a
provisions of labour laws.
Wage at Rs Typically minimum wages were determined
based on local conditions in order to ensure a basic
15000/- has been standard of living for employees and the
components of minimum wages has changed over
on the anvil for time from food, clothing and shelter to include
education, transportation and health. It is rooted in
quite some time in the cost of living index. But increasing minimum
India. The demand wages in order to increase demand and thus boost
the economy has often been considered. In the
and supply theory aftermath of the global financial crisis there was a
fear that there would be wage freezes and employees
of wages however would be ready to offer wage concessions thus
weakening overall demand leading to deflation.
would set the Thus the ILO adopted a global jobs pact which
demanded that "Governments should consider
wages at a options such as minimum wages which will
significantly increase demand and contribute to economic
stability".
lower level.
The proposal to introduce a National Minimum
Wage at Rs 15000/- has been on the anvil for quite
some time in India. The demand and supply theory
of wages however would set the wages at a
significantly lower level. With labour supply being
available at lower levels of wages this macro level
policy of setting higher minimum wages offers a
Business
scope for "rent seeking" behaviour manifested
Knowledge,
through payments made to contractors who in turn
Motivation manipulate records and ensure lower payments to
theories workers. Works contracts are contracted which
obfuscate the difference between actual manpower
deployed and actual wages paid with the payments
received for the jobs done.
Compensation Survey
Benchmarking,Networking, Contentious issues such as the definition of
Mean, Median, Mode, wages in the Employees' Provident Fund Law
Regression provide enough space for both the principal
Pay Scales, Broad banding employer and contractor to play "hide and seek"
with the law through clever documentation and
management of employment durations.
Incentives None of these can be mentioned in a text book or
TOTAL PAY Variable Pay, Standards theory on Compensation.
Work Life Balance; Preventing Manipulation
Learning, Security
Psychological Contracts
STRATEGIC COMPENSATION A little known but nevertheless important theory
Aligning with Business Goals in compensation is the "Psychological Contract"
LEAD, LAG, MATCH , HYBRID which refers to the difference between expectations
and actual performance of obligations and duties
not specifically captured in the employment
contract. In other words the employment contract
LABOUR LAWS COMPLIANCE
and the psychological contract taken together
define the employment contract.
19 BUSINESS MANAGER
 www.businessmanager.in

However, when it comes to

contracts between company and
top executive appointments,
everything is mentioned in the
Ardhnarishvar inspired
employment contract and the
only psychological
manifestation of concepts is a
GENDER PARITY
certain lack of trust, deception
and expectation of outright
betrayal. Top executive
employment contracts now
include several covenants such
In a professional work environment,
as non - compete; non- Ardhnarishvar manifests as the representation
disclosure; non - solicitation
and non - dealing to prevent
of men and women in the organization. It also
breach of trust and mitigating depicts how men and women work together
losses due to dealing with balancing energies that they bring forward to
competitors. The psychological
contract ceases to exist in such collaborate and take business forward.
cases and legal interpretations
on specific clauses in contracts
hold sway needing a sound Mridula Sankhyayan
footing in Contract Law. The Founder and Leadership Coach,Vatt Vriksh Consultants,Bangalore
paradox though is that such top
executives expect the others
lower down in the hierarchy to

continue to be focussed and be
committed to the company and
their work.
Master - Servant
Relationship
The Master - Servant
relationship is at the crux of the
employment contract. Taxi
aggregators and their taxi
drivers do not constitute a
master - servant relationship in
the sense that we understand
employment relationships.
They are independent
contractors. But a U S Court has
ruled that there exists an
employment relationship
entitling the taxi drivers to get
social security benefits. In India
the drivers of Uber and Ola
have gone on strike much like
regular employees. Their
consideration, their incentives
and the points system of
monitoring their performance
across various parameters
suggest a remote administrative
control even though the
companies must have ensured
sufficient legally valid
covenants to prevent any
master - servant or employer -
employee relationship.
Text Book theory must
capture the changed nature of
determining Compensation
and must prepare the young HR
professional to face the real
world issues adequately. BM
A
s a child, I was fascinated by
the manifestation of Lord
Shiva. The aloof,
meditative, unconcerned,
half naked Lord with snake,
moon, skulls and lion cloth. While
Krishna and Ram have so many stories
and conversations to their account, that
you think, you know them in person,
while Lord Shiva is non-communicative
and yet easily pleased (Ashutosh: one
who gets pleased easily) as believed. I
found him full of contradictions and yet
he charmed me with his mysticism and
magnificence.
And then came the abstract
Ardhnarishvar. This was beyond me
and as a child I did not make an attempt
to dive deep in order to make sense of it.
Shiva - Shakti, Half
Man, Half Woman!
And I thought isn't
this what we are
trying to achieve? -
an equal
representation of
men and women,
50:50 gender ratio
in organizations!!
And despite the
best efforts world
over we are
nowhere close. In
fact, we may see
light at the end of the tunnel in 2186.
Longest tunnel in history. The World
Economic Forum predicts the gender
gap won't close entirely until 2186. It will
take us 170 years to reach 50:50
representation. Half men and half
women in organizations! So, I looked at
the parallels from Ardhnarishvar to
Corporate World and strangely in my
mind's eye I found some. Hopefully, they
will resonate with you too.
First
Ardhnarishvar represents the
synthesis of masculine and
feminine energies of the universe
(Purusha and Prakriti) and
illustrates how Shakti, the female
principle of God, is inseparable
from or the same as, Shiva, the male
principle of God.
Corporate connect: In a
professional work environment, this
manifests as the representation of
men and women in the organization.
It also depicts how men and women
work together balancing energies
that they bring forward to
collaborate and take business
forward.
Second
Ardhnarishvar infers: The
universe had risen from the union of
sexes.
Corporate connect: The rise of an
organization is driven by bringing
in male and female perspectives,
approaches and styles to drive
innovation in business, build high
performing teams and inspire a
culture to make an inclusive
organization that taps the potential
of diverse talents.

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Third
Ardhnarishvar conveys: The
interdependence of Shiva on his power
(Shakti) as embodied in Parvati. The
separation of two results in Shiva's
Tandav leading to an out of balance
catastrophic nature.
Corporate connect: This depicts that
men and women are naturally
interdependent. An imbalance in
gender representation will lead to
imbalance of energies. The imbalance
leads to aggression, conflicts, myopic
decision making, big losses,
psychologically unsafe workplaces and
the list continues.
Fourth
Ardhnarishvar: Across cultures,
hermaphrodite figures like
Ardhnarishvar have traditionally been
associated with fertility and abundant
growth.
Corporate connect: The gender
inclusion and gender parity in business
leads to an environment which is highly
productive and growth oriented.
Diverse perspectives are valued not
envied or feared creating employer of
choice organisations.
Fifth
Ardhnarishvar: Often, the right half of
Ardhnarishvar is male and the left is
female. The left side is the location of the
heart and is associated with feminine
characteristics like intuition and
creativity, while the right is associated
with the brain and masculine traits -
logic, valor and systematic thought.
Corporate Connect: In a corporate
environment, its symbolic and
manifests as the energies we need at
workplace to sustain profitable
business. It's important to state that
women are capable of showing valor
and men emotional intelligence. I see
the traits as gender agnostic. It's about
balancing the energies at workplace. If
we just demonstrated logic, analytical
thinking and bravado, we cannot create
an inclusive work environment that
fosters creativity, innovation and
emotional intelligence. These energies
when represented equally and
synergistically create world class
businesses that lead to unprecedented
growth and raise the bar to next level
evolution for mankind.
My bows to Ardhnarishvar that inspires
Gender Parity! BM
APRIL 2017
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Drop the labels,
please!
Aparna Sharma
Independent Director on the Board of T.S Alloys Ltd.(100 percent subsidiary of Tata Steel),Mumbai
O
ur society Another one, if you
lives by wrote a book during
Stereotypes! your corporate career,
Now, that we it was an indication
acknowledge that that you wanted to
the world & society hang your boots &
is constantly evolving, I had become an academician!!!! I
thought that by now in the found these really funny. My
professional world the story friend too, that's why she
would be different. discussed these with me.
As I was growing up, have In my view, any practising
heard of various stereotypes manager may want to share
even in the professional world his/her experiences for the
like for the role of a secretary, a benefit of others (students,
woman would be best; teaching practitioners, academicians
profession is good for women etc) by writing a book. Infact,
since they can take care of they are trying to create a body
families well due to better work of knowledge which will be a
life balance; a guy is the ready reckoner & help everyone
primary bread earner in a immensely. They straddle
family - a woman's income is between their highly
only supplementary; its okay demanding jobs & yet have the
for a man to be aggressive, if a zeal to contribute.
woman asserts herself, she is I can't understand the
aggressive which is not connection between authoring
acceptable etc. a book & retirement or the label
While some of these still of turning an academician!!!
remain or their degrees vary. Can you?
there are many more The society or the world at
stereotypes that keep coming large has strong perceptions
in, to add to the professional which have become stereotypes
potpourri! & we try to label people & fix
Very recently, a close friend them into frames.
shared some new ones I had What I told my friend, is that
not heard of them before nor I find such practising managers
did such thoughts ever cross my as versatile & multi talented
mind. who rise above their so called
In the Indian context, one professional defined roles to
strong one was that you must make an impact. They are rare
write a book or turn an author & need to be cherished &
only once you have decided to encouraged!
hang your boots in the Point to ponder & act- Can
corporate world either thru we drop the labels, please? & let
superannuation or even before; people be! BM
21 BUSINESS MANAGER

Cover Feature
FUTURE of
PERFORMANCE
MANAGEMENT
The writing on the wall has started
becoming visible that traditional
performance management systems
are going to be replaced sooner or
later.
Yet 80% of organizations continue not
only to generate performance scores
for employees but also to use them for
compensation purpose. The time is not
APRIL 2017
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far when modified version of PMS will
take over in majority of organizations.
Analytics and big data with the support
of technology will change the face of
PMS. The Performance management
system of future has to be outcome
driven, forward focused, engaging and
adaptive. Following pages are going to
reveal as to what all should have a PMS
of the future.
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Cover Feature

FUTURE of
PERFORMANCE The
MANAGEMENT
Performance
dialogue is
here to stay

PRASHANT SHARMA, President (Global Formulations Manufacturing & Operations),Cadila Healthcare Limited,Ahmedabad

M
ost organizations love the
Is it about concept of managing
performance, and most
managing employees think of this
performance, or exercise in a narrow
dimension. They often think of the
managing the dialogue as heavily loaded with a pre-
behavior that will determined agenda focused on a
produce the financial outcome for them. Is it about
managing performance, or managing the
performance? And behavior that will produce the
if it is indeed about performance? And if it is indeed about
influencing the person so that he has
influencing the clarity of agreed outcomes and the
person so that he support available to him to achieve
these, are organizations doing lip service
has clarity of to it or are they serious about the
agreed outcomes process? Are they really influencing his
behavior or is the Performance
and the support Management system seen as a fixed
available to him to match?
This is not just a provocative
achieve these, are statement. The biggest power that a
organizations manager possesses is his freedom of
discretion or latitude in decision
doing lip service to
making. Traditional HR depended on
it or are they tools like the Bell Curve to ensure that
the financial burden of salary increases
serious about the
was managed. The underlying
process? assumption was that the Gaussian curve
would apply to any organization. The
curve itself challenged the line manager
and in his mind deprived him of the
latitude in rating his people. In my view
this was more an emotional response
than an objective one. He resisted the
Bell Curve simply because he thought it
took away his power. A research paper I
read (done at IIM-A) spoke of replacing
the Bell Curve with the Power Curve. It
hinted that the performance of the
organization was driven by a minority of
superstars, supported ably by a thick
band of moderate performers and had a
small base of dead wood.
Let me share my own experience of
observing the PMS across multiple
organizations:
1. Does it measure
business outcomes or
activities:
I have seen some of the senior-most
managers try and hide behind activities
and avoid committing themselves to
clearly stated financial or business or
people outcomes. They would keep them
very open-ended and this sends a
message to their teams. In future I see
business holding their leaders
accountable to at least 70% outcome
driven KPIs. "Keeping team motivated"
will no longer be a KPI with 25%
weightage!
2. Individual goals
vs Team goals and
Functional vs Process
goals:
While we love to talk about inter-
dependence and collaboration, how
many of us are measured on team goals?

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The Performance dialogue is here to stay
Cover Feature
Unless you measure and
reward on team based goals,
especially at senior levels,
correct messaging will not
happen. I am not talking of a
small portion of Variable
linked to company's revenue
and profit. Companies will
need to look at larger KPIs
that transcend at process or
project outcomes than on
functional outcomes.
3. Kill the Bell
Curve. Long
live the Bell
Curve:
If organizations can
move to measuring people
with a solid linkage to
business outcomes, they
may still get a curve
resembling the Gaussian
Bell Curve, but closer to the
Power Curve I mentioned
above.
4. De-link
development
dialogue and
appraisal
discussion:
Unless organizations
invest heavily in creating an
honest culture where people
are trained to have difficult
conversations, the appraisal
discussion will risk being an
one dimensional wherein
rating and financial
outcome will hang heavy.
Organizations could do well
with having a dedicated
dialogue backed by a good
assessment process that
focuses on development
journey and career ladder of
the person. This is where the
employee, unburdened of
the pressure of linking
feedback to monetary
outcomes will be
encouraged to have a good
discussion on how can he
grow better.
APRIL 2017
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FUTURE OF PERFORMANCE MANAGEMENT
5. Increased Frequency:
Digitization, business outcomes based discussions and a
development plan that is being closely tracked; all these are
fertile ingredients for encouraging a quarterly discussion
on development. In most organizations a lot of
performance feedback is real time and a lot of performance
discussions are embedded in the multiple reviews most
organizations have as a part of their governance structure.
In addition to the structured quarterly or half-yearly
dialogues, organizations will increasingly depend on
performance feedback through the year using digital
platforms.
6. A good balance of
"What" and "How":
As we focus on the business outcomes, we need to assess
the competencies that led to these. That will help us
understand whether these success or failures were going to
sustain and what kind of development needs emerge in
helping the leader get to the next step.
7. Global frameworks:
Organizations need to have global frameworks backed
by strong digital backbones so their entire global footprint
is being motivated to have the same value system and
leadership competencies.
I feel the biggest challenge in shifting to converting the
"Performance Dialogue" into a "Growth Dialogue" will be
enabling the managers with the skill set to do so. What we
do not know well always scares us. Most of us were never
trained to assess people and their competencies or to have
structured feedback sessions and are rarely trained to have
difficult conversations.
While organizations will be able to measure business
outcomes well, assessing leadership competencies will be
an extremely important part of the performance
discussion. Organizations will thus need to invest in:
1. Knowing which leadership competencies they want to
measure universally. This will call for well researched
company specific competency frameworks being
developed.
2. Knowing how to measure these competencies:
Developing tool kits to measure each identified
competency.
3. Training Managers (not just HR Managers, but also
line managers) to use these tools. Thus they will be able
to get into behavioral event based discussions and
identify which competencies are strengths and which
need help on development.
The Performance Dialogue is here to stay. Like any
human process, it will keep evolving and challenging us. It
will always excite us with its power to shape the behavior of
the entire organisation and thus is too precious to be left to
the HR team alone! BM
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Cover Feature

FUTURE of
PERFORMANCE First,
MANAGEMENT
bring change
in philosophy
& mindset

RAJESH PADMANABHAN, Director & Group CHRO,Welspun Group,Mumbai

W
Today most of the ith the changing According to a research by Forbes,
dynamics of business worldwide only 6% of organizations
companies want to models, macro-economic think their performance management
re-think about their trends, digital processes are worthwhile. Many
disruption, performance companies have undergone a move away
performance management has become a hot topic of from traditional, metric-based
management discussion in the HR function. While performance assessment in recent years.
some of the organizations have re- Reason being employers and managers
process but before modelled their overall approach to largely work with their personal
doing so, it's a measure performance, some are "instinctive feeling" on who they like or
currently thinking of following the dislike. The bigger fact is that the overall
change in the industry trend and there are few that nature of work has changed and
philosophy and might continue with their current resultantly the skill set. The traditional
approach and may introduce small phenomenon of setting annual or mid-
mind-set that is changes in the times to come. term goals has been a point of worry
required. Just According to some sources, the largely due to shorter & much volatile
traditional form of performance cyclical fluctuations in macro & micro
simplifying the economic environment, changing
management system started around
process without 220AD where members of Wei Dynasty workforce demographics and rampant
believing in it will used this approach to rate official family speed of the technological progress. All
members. A more formal adoption of these put together are creating an
not get the desired this system took place during the 18th unending pressure of re-looking at
results. century in the US when around talent attraction and development
industrial revolution; workers were strategies.
evaluated and paid based on the output. By 2020, India is set to become the
Following century saw minor world's youngest country, with majority
improvisations in the approach, of its population in the working age
however appraisal systems for group of below 35 years. With the advent
measuring managerial and professional of artificial intelligence and predictive
employee performance weren't used data modelling, organizations today can
extensively until about late 1950s when enable this younger workforce using a
there was an emergence of 'Management mix of scientific tools to provide a better
by Objective'. Employees were appraised cultural alignment, functional expertise
on the basis of achieving short-term & capability building. I would like to
goals, jointly set by the employee and the share some steps that could pave way for
manager, rather than personality traits. introducing this change in approach.
There was also a shift in the purpose of 1. Real time performance feedback:
performance appraisal system towards A shift away from a 'long' annual or
employee development and feedback. Bi-annual process to a more frequent
Today, there's somewhat of a crisis of manner of capturing performance
confidence in the way industry feedback is becoming essential. This
evaluates employee performance. can help employees align their

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First, bring change in philosophy & mindset
Cover Feature
contributions to making a
real time impact. As a
result, organizations too
will be able to resolve a
real time problem and not
go all out to address the
ones with retro effect.
While it is important to
reflect on past results and
achievements, it is
equally critical to have
forward looking
conversations to address
performance gaps that
may arise in the future.
Annual/B-annual reviews
mean an employee has
about a limited duration
to check how they're
doing and their
achievements in the past
year. Frequent
conversations, will help
keep matters discussed at
the forefront of both from
employee and
organization's perspective
to deliberate on
'contribution' made /
expected rather than
discuss just performance.
2. Balancing the act: An
effective manager needs
to understand the skills of
giving out both praise and
criticism. While praise is
easy to give, it is far more
challenging and
unpleasant to give out
negative feedback. While
it is important to
occasionally show
employees where they
need to improve as people
generally respond more
strongly to negative
events than positive ones,
it is vital for managers to
learn how and when to
give negative feedback.
3. Disappearing
performance ratings:
Having a numeric scale to
calibrate performance
and employee
development just doesn't
work. It continues to
breed internal
competition that may lead
to an overall reduced
productivity. On the
contrary, businesses can
shift to evaluations in
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FUTURE OF PERFORMANCE MANAGEMENT
terms of how successful each member is at working
An effective toward company goals and what can be done to improve
within the desired timelines. Similarly, while data
manager needs around people analytics can provide insight into skill
to understand levels, it doesn't mean much about engagement.
Working towards employee delight similar to customer
the skills of satisfaction can be a real winner.
giving out both 4. Alternative to Bell curve: An alternative to the
praise and traditional Bell-curve seems to be gaining traction is
some parts of the world. According to some articles, a
criticism. "Power Law" distribution, also known as a "long tail"
indicates that people are not "normally distributed." In
this statistical model, there are a handful numbers who
are "hyper high performers," a broad swath of people
who are "good performers" and a smaller number of
people who are "low performers."It seems to have
different characteristics from the traditional Bell Curve.
For example in the power curve most people fall below
the mean (slightly). Roughly 10-15% of the population
are above the average (often far above the average), a
large population are slightly below average, and a small
group are far below average. So the concept of "average"
becomes meaningless. There are superstars in every
organization. Some employees could be 10-15 times more
productive than the average; such "hyper performers"
could be the ones to attract, motivate and empower.
Steep differentiation is becoming key and moving away
from socialistic and conventional distribution may fade
in times to come. Accordingly, the system needs to be
nurtured in recognising and rewarding appropriately.
5. Connecting the dots: A culture fostering trust,
openness and transparency along with simplicity of
executing the desired processes holds the key. Similar to
training on 'What' and 'How', employees must
understand the 'Why' quotient to establish the connect
between the offerings by the organization and personal
desires. How do I fit into the overall organisational
purpose draws a higher energy from individual?
6. Role of Technology: Predictive performance
management involves applying suite of statistical
applications that sift through vast amount of data to
discover meaningful correlations, patterns and trends.
Such analytic techniques for modelling, forecasting and
simulating potential outcomes can help answer critical
questions such as:
Which measures drive the business progressively?
Where do I need to improve and by how much?
Are employees aligned with the strategy?
How should I adjust my strategy and modify
initiatives?
Today most of the companies want to re-think about
their performance management process but before doing
so, it's a change in the philosophy and mind-set that is
required. Just simplifying the process without believing in
it will not get the desired results. How will this trend pan
out is still to be seen and we may see an increasing
adoption of variation in the process. Organizations that
are successfully creating a culture of ongoing performance
management are the ones transforming the process from
an annual administrative task to an ongoing, collaborative
strategic priority that delivers meaningful business
results. BM
26 BUSINESS MANAGER
 www.businessmanager.in

Cover Feature

FUTURE of
PERFORMANCE Towards
MANAGEMENT
stamping out
unconscious
bias

DR. SANJAY MUTHAL, Executive Director,RGF Management Search,Mumbai

The organizations where changes to PMS are taking place believe that
future of performance management will be where there are more continuous
conversations between the boss and their subordinates, rather than ritual
of annual event. Future PMS will become more personal, more real times,
open in terms of updating individual goals and their alignment to the rate
of change in the organizations.

A
re we done with Bell Curve?
Is forced distribution a thing
of past? What next - how do
we measure performances
in dynamic business
environment? These are the voices of
one hears when you take a walk in the
corridors of any corporation today.
Performance management is a tool that
has been fully utilized or may I say
exploited by the HR managers in an
organization. We in India have been
faithful followers of Bell Curve (GE
Model) for last atleast 3 decades. Before
we go to the future, lets look at how we
got here.
History of PMS
Economic environment and
Historical context has played a
significant role in the evolution of
Performance Management over the last
Century when there were excess people,
the focus of PMS was on which people to
retain and which people to reward. For
such purposes, historical appraisals
with emphasis on individual
contribution were useful. But when the
scenario changed and the talents became
scares, developing employee became a
greater importance.
Let's look at
how PMS evolved
It all started with World War I & II
where the U.S. military created merit-
rating system to flag and dismiss poor
performers. In 1950s Douglas McGregor
argued for engaging employees in
assessments and goal setting. It further
moved when in 60s & 70s, Inflation rates
shot up, and organizations felt pressure
to award merit pay more objectively, so
accountability again became the
priority in the appraisal process. When
1980s arrived Jack Welch championed

APRIL 2017 27 BUSINESS MANAGER

Towards stamping out unconscious bias
Cover Feature
forced ranking at GE to
reward top performers,
accommodate those in the
middle, and get rid of those
at the bottom. By end of the
century, organizations got
flatter, which dramatically
increased the number of
direct reports each manager
had, making it harder to
invest time in developing
each one of them. In 2011
Kelly Services was the first
big professional services
firm to drop appraisals, and
other major firms followed
suit, emphasizing frequent,
informal feedback. Recently
Adobe ended annual
performance reviews, with
the notion that annual
targets were irrelevant to the
way its business operated.
Now even Deloitte, PwC,
Accenture and others have
followed suit.
The recent trends have
indicated that many large
corporations mostly in the
western hemisphere and
many large consulting
companies are already
moving away from
traditional PMS. In 2014,
Deloitte survey found that
60% of companies survived
did not think that PMS was
an effective tool anymore. In
fact in 2015 many GE,
Accenture and Adobe junked
their old and traditional Bell
Curve driven PMS Process in
favor of more continuous
feedback systems.
In the traditional system
where goals are set at the
beginning of the year and
are reviewed at the end of
the year. Typically employee
does self assessment and
then sits with his boss,
reviews his / her
performance against the
goals set many months ago.
Boss then writes the
summary and assigns the
ratings to the employee. The
ratings are part of forced
distributions where most
employees fall in the middle,
APRIL 2017
www.businessmanager.in
FUTURE OF PERFORMANCE MANAGEMENT
The recent trends have indicated that many
large corporations mostly in the western
hemisphere and many large consulting
companies are already moving away from
traditional PMS. In 2014, Deloitte survey found
that 60% of companies survived did not think
that PMS was an effective tool anymore.
while a small minority fall at the bottom and small
minority at the top.
The biggest grouse against this system is the illusion
that boss feedback to employees will be helpful in driving
their performance. Whereas many feel the current system
is really designed to justify a ranking/ rating that is linked
to a compensation increase.
The critics believe that a one-size-fits-all approach to
managing performance does not take into account what
drives employee.
The Future of
Performance Management
Where do we go from here? The organizations where
changes to PMS are taking place believe that future of
performance management will be where there are more
continuous conversations between the boss and their
subordinates, rather than ritual of annual event. Future
PMS will become more personal, more real times, open in
terms of updating individual goals and their alignment to
the rate of change in the organizations. Future objective
will be more fluid and changeable than current Annual
KRAs. There will be frequent & ongoing feedback
discussions rather than typical annual once a year
conversation. There will be more emphasis on coaching for
individual development rather than ratings and forced
distribution. Teams will be a central focal point than
individuals.
Some experts believe for developing future PMS in
organization, HR Leaders should take into account
following major factors
- Stamp out unconscious bias
- Look at the future and not the past
- Involve everyone & create growth mindset
- Make feed back & coaching central to PMS process
- Separate rewards from development dialogue
We are anyways in exciting times in the history of
mankind. Future of PMS is going to make it more exciting
& hopefully meaningful. BM
28 BUSINESS MANAGER

Cover Feature
FUTURE of
PERFORMANCE
MANAGEMENT
SIMIN ASKARI, Vice President-Corporate HR,DS Group,Noida
A key change has been that performance management is now an
ongoing process rather than a mandatory post-financial year activity.
It is conducted all year around and specialist activities are mapped
against the overall achievements through the year.
P
erformance management has
gone through major avatars
and innovations in the last 10
years. This is partly due to the
change in the world economy,
geographically displaced workforces,
new economic sectors like IT and ITES,
rise of new markets like Africa and East
Asia and the need to integrate differing
cultural practices in one performance
template. This is no easy task. For any
organization which boasts of hundreds
of employees, some sort of format
driven performance management is
mandatory.
Bell curves or Pareto Curves are no
longer the favorite as many progressive
companies have done away with this
force fitment process. The calibration
against one another on the bell curve is
with the assumption that majority of
employees lie around the mean with a
smaller number over or under
performing. This may not reflect the
reality. Not everyone can be categorized
as an 'average' performer under the bell
curve and not just 1-2% could be
exceptional.
Performance grading has
traditionally influenced compensation
too. Levels are set against the rating
APRIL 2017 29
www.businessmanager.in
For an
effective,
transparent,
measurable
and motivating
PMS
acquired. This can add a skew if the
process is not transparent or if involves
only the line manager. Contamination of
data, views and personal preferences
makes the employee unsure of the
process. Such a single-line process also
makes an ordinary worker prey to
victimization. To make this process less
dependent on individuals, companies
also shifted to score card based
evaluation system, with specific KPIs,
linking it to financial perspective,
customer perspective and organizational
learning perspectives. This made the
process more quantitative and evidence
based which could be crosschecked and
reviewed by all levels within the
organization.
Over the last five years as companies
have undergone rapid changes in the
profiles of employees, young vs. old,
technical experts vs. service employees,
gender composition and the paradigms
of performance management have
further needed to be amended. One-size-
fits-all policy has been found to be
limiting in organizations where
multiple roles, across multiple offices
are carried out, often in varying and
different circumstances. A technical
expert at a manufacturing plant cannot
be clubbed with a person with the same
BUSINESS MANAGER
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Cover Feature FUTURE OF PERFORMANCE MANAGEMENT

To keep the process infallible, data is beginning to play a big role,

especially in situations where sales, revenues, channels developed,
measurable outcomes come into play.

qualifications and post in a HR specialists the world over agree that giving
management role at the constructive feedback is an art. As humans, it is not always
corporate office. Both may be possible to keep emotions or personal views out but
at the same level, the same increased training and information of successful
compensation package but international practices have helped line managers take the
their outputs are completely personal equation out and focus on the overall outcome.
different and hence their The introduction of 360 feedback system has helped make
performance management the employees also feel empowered to be able to give their
system cannot be made own views without fear of reprisal.
single dimensional. This is
where companies are now Of course, such a change takes time. We are embedded
linking performance systems into a hierarchical ways of thinking where 'power' flows
and their thinking to the from one influential individual and it takes time for an
overall performance of the employee to gain confidence to believe in the process itself.
organization itself. This also Learning and development takes time and HR decisions
ensures that the system is have to be seen as above-board and fair so that any
linked in to reality on the cynicism in the process can be eliminated and mistakes, if
ground and not just any, are quickly corrected. People in any organization are
personalities or on-paper concerned about giving any honest feedback because they
qualifications. feel that they will be penalized for it. If it can be kept
confidential in the real sense of the word, then HR would
A key change has been have made a great step toward building employee
that performance confidence and thence ensuring parity and honesty in
management is now an performance management. However, like any policy, this
ongoing process rather than too has a flip side. The HR teams have to ensure that even
a mandatory post-financial from the employee stand point, the anonymity does not
year activity. It is conducted lend it to being an issue of settling scores (since no one can
all year around and specialist find out who gave the feedback) and that the confidential
activities are mapped against process displays maturity and transparency. HR then has to
the overall achievements play the role of a mediator to ensure that no one gets to use
through the year. This gives a the process for his or her own personal agenda!
much-needed boost to
employee confidence and To keep the process infallible, data is beginning to play
their long-term performance, a big role, especially in situations where sales, revenues,
as they feel constantly channels developed, measurable outcomes come into play.
involved with a voice of their Data can be mined and it can alone demonstrate the value
own. This ongoing system created by an individual. Many international companies
also addresses issues that have developed skill sets and behavioral guidelines to
may crop up as the time goes match the role an individual fills. This data driven
forward; team issues, performance management is based on evidence, which can
resources, conflict be evaluated as part of the performance process.
management, barriers or
problems which may be out Finally, the issue is also about motivation to make an
of an individual's control. employee feel wanted and valued to keep up their
With this system, an momentum. Rewards and Recognition play a very big role
employee and a line manager, here. Many studies have proved that recognition by peers is
both can be more an immense motivator. In conclusion, the HR managers' job
constructive and can is cut out at multiple levels: actual target-based
intervene to improve performance on the ground, behaviors demonstrated, skills
performance as and when acquired and implemented feedback that is constructive
required, rather than wait till and constant recognition of desired outcomes and
an entire year has passed and behavior. It is an amalgam of all the above that will make
then use it as an academic for a rounded performance management system that is
exercise just to influence effective, transparent, measurable and motivating. BM
annual compensation.

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Cover Feature
FUTURE of
PERFORMANCE
MANAGEMENT
RAGHAV GARG, Manager-Human Resources,Snapdeal,Gurgaon
Constant transformation is the new normal, when it comes to the
performance management systems of today's organizations. We can see
three specific changes which organizations are aiming for - First, they
are discarding the "ranking" and the forced bell curve distribution of
employees. Second, annual reviews are being replaced with more frequent
ones-quarterly, or even weekly. Third, compensation reviews and
performance reviews are being done separately.
C
onstant transformation is the
new normal, when it comes to
the performance
management systems of
today's organizations. We can
see three specific changes which
organizations are aiming for - First, they
are discarding the "ranking" and the
forced bell curve distribution of
employees. Second, annual reviews are
being replaced with more frequent ones-
quarterly, or even weekly. Third,
compensation reviews and performance
reviews are being done separately.
As the trend suggests, most of the
organizations are advancing on this
path. However, a word of caution for all -
every new road will pose challenges of
its own and the upcoming PMS
processes are no exception. Before
adopting this, organizations need to
understand the challenges they are
currently facing and then take a call
whether they too want to tread this path
or not. The new version of PMS will
have its unique set of hurdles.
Highlighted below are the key
challenges, organizations would need to
APRIL 2017 31
www.businessmanager.in
Death of
the annual
appraisal :
Tread
caution
think about during their transition to
the new system.
Selecting high
performing talent
A vital part of annual performance
management (and its biggest criticism)
has been to rank team members against
their peers and categorize them into
Poor - Average - Top Performer buckets.
The top performing employees would
then be considered for leadership
development, potential assessment,
succession planning and other top talent
initiatives. All such initiatives select its
target audience on the basis of their
relative performance scores. However, in
the absence of a dedicated ranking
system, organizations would face a
challenge in identifying talent wherever
relative performance data is required.
Most of the organizations that have
moved on to the new system, have not
explicitly abandoned the usage of
relative performance scores. They are
BUSINESS MANAGER
Death of the annual appraisal : Tread caution
Cover Feature
still trying to find alternate
ways to determine what
proxies of relative
performance scores should
be considered for
shortlisting team members
for such initiatives. This will
be the biggest challenge the
new process will face and
credible solutions are still to
be arrived at.
Perceived
fairness in
rewards
Primarily two attributes
along with other market
factors have been used to
determine functional
compensation budgets - down to all
function's business impact
and function head's
performance. Budgets, thus
determined, are then
cascaded down to all
managers based on their
team and individual
performance. However,
determining the budgets in
the absence of relative
performance scores will be a
challenge. In times of limited
rewards budget, there needs
to be a common yardstick
across the function to
determine and allocate the
rewards on. If budgets are
determined based only on
absolute performance, there
would be a perceived sense of
unfairness in the process.
Employees with similar
ratings from different teams
might have different budgets
owing to their managers'
perception of the absolute
performance. While most of
the new age organizations
are moving away from
categorization of employees
for the purpose of rewards
provisional ratings are still
in vogue. To address this
challenge, the new appraisal
systems should effectively
aim to delink performance
appraisal from rewards
appraisal. At the same time,
APRIL 2017
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FUTURE OF PERFORMANCE MANAGEMENT
they should establish a fair process for distribution of
Primarily two rewards aligning to pay for performance model.
attributes along Communicating reward principles effectively and having a
with other market well-articulated compensation philosophy could also help
in ensuring organizations move forward on this path.
factors have been
used to determine
functional Cultural Impact
compensation
budgets - - In my experience, I have seen managers trying to avoid
having difficult conversations with low performing
function's employees till the time such an action is mandated. A
business impact system where there are no relative ratings, might
and function actually encourage such evasive behaviours in managers
as they might carry the burden of low performers in
head's their team till it is bearable and in the process actually
performance. shield them against any corrective action. To correct this,
managers should be encouraged to identify low
Budgets, thus performing employees on the fly and then coach them so
determined, are that corrective action can be taken at an early stage.
then cascaded - Moving to 'regular check-ins' requires a culture that will
encourage the managers to take deep interest in a team
member's development and keep providing regular
managers based feedback to them. They should be able to regularly
on their team and observe behaviours exhibited by their team members
and have developmental conversations with them. Just
individual adding another scheduled meeting to a calendar,
performance. without the supporting culture and active participation
from leadership will be a perfect recipe for failure.
Organizations will have to ensure that their people,
processes and systems are aligned to support this
periodicity and the same is ingrained in culture.
Re-invent HR Practices
Lastly, most HR initiatives - succession planning, top
talent identification and retention etc. consider relative
performance ratings as the eligibility criteria. They
weren't designed to accommodate continuous feedback
with absolute performance scores. To keep up with the new
performance measures, the traditional practices will have
to evolve. Organizations would need to find alternatives to
relative performance measures, while being true to the no-
bell-curve philosophy.
It will be interesting to see how well the organizations
try to find answers to these challenges while adapting to
the new performance management practices. Most early
movers are yet to figure these out. Some fundamental
questions need to be answered first in order to address
these: 1. How do we ensure that every employee feels the
process is fair and transparent to them? 2. How does the
role of Compensation & Benefit team changes so that they
add value to the process 3. How do we build managers'
capability in the times of byte sized learning? 4. How does
organizations keep track of these 'check-ins' and derive
adequate value from them?
It is a long way to go, beforeyou call it a "system" which
has closed the loop. BM
32 BUSINESS MANAGER

Cover Feature
FUTURE of
PERFORMANCE
MANAGEMENT
HAMSAZ VASUNIA, Head HR & Training at DCB Bank,Mumbai
L
ife is full of tests and
contests. We had to do well
in exams when we were
young, had to score well in
the entrance tests to get into
a good B School and as we get older will
have to do well in our medical Tests.
Amidst all this, appraisals are yet
another test. a report card of the
year gone by. A test that will decide if
you can buy that car, afford a house or
go for a long holiday this year. The
stakes are high as the one thing our
country has gained over the past few
decades is competitiveness. And most
of the times it's not about what you got,
but it's about what the others got.
So this article is for all HR
professionals who will be busy during
this time of the year. Busy as we not
only have to deal with several
spreadsheets, documents and an
elaborate appraisal process (that is
hopefully online), but mostly cause we
have to deal with several aroused
emotions of ego, disappointment and
anger. A lot of these directed to the HR
function. One of the other tough parts
about the appraisal process is that on
one side we have fairness &
consistency in mind and on the other
side there is business and practical
issues to take care of. And I believe that
a good HR professional has to balance
both. It's very easy to have a well-
structured model that is based on
market data, bell curve and compa
ratios, but it's very tough to know
where to draw the lines.
The tragedy of creating a fair
reward system is the need to deal with
fewer variables. Few variables mean
we need to categorize people in buckets
or ranks or ratings. This allows us to
APRIL 2017
A hell
of a Bell
to manage
One of the other tough parts about the
appraisal process is that on one side we have
fairness & consistency in mind and on the other
side there is business and practical issues to
take care of. And I believe that a good HR
professional has to balance both.
then build several models that we
think are the most fair. Not just that, in
order to ensure evaluations are
consistent, we force rank people into
the BELL CURVE.
So my question to all HR
professionals is that does it really
work?
If we do not expect our employees to
compare each other's salary and
bonuses, why do we propagate a
relative rating mechanism that
compares their performances?
Is trying to be fair the most unfair
practice?
Can we deal with the rewards
exercise without really putting a
number on each employee?
Can we do this differently?
I don't have an answer to that
question. And even some
organisations that claim to have
eliminated ratings actually haven't.
They have just camouflaged it to a
certain extent. But I do know that the
'how part' is as important as the 'What
part'.
Following are some of my
learning around managing the
process:
Firstly, do not take to heart the
33
www.businessmanager.in
nasty blaming comments. It's what
the doctors need to endure when
they have to give the bad news.
Make sure that you try as hard as
possible to create an environment
where development of the employee
remains core to the appraisal
system.
You will have to make exceptions to
your process. Just let them be few
and let them be the right ones.
Your reward strategy cannot be
kept a well-guarded secret. Talk to
your stakeholders about the
rationale. Either you are
transparent or you are unfair.
Take some effort in creating a good
perception about the process. A
little marketing helps. Everyone
likes an attractive package (No, I
didn't mean salary package).
One emotion that either gets over
played or forgotten is 'Empathy'.
Don't get completely carried away by
emotions. However, without empathy
you will be like the 90s multi-starrer
movie. They had everything except
an audience. BM
BUSINESS MANAGER
 www.businessmanager.in

Cover Feature

FUTURE of
PERFORMANCE Making
MANAGEMENT
PMS
relevant

DR. BHUPENDRA KAUSHAL, Vice President - Corporate HR,Ginni Filaments Limited,Noida

H
It is desirable that istorically, it is needed to merits but success depends upon its use
HRD maintains a measure the performance of in true sense. In most of the cases,
an individual in an appraisal system fails due to poor
record for follow-up organization for deciding implementation from top to bottom or
actions for the his/her career growth for poor commitment from top, which leads
individual and organizational to reluctance in appraisal system or loss
success of appraisal development. In the corporate world of faith into a performance appraisal
system. It may be PMS system has been developed to system resulting into favoritism leading
understand the deviation arisen out of to failure.
concluded that differences between Job descriptions Point-wise Appraisal: Normally,
OKRA based PMS and Job specifications, which are employees are rated on 0-10 Scale
measured and improved through comprising of functional and
system is suitable in training and development initiatives for administrative criteria but fails because
present time at the his/her career development. In of no connectivity of the objective or no
Govt./PSUs it is known as Annual knowledge to appraise about his / her
time of cut throat Confidential Report(ACR) which is done performance / development area. The
competition and annually with almost no transparency appraisals are done by Supervisor single
unless and until the performance is handedly. This system was in practice
management should extremely poor. Academically, there have for more than 3 decades but replaced by
implement seriously been different theories as under: other methods.
for success of a) Classification Method. Appraiser-Appraisee Interview:
organization to b) Ranking Method. This system bridges-up the gap, which
c) Point Rating Method. was arisen out of point-wise appraisal
arrest attrition. system but could not sustain because of
d) Point-wise Rating Method. having no linkage with objective/
In the corporate world, following organizational goal linkage. Therefore,
tools were adopted as per the this system also did not gain confidence
progression of time. and almost collapsed about 2 decades
Point-wise appraisal. ago.
Appraiser-Appraise interview Self/Online Appraisal: This system
appraisal. was started for appraising the work of
Self/online appraisal. executive and above wherein number of
360 Degree appraisal. man-power is large, which has lead to
OKRA/KRA based appraisal. online appraisal system. Since the
supervisor and appraisee are not able to
The above mentioned methods of
meet each other due to distance barrier
appraisal systems were found fit at that
and appraisals are done ONLINE. This
particular time period but became
system is still prevalent mostly in
obsolete in a phased manner as per the
software industries or industries of a
changing business scenario and
large manpower. The success of the
changing skill sets. Each appraisal
system depends upon how much the
system did have some merits and de-

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Making PMS relevant
Cover Feature
Business leader unleash his long term goal i.e. 5 years target and
share annual operative plan (AOP) review meeting with unit heads and
functional heads (UH/FH) annually. The unit heads/functional heads
KRAs are designed and appraised.
employee is computer/IT
savvy.
360 Degree Appraisal:
This system is mainly
prevalent in knowledge
based industry or existing at
the senior levels wherein an
employee is appraised by
seniors, juniors, peers,
customers and vendors
towards the performance of
an individual. This system is
not adopted at all the levels of
hierarchy due to lack of
maturity level of people
involved prevalent in the
industry.
Objective based KRA
(OKRA) or KRA based
Appraisal: Business leader
unleash his long term goal
i.e. 5 years target and share
annual operative plan (AOP)
review meeting with unit
heads and functional heads
(UH/FH) annually. The unit
heads/functional heads
KRAs are designed and
appraised. KRAs of unit
heads /functional heads are
further cascaded from their
KRAs into departmental
KRAs and departmental
KRAs are cascaded into
individual KRAs, based upon
the targets set for the unit
heads /functional heads. The
appraisals are done annually
but mid-term review is done
six monthly / quarterly, to
correct one's performance. In
the normal course, 80% of
weightage is given to the
KRA and 20% are allowed for
individual behavioral
attributes etc. This Form of
appraisal system is mostly
successful in the current
decade, provided KRAs are
designed scientifically at
each level of hierarchy and
mid-term reviews are done.
These OKRAs/KRAs are
prevalent in Google, IL&FS,
JK Group to name a few.
APRIL 2017
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FUTURE OF PERFORMANCE MANAGEMENT
ROLE OF HRD DEPARTMENT:
The success of the appraisal system in an organization
will depend on the role played by HR in implementing and
monitoring the system.
The HRD department should explain the concept,
appraisal guidelines and implementation procedure and
carry out the necessary training and counseling,
wherever required.
It is very important that the appraisal forms are
completed timely and objectively and each form is
scrutinized by the HRD department for proper filling up
of the forms as per the system and guidelines before its
finalization and the appraisal discussions.
HRD department is not the "Appraiser" or "Evaluator"
of the rating. Their role is to ensure "System &
Guidelines" finalized by appraisal committee.
ROLE OF DEPARTMENT HEAD:
The department head should review the appraisal form
filled by immediate superior on the basis of his personal
knowledge of the appraise performance, strong
points/weak points, potential for growth & training
needs etc.
Encourage proper objective standards of evaluation in
your department.
Conduct along with appraisal committee the appraisal
discussion in a smooth and healthy manner and find
objectives as planned versus additional.
Decide what 'Follow-up' actions' i.e. training, transfer,
job rotation, job enrichment along with the HRD.
Assess the growth potential of the appraisee. The level
& type of work in near future i.e. 1 to 2 years and in
distant future i.e. more than 5 years.
ROLE OF APPRAISEE:
Appraisee should take the appraisal discussion
objectively and seriously. He should give his view point
wherever he/she needed should end up with a positive plan
of securing strengths and covering weaknesses including
training etc. in the interest of appropriate career planning.
APPRAISAL DISCUSSION:
One of the most important aspects of a good appraisal
system is conducting of the proper Appraisal discussion
with the appraisee by appraisal committee along with the
department head.
Department Head should spare sufficient time to make
sure that appraisal discussion ends with a proper
35 BUSINESS MANAGER
Making PMS relevant
Cover Feature
understanding between
the appraiser and
appraisee.
Conducting the
discussion:
The Appraisal disussion
should start with the job
description KRAs to avoid
ambiguity, if any.
The appraisal discussion
should convey the idea -
"All of us have strengths
and weakness".
The weak points should
be addressed by training
& development.
Training needs and
growth potential in
general should be
discussed and made sure
that it is taken positively
by the appraisee.
Joint objective setting for
the next year, joint action
plans for improving
weaknesses and building
over strengths.
If the Appraisee does not
accept a particular rating
in spite of detailed
discussion with data and
examples etc. then the
same may be referred to
higher level.
FINALISATION OF
APPRAISAL AND
"OVERALL RATING:
The finalization of overall
appraisal of an employee
is to be done once
reviewed by a reviewer/
apex committee.
The purpose of the
appraisal system is not for
deciding only the salary
increase and promotion of
that year but for helping
in finalizing a long-term
career plan.
On the basis of the overall
appraisal, classification
may be done for all
employees under the
following four categories
for career planning:
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FUTURE OF PERFORMANCE MANAGEMENT
1. High performance/high potential
Each
2. High performance/moderate potential
organization 3. Moderate performance/low potential
for faster 4. Low performance
communication The career planning will decide the job responsibilities,
plans its job rotation, training, promotion and salary increases
structure as per etc. for the next few years. Each year considering the
latest appraisal also the career plan is reviewed, and
organizational appropriate action for higher responsibility, salary
goal and concept.
increase, and promotion etc. for that year is taken.
The designation
system and salary PROMOTIONS:
ranges are fixed In an open and competitive market situation,
for these organization structures are getting leaner and flatter for
organizational effectiveness. Each organization for faster
levels. communication plans its structure as per
organizational goal and concept. The designation
system and salary ranges are fixed for these
organizational levels. All the jobs are evaluated on the
basis of responsibilities and complexity existing
various organizational levels. The applicable
designation and salary range for each job is thus clear
from this system.
The Promotion is only considered if the individual is
effectively performing the job and able to take-up higher
level responsibility subject to availability of
vacancy/position. The Promotion is an important part
of career planning and not a one-time reward, while
considering a promotion the current appraisal along
with previous two appraisals should be reviewed.
INCREMENTS:
Increments whether normal, special or high are decided
on the basis of the individual's job level/Job responsibility,
salary range applicable to the job level, his present Salary,
internal comparison and his performance/potential level.
FOLLOW-UP ACTIONS:
After the appraisal discussions with appraisee, the
department head and HRD should separately decide and
record the follow-up actions.
Training needs should clearly emerge from the
appraisal system for covering weaknesses for
developmental growth of the individual.
Follow-up action regarding job rotation, job
enrichment, transfer and career pathing should be
recorded on the appraisal form at the end and
implemented jointly by the department head and HRD
after approval of management.
CONCLUSION:
It is desirable that HRD maintains a record for follow-up
actions for the success of appraisal system. It may be
concluded that OKRA based PMS system is suitable in
present time at the time of cut throat competition and
management should implement seriously for success of
organization to arrest attrition. BM
36 BUSINESS MANAGER

Cover Feature
FUTURE of
PERFORMANCE
MANAGEMENT
DEEPANITA DUTTA MAZUMDER, Founder Director,STRIDE Human Skill Management Private Limited,Kolkata
Sympathizing, understanding and mind connect is more essential
requirement for HR professionals with all stake holders, in my belief and
perception to manage performance in future.
W
hen we speak of HR, the
first and most oriented
definition which comes
to our mind is HUMAN
RESOURCES...... did we
ever tried to redefine HR as "Hansatey
Rakho" !!
Within this universe of generally
defined HR, we have components like the
JDs, KRAs, KPIs, PMS, KSAs, Appraisal,
Attrition, Behaviourally Anchored
Rating Scale [BARS], Core
Competencies, Benchmarking, Change
Management, Emotional Intelligence,
Employee Retention, Empowerment,
Ergonomics, Goal setting, Group
dynamics and so on and so forth.
All the above terms look very
familiar, isn't it.....? Some of my valued
readers may have already started
thinking of the terms which are not
mentioned here. The HR professionals
generally have been subjected to remain
within the prescribed ambit of HR, as a
topic mostly - which progressed, adopted
and adapted with business and
organizational challenges.
An individual human being performs
to the best of his/her abilities when - the
body, the mind, energy, knowledge, living
& lifestyle - all are aligned and balanced
APRIL 2017 37
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Alignment
of body
with mind
towards positive orientation. Future
performance management needs to
devise ways and means to work upon
this combination of tangible and
abstract aspects rather than only
focusing on the technical attributes.
When I say abstract, a question may
arise - has anyone been able to ensconce
abstract into tangible form?
The body and mind is reactive to the
surrounding situation and environment.
Mind is free to veer in any direction,
purely driven by perceptions and
individual understanding and
interpretation, which may or may not
depend upon proven past experiences.
Also, in the whole physical anatomy,
mind is something which at times acts as
conflicting and contradicting reactant.
The knowledge entirely depends on
situational tangible elements during the
process of growing up of the individual.
Enhancement of knowledge, by way of
seeking further refinement and
updation of course depends upon the
person's willingness to pursue and
acquire more awareness and clarity to
develop and enrich himself/herself.
Energy is a relative factor, dependent
on host of features like food intake,
physical wellness, etc. living & life style
BUSINESS MANAGER
Alignment of body with mind
Cover Feature
in present time is well
influenced by technology
and its advancements.
So...... where and how
does once begin to work on
these combination of
abstract and tangible factors
in order to formulate future
performance management?
I believe that, going back
to our roots may be the best
option, for a change !!
A reference here may be
made to "Hawthorne Effect" -
a term produced as a result
of an experiment conducted
by Elton Mayo, whereby he
concluded that expressing
concern for employees and
treating them in a manner
which fulfils their basic
human needs and wants will
ultimately result in better
performance.
To take a step in this
direction, we may consider
interspersing our various
employee engagement
activities with innovative
solutions. The Training &
Knowledge sharing sessions
may include periodic but
regular yoga & meditation
sessions. A flexible healthy
body nurtures an open and
receptive mind. The moment
the mind's chatter becomes
silent and the person can
focus on nothingness all that
is relevant surfaces and that
which is garbage gets out of
the whole system. The
process will eventually lead
to heightening of energy
levels in the individual too.
The feel good factor may
further be able to arrest
attrition in today's highly
volatile talent jerky market.
Enhancing knowledge
through individualistic
approach may be considered
more apt by an employee,
rather than as in big group
approach. Talent blossoms
best, when given more space
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FUTURE OF PERFORMANCE MANAGEMENT
The Training & Knowledge sharing
sessions may include periodic but regular
yoga & meditation sessions. A flexible
healthy body nurtures an open and
receptive mind.
and scope, rather than in a bunch, where everyone tends to
elbow each other. All that is required to connect individual
talents to create group excellence.
On an average, in the daily defined time of 24 hour cycle,
an individual spends 8-10 hours of every day life and
moments at work. The rest 14 - 16 hours is devoted to family,
friends, daily chores, etc. Given a situation, where the body
is well aligned with the mind - there happens to be high
energy level which the individual experiences internally,
everyday and every moment. Then living and life will
generally happen in a more sorted manner. This in turn
will create a sense of blissfulness which shall certainly
have a direct impact on the individual's performance.
There are many ancient but very recognizable objects
in our country which defines the performance of those
long forgotten minds and hands - who have left behind time
tested deliverables, when human resource management, as
we know today was not there to intervene, guide and
neither measure individual/group Performances.
The Kedarnath Temple in Uttarakhand - which
withstood the great Himalayan Tsunami;
The Taaj Mahal ;
Sun Temple - Konarak ;
Sanchi Stupa ;
Meenakshi Temple ;
Qutub Minar...... and numerous more located across the
length and the breadth of this great land.
Hence delving in our ancient past may surely yield
much more appropriate results in finding means of
devising processes of performance management which is
future oriented, as our populace through eons has shown
performance in every sphere, be it in developing
knowledge centres and education hubs, city building,
structure building, Trade and Commerce - both domestic
and international, cultural excellence, as also have shown
tremendous resilience and pliability in face of repeated
aggression by plunderers/invaders.
In conclusion, sympathizing, understanding and mind
connect is more essential requirement for HR professionals
with all stake holders, in my belief and perception to
manage performance in future. BM
38 BUSINESS MANAGER
 www.businessmanager.in

employees who have not been able to adjust to this and have started leaving
Can the organisation.
What remains as the core principle of holacracy is the decision making
process which allows it to take decision without any manager instead there is
Indian a lead person responsible with the communication of the details both inside
and outside. However, the thriving of this holacratic culture is possible only
when the employees are self-regulated and initiative taker. If not then we will
organisations face the ultimate mismanagement of the organisation.
The challenges present with the current corporate culture however does
give us an opportunity to try this because of its various benefits that it brings
adopt to the table as:
Agility Transparency Adapting to changes
Free flowing Purposeful Scalability
holacracy? Agility: Every start-up faces this situation where the employees have to
take decision in hand and in a quick manner here this holacracy comes handy
where the employees have the authority to discuss the case scenarios in hand
and take the decisions quickly without waiting for the approval of the senior
Nikhil Abhishek Mishra most person.
Manager (Tie-up and Partnerships) for Gautam Solar Private Transparency: Since everyone is involved in the process it guarantees the
Limited,New Delhi
complete transparency of the system without any problem. The entire process
has involved all the concerned parties thus bringing the transparency in the

T
he term holacracy was first developed process.
by the entrepreneur Brian Robertson
Adapting to changes: The agile systems are also comfortable to adapt to
and later came to spotlight with the
the changes happening in the business world and since the entire process
start-up firm Zappos adopting it.
happens at a much greater speed than that of the hierarchical one plus the
Holacracy in its approach is a democratic working style of the start-ups also help them in adapting the changes in the
concept where the emphasis is being laid on world.
the democratic decision making rather than
Free Flowing: Since, Holacracy is a process driven concept everyone
following the hierarchical order. It doesn't
knows the procedure of taking the actions and the decisions are taken after
means that there is no hierarchy in the
discussing all the important aspects of matter and everyone involved in the
system. Rather than that there are circles at
process has his own viewpoint and is free to pitch it in. This makes the ideas
each and every hierarchy which helps in
flow freely without any hindrance. This on the other
decision making where no one particular
hand helps the start-ups in coming up with potential
post or person is responsible for taking the
ideas of business and processes to add edge to
decision. Rather it is the group of people at
themselves.
that level/circle who collectively take
decisions regarding the matter in hand. Purposeful: The other intent is of employees
being purposeful or we can say that decisions being
In this write -up we will, however, be
purposeful which help in solving the problem. This
discussing the possibilities of holacracy in
helps in being focus on different aspects of the
the Indian corporate culture. It has been
meeting and avoids any unnecessary delay in making
observed that the corporate culture
decisions.
prevalent in any country draws its
structures or gets affected by the societal Scalability: However, the picture is not all glossy,
structures prevalent in the society. other things being true, it faces the ultimate test of
the scalability as the start-ups after initial success of
But with the change in times and the
the idea at a smaller level tries to capitalise on it and
next wave of globalisation kicking in we
scale it to a much bigger platform. This presents a much bigger challenge as
have seen new entrepreneurs armed with
we have already seen that employees form the most crucial aspect of this
technology and new set of ideas are ready to
concept finding employees at much faster rate which suits this culture is one
create new space and experiment with it.
problem, training them in this new system is the other problem as well. The
These new set of entrepreneurs have one
next challenge is the functioning of this concept in a large organisations
thing in common i.e. they all have come up
having top -down hierarchical structure. Once this idea is operational and the
by challenging the status quo or the set
organisations grows up with it will find so many layers of decision making
norms of doing things in our day today
that it becomes impossible to take a decision on quick basis. The entire
lives. They have explored the unique
process becomes so slow that even the simplest decisions may take long time
opportunity to shape the corporate culture
to get settled and if some major decisions are to be taken as in the case of
of the country.
start-ups which happens more frequently it will be even more cumbersome
However, there are certain challenges once they grow into a large organisation.
that this idea faces in the wake of
Conclusion: For this, one of the important things which have to happen is
prevailing organisational culture. First and
the self-regulating environment and the drive amongst the employees to
foremost being the employees itself.
succeed. If any organisation succeeds in implementing this concept even after
Holacracy is all about self-motivated
growing on a large scale it will help them in becoming a very successful
employees with their own
organisation.
Morningstar/guiding light to be able to take
decisions. However, there is no guarantee However, the chances of success of that organisation being a start-up are
that they will be able to imbibe the same much higher as they can imbibe this aspect into their organisation from the
amongst the other members of the company very beginning. Thus, making the implementation is much easier in new
as we have seen in the case of Zappos organisation than the existing one. BM

APRIL 2017 39 BUSINESS MANAGER

Putting the Human Back in HR
Time for new beginnings!
By Prof. Arup Varma
I am proposing that we take a fresh look at my favorite
part of the HR function - performance management.
Accordingly, I am starting a five-part series on managing
people's performance. After all, as long as there are
people performing jobs, there will be a need to manage
them and their work. Clearly, there is a need to organize
the system and processes related to individual work.
However, too many organizations too often get caught
up in the processes and systems and forget the primary
purpose why these were set up in the first place.
As such, over the next five issues, I am going to
attempt to describe and discuss the key considerations
involved in managing work, and by extension managing
people, without resorting to too much jargon. In this
issue, I want to address two of these many elements of
work - first, hiring the right person for the right job, and
next, making sure the individual understands what
he/she is supposed to do and why. Clearly, these are the
most critical pieces of the puzzle.
Let me explain these further with the use of some
personal anecdotes. In the mid to late 1980's, I used to
live in New Delhi, and was very lucky to have found an
outstanding Man Friday, Teju. Teju had come to me
through a dear friend, who was moving and couldn't
utilize his services anymore. Teju was so adept at handling
all the chores of a single household that I became fully
dependent on him. He was an excellent cook, a terrific
housekeeper, and pretty much managed all related
activities. Without realizing it, I had become totally
dependent on him. When he suddenly announced that
he was leaving for a better opportunity, I was stumped.
Lesson number one - nothing is permanent and yet,
nobody is indispensable.
Over the next couple of weeks, I struggled to find a
suitable replacement - perhaps because I was expecting
to find a carbon copy of Teju. Finally, I asked a friend's
driver to help find me someone who could help out with
the basics, while I searched for a more suitable
permanent replacement. Sure enough, the next day Mr.
Muru showed up all eager to get started. There was just
one problem - Muru did not speak any Hindi, and I spoke
just enough Tamil to get into trouble, but that's another
story for another time. In any case, being desperate for
some help, I decided to hire him, with one condition - I
would first test him out before committing to a long term
arrangement. Accordingly, his first assignment was to
make tea, and serve it with some snacks when my friends
came over. To my pleasant surprise, his first effort was
very successful and I offered him the job. A couple of days
later, some friends were visiting and we decided to have
coffee instead of tea, and so the request was conveyed to
APRIL 2017
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Column
Loyola University,Chicago
him through a smattering of Tamil, English, and sign language combined.
When Muru brought out the nicely decorated tray, the first sip of his freshly
made coffee resulted in a few confused expressions. Truth be told, the coffee
tasted like nothing any of us had consumed before. A couple of follow up sips
failed to clear up the mystery, though it did become clear that we were not
going to be able to drink any more of the mystery beverage. When we asked
Muru to tell us how he had prepared the coffee, his detailed description had
us all laughing out loud. In brief, he had proceeded to make tea the way he
had been taught - place water and ginger and cardamom in a pot on the
stove, add tea leaves and milk and sugar, when the water starts boiling - lift
the pot off the flame and then put it back - do this a few times, and the tea is
ready! Before our stunned expressions could turn into smiles, he explained
that he then proceeded to pour the tea into cups so far so good. We were
expecting him to say that he had replaced tea with coffee this time around.
However, he had never made coffee, so he did not know what to do. As he
explained to me later, he simply added a spoonful of coffee to each cup of
tea. The resultant drink, which we jokingly called choffee for a long time was,
of course, highly unpalatable. However, this got me thinking - Muru had
never been trained to make coffee, so he improvised. Also, since I had
company he decided not to bother me, and just went ahead and did his best.
Lesson number two - just because someone can make tea, does not mean
they can make coffee. In other words, we need to be careful when we make
assumptions or extrapolations about individuals' abilities. If we want people
to do something, we have to make sure that they know how to do it or, when
necessary, show them how to do it.
Over the next few weeks, Muru started doing better and better, and we
managed to start communicating, though only barely. In any case, I decided
to stop hunting for another Teju, and accept Muru as the new Man Friday,
instead. Almost immediately after I accepted this fact, life got easier, though
interesting and amusing surprises seemed to creep up from nowhere on a
regular basis. In those days, I used the services of a very popular dhobi in the
neighborhood who would stop by regularly to collect dirty clothes and bring
them back the next day, washed and ironed. A few weeks after Muru started,
the washerman took ill, and sent word that he would not be able to come by
for a few days. I asked Muru to take my "good" shirts over to the laundry in
the market nearby, but Muru offered to wash them at home. I was reluctant
to let him handle a couple of my favorite shirts, but seeing his eagerness, and
the fact that he was a fast learner, I agreed. As he was putting the dirty clothes
into a bucket, I tried to explain to him that the two formal shirts were rather
expensive and should be treated very gently, instead of the usual treatment
the other clothes got - scrubbed vigorously with a nylon brush, and beaten
repeatedly onto the wooden washboard. All my efforts seemed to be failing,
as he kept giving me his by now familiar blank expression. I was almost out of
ideas, so I simply picked those shirts out of the lot and gestured that I would
wash them later. Suddenly, his face lit up, and he excitedly yelled out "export
quality!" He then proceeded to wash those shirts exactly as I had hoped --
gently and with utmost care. Lesson number three - when you have to
communicate - use language and jargon that the employee understands. In
other words, a working relationship requires both parties to learn new things.
I hope you enjoyed my walk down memory lane. I will follow this up with
more anecdotes on performance management in subsequent issues. BM
40 BUSINESS MANAGER
LABOUR PROBLEMS & SOLUTONS
Anil Kaushik Management Expert -HR & IR
LINE
Solutions provided here are in context to narrated facts & not in general.
Q. Can you throw light on what factors EPF
Authority considers while deciding about
the employer-employee relationship for the
purpose of coverage of such employees
under the EPF Act.
Ans. It is seen that normally the attitude of the
EPF Authority has been to consider all persons
working in the establishment as employee to
cover them under the Act and direct the
management to extend the benefit of the
provisions of the Act. But recently Bombay
High Court in the case of The Pachora Peoples
Co-operative Bank Ltd. vs. The Employees
Provident Fund orgainsation. 2017 LLR 229
have framed the guidelines for the EPF
Authorities to consider the following factors
while deciding the issue of employer-employee
relationship:
(a) The EPF Authorities should collect
Payment of necessary documents by inspection of records
any customary of the establishment/industry/management.
bonus such as (b) A direction to the management to produce
attendance the documents as may be found necessary,
should be issued whenever the EPF Authorities
bonus, festival realize that the management is holding back
bonus or the certain documents.
like does not (c) The appointment orders/contract letters or
absolve the agreements in between the Employer and
contract labour or contractor should be made
management available for scrutiny and should be taken into
from their consideration.
liability to pay (d) Based on such documents, the EPF
statutory Authorities must adjudicate on the following
aspects:- (i) Whether, the contracts/
bonus. appointment orders have a semblance of
employer-employee relationship?
APRIL 2017 41
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(ii) Whether, there is supervision control
and direction of the employer over such
contract labour?
(iii) Whether, these contract labours are
under an obligation to work only for a
particular employer or its branches?
(iv) Whether, these contract workmen are
permitted to work or undertake any other
business, job, profession or calling?
(v) Whether, such contract workmen are
primarily dependent upon the work of that
particular establishment/employer/
management?
(e) Interrogate the contract employees to
elucidate information about their exact nature
of duties.
(f) Based on the documents and an analysis
upon considering the above mentioned factors,
the EPF Aughority will have to arrive at a
conclusion supported by reasons that such
contract employees can be termed as
workmen having employer-employee
relationship with the employer and are being
paid wages disguised as commission. The said
commission amount would then be termed as
basic wages under Section 2(b) of the EPF Act.
Q. We have a NGO devoted to cleaning of
public places like parks, roadsides etc
working towards swachch bharat abhiyaan.
Our members work voluntarily but also call
some sweepers on many occasions when we
undertake cleaning of deep drains. Are we
liable to pay minimum wages to such
sweepers called for specific jobs?
BUSINESS MANAGER
LABOUR PROBLEMS & SOLUTONS
Ans. Yes! Such sweepers are entitled to get
minimum wages applicable in your state for this
category. You are doing a social work of your
own, that is commendable and your members
are also working free but when you engage some
persons who are not your members of NGO,
then they have to be treated as employees of
NGO and minimum wages are to be paid.
Jharkhand High Court in the case of Robert
Tope v. State of Jharkhand, 2003 LLR 948; 2003
(98) FLR 716 has also held that plea of the school
management that the labourers engaged in
construction of a school hall by labourers were
not paid rather they were doing shramdaan of
their own being guardians of school children
studying there and minimum wages were not
applicable to them, cannot be accepted. Court
held that construction of building comes under
schedule employment and there was a
notification from the state Govt. with respect to
payment of minimum wages to labourers in this
scheduled employment. There is no provision in
the Act or the Rules that any "Shramdan"
should not be treated as labour. So the school is
liable to pay minimum wages to such labourers.
Accordingly, you are also liable to pay at least
minimum wages to such sweepers.
Q. We pay performance bonus to employees
irrespective of profit. It is paid two times in
a year. This amount is shown as part of CTC
in employees offer letters at the time of
joining. We also mention about statutory
bonus in CTC letters. In case of old
employees we have included this amount by
mentioning it in annual increment letters.
My question is, are we liable to pay the
statutory bonus also after paying
performance bonus?
Ans. Schematically the statutory bonus under
the Payment of Bonus Act is a profit bonus. It
has to be paid according to the provisions of the
Act to all eligible employees, irrespective of
terms of employment.
The Act also recognises two other types of
bonus as defined under section 17 of the Act
namely Pooja Bonus & the Customary Bonus.
This section permits the employer to adjust the
amount paid to the employee towards Pooja or
Customary bonus against the statutory bonus to
be paid under the provisions of the Act. It also
includes the payment of interim bonus. The
essence of this section is that to make the
employer entitled to deduct the amount of
bonus so paid from the amount of statutory
bonus payable by him to the employee, the
character of the amount paid should be either
Pooja Bonus or Customary Bonus. Supreme
Court in the case of Baidyanath Bhawan
Mazdoor Union vs. Baidyanath Ayurvedic
Bhawan Pvt. Ltd., 1984 Lab I.C. 148 has held that
payment of any customary bonus such as
attendance bonus, festival bonus or the like does
not absolve the management from their liability
to pay statutory bonus.
APRIL 2017
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Any amount by any name be it performance
link bonus or otherwise indicated as part of
remuneration to be paid to the employee in the
appointment letter, which is paid based on the
performance of the particular employee neither
falls under the category of Pooja Bonus nor
Customary Bonus. Rather such payment made There is no
to employee as performance bonus or incentive
is nothing but implied/express term of provision in the
contract. So, such performance bonus paid to Act or the
employee cannot be adjusted against the
statutory bonus as it does not meet the Rules that any
requirement of section 17 of the Payment of
Bonus Act.
"Shramdan"
should not be
In order to get the amount paid as performance
bonus to employee to be adjusted against
treated as
statutory bonus, either it should be mentioned labour.
as interim bonus or there should be an
agreement between the employees and the
employer giving consent for such adjustment of
amount of performance bonus against statutory
bonus.
Though there has been practice by the
employers to adjust the amount of performance
bonus against statutory bonus but in case of
any dispute by eligible employees under the Act,
the probability of decision may be against the
employer.
Q. Labour court has decided a case of
employee against us. We want to challenge
the decision in high court. We are told that
we have to pay full wages to be employee
during the period the matter remains
pending in high court. What does this "full
wages" means? It is not clear.
Ans. Section 17-B of ID Act clarifies that the
term full wages means "full wages last drawn by
him." Actually before insertion of this section
in ID Act, it was discretionary for the higher
courts to grant such relief to workman in case
the employer prefers to challenge the order of
the lower court, passed in favour of workman.
Now it is mandatory for you to pay the last
wages drawn to workman and it will continue to
be paid till the final disposal of your writ
petition against the labour court order. S.C. in
the case of Bank v. Kiriti Kumar, T. Patel, 1998
(78) FLR 45 has held that full wage last drawn
must be given their plain and material meaning
and they cannot be given the extended meaning.
Court further said that the word "full" only
emphasizes that all the emoluments which are
included in "wage" as defined in clause (rr) of
section 2 of ID Act including the amount
referred to in sub-clauses (i) to (iv) of the Act,
1947 are required to be paid. Full Bench of
Gujarat High Court in the case of Suresh
Kumar Ram Sewak Pandey v. Municipal
Commissioner, 2004 (102) FLR 1169 also held that
neither the term "full wages" means wage
payable nor minimum wages. It only means the
wage actually paid on the date of said
termination or dismissal. BM
42 BUSINESS MANAGER
 www.businessmanager.in

RECENT IMPORTANT LABOUR JUDGMENTS

Abandonment DHL Express (I) Pvt. Ltd. vs. Labour Officer (III), Kuralagam,
Chennai. 2017 LLR 292 (Mad. H.C.)
Merely because the workman did not submit reply to the
letters of the management doesn't mean that he had Contract Labour
abandoned his service. Any misconduct against the
Prosecution of any other employee of the firm or company
workman without conducting proper disciplinary
except its occupier or responsible person for its day-to-day
proceedings would not stand proved.
functions is illegal being an abuse of process of law.
While adjudicating a reference of an industrial dispute, non-
Sam B. Jijina vs. The Tamil Nadu State Re. by Inspector of
framing of issued by the Labour Court is not an illegality since
Factories. 2017 LLR 293 (Mad. H.C.)
the Labour Court receives reference with the issue framed for
adjudication. Under section 10 (2) of Contract Labour Act, the
appropriate government can proceed to initiate steps for
Merely because the workman did not submit reply to show
abolitions of contract labours system. Workers union has
cause notice or letters does not per se mean that he had
no locus standi to raise any issue of abolitions of contract
abandoned his service since he has raised an industrial dispute
Labour System. Union does not represent any contract
within a month of his retrenchment.
labourers.
M/s. ACE Facilities Management Services vs. Tejbir Chauhan &
Ambadas and Others vs. Exide Industries Ltd. 2017 (152) FLR 780
Ors. 2017 LLR 267 (P&H H.C.)
(Bom. H.C.)
Adjudication Court Powers
Issue of fairness of enquiry is to be decided as preliminary
Power of judicial review by Industrial Tribunal/Labour
issue.
Court under Section 11A of the Industrial Disputes Act,
Where the Management has sought approval of the Labour 1947 is to be exercised only when there exists perversity or
Court in which the industrial dispute is pending , for its action procedural lapses or violation of principles of natural
i.e., dismissal of the workman after conducting domestic justice in findings, relied upon by the Management.
enquiry, issue of fairness of enquiry, may be taken as a
Industrial Tribunal/Labour Court is empowered under Section
preliminary issue to be decided by the court, when the
11A of the Industrial Disputes Act, 1947 to interfere with the
Management has moved an application for the same.
order of termination of services of the workman only when the

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impugned order is passed on the basis of good faith indicating
victimization and unfair labour practice by Management.
Branch Manager, Orissa AIR Products Pvt. Ltd. vs. State of
Orissa and Another. 2017 LLR 296 (Orissa H.C.)
Disciplinary Proceedings
Enquiry Officer cannot be held to be biased merely on the
basis that he was legal adviser of the employer. Bias is to be
proved by cogent documentary evidence.
Vitiation of an enquiry by the Labour Court on the ground that
Enquiry Officer being Legal Adviser of the company would
have not conducted a fair and proper enquiry proceedings since
he cannot be expected to be impartial, in the absence of any
documentary evidence, is not justified.
An Enquiry Officer can't be held to be biased merely on the basis
of presumption that being Legal Adviser of the employer or
having some other relations with the employer, he would not be
impartial.
Biasness on the part of an Enquiry Officer is to be proved by
way of cogent documentary and oral evidence and not on the
basis of presumption and assumption.
M/s. Star Wire (India) Limited vs. B.L. Tomar and Another. 2017
LLR 264 (P&H H.C.)
Acquittal in criminal case by itself cannot constitute a
ground to set aside the findings of the Enquiry Officer
because the standard of proof is different in both
proceedings.
Standard of proof in departmental proceedings and criminal
proceedings is quite different. Requirement of standard of proof
in criminal proceedings is 'strick proof of evidence'. Basis of
enquiry finding is 'preponderance of probabilities' i.e.,
probative material of evidence. Acquittal in criminal case by
itself cannot constitute a ground to set aside the finding of
Enquiry Officer. Acquittal in criminal case cannot be the basis of
taking away the effect of departmental proceedings.
Departmental action cannot be termed as double jeopardy.
Departmental proceedings and Criminal proceedings can
proceed simultaneously.
Misconduct of theft, forging signature by a Bank employee are
serious and grave to justify punishment of dismissal from
service.
Yemanura vs. Union Bank of India. 2017 LLR 273
(Kar. H.C.)
An enquiry is liable to be vitiated if it is held without
following the procedures laid down or it is in violation of
principles of natural justice.
Branch Manager, Orissa AIR Products Pvt. Ltd. vs. State of
Orissa and Another. 2017 LLR 296 (Orissa H.C.)
Enquiry completed in haste by doing ex-parte on the same
day when workmen left the enquiry in between
without providing him another opportunity, is liable to be
set aside.
An enquiry is liable to be vitiated due to procedural lapses on
the part of the Enquiry Officer while recording enquiry
proceedings.
An enquiry is liable to be vitiated if it is conducted without
issuing a proper charge-sheet-cum-show cause notice,
indicating specific charge, calling explanation thereto from the
delinquent employee since it is first right of the delinquent
employee to submit his defence or explanation to the charges
leveled against him, based on 42nd amendment in the
Constitution of India.
An enquiry is liable to be vitiated if it is conducted without
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issuing a proper charge-sheet-cum-show cause notice to the
delinquent employee, when Standing order mandates fort the
same.
Enquiry Officer himself is not competent to decide the objection
of the delinquent employee in respect of his appointment as an
Enquiry Officer since it is function of the Disciplinary
Authority/Management.
Enquiry Officer is under an obligation to avoid any undue haste
in deciding any issue or application, resulting in causing any
prejudice to the delinquent employees.
Enquiry Officer must act patiently, adhering to the principles of
natural justice.
On the basis of one solitary instance of leaving the enquiry
place by the delinquent employee is not enough to conclude that
delinquent employee boycotted the enquiry or never intends to
participate.
When the delinquent employee boycotts the enquiry under heat
of the moment, to be termed as an impulsive act, enquiry can be
deferred to some other date since with the passage of time the
delinquent employee would cool down and reappear in the
enquiry.
Enquiry Officer is under an obligation to analyses the evidence
as recorded before arriving at his final conclusion.
Enquiry Officer cannot import his own knowledge in his finding
which is not having support on record.
Enquiry is liable to be vitiated if evidence recorded and
documents taken on records are not considered with proper
analysation for arriving at final conclusion.
Self certification by the Enquiry Officer himself that he has
conducted the enquiry by following principles of natural justice
is of no weight age.
An award passed by the Labour Court is liable to be set aside if
the same has been passed without considering the evidence on
record or considering such other irrelevant facts which are not
on record since such a finding is perverse.
Vinod Pralhadrao Farkade vs. M/s. Ceekay Daikin Limited. 2017
LLR 322 (Bom. H.C.)
The delinquent has to show as to how he was prejudiced by
non-supply of inquiry report.
Departmental inquiry was proceeded against the employee who
was boiler operator on the charge of pilfering of some items viz.
milk, eggs, bread slices etc. In the inquiry the employee was held
guilty of the charge and accordingly the Inquiry Officer
submitted his inquiry report to the Management, which acting
upon it dismissed the employee from service. The employee
challenged his termination by raising an industrial dispute but
the Labour Court dismissed the reference. Being aggrieved, the
employee challenged that order by filing the present writ
petition making a grievance; inter alia, that he was not supplied
with a copy of the inquiry report.
It was pointed out by the High Court that the Respondent had
dispatched a copy of the inquiry report to the employee but it
was returned unserved as the employee was out of station. By
the time the employee returned back, the dismissal order had
already been passed and posted by RPAD to the Petitioner. The
High Court observed that the management had taken right step
for serving the employee with the copy of the inquiry report.
The High Court relied upon the Supreme Court decision
Haryana Financial Corporation & Anr. vs. Kailash Chandra
Ahuja 2008 (118) FLR 700 (SC) wherein it was held that if non-
supply of inquiry report does not cause any substantive
prejudice to the delinquent, then such non-supply of inquiry
report would not vitiate the proceedings and the order of
punishment cannot automatically be set aside. In the present
case, the employee has not been able to justify before the Labour
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Court as to how his right were prejudiced by the non-supply of
the inquiry report, especially when he was accorded full
opportunity to defend himself in the inquiry proceeding. The
High Court, therefore, dismissed the petition.
Sukhdev vs. Habitat World at India Habitat Centre 2017 FLR (152)
P. 45; 2017 (152) FLR 45 (Delhi H.C.)
Employer-EEmployee
Relationship
When workman was directly engaged, wages were paid by
the management and he was under administrative control
of the management, it is sufficient to conclude the
relationship.
In the absence of material evidence, oral plea taken latter on by
the Management to demonstrate that termination of the
workman was due to shifting of branch to its Regional Officer,
is not sustainable.
When the workman was directly engaged by the management,
paid wages directly by the management, working under the
administrative control of the management, he cannot be
constructed to be a contractual employee either engaged
through any contractor or directly by the principle employer on
contractor basis.
Termination of services of an employee who is senior to others
continuing in the employment of the employer, is illegal being
in violation of Section 25G of the Industrial Disputes Act, 1947,
attracting reinstatement with back-wages.
Termination of services of an employment in violation of
provisions of Section 25F, 25G an 25H of the Industrial Disputes
Act, 1947, is illegal, attracting reinstatement with back-wages.
State Bank of Patiala vs. Central Government Industrial
Tribunal-cum-Labour Court-I, Chandigarh. 2017 LLR 265
(P&H H.C.)
In the absence of documentary or oral evidence, the
contention of the management that workman were
engaged through the contractor, cannot be accepted.
Employer-employee relationship between the corporation
and workmen established. Termination of such workmen
without complying section 25F of ID Act would be illegal.
If a litigating party fails to prove its version by oral or
documentary evidence, the award passed against him is
justified.
Non-compliance of provisions of Section 25F of the Industrial
Disputes Act, 1947 by the management at the time termination
of services of the workman is illegal attracting reinstatement
with back wages.
If the management/principal employer fails to produce relevant
records, to disclose the name of the contractor, registration
certificate under CL (R&A) Act, the workmen would be treated to
be employee of the principal employer.
Non-compliance of provisions of section 25(0) of the Industrial
Dispute Act, 1947 at the time of closure of establishment,
resulting into termination of workmen is illegal.
Stoppage of work by the Management without making
compliance of legal provisions, amounts to illegal retrenchment
violative of Section 25(N) of the Act, justifying quashing of
order of dismissal of services of the workmen by the Industrial
Tribunal.
Food Corporation of India vs. Food Corporation of India,
Shramik Sangh & Ors. 2017 LLR 315 (Uttar. H.C.)
Employee name was not found in the attendance register
maintained by the management. No appointment letter
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was ever given to him. Leaves, etc. were not granted by the
management. There was no direct supervision and control
by the management. No employer-employee relationship
existed.
Ram Chandra Ram vs. Employer in Relation to The Management
of M/s Central Coalfields Ltd. 2017 (152) FLR 692 (Jhar. H.C.)
Employees Provident Fund
Civil Court not to dismiss suit relating to PF matter at pre-
trial stage. Court can go into preliminary issue and look
into entire documents before dismissal.
On a application under order VII Rule 11 of Civil Procedure
Code, the Civil Court can only see the pleading in the 'plaint' and
not anything else including written statement.
Contention of the respondent is that the procedure under the
EPF&MP Act has not been followed by the EPF Authority while
conducting enquiry under section 7A of the Act.
If the procedure, legally laid down, has not been followed by the
EPF Authority, while conducting enquiry under section 7A of
the Act, the plaintiff are entitled to file a suit.
Only suppression of the crucial facts in the plaint is not a valid
ground for dismissal of plaint at the threshold.
Rejection of plaint on institutional grounds is different from
dismissal of a suit at pre-trial stage on the ground of
maintainability.
For dismissal of a suit on a preliminary issue, the court is
entitled and liable to look into the entire documents including
those furnished by defendant.
Central Provident Fund Commissioner, New Delhi & Ors vs. Lala
J.R. Education Society & Ors. 2017 LLR 225 (S.C.)
Artisans getting training to improve skills by NGO and
Trust, would not be employees under EPF Act for
contributions.
As per section 2(f) of the Employees' Provident Funds and
Miscellaneous Provisions Act, 1952, any person engaged as an
apprentice not being an apprentice under Apprentices Act, 1961
or under the Standing orders of the establishment, is an
employee to be covered under the Act.
Labour Laws shall not apply to any apprentice.
A trainee undergoing apprentice under Apprentices Act, 1961 or
under the Standing orders of the establishment shall be a
trainee and not a worker to be covered under the Act.
Only when an amount is paid to an employee and it qualifies as
'wages' under section 29b) of the Act of 1952 would attract EPF
contributions and not otherwise.
In the absence of payment of wages to a person employed by an
employer, the relationship of employer-employee would not
come into existence.
An amount paid to a trainee is incentive and not wages, if the
purpose of that amount is to attract the trainee for upgrading
his skill.
When a trainee is imparted training only for upgrading his skill
and not to do any work for the gains for the employer, any
amount paid to him attracting him to attend coaching classes,
cannot be treated as 'wages' for the purpose of EPF
contributions.
Regional Provident Fund Commissioner vs. M/s. Sriniwas
Malliah Memorial Theatre Crafts Trust. 2017 LLR 226; 2017 (152)
FLR 663 (Delhi H.C.)
Pigmy agents of the bank are coverable under the EPF Act.
An employee working for more than one employer on
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commission basis would not be covered under the definition of a
'workman' of any of the employers to be covered under the
Employees' Provident Funds and Miscellaneous Provisions Act,
1952.
Pigmy agents engaged by the Bank would be employees of the
Bank, coverable under the Provisions of the Employees'
Provident Funds and Miscellaneous Provisions Act, 1952 if they
are working exclusively for the Bank under the control and
supervisions of the Bank, performing perennial nature of work
irrespective of getting commission instead of 'wages' for their
performance.
When appointment letter indicates that the employee has to
work under the supervision, control and direction of the
employer, he is prohibited to work for any other employer, work
is of perennial nature, any amount of commission paid to him
would be 'basis wages'
A person employed by the employer itself or through contractor,
for wages in any kind of work in connection with the work of
the establishment of that employer, getting wages directly or
indirectly from the employer, would be employee of the
employer.
The Pachora Peoples' Co-operative Bank Ltd. vs. The Employees'
Provident Fund Organisation. 2017 LLR 229 (Bom. H.C.)
Establishment providing food against pre-paid coupons or
cash on concessional rates would be treated as hotel,
coverable under the Act.
Registration of Charitable Trust under Income Tax Act, 1961,
exemption of tax under Bihar and Orissa Municipal Act, 1922
and electrical connection being domestic would not exclude it
from the coverage under the Employees' Provident Funds and
Miscellaneous Provisions Act, 1952.
A liberal and purposive interpretation of EPF Act, a social
welfare legislation, should be taken keeping in view the
directive principles of State Policy contained in Articles 38 and
43 of the Constitution of India.
An establishment being a charitable Trust Providing food
against prepaid coupons or against cash, may be on
concessional rates, would be treated as a Hotel, coverable under
the Employees' Provident Funds and Miscellaneous Provisions
Act, 1952.
Marwari Kanwar Singh vs. Employees' Provident Funds
Organisation Ranchi and Others. 2017 LLR 249
(Jhar. H.C.)
Consolidated appeal is not maintainable in case different
orders are passed under sections 14B and 7Q of the EPF
Act.
As per law settled by the Supreme Court of India in the case of
M/s Arcot Textile Mills Ltd. v. The Regional Provident Fund
Commissioner and Others, (2003) 16 SCC 1, consolidated appeal
is not maintainable in case different orders are passed under
sections 14B and 7Q of the Act by the EPF Authority.
Joint appeal would be maintainable only if consolidated order
is passed under sections 14B and 7Q of the Act by the EPF
Authority imposing damages and interest.
Writ Court is not having jurisdiction under Articles 226 and 227
of the Constitution of India to interfere in an order passed by
the EPF Appellate Tribunal, granting interim stay of operation
of order passed by EPF Authority.
Writ Court may remand the matter back to Tribunal to consider
the objection regarding maintainability of consolidated appeal
against different orders passed under sections 14B and 7Q of the
Act by EPF Authority preferably expeditiously in view of law
settled by the Supreme Court of India.
Employees Provident Fund vs. M/s. Lbd Nalanda Infrastructure.
2017 LLR 259 (M.P. H.C.)
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Allowances not being paid regularly and to all the
employees are excluded from the definition of basic wages
as defined under section 2(b) of the Act.
Basic Wages, under section 2(b) of the Employees' Provident
Funds and Miscellaneous Provisions Act, 1652, means,
'emoluments which are earned by employees while on duty'.
Section 2(b)ii) of the Act spells out some of the exclusions other
than those paid by cash.
Scone of judicial review under Article 226 of the Constitution of
India, is very limited, only when the order of Tribunal is
perverse or irrational or is based on no evidence or
misinterpretation of law.
Employees Provident Fund Organisation Bhatinda (Punjab) and
Another vs. M/s. Arihant Spining Mills and Another. 2017 LLR
260 (P&H H.C.)
There is no provision for appeal against the order of EPF
Authority rejecting the review application. Only writ
petition is maintainable against review order.
No appeal lies against the order of the EPF Authority, rejecting
the review application filed under section 7B of the Employees'
Provident Funds and Miscellaneous Provisions Act, 1952.
When remedy of appeal is not available, writ petition would lie
against the order of the EPF Authority passed under section 7B
of the Act.
An order rejecting the application by the EPF Authority, filed
without mentioning the Provisions of law under which it is
filed, is liable to be set aside since the authority should have
know that so long as power can be traced to a statutory
provisions without it being mentioned in an application since
the law permits ignoring such minor deficiency because the
court is concerned with the substance and not the form.
Limitation as provided under the statute is to be taken from the
date of first application which is rejected by the EPF Authority,
directing the applicant to file a fresh application and not from
the date of second application.
Chandigarh Sports Council vs. Provident Fund Commissioner &
Anr. 2017 LLR 272 (P&H H.C.)
Appellate Tribunal is empowered to reduce the damages as
imposed by the EPF Authority under Section 14-B of the
EPF Act.
Reduction of assessed amount to 25% by the EPF Appellate
Tribunal is justified in view of the fact that employer has been
declared a sick industrial company and the EPF Authority has
computed the damages on the basis of new amended table,
effective only after 26.9.2008 whereas the damages are in respect
of period from 03/1999 to 9/2015.
Employees Provident Fund Authority vs. Dm Woollen Mills Pvt.
Ltd. 2017 LLR 278 (M.P. H.C.)
When remedy of appeal is available before appellate
tribunal, writ petition is not maintainable.
Writ petition is generally not maintainable whenever
efficacious remedy of appeal is available to challenge any
adverse order.
Writ petition is not maintainable unless it involves the issue of
fundamental rights of an individual or the impugned order, on
the face of it, is illegal or without jurisdiction or without
authority of law.
Krishna Keshav Laboratories Limited vs. Employees Provident
Fund Organisation Ministry of Labour & Anr. 2017 LLR 280
(Guj. H.C.)
When the Authority under section 7A and 7B of the EPF
Act have taken into account all documents on record and
law involved while concluding their findings, challenge
thereto by way of filing of writ petition is not
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maintainable.
Writ petition under Article 226 of the Constitution of India is
not maintainable against the order of the lower authority if the
impugned order is neither perverse nor without jurisdiction.
Amount due towards employer may be permitted to be paid in
installments.
Unicorn Plywoods (P) Ltd., rep. by its Managing Director, S.
Salim, Kollam vs. Assistant Provident Fund Commissioner. 2017
LLR 289 (Ker. H.C.)
An 'employee' under EPF Act and a 'workman' under ID
Act are two different distinguished definitions. Since all
employees may not be workmen but all workmen would be
covered under the definition of 'employee' making the
scope of 'employee' under EPF Act wider than that of the
'workman' under ID Act.
Applicability of the Employees' Provident Funds and
Miscellaneous Provisions Act, 1952 is not limited only to
industries but to any other establishment, employing 20 or more
employees which may not be industry.
While discharging quasi-judicial power under section 7A of the
Act, the EPF Authority is under an obligation first to decide the
dispute of applicability since if the dispute is decided against
the employer, the EPF Authority has to proceed for assessment of
EPF dues, damages and interest as per provisions applicable but
if the dispute is decided in favour of the employer, the 7A
proceedings would be closed.
Since the enquiry under section 7A of the Act is not prejudiced
in any manner to the employer, the EPF Authority is having
power to decide the issues in dispute in accordance with law
giving sound reasoning for each conclusion.
No automatic exemption under the Act is there to NGOs or such
other Charitable and Voluntary Social Service Organisations
working on "no profit no loss basis".
Central Government only is empowered under Section 16(2) of
the Act to exempt any establishment either prospectively or
retrospectively from operation of the Act for such specified
period in its notification.
Sulabh International Social Service Organization through its
General Secretary, Patna vs. Regional Provident Fund
Commissioner, Patna & Anr. 2017 LLR 304 (Pat. H.C.)
When the employees engaged as apprentices, are required
to do the regular work and they are not engaged as such, as
prescribed under the Apprentices Act 1961, they are
rightly held to be employees of the said establishment.
A challenge is from the management to rejection of its appeal by
Appellate Tribunal, confirming the Order passed by the APF
Commissioner covering the establishment and asking it to pay
contributions as per the order. The Court held that (i) the
Attendance Registers and even other records were not properly
maintained by the employer. (ii) As the trainees were not
engaged as prescribed under the Apprentices Act, 1961, they
were presumed to be employees of the establishment. (iii) But
the EPF Appellate Tribunal failed to note that there is clear
mention of the fact that establishment entertains only those
employees, who are willing to work without any remuneration,
food and accommodation to stay, as those employees are only
interested in getting certificates from such Two Star Hotels after
completion of training. (iv) At the same time it is rather difficult
to believe that such a Hotel can be managed with only seven
employees' as claimed by the employer. (v) At the same time
there is no convincing evidence to conclude that then there were
more than twenty workers/employees working in the Hotel.
Authority directed to examine the matter afresh.
K.N. Karthikeyan, Mavelikkara vs. Assistant Provident Fund
Commissioner, Sub-Regl. Officer, Kochi. 2017 I CLR 251 (Ker. H.C.)
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Employees Pension Scheme
Since the Employees Pension Scheme, 1995 and
Special Voluntary Retirement Scheme 2004 are on
different footings, employees having opted retirement
under the Scheme, 2004 are not entitled to pension
under Employees Pension Scheme, 1995.
Mrs. T. Chitra vs. The Chairman & Managing Director, The
New India Assurance Co. Ltd. (Pension Fund) 2017 LLR 295
(Mad. H.C.)
E.S.I.
Even unaided educational institutions are included
within expression "educational institution" found in
"description of establishment" of notification
thereby rendering the institution amenable to ESI
Act.
This Court has no hesitation to hold that even unaided
educational institutions are included with the expression
"educational institution" found in the "description of
establishment" of Notification dated 19.5.11 thereby
rendering the institution amenable to ESI Act, by virtue of
the said Notification.
Other peripheral questions raised by the institution of the
teachers employed by the institution being part-time or
seasonal in nature can very well be raised before the
Employee Insurance Court constituted by the State Govt.
under section 74 of ESI Act, where after further remedy
lies by way of an appeal provided under section 82 of the
said Act.
Sanatan Dharm Kanya Uchattar Madhyamik Vidyalaya,
Gwalior vs. Union Of India. 2017 (152) FLR 579 (M.P. H.C.)
Factories Act
In the absence of any disclosure as to under which
entry of the first schedule of the factories Act, the
firm manufacturing ball bearings falls, prosecution is
liable to quashed.
As per provisions of the Factories Act, 1948 for coverage of
an establishment under the Act, it must be specified in first
schedule of the Act.
Disputed question of a fact cannot be gone into by the High
Court under section 482 of the Cr. P.C.
Soumitra Hazra vs. The Inspector of Factories. 2017 LLR 291
(Mad. H.C.)
Fixed Term Employment
After expiry of fixed term merely because the
workmen was allowed to over stay due to
administrative exigencies, termination will still fall
under section 2(oo) (bb) of ID Act.
Merely because the workman was allowed to overstay due
to administrative exigencies, it does not take the case away
from the exceptions to retrenchment in section 2(00) (bb) of
the Industrial Disputes Act, 1947.
While dealing with public employment, Court cannot
disregard the principles of service jurisprudence and of
delay and latches.
Rakesh Kumar Saini vs. The Engineer-in-Chief, Irrigation
Department, Haryana, Chandigarh and Another. 2017 LLR
334 (P&H H.C.)
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Industry
It would be proper that all issues of the dispute including
whether the national institute of engineering is industry
or not under ID Act, should be decided at the same time
without trying some of them as preliminary issues.
Bhagwan Jagannath Nitnaware vs. Union Of India other. 2017
(152) FLR 651 (Bom. H.C.)
Industrial Disputes Act
Pay scale revised does not mean that the benefit of 50%
special allowance granted under the circular would expire
automatically. Workmen entitled to claim 50% allowance
under section 33C (2) of ID Act as pre-existing right.
Workman had a pre-existing right to 50% special allowance
since they were receiving the same since 01.01.1978. A plea not
taken before lower Court cannot be taken before Writ Court for
the first time.
Punjab State Electricity Board and Others vs. The Presiding
Officer, Labour Court Ludhiana & Others. 2017 LLR 333
(P&H H.C.)
Labour Court/Tribunal cannot sit as a court of appeal over
a decision based on findings of enquiry officer for approval
under section 33 (2) (b). Court cannot review the
conclusion reached by disciplinary authority.
The reasoning given by the Industrial Tribunal affirmed by
learned Single Judge and observe that the said reasoning per se
and ex facie is unacceptable. A perusal of the impugned orders
show that it has misconstrued the scope of section 33(2)(b) of the
Act. There is a distinction between deciding an application
under section 33(2)(b) and deciding a labour dispute. Failure to
draw the distinction has led to error in the decision making
process and accordingly erroneous verdict.
When an Industrial Tribunal is asked to give its approval to an
order of dismissal under section 33(2) (b) of the Act, it can
disregard the finding given by the Enquiry Officer only if the
finding are perverse, i.e., the decision is unsupportable and not
the sufficiency and adequacy of evidence and the conclusion.
The test of perversity that is indicated in these cases is that the
findings may not be supported by any legal evidence at all.
While deciding the application under section 33(2) (b) of the ID
Act, it is not the sufficiency of evidence that is required rather
some evidence i.e. if prima facie the case has been made out that
is sufficient. The legal position regarding whether grant or
refusal of permission by the Industrial Tribunal under section
33 (2)(b) is well settled that it is not an adjudication and he
industrial adjudication comes only when the matter is referred
under section 10 of the Labour Court. The order of discharge or
dismissal which may be passed against the respondent-
workman would be liable to be challenged in an appropriate
proceeding before the Industrial Tribunal in terms of the
provision of the Industrial Disputes Act.
Industrial Tribunal cannot sit as a Court of appeal over a
decision based on the finding of the inquiring authority in
disciplinary proceedings. Where there is relevant material
which the disciplinary authority has accepted and which
material reasonably supports the conclusion reached by the
disciplinary authority, it is not the function of the Industrial
Tribunal to review the same and reach different finding than
that of the disciplinary authority. In the factual matrix of the
present case, we find that there is error apparent in the decision
making process by the Industrial Tribunal. This was not
appreciated and considered in the impugned judgment.
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Delhi Transport Corporation vs. Pale Ram. 2017 (152) FLR 32
(Delhi H.C.)
Tribunal's order of rejecting the application under section
33 (2) (b) will be illegal when tribunal found fault with the
management for its alleged lapses in not acting against the
employee and on the status of the Enquiry Officer.
Enquiry conducted by not directly subordinate to
disciplinary authority will not be invalid as per provisions
of the standing orders.
A can be seen from Clause 30 (ii)(a), only such officer who is
directly subordinate to the disciplinary authority, is
incapacitated from acting as the Enquiry Officer. But Mr. J.
Debnath who conducted the enquiry was not directly
subordinate to the disciplinary authority and therefore in our
considered opinion, the finding given against Mr. Debnath by
the Tribunal was rightly found to be erroneous by the writ
Court, on account of the requirement specified under Clause
30(ii)(a) of the Standing Orders.
Already found that the Enquiry Officer Mr. J. Debnath was not
incapacitated under Clause 30(ii)(a) of the Standing Orders from
conducting the enquiry since, he was not in the directly
subordinate category and therefore, when the employee had
admitted to the charge, we see no error in the guilt finding
recorded against the errant employee, by the Enquiry Officer.
The interference with the decision of the Industrial Tribunal
was rightly made by the writ Court as the Tribunal erred and
went beyond its jurisdiction in dealing with the application
under section 33(2)(b) of the Industrial Disputes Act. It was not
the business of the Tribunal to find fault with the management
for its alleged lapses in not acting immediately against the
errant employee and then to decide the section 33(2)(b)
application, inter alia, on this point. Moreover, the finding
recorded by the Tribunal on the status of the Enquiry Officer
vis--vis Clause 30(ii)(a) was a perverse conclusion as the
Enquiry Officer was not in the category of a direct subordinate
of the disciplinary authority.
Ranjit Bhowmik vs. Hindustan Paper Corporation Ltd. and
another. 2017 (152) FLR 161 (Gau. H.C.)
In the absence of declaration that the closure was illegal
by labour court in independent adjudication, workers not
entitled to claim their salary and allowance under section
33C (2) of ID Act.
Workmen claimed their monthly pay, dearness allowance and
other allowances for the period 1.4.1998 to 19.12.2003. Learned
Labour Court held that workmen failed to prove that they
worked during that period. Labour Court also held that it could
not legally prove on the factual presumption that temporary
closure of the company was illegal. On challenge of the order,
high court held, there was a temporary closure of the Unit due
to disconnection of power supply. Whether the closure of the
Unit was legal or not was dependent upon independent
adjudication on reference to be made before the Labour Court.
Labour Court while declining the prayer of the workmen for the
payment of wages under section 33-C (2) of the Act, 1947 had
committed no error. No infirmity in the order. Writ petition
dismissed.
C.H. Bapa Rao vs. Indian Steel and Wire Production Ltd.
Jamshedpur, Singhbhum. 2017 (152) FLR 688 (Jhar. H.C.)
Workman is entitled to raise his individual dispute within
3 years from the date of amendment under ID Act.
Workman services were terminated in 2000 but reference
filed in 2012. Reference held valid being in limitation
period of 3 years from the date of amendment in 2010.
Municipal Council, Guna vs. Krishna Pal. 2017 (152) FLR 714
(M.P. H.C.)
48 BUSINESS MANAGER
RECENT IMPORTANT LABOUR JUDGMENTS
Loss of Confidence
When the workmen and his helper both were sleeping
while on duty but manipulated the records of compressor
reading, column presser, purity of gas and temperature of
gas in advance, amounts to loss of confidence.
Branch Manager, Orissa AIR Products Pvt. Ltd. vs. State of
Orissa and Another. 2017 LLR 296 (Orissa H.C.)
Maternity Benefit Act
Woman contractual employee is covered under the benefits
of the Act and as same is liable to be paid by the principal
employer, if not meted out by the contractor.
Smt. Kavita Pant vs. State of Uttrakhand. 2017 (152) FLR 796
(Uttar. H.C.)
Minimum Wages
Contract Labour are entitled to minimum wages as
indicated in notification issued by State under Minimum
Wages Act.
Contract labourers are entitled to minimum wages as indicated
in the notifications issued by the State Government under the
Minimum Wages Act and failure to make payment by the
contractor or the principal employer deserve to be dealt with
strong arm of law. Therefore, this Court directed the petitioner
to pay the entire difference of minimum wages as determined
by the authority with liberty to recover not only the difference
amount of wages which was not paid by the contractor, but also
the compensation/ordered by the authority in the order
impugned.
Asstt. Executive Engineer (AEE)., B.W.S.S.B. vs Senior Labour
Inspector and others. 2017 (152) FLR 577 (Kar. H.C.)
Misconduct
Sleeping while on duty of watching constantly the running
of compressors is a serious and grave misconduct.
Allegation of sleeping while on duty of watching constantly the
running of Compressors is a grave and serious misconduct
since it may cause heavy damage to the machines for which the
workman was duty bound to check the machines frequently,
justifying dismissal of workman from his service.
An act of recording reading of compressors, solumn pressure,
purety of gas, temperature in advance amounts to
misappropriation of facts, manipulation of records, justifying
loss of confidence of the management upon the workman.
Branch Manager, Orissa AIR Products Pvt. Ltd. vs. State of
Orissa and Another. 2017 LLR 296 (Orissa H.C.)
Payment of Gratuity Act
For calculating the number of days worked to be entitled
for gratuity, weekly and national holidays would not be
considered as break in service.
Considering that the Payment of Gratuity Act is piece of social
legislation, a broader meaning needs to be given to section 2-A
and my endeavour is to analyze the evidence so as to find out on
the basis of the principles of probabilities as to whether the
weekly holidays could have been added or not. The title of the
chart would indicate only the number of days worked by the
petitioner.
The Hon'ble Apex Court has concluded that the 15 days wages
for calculation of gratuity ought to be on treating the monthly
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wages as being paid for 26 working days in a week since the
weekly holiday are to be treated as unpaid holidays.
It is held by the Madras High Court the Sunday/Weekly holiday
and National holidays are to be added to the number of days
worked while calculating completion of 240 days.
The employee had worked for 240 days in each calendar year by
adding the weekly holidays from 1973-74 till 1977-78 thereby
satisfying the requirement under section 4. His gratuity would
therefore be calculated from 1973 till his date of retirement on
the basis of the revised pay scale applicable to him.
Since the gratuity is to be calculated from 1973 onwards, the said
amount from 1973 till 1990 will carry interest @ 6% p.a. from the
date on which it became payable to the petitioner, which is
1.7.2012.
The employee shall now be entitled for gratuity from 1973 under
the revised pay scale and the amount of gratuity from 1973 to
1990 would carry interest @ 6% from 1.7.2012.
Baban vs. Estate Manager, Maharashtra State Farming
Corporation Ltd. and others. 2017 (152) FLR 17 (Bom. H.C.)
Payment of Wages Act
Payment of wages authority has power to rehear the case.
Persual of the relevant Rule brought out on record revealed that
as per provision in terms of Rule 8(3) of the Rules, the Authority
was bestowed with power to re-hear the case on showing good
cause. Limitation for challenging the order can be considered,
even in the application for condonation of delay.
The Authority under the Payment of Wages Act, is not a Court
subordinate to the High Court. This Court in revisional
jurisdiction has a very limited scope to interfere with the
finding of the Authority. Once the jurisdiction was exercised by
the Authority under the Act, the powers under article 227 of the
Constitution of India under supervisory jurisdiction of this
Court is very limited. The equitable jurisdiction by the
Authority in restoring the claim petition in considered opinion
of this Court is justified. The condonation of delay can be made,
even on the basis of oral prayer.
In deciding the controversy of the present type more
particularly the application for restoration, the Court should
adopt a pragmatic approach. The technicalities should not come
against the cause of justice. The cause of justice should not be
ignored at the altar of technicality.
Sahara Security and Man Power Services vs.
Authority/Commissioner another. 2017 (152) FLR 742 (P&H H.C.)
Punishment
When the bus driver of the school was habitual to commit
misconduct creating indiscipline in the bus and school,
punishment of termination for physical beating of school
staff cannot be deemed as disproportionate.
Giving physical beating to a school staff by the Bus Driver is a
grave, serious disorderly behavior justifying termination of
services.
Allowing unauthorized or third persons in the school bus is a
misconduct on the part of a school bus driver.
Commission of misconduct repeatedly/habitually, creating
indiscipline in the bus and school, justifies punishment of
termination of services of the Bus Driver.
Punishment of termination from services of a school bus Driver
is not disproportionate to gravity of misconducts inter alia
including giving of physical beating to a school staff.
Scope of judicial review by the Writ Court under Articles 226
and 227 of the constitution of India is limited to the extent
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where action or decision is perverse or is such that no
reasonable body of persons, property informed, could come to, or
has been arrived at by the authority misdirecting itself by
adopting a wrong approach or has been influenced by irrelevant
or erroneous matters.
Som Nath vs. Handoor Education Society. 2017 LLR 244 (H.P. H.C.)
Reinstatement
On a technical finding of violation of Section 25F of the
Act, reinstatement does not follow automatically.
Though the Industrial Disputes Act, 1947 does not provide any
limitation but the Courts have held that the approach to the
Labour Court by the workman should be within reasonable
time.
When the workman has not placed on record even an iota of
explanation for the inordinate delay for condoning the delay, he
does not deserve any relief even of any compensation.
While dealing with employment in public sector, issue of delay
gets exacerbated when claiming reinstatement to a code post
then delay can be factored in Labour Law jurisdiction to decline
relief.
Pawan Kumar vs. Presiding Officer, Labour Court & Anr. 2017
LLR 314 (P&H H.C.)
Resignation
After acceptance of resignation and conveying the
same to the workmen, withdrawal of resignation is not
valid.
Withdrawal of resignation, after acceptance of the same by the
Management and conveying to the workmen, is not legally valid.
Keeping in view long duration in litigation, offering lumpsum
compensation by the Management to the workman through
Court to settle the dispute in full and final, is appropriate to
establish industrial peace and harmony.
Radheshyam Chhatrapal vs. Anil Synthetics and Ors. 2017 LLR
240 (Guj. H.C.)
When the employee submits resignation, employer accepts
the same and employee receives the full and final dues,
such resignation cannot be held as invalid.
When an employee voluntarily resigns, it is an act by which he
voluntarily gives up his job i.e., synonymous to 'voluntary
retirement'.
Voluntary retrenchment of a workman or retrenchment on
attaining the age of superannuation can hardly be described as
termination by the employer.
If the contract of service is determined at the behest of the
employer, it may amount to retrenchment unless it is by way of
punishment for proved misconduct.
Resignation is not complete until it is accepted by the proper
authority of the employer.
Before confirmation of acceptance of resignation to the
employee by the employer, the employee can withdraw his
resignation.
Relationship of employer-employee stands severed only when
resignation submitted by the employee is accepted by the
employer and conveyed to the employee.
In submission of resignation, employee's role is active while the
employer's role is passive and formal since an employer cannot
force an unwilling employee to work for him.
An industrial dispute raised by the workman claiming
reinstatement is not sustainable if the workman has already
received his full and final dues, as settled with the employer
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without submitting resignation which was duly accepted by the
employer and conveyed to the workman.
Om Dutta Sharma vs. State of Jharkhand and Another. 2017 LLR
282 (Jhar. H.C.)
After submitting resignation without indicating its
effective date, if the employee stops attending office that
would mean that he has submitted the resignation with
immediate effect. Withdrawal of resignation after expiry
of notice period even before its acceptance is not proper.
If resignation is submitted with immediate effect i.e., without
giving one month notice, the Management is entitled to deduct
notice pay from unpaid salary of the employee by accepting the
resignation with immediate effect or before expiry of notice
period.
Amit Kumar Gupta vs. Indian Oil Corporation & Ors. 2017 LLR
331 (Delhi H.C.)
Retirement
After attaining the age of retirement, employee would be
liable to be retired at anytime during the extended period
if any.
Retirement of an employee is to be effected as per terms and
conditions of employment contract.
Retirement of an employee effected as per terms and conditions
of employment contract would not attract compliance of section
25F of the Industrial Disputes Act, 1947.
Retirement of an employee during extension period on the
ground that his services are not up to the expectations of the
management is not illegal 'retrenchment' since it does not touch
the character or behavior of the workman.
Extension of services after the retirement age depends upon
discretion of Management since assessing utility of an
employee is a management function.
Devender Mohan vs. The Presiding Officer, Labour Court,
Ambala & Ors. 2017 LLR 269 (P&H H.C.)
Retrenchment
In case of illegal retrenchment, compensation of 1 lakh in
place of reinstatement would be proper.
As per law settled by the Supreme Court, the reinstatement in
all illegal retrenchment/termination cases is not a rule of
thumb.
Keeping in view a short duration of service, non-existence of
the post anymore and rising cost of living index, the
compensation of Rs. 1.00 lac, as per rough rule laid down by the
Court in 'Municipal Council, Dina Nagar vs. Presiding Officer,
Labour Court, Gurdaspur and another, 2015 (1) RSJ 765 (P&H
HC) is appropriate.
While awarding compensation in lieu of reinstatement, the
Court has to consider the length of service, nature of post i.e.,
casual or permanent in nature, existence or non-existence of
post at the time of passing award, reason of termination, nature
of misconduct, if any on the part of the workman, rising of cost
of living index etc. for deciding amount to be awarded.
Rajesh Kumar vs. Presiding Officer, Labour Court, Patiala and
Others. 2017 LLR 270 (P&H H.C.)
Termination
Termination of a delinquent employee, who has admitted
his guilt, without conducting proper enquiry, is illegal
being in violation of principles of natural justice.
Termination of services of an employee without making
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RECENT IMPORTANT LABOUR JUDGMENTS
compliance of Section 25F of the Industrial Dispute Act,
1947, is illegal, liable to be set aside, attracting reinstatement
with back-wages.
Non-conducting of proper an fair enquiry, even when the
delinquent employee has admitted his guilt, is not proper
while punishment of termination of services is imposed
upon the delinquent employee.
M/s. Vibewell Techniks (Pvt) Ltd. vs. Amit & Another. 2017
LLR 262 (P&H H.C.)
Oral termination of services of a workman stands
proved if the Management has not taken any steps to
call the workman to attend duty by making positive
efforts.
Physical scuffle between workman and driver of
Management and compromise between them later on in
police, is sufficient to prove that the services of the workman
were terminated orally, if not in express mode.
Oral termination is illegal if the same has been effected
without compliance of legal requirements.
For proving abandonment on the part of the workman, the
management inter alia has to prove through documentary
evidence that despite its best positive efforts the workman
himself did not report for duty and kept him away from the
work place.
M/s. Fuelsave System & Devices Pvt. Ltd. vs. Raj Kishore and
Another. 2017 LLR 263 (P&H H.C.)
In the cases of oral termination, calculation of 240 or
more working days during the preceding 12 calendar
months is to be considered without any doubt before
awarding any relief to the workman.
Industrial disputes raised after 17 years is liable to be
rejected being filed after abnormal delay that too without any
sufficient reason.
Workman is not entitled to any relief under the Industrial
Disputes Act, 1947, if he has not performed duty with the
employer for 240 or more working days during the preceding
12 months.
An industrial dispute, raised by the workman, could not be
entertained in the absence of proper and necessary parties.
Executive Engineer, GRBCC Division No. 1, Belgaum and Anr.
vs. Shivakka Ramappa Lankannawar. 2017 LLR 318
(Kar. H.C.)
Trade Union
The Trade Union Act and Trade Union Regulations do
not confer any quasi-judicial power upon the Registrar
to enter into a detailed inquiry over rival claims set up
with respect to election of office bearers of a Trade
Union.
Bhartiya Khadya Nigam Shramik Sangthan, Kanpur is a
Trade Union registered with the Registrar, Trade Union, U.P.,
Kanpur and was registered under the provisions of Trade
Union Act, 1926. The said Union has its members of Food
Corporation of India (FCI). The Union is to be administered
through working committee elected by members. Tenure of
such elected body is two years as per the constitution of the
Union. Clause 37 provides that earlier working
committee/office bearers shall continue till the date of
election of new Committee. There is no provision in the
constitution of Union of deal with a situation where election
of office bearers is subjected to any dispute. There is nothing
to meet a situation when such a dispute arises, to how and in
Courtsey - Labour Law Reporter, FLR, CLR , LLJ & APS Labour Digest
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what manner the Union will be administered, if by next date
of election an undisputed office bearer is not available.
It was said that in 2013, election was held on 28.4.2013 and
information about new office bearers was conveyed to the
Registrar. New elections ought to have been held between
March-April 2015. But, earlier working Committee did not
take steps to hold the same. Consequently, executive meeting
was convened on 12.7.2015 and it was resolved to hold election
on 4.8.2015. The election held on 9-8-2015 resulted in return of
Parasnath as President. In the said election, 1440 members
out of 4880 participated and Shraddhanand Paswan was
elected as Secretary. Respondent No. 5 set up a claim of
different election held on 25.4.2015 in which Respondent No. 5
himself was returned as the President and Tarni Kumar as
Secretary. Petitioner No. 3 disputed the election set up by
Respondent No. 5 where after Respondent No. 2 passed the
impugned order holding that dispute between rival
Claimants of election of Trade Union cannot be adjudicated
by Registrar/Deputy Registrar, since the Trade Union Act or
bylaws/Constitution of the Trade Union confers such powers
upon it and parties should have their dispute resolved
through Competent Court of law. By the impugned order, the
Deputy Registrar, Trade Union directed both the parties to
avail of remedy before the Civil Court since there is rival
dispute in respected to office bearers to run the Trade Union.
The Appellant Union challenged the said order by filling the
present writ petition.
The High Court relied upon its earlier decision of a Division
Bench in North Eastern Railway Majdoor Union vs.
Registrar of Trade Union, 1969 LIC 209 wherein it was held
that the Registrar under Regulation 17(3) is not required to
hold any elaborate inquiry akin to the process of
adjudication in judicial or quasi judicial proceedings. He is
only required to make a summary inquiry to satisfy himself
that the return accompanying the changes of office bearers
is proper and in accordance with the Rules. The High Court
also relied upon the decision in Roadways Mazdoor Sabha
U.P. & Ors. vs. State of U.P. & Anr. 2010 III CLR 61 wherein it
was held that the exercise of powers under Section 28 read
with Regulation 17-A is purely administrative. The Registrar
can conduct a summary inquiry to satisfy himself before
taking on record the names of office bearers, that there has
been compliance with the requirement of the Act. In view of
the law so settled, the High Court held that the dispute as to
who are the office bearers can only be resolved by the Civil
Court. Hence, the writ petition was dismissed.
Bhartiya khadya Nigam Shramik Sangthan & 2 Ors vs.
Registrar, Trade Union, U.P. & Ors. 2017 CLR I P. 16, (All. H.C.)
Transfer
Court cannot interfere with the order of transfer unless
it is shown that such order is passed as a measure of
punishment or due to mala fide intention on the part of
employer.
Transfer from one department to another within city of
Chennai is the prerogative of employer when the post is
transferable as per contract of employment.
Since the transfer is an incidents of service, scope of
interfere with the order of transfer for convenience of the
employee, is not justified.
It is for the Management to consider the health problem of
the employee concerned giving him suitable place of posting.
P. Premkumar vs. The Executive Director RS (SR), Indian Oil
Corporation Ltd. 2017 LLR 294 (Mad. H.C.) BM
51 BUSINESS MANAGER
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Maternity Leaves increased to Workers wages to be paid

26 weeks in E.S.I. through banks
NOTIFICATION New Delhi, the 28th December, 2016/Pausha 7, 1938 (Saka)
New Delhi, the 20th January, 2017
THE PAYMENT OF WAGES (AMENDMENT)
ORDINANCE, 2016
G.S.R. 62(E).Whereas draft rules further to amend the No. 9 of 2016
Employees State Insurance (Central) Rules, 1950 were
published in the Gazette of India, Extraordinary, Part-II, Promulgated by the president in the Sixty-seventh Year of the Republic
Section 3, Sub-section (i) vide number G.S.R. 958(E), dated of India.
the 6th October, 2016, as required under sub-section (1) of An Ordinance further to amend the Payment of Wages Act, 1936.
section 95 of the Employees State Insurance Act, 1948(34 of Whereas the Payment of Wages (Amendment) Bill, 2016 has been
1948), inviting objections and suggestions from all persons introduced in the House of the People on the 15th December, 2016 and is
likely to be affected thereby before the expiry of a period of pending in that House;
thirty days from the date on which the copies of the Gazette And whereas Parliament is not in session and the President is satisfied
containing the said notification was published were made that circumstances exist which render it necessary for him to take
available to the public; immediate action;
And whereas, copies of the said Gazette were made Now, Therefore, in exercise of the powers conferred by clause (1) of
available to the public on the 6th October, 2016; article 123 of the Constitution, the President is pleased to promulgate the
And whereas, no objections and suggestions were following Ordinance:-
received from persons in respect of the said rules; 1.(1)This Ordinance may be called the Payment of Wages (Amendment)
Now, therefore, in exercise of the powers conferred by Ordinance, 2016.
section 95 of the Employees State Insurance Act,1948(34 of (2) It shall come into force at once.
1948), the Central Government after consultation with the 2. For section 6 of the Payment of Wages Act, 1936, the following section
Employees State Insurance Corporation, hereby makes the shall be substituted, namely:-
following rules further to amend the Employees State "6. All wages shall be paid in current coin or currency notes or by cheque
Insurance (Central) Rules, 1950, namely:- or by crediting the wages in the bank account of the employee:
1. Short title and commencement.- (1) These rules Provided that the appropriate Government may, by notification in the
may be called the Employees State Insurance (Central) Official Gazette, specify the industrial or other establishment, the employer
Amendment Rules, 2017. of which shall pay to every person employed in such industrial or other
(2) They shall come into force on the date of their establishment, the wages only by cheque or by crediting the wages in his
publication in the Gazette. bank account.".
PRANAB MUKHERJEE,
2. In the Employees State Insurance (Central) Rules, President.
1950,- DR. G. NARAYANA RAJU,
(a) in rule 2, after clause (6), the following clause shall be Secretary to the Govt. of India.
inserted, namely:-
(6A) insured woman means a woman who is or was Revised Minimum Wages in Shops
an employee in respect of whom contribution is or were
payable under the Act and who is by reason thereof, entitled
& Establishments of West Bengal
to any of the benefits provided under the Act and shall w.e.f. 1.1.17 to 30.6.17
include--
Categories of Employees Monthly Minimum Rates
(i) a commissioning mother who as biological mother
of Wages
wishes to have a child and prefers to get embryo
implanted in any other woman; Zone A Zone B
(ii) a woman who legally adopts a child of upto three
(a) Unskilled Rs. 7546.00 Rs. 6669.00
months of age, ;
(b) Semi-Skilled Rs. 8301.00 Rs. 7334.00
(b) in rule 56, in sub-rule (2),--
(c) Skilled Rs. 9131.00 Rs. 8069.00
(i) for the words twelve weeks of which not more than six
weeks, the words twenty-six weeks of which not more (d) Highly Skilled Rs. 10044.00 Rs. 8877.00
than eight weeks shall be substituted; (b)Implementing areas : Zone 'A'= (i) Areas under Municipal Corporations,
(ii) after the first proviso, the following provisos shall be Municipalities, notified Areas/Authorities, Development Authorities, Thermal
inserted, namely:-- Power Plants Areas including Industrial Township Areas;
Provided further that the insured woman shall be Zone 'B'= Rest of the West Bengal.
entitled to twelve weeks of maternity benefit from the date (c) The classification of employee in the above employment is as follows :-
the child is handed over to the commissioning mother after
birth or adopting mother, as the case may be: Unskilled:Peon, Cleaner, Sweeper, Security Guard, Bearer, Messenger;
Provided also that the insured woman having two or Semi-skilled:Duftry, Assistant Accountant,
more than two surviving children shall be entitled to receive Skilled:Clerk, Typist, Office Assistant, Office Maintenance and Inventory
maternity benefits during a period of twelve weeks of Management Staff. Data Entry Operator, Accountant;
which not more than six weeks shall precede the expected Highly Skilled :Head Assistant, Senior accountant, Computer Operator,
date of confinement.. Research And Development Staff/Executive, Market Research Staff/Executive,
[F.No.S-38012/02/2016-SS-I] Godown-in-Charge. Office Supervisor, Sales Representative/Sales Promotion
RAJEEV ARORA, Jt. Secy. Employees.

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Bill No. XLIII of 2016

Revised Minimum Wages in The Maternity Benefit
Haryana (Amendment) Bill, 2016
w.e.f. 01.01.2017
A BILL further to amend the Maternity Benefit Act, 1961.
S.No. Category Monthly Daily BE it enacted by Parliament in the Sixty-seventh Year of the
Wage Wage Republic of India as follows:
1 Unskilled 8280.20 318.46 1. (1) This Act may be called the Maternity Benefit
2 Semi-Skilled-A 8694.20 334.39 (Amendment) Act, 2016.
(2) It shall come into force on such date as the Central
Semi-Skilled-B 9128.91 351.11
Government may, by notification in the Official Gazette,
3 Skilled-A 9585.35 368.66 appoint:
Skilled-B 10064.62 387.10 Provided that different dates may be appointed for different
4 Highly Skilled 10567.85 406.45 provisions of this Act and any reference in any such provision
to the commencement of this Act shall be construed as a
5 Clerical & General Staff
reference to the coming into force of that provision.
(i) Below Matriculation 8694.20 334.39 2. In the Maternity Benefit Act, 1961 (hereinafter referred to
(ii) Matriculation but not 9128.91 351.11 as the principal Act), in section 3, after clause (b), the following
Graduate clause shall be inserted, namely:
(iii) Graduate or above 9585.35 368.66 (ba) commissioning mother means a biological mother
(iv) Steno Typist 9128.91 351.11 who uses her egg to create an embryo implanted in any other
woman;.
(v) Junior Scale Stenographer 9585.35 368.66
3. In the principal Act, in section 5,
(vi) Senior Scale Stenographer 10064.62 387.10 (A) in sub-section (3)
(vii) Personal Assistant 10567.85 406.45 (i) for the words twelve weeks of which not more than six
(viii) Private Secretary 11096.25 426.77 weeks, the words twenty-six weeks of which not more than
6 Data Entry Operator 9585.35 368.66 eight weeks shall be substituted;
(ii) after sub-section (3) and before the first proviso, the
7 Driver
following proviso shall be inserted, namely:
Light Vehicle 10064.62 387.10 Provided that the maximum period entitled to maternity
Heavy Vehicle 10567.85 406.45 benefit by a woman having two or more than two surviving
8 Security Guard children shall be twelve weeks of which not more than six
weeks shall precede the date of her expected delivery;;
without weapon 8694.20 334.39
(iii) in the first proviso, for the words Provided that, the
with weapon 10064.62 387.10 words Provided further that shall be substituted;
9 Security Inspector/Security 10567.85 406.45 (iv) in the second proviso, for the words Provided further
Officer/Security Supervisor that, the words Provided also that shall be substituted;
10 Safai Karamchari in any 8824.95 339.42 (B) after sub-section (3), the following sub-sections shall be
employment inserted, namely:
(4) A woman who legally adopts a child below the age of
three months or a commissioning mother shall be entitled to
maternity benefit for a period of twelve weeks from the date the
child is handed over to the adopting mother or the
commissioning mother, as the case may be.
(5) In case where the nature of work assigned to a woman is
of such nature that she may work from home, the employer
may allow her to do so after availing of the maternity benefit
Revised Minimum Wages in for such period and on such conditions as the employer and the
Delhi w.e.f. 3.3.17* woman may mutually agree..
4. In the principal Act, after section 11, the following section
Schedule of Category of Minimum rates of shall be inserted, namely:
Employments Workmen/Employees wages in Rupees 11A. (1) Every establishment having fifty or more
Per month Per day employees shall have the facility of creche within such
distance as may be prescribed, either separately or along with
All Schedule Unskilled 13,350/- 513/-
common facilities:
employments Semi-skilled 14,698/- 565/-
Provided that the employer shall allow four visits a day to
Skilled 16,182/- 622/- the creche by the woman, which shall also include the interval
Clerical and supervisory staff for rest allowed to her.
Non Matriculate 16,698/- 565/- (2) Every establishment shall intimate in writing and
Matriculate but not 16,182/- 622/- electronically to every woman at the time of her initial
Graduate appointment regarding every benefit available under the Act..
Graduate and above 17,604/- 677/- NEW DELHI;
*Stayed by Delhi H.C.
The 8th August, 2016.
BANDARU DATTATREYA.

APRIL 2017 53 BUSINESS MANAGER


The definition of 'employee' under the E.P.F. Act is very wide. It includes
not only persons employed directly by the employer but also persons
employed through a contractor. Under the statutory definition even if a
person is not wholly employed, he would be a person within the meaning
of the term 'employee'.
Employee under EPF Act
needs to be redefined
H.L. Kumar , Advocate,Supreme Court,New Delhi
Authorities are known for
creating disputes where there is
none or to make the net so wide so
as to have galore of disputes. Finding
the solution to the problems is not
their hallmark but by making them
messy ensures them the epithet of
'experts'. It has been the main reason
for most of the litigations.
Department of Provident Funds
adopts many methods to use sticks
against employers for their
harassment on the one hand and for
indulging in the corruption on the
other. Although the technology has
considerably reduced the scope of
exploitation yet wherever there is
any possibility of subjective
consideration invidious ways are
invariably adopted for arms twisting.
The terms of the definition of
'employee' under the employees'
Funds act are very wide. They
include not only persons employed
directly by the employer but also
persons employed through a
contractor. Moreover, they include
APRIL 2017
www.businessmanager.in
not only persons employed in the factory but also persons employed in connection with the work of the
factory or establishment. For example, a home worker in beedi industry, by the fact that he rolls beedies, is
involved in an activity connected with the work of the factory but under the statutory definition even if a
person is not wholly employed, he would be a person within the meaning of the term 'employee'.
Section 2(f) of the Employees' Provident Funds & Miscellaneous Provisions Act, 1952, hereinafter referred
to as Act of 1952, is very comprehensive, which defines an 'employee' as under, which says that any person
who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of
an establishment, and who gets, his wages directly or indirectly from the employer, and includes any person
-
(i) employed by or through a contractor in or in connection with the work of the establishment;
(ii) engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of
1961), or under the standing orders of the establishment.
Despite above definition it is not easy to determine as to who is an employee in view of various
nomenclatures like home worker, domestic help, daily wage worker, casual worker, workman, part-time
retainer, advisor, consultant, piece rated worker, Director, partner, flexitime worker, field worker, agent,
commission agent, hawker, vendor, apprentice, trainee, drivers and conductors of school buses, car driver,
courier, loader-unloader, driver of the company executive getting reimbursement, team member,
karamyogi, hon'ry doctor, volunteer, sevadaar, retired employee of government, re-employed retired
employee, newspaper employees, cimena employees, employees from foreign countries or Indian
employees appointed into foreign countries, summer trainees paid stipend etc.
Sometimes the employers do not want to cover such employees under the Employees Provident Fund
Act whereas the authorities insist they should be covered. There have been number of cases interpreting as
to who is an employee to be covered under the Act. Therefore, it is necessary to have a look at some of the
judgments on the subject in order to understand the legal implications. At the very outset reference is made
to a landmark judgment of the Gujarat High Court in Satish Plastics vs. Regional Provident Fund Commissioner,
1982 (44) FLR 207, wherein it has been observed that:
"The inclusive part of the definition makes it clear that even if the person concerned has been employed
through a contract in or in connection with the work of establishment, he would yet fall within the
description of "employee" within the meaning of the Act. In order to answer the question some other
questions have to be asked and answered viz: - (1) Was he doing the work of monetary payment?
(2) Was the work done by him the work of the establishment or has a nexus with such work?
(3) Was the payment made wages, in the sense of being remuneration for the physical or mental effort in
connection with such work?
(4) Was the work such that it had to be done as directed by the establishment or under its supervision and
control to the extent that supervision and control are possible having regard to the specialised nature
of the work or the skill needed for its performance?
(5) Was the work of such a nature and character that ordinarily a master-servant relationship could exist and
but for the agreement styling it as a contact common practice and common sense would suggest a
master-servant bond?
(6) Was the relation indicative of master-servant status in substance having regard to the economic realities
irrespective of the nomenclature devised by the parties?
54 BUSINESS MANAGER
Employee under EPF Act needs to be redefined www.businessmanager.in

(7) Was he required to do the work master-servant relationship in case the person is allowed to work (1) at his own place, and/or (2) at the
personally without the liberty to hours of his sown choice and/or (3) for someone else?"
get it done through someone In the era of very high technological development, where the very concept of work and workplace have
else? completely changed and robotic machines are replacing human beings, the definition of 'employee' needs
(8) Is such relationship any the less a to be drastically changed to make it more rationale and in consonance with developing situations.

EMPLOYEES COVERED EMPLOYEES NOT COVERED

Agents - Getting commission for procuring work for the establishment.
Focussed Corporate Services (India) Pvt. Ltd., Coimbatore v. Union of India, Ministry of Labour and Employment, New
Delhi, 2011 LLR 989 (Mad HC).
Apprentices - We required to do work of regular employees.
1. N.E.P.C. Textile Ltd., Rep. by its Director, Coimbatore v. Asstt. P.F. Commissioner, Coimbatore,2007 LLR 535 (Mad HC).
2. Mangayarkarasi Mills (P) Ltd., Madrai Dist. v. 1. APFC, Madurai, 2011 LLR 604 (Mad HC).
3. M.R.F. Ltd., Pondicherry v. Presiding Officer, E.P.F. Appellate Tribunal, 2012 LLR 126 (Mad HC).
Casual labour/temporary/peripatetic workers - Engaged in construction
industry/activities.
Builders Association of India, Madurai Centre v. Union of India, 2016 LLR 1248 (Mad HC). Supreme Court has also
confirmed its applicability in an order dated 16.10.2015 vide SLP No. CC.No.8035/2016.
Deposit collectors- South Malabar Gramin Bank v. RPFC, 2013 LLR 470 (Karn HC).
Directors of a company -Working on part-time basis discharging extra duties.
Tin Printers (Pvt.) Ltd. v. Regional Provident Fund Commissioner, West Bengal, (2001) 88 FLR 187: 2000 LLR 1175
(Cal HC).
Driver - Of Managers of the Company whose wages are reimbursed the Company
has been providing uniforms, footwears, etc.
BASF India Ltd. v. M. Gurusamy, Regional Provident Fund Commissioner, Maharashtra and Goa, (2004) 2 Mah LJ
164: 2004 LLR 463 (Bom HC).
Employees engaged through contractor- By the definition of 'employee' itself.
1. D.C.M. Ltd. v. Regional Provident Fund Commissioner, 1998 LLR 532 (Raj HC).
2. The Executive Engineer, Head Works Division, Rengali Irrigation Project, Samal, Distt. Angul v. Regional Provident
Fund Commissioner, 2016 LLR 473 (Ori HC).
Employees in canteen and cycle stand of cinema
Narmada Cine Enterprises, Jabalpur vs. Regional Provident Fund Commissioner, 1991 LLR 466 (DB) (MP)
Employee getting more than prescribed wages - If he has been member of the
Scheme, he will continue to be member at least upto the prescribed ceiling.
Marathwada Gramin Bank Karamchari Sanghatana and Another vs. Management of Marathwada Gramin Bank
and Others, 2011 LLR 1130 (SC)
Home workers - Covered under the Beedi & Cigar Workers (Conditions of
Employment) Act.
1. Bagi Beedi Factory v. The Appellate Authority, (1997) 77 FLR 971: (1999) III LLJ Supp 739: 1998 LLR 23 (Karn. HC).
2. Ram Chandra Omkar Lal v. Assistant Provident Fund Commissioner, 2016 LLR 767 (Ori. HC).
3. M/s. P.M. Patel & Sons and ors vs. Union of India and Ors., 1986 LIC 1410 : 1986-I LLN 55
International Worker - Employed in India or any other country which does not
have social security agreement.
Lady members of a society- Working for wages at a branch engaged in the
manufacture of papads etc.
Shri Mahila Griha Udyog Lijjat Papad, Jabalpur v. Union of India, 1994 LIC 1308: (1994) 68 FLR 1129: (1994) II LLJ
610: 1994 LLR 307 (MP HC).
Loaders -Working long for one principal employer.
M.M.T.C. Ltd. v. Regional Provident Fund Commissioner, New Delhi, 2012 LLR 1121 (Del. HC).
Managing Director and the Directors - Getting salary.
1. Speed Sales Private Ltd. v. Union of India, 2009 LLR 1007 (Gau HC).
2. Saheli Marbles Private Limited, Udaipur v. Assistant Provident Fund Commissioner, Udaipur, 2015 LLR 1189 (Del
HC).
Part-time employee - Engaged in work incidentally connected with work of
establishment
Swamy (G.V.V.) vs. RPFC, Hyderabad and anr., 1987 (1) LLN 94 (AP HC)
Pigmy Agent - Exclusively working for a bank.
The Pachora Peoples' Cooperative Bank Ltd. vs. The Employees Provident Fund Organisation, 2017 LLR 229 (Bom.
HC)
Retired employees from railways- Since railways is not covered by the Employees
Provident Fund & the Scheme.
Central Provident Fund Commissioner vs. Modern Transportation Consultancy Service (Private) Ltd., 2009 LLR (SN)
324 (Cal. HC)
Accountant - Not a regular employee.
Assistant Provident Fund Commissioner vs. Sushil Kumar Gupta, 2011(2) LLJ 644 (Jhar. HC).
Apprentices- Engaged under the Apprentices Act, 1961.
Sevayan Medical & Research Centre v. Assistant Provident Fund Commissioner, 2012 LLR 325 (SN): 2012-
I CLR 55 (Del HC).
Car driver - Not engaged for establishment
Ratan Lal vs. The RPFC, New Delhi and Anr., 1977 LIC 1765 : 1978-I LLN 210 (Del. HC)
Casual or temporary labour - Not connected with the normal work.
Sarda Gum & Chemicals v. Union of India, 2012 LLR 416 (Raj HC).
Chartered Accountant - Firm of employer has to be a natural person and
not a firm.
Pre Aar Electrodes vs. RPFC, 2010 (3) LLJ 355 (Del. HC).
Consultant Doctors - Providing services for some hours only.
Employees Provident Fund Organisation v. Employees' Provident Fund Appellate Tribunal, 2012 LLR 165
(Ker HC).
Director - Not to be counted with employees.
Prabhat Hospital Private Ltd. v. Union of India, 2016 LLR 621 (Guj HC).
Drivers & conductors - Engaged by the transport contractor for providing
transportation for school children.
1. Springdales School v. Regional Provident Fund Commissioner, 2006 LLR 47 (Del HC).
2. Summerfield School vs. RPFC, 2016 LLR 451 (Del. HC)
Drivers, engaged by the executives of the Company
Employees' Provident Fund Organisation v. L&T Komatsu Ltd., 2009 LLR 1274 (Karn HC).
Employee retired after 55 - Having settled his provident fund dues.
Bombay Printers Ltd. v. Union of India, (1992) 1 LLJ 816: 1991 LLR 443: 1991 (63) FLR 106 (Bom HC).
Employees of the suppliers -
Karachi Bakery, Hyderabad v. RPFC, Hyderabad, (1991) 62 FLR 627: 1991 LLR 24 (AP HC).
Excluded Employee - Drawing wages more than the prescribed ceiling
and has never been member of the Employees' Provident Fund Scheme.
Goldsmiths paid for the piece-meal work
Assistant Provident Fund Commissioner, Ranchi v. Sushil Kumar Gupta, 2011 LLR 305 (Jhar HC).
Managing Director or Director
Can't be an employee.
Sanatan Ghosh v. Regional Provident Fund Commissioner, 1990 LLR 742 (Cal HC).
Members of the Cooperative Society - Not employees.
Vannan Pottavilai, Handloom Weavers' Co-Op. Society Ltd. v. Presiding Officer, Employees Provident
Fund & Appellate Tribunal, 2013 LLR 34 (Mad HC).
Partners of an establishment - Receiving salaries.
Om Roller Flour Mills v. Union of India, 2002 LIC 1229: 2002 LLR 683 (Cal HC).
Part-time medical practitioner
Hindustan Lever Limited v. The Assistant Provident Fund Commissioner, 2014 LLR 1098 (Bom. HC)
Persons collecting raw material and returning - They were engaged to
promote khadi cloths.
Punjab Khadi Mandal v. Regional Provident Fund Commissioner, Punjab, (1997) 1 LLN 480: 1996 LLR
490 (P&H HC).
Persons giving services voluntarily
Jan Shiksha Prasar Samiti, Barwari v. Assistant Provident Fund Commissioner, Madhya Pradesh, Indore,
2013 LLR 458 (MP HC).
Priest - They are only subsistence paid an allowance to enable them bare
necessities of life.
Revered Father Agnelo Gracies vs. RPFC of Maharashtra & Goa, 2005 (104 FLR 902 (Bom. HC)

Sons of the Petitioner -They were being paid wages.
Goverdhanlal Purohit v. R.P.F. Commissioner, 1993 LLR 575 (Raj HC).
Unloaders - Sitting inside the truck bringing bamboos for manufacture of paper.
Orient Paper Mills v. Regional Provident Fund Commissioner, 2006 LLR 177 (MP HC).
Weavers/Artisans - Even working at home will be covered.
Padiyur Sarvodaya Sangh v. Union of India, (2000) 1 LLJ 290: 1999 LLR 551 (Mad HC).
Summer trainees getting stipend
EPFO Clarification No. Coord./40(5)2015/Misc./clarification/27308 dated 12.10.2015
Trainees - Engaged under Certified Standing Orders.
1. Regional Provident Fund Commissioner, Mangalore v. M/s. Central Aercanut & Coca Marketing and
Processing Coop. Ltd., Mangalore, 2006 LLR 263 (SC).
2. Gorware Electronics Ltd. v. Regional Provident Fund Commissioner, 2010 LLR 882 (All HC).

Working Journalists - Engaged on monthly wages. Trainees - Without wages.

Express Publications (Madurai) Ltd. v. Regional Provident Fund Commissioner-II, 2013 LLR 614 (Ker HC). RPFC vs. Hotel Highway Ltd., 1992 LIC 1201 : 1991(2) LLN 678 (Karn. HC) BM

APRIL 2017 55 BUSINESS MANAGER

 www.businessmanager.in

Instead of resolving and settling down the controversy hovering this vexed
question, it seems a new pandora box is let loose by this verdict. Authors
in this article while conceding to the jurisprudence accompanying the
ratio decidendi have examined the implications a little bit critically.

Concept of Pay Parity-

Front and Center

S.M.Jain, Advocate &

P.C. Chaturvedi,Sr. Manager (IR), Rajasthan Textile Mills, Bhawanimandi

key to this ongoing transition must make us alert and

cautious because of its new emerging area which
requires comprehensive and all encompassing
knowledge of the concept.
It is correct to say that our Supreme Court is
probably the strongest in the world and that its verdicts
usually display a rare jurisprudential vision but then
sometimes its elaboration of a concept confuses instead
of illustrating. This seems to have happened when it
must have delivered the judgment in the case of State of
Punjab and others V/s Jagjit Singh and Ors 2017 (1) SCC
148. Whenever a statute comes up for consideration, it
must be remembered that it is not within human powers

T
to foresee the manifold set of facts which may arise, and
he concept of it if were, it is not possible to provide for them in terms
equal pay for free from all ambiguity. Obviously and at first flush the
equal work is all aforesaid Supreme Court Case seems to have delivered
abstract and comprehensive and elaborate guide lines and yardsticks
defies definition. to under stand the principle of equal pay for equal work
Its enunciation and and its practical application. The court again appears to
interpretation is ticklish have ruled that temporary, casual or contractual
and vexed. So whenever we employees doing work with the same quality
come across any case law of responsibility and transparency as of regular
High Court or Supreme employees would be entitled get equal Pay. In this
Court on this proposition, perception this judgment ought to have far reaching
we just learn, unlearn and consequences and implications for industries which
relearn as to what it employ maximum number of contract labour with a
actually connotes or what view to save cost on wages. This may not now be worth
are its implications. There doing. It is said that law does not countenance that
is paradigm shift in the similarly placed two constituencies and pay them
implementation side and differently. Such an exercise might be termed to be an

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Concept of Pay Parity-Front and Center www.businessmanager.in

The SC judgment has ignited a hot debate as to whether the temporarily

engaged employees including daily wage earners, adhoc appointees,
casual and contractual employees would be entitled to regular pay
scale along with dearness allowance on account of their performing
same duties which are performed by those engaged on regular basis
against sanctioned post.

act of oppressive, suppressive and coercive in

nature as it results in voluntary subjugation. In
this resultant back drop we have to refer to the
decisions of Supreme Court State of Orrisa V/s
Balaram Sahoo 2003 (1) SCC 250, State of Haryana
V/s Tilak Raj 2003, LLJ 823 Uttar Pradesh
Electricity Board V/s Ajeej Ahmed 2009 (2) SCC
606 and Official Liquidator V/s Dayanand 2008 (10)
SCC 1 Cumulatively these decisions support the
preposition that simply performing the same task
or duties as those regularly employed would not
entitle, the casual workers to parity of Pay with
regular employees. On the principles as
enunciated by Supreme Court decision, the Delhi
High Court in the case of Air India Ltd. V/s
Presiding Officer, CGIT & anrs. 2011 LLR 951ruled
that the principle of equal pay for equal work can
not be extended to the workman appointed on
casual basis even when they are performing the
same or similar duties as the regular employee
since the casual workers are not required to
policy of placing different post and different
possess the same qualification as prescribed for
scales. Lastly the principle would be inapplicable
regular ones. However this Delhi case does not
where differential higher pay scale is extended to
hold ground.
person discharging same duties and holding same
Precisely speaking the law on this vexed designation with a objective of ameliorative
question must be held to mean that the claimant stagnation or decrees of lack of promotional
for equal pay must prove that subject post avenues.
occupied by him requires him to discharge equal
For the last about three decades we have had
work of equal value and sensitivity as reference
several pronouncements delivered by the Hon'ble
post that subject post occupied by him is in
Supreme Court on this pay parity concept or on
different department vis-a-vis reference post
substantially similar one. The present matter was
would be in consequential. It is also held that this
also the subject matter of full bench of Punjab
principle of parity in pay would not be invoked
High Court and it seems that the Hon'ble Supreme
simply because subject and reference post have
Court reviewed about 35 Judgments and even went
same nomenclature. The law would permit
to the extent of tracing a debatable point from the
differentiation of pay scale for post with different
preamble and Article 14,16 and 39 (a) of the
in degree or responsibility reliability and
constitution of India and as we mentioned in the
confidentiality. The law would also permit that
earlier part of my this article instead of perfect
persons performing similar functions duties and
answer to the existing controversies it would
responsibilities could be placed in different pay
create more confusion. A debate has already
scales such as "Selection Grade" in same post but
started whether the temporarily engaged
such difference must have legitimate foundation
employees viz- daily wager, adhoc appointees etc
such as merits, seniority etc. It is also envisaged
who were picked up on casual and contractual
that the post with which parity is claimed must be
basis are entitled to minimum of the regular pay
in same hierarchy as subject post. Similarly the
scale along-with DA because they too perform the
principle would not be applicable where subject
similar duties and that there are voluminous
post and reference post are in different
conclusions that the judgments hand over to us
establishment having different management or
would not come in conflict to each other because of
even where establishment are in different
the neck-deep competitiveness in the industries,
geographical locations though owned by same
the employers are very much conscious of cutting
master.
cost to stay viable. So we are in for some more
The Government can also have a prevalent confusion. BM

APRIL 2017 57 BUSINESS MANAGER

Case Study
Dr. Kavita Singh
Professor,O.B.FMS,University of Delhi,Delhi
Change for better but how?
1991 ushered in a new era for Sea Side,
the email order retailing agent. The
company with a turnover of over a billion
rupees was growing faster than ever
before and was no longer the small,
home-grown catalogue store. Located in
south Kolkata, its 5,000 employees
adhered to its culture and its management
practices as well as the philosophy of its
founder and chairman, Shantanu Das,
"Take care of your people, take care of your
customer, and the rest will take care of
itself." In 1991, Das decided that the
company needed to apply modern
management practices to keep up with its
growing size and complexity.
The first step was the recruitment of a
new executive vice president from
competitor Mountain View, Subodh
Marwah to lead the changes. Marwah
quickly made numerous changes to
modernize the management systems and
processes including team-based
management, training programs for
trainees at all levels, a new multi-rater
evaluation system in which managers
were rated by peers and subordinates as
well as their supervisors and the use of
numerous consultants to provide advice.
The company reworked on its mission to
provide excellent products and services
and to turn every customer into a friend. In
addition, the company entered into a new
international venture and a new business
segment each year, resulting in solid
businesses in the UK, Japan and Germany.
Marwah was promoted as the chief
executive officer in 1993. In the
continuation of the modernization efforts,
he hired seven new vice presidents,
including Ankit Verma as the new vice
president of human resources to oversee
all the changes in the employee arena. In
the first two years, the changes seemed to
be working as the company added 100
million rupees to its revenues and posted
record profits.
However, all was not as rosy as the
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profit picture seemed to show. In spite of
the many programs aimed at employee
welfare, training and team building, many
employees complained of always having
to meet production and sales targets. The
new employee performance evaluation
system resulted in numerical rating which
seemed to depersonalize relationships. No
matter how many pieces she
monogrammed per day, one employee
felt that her work was never appreciated.
Other employees complained of too many
meetings necessitated by the
reorganization and the cross-functional
teams. One team of catalogue artists,
buyers, and copywriters needed
numerous meetings each week to
coordinate their activities. A quality
assurance manager complained that his
work week had increased from 40 to 55
hours and that the meetings were taking
time away from his real job. Many
employees complained that they did not
need to go to training programs to learn
how to take care of customers and
communicate when they had been doing
that all along.
The doubts grew until late 1994, when
the board led by Das decided that the new
management was moving the company
too far too fast and moving far away from
the basic philosophies that made the
company successful. On 2 December 1994
Das and the Vice Chairman Nikhil Rao
asked for Marwah's resignation and fired
Verma citing lack of confidence in the
direction the company was heading under
the present management and the need to
return to the company's basic philosophy.
Mr. Das then chose 34-year-old Vikash
Sen as the Chief executive officer to steer
the company. Sen and 11-year veteran of
Sea Side (his entire working career),
immediately started the about-face by
dismantling most of the terms,
reorganizing the others and returning to
focus on what the company excelled at
previously-top-quality classic clothes and
58
www.businessmanager.in
excellent customer service. Three other
executives left the company shortly after
Sen's appointment.
Shortly after his takeover, however,
paper prices doubled, postal rates
increased, and the demand for clothing
dropped sharply and profits for the third-
quarter dropped by 60% as the year
ended, overall profits were down to 30.6
million rupees on barely Rs 1 billion in
sales and Sen had to cancel a mail order to
save money. Rather than cutting quality
and laying off people, Sen spent even
more on increasing quality and employees
benefit, such as adoption assistance and
mental health referrals. His philosophy
was that customers still demand quality
products and those employees who feel
squeezed by the company will not provide
good customer service. Early results were
positive, with the company's first-quarter
producing profits three times as those
produced the previous year.
Critics of Mr. Sen's return to basic
philosophy argue that the modernization
attempts were necessary to position the
company for global competition and
faster reaction to competition in several of
its catalogue lines. Its return to growth
occurred primarily in acquisition and new
special catalogue lines and not in the main
catalogue for which it was so famous. Mr.
Sen has put further acquisition and global
expansion on hold as he concentrates on
the core businesses. Employees say that
they have fewer meetings and more time
to do their work.
Questions for Discussion
1. How would you characterize the two
sets of changes made at Sea? Which
set of change is really modernization?
2. How did the change processes differ?
3. How do you think employees will view
future attempts to implement change
at Sea Side? BM
BUSINESS MANAGER

Mihir Gosalia
Manager - ISO & OHSAS,
Kesari Tours Pvt.Ltd.,Mumbai
To bring change, reinforce trust among employees
1. How would you characterize the two
sets of changes made at Sea? Which set
of change is really modernization?
The first change process initiated by
Executive VP Subodh Marwah should be
perceived as modernization. He made
numerous changes to modernize the
management systems and processes
through a slew of measures including
reworking on company's mission
statement, new international ventures and
markets. He even recruited a new team to
give him new ideas and perspectives to
support the growth plans. All of this
showed in the results as the company
added 100 million rupees to its revenues
and posted record profits.
However, it seems that the employees
weren't able to keep pace with the rapid
growth rate of Sea Side. The employees
were not prepared for this rapid change
management process that was happening
and could not keep up pace with it. This
resulted into them being unhappy with
the current scenario at work and thus
disengaged.
The board led by Shantanu Das saw that
the company was moving away from its
core philosophy of taking care of its
employees and customers. So they asked
Subodh Marwah to resign and fired VP - HR
Verma citing lack of confidence in the
direction the company was heading and
need to return to company's basic
philosophy.
The Board hired a new chief executive
Vikash Sen who immediately began
dismantling and reorganizing most of
what the previous team had done and
focusing on past excellence history of the
company .However, much to his and
company's dismay, things did not work out
as planned.
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www.businessmanager.in
Case Analysis
It seems that there was no planned strategy in place by Sen. He was just following the
mandate given to him by the board of returning to the company's basic philosophy. It is
fine that one should stick to its core value or philosophy of what it is good at but this
should be regularly revisited in tune with the changing internal & external business
environment or context or issues. One cannot keep on doing the same things repeatedly
and expect to grow. Change takes time.
2. How did the change processes differ?
The first change process initiated by Marwah failed to understand properly the needs and
expectations of important stakeholder groups like the board headed by Das and key
employee concerns. If that were in place as a preventive action measure in terms of what is
likely to go wrong if not addressed or fulfilled, then the resultant reactive measures that
occurred later could have been nullified or reduced to some extent.
Also it needs to be pondered as to whether the leaders understood as to what is expected
of them as leaders of organizational change and making sure that their actions and words
support the change management initiative.
The next round of change process set off by Sen was typical that of a new person in helm
of affairs would do things his way or follow instructions of his boss just because the earlier
person failed to live up to expectations and causes disarray in the organization. He went
about dismantling, reorganizing things set in motion by his predecessors and bringing in
his own viewpoints which he felt will bring in the desired results that the company wanted
in first place itself. Sen should have instead used the opportunity given to him firstly to
realise as to what exactly went wrong.
3. How do you think employees will view future attempts to implement change at Sea
Side?
Employees will think that continuous change is not important. It will not be taken seriously.
Employees will think that all this will keep on happening at top level. We just keep on
continuing with our daily routine work as usual. This also implies that any major
announcement by the top leadership at Sea Side will not be viewed in the usual serious
manner as it should have perceived to be. Because employees cannot see continuity in
what is being said and what is happening in reality or in actual practice.
An organization's success depends increasingly on an engaged workforce that benefits
from meaningful work, clear organizational direction, and performance accountability and
that has a safe, trusting and cooperative environment. By asking the CEO to resign and
firing VP HR citing lack of confidence in direction in which the company was headed,
employees down the line will begin to ponder as to what exactly is happening in the
organization. The rumblings at the top level will undoubtedly have a cascading effect down
the line as is seen by three other executives also leaving shortly.
All in all the employees will not view seriously the change management attempts at Sea
unless it is leadership top driven and there is stability and continuity in the initiatives. BM
59 BUSINESS MANAGER

Bhaskar Dhariwal
Manager - HR & ER,ESSAR POWER
BUSINESS,JAMNAGAR
To change, first understand the business and people dynamics
The key to change iswin the trust and
confidence of your employees and feel the
miracles.
Change management is both "Art" &
"Science". When you intend to change or
upgrade the level of organization to meet the
expectation of market or customers, one must
have to consider the criticalities involved in
human behavior first. Here comes the role of
effective HR professional. It is common human
tendency to work in a set comfort zone and
avoid any change or alteration in that.
The first principle of any effective change
management is effective communication of
"change" to the group of expected affecting
population.
Management of Sea Side hired Mr. Marwah
as an Executive Vice President in 1991 with an
objective to lead the modern changes.
Although Marwah made numerous changes to
modernize the management systems and
processes including team-based management,
training programs for trainees at all levels, a
new multi-rater evaluation system in which
managers were rated by peers and
subordinates as well as their supervisors but
somewhere failed to connect the human
emotions to the business.
Before joining of Mr. Marwah, Sea Side was
in a full swing and was doing extremely well in
the market, the tag line of the organization was
"take care of your people, take care of your
customer, and the rest will take care of itself."
Marwah hired seven new vice Presidents
and Mr. Ankit Verma as a new Vice President -
Human Resources to oversee the changes in
employee arena. But in place of getting
improvement in the level of employee
engagement, employees started feeling
depressed and complaints started floating
which were serious in nature. The way
employees started complaining about the
issues, this can be easily understood the shift in
culture of the organization from "people
centric organization" to "profit centric
organization", somewhere in the race of
APRIL 2017
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Case Analysis
modernizing the organizational culture & concepts, the tag line of founder and chairman was also
sidelined by both Marwah and Mr. Verma, employees of sea side were not comfortable with
following issues, which were purely human dealing related issues:
1. Always have to meet production and sales targets.
2. New employee performance evaluation system resulted in numerical rating which seemed to
depersonalize relationships.
3. No appreciation for good work or for achieving extra milestone.
4. Too many meetings necessitated by the reorganization and the cross-functional teams.
5. Extra working hrs.
6. Inappropriate training need assessment method. (Employees not willing to attend the training
programs for improvement)
All the improvements done for the sake of modernizing the management systems and
processes, led to the employees dissatisfaction and drop in the level of employee engagement &
connectivity.
Management seemed to feel the wrong path taken by team Marwah and asked the resignation
or Mr. Marwah and fired Mr. Verma.
After the departure of Mr. Marwah and Verma, baton for implementation of business
transformation and introducing the modern concepts is given Mr. Sen, very young and having 11 Yrs.
Of experience. First challenge for Mr. Sen was to overcome or dismantling the terms which were not
in favor of organization and to focus on basic inherent nature of the business and that was to focus
on "top quality classic cloths and excellent customer service & employees benefits".
Here comes the difference of approach between Mr. Marwah & Mr. Sen, when Mr. Marwah
focused on complete transformation of Business, implementation of numerous of changes, without
knowing the basic philosophy of the organization.
When Mr. Marwah entered to the business, business was doing extremely well and in that
situation Mr. Marwah failed to gain the trust of employees for implementation of modern concepts,
whereas, the condition of business was totally opposite when Mr. Sen took over and without
compromising on employees benefits and quality of product, he successfully gained the trust of
employees.
Philosophy of Mr. Sen was quite in alignment with the business requirement and expectations
of management. For all HR professionals it is very important to know the actual requirement of
business and to keep oneself in alignment with the ultimate business vision and philosophy.
Basic difference in implementation of change process of both the leaders were quite visible and
result of the same were also quite expected in nature. Company achieves profits three times as those
produced in the previous years were encouraging for management, employees & for Mr. Sen.
The key to change is trust. If people trust in the future scenario, they will let go the past. If people trust
their leaders, they will believe the change vision. If they trust in a final state of stability, they have less fear
about having some unsteady times. If they trust that their performance is evaluated in a fair way, they
perform even without thinking about.
So in first phase Mr. Sen has successfully gained the confidence of employees as well as
management, so in future attempts for implementation of any change towards modernization or
further acquisition of business or global expansion will be a smooth sail for him. BM
60 BUSINESS MANAGER

This case analysis pertains to the case study published in March 2017 issue
"HR- an enabler or a crippler?"
Bhaskar Dhariwal
Manager - HR & ER,ESSAR POWER
BUSINESS,JAMNAGAR
HR lost the game, not Devanshu!
It is always expected from the HR
professional to be fair and transparent in
each and every activity, whether dealing
with existing employees or while
negotiating with new candidates.
As this was the first time for Mr.
Devanshu, when he was taking the change
from his organization, my sympathy will
always be with the candidates like Mr.
Devanshu, who become the victim of such
win-loss game by HR professionals. When
consultant was after him to accept the offer
letter and said "now learn to trust the
consultant and HR or such a big MNC",
somewhere, there is a big need to make
change in the way of working in many of
such HR consultants by stop giving the false
hope to the candidates.
Not only candidate like Devanshu, who
are from small town background may
become the victim of such or similar kind of
incidences but whosoever believes in the
importance of words, rather than written
commitment may fall in this type of trap.
While reading the case study I myself lost
with the condition of Mr. Devanshu and with
every moment and discussion with HR
representative of his new company, deeply
felt that how a HR representative can
behave in this manner.
When HR representative asked him
about the company, that how you like the
company, Mr. Devanshu given the expected
answered very professionally that "it's too
early to say anything". When conversation
proceed with joining time and payment of
notice period, again felt a second face of HR,
still many organizations have, and
surprisingly, by doing that, HR
representative feels that they have saved
the money for the organization but fails to
realise that somewhere they have cheated
with themselves, with basic principles and
ethics of HR function with the person who
has joined their organization in good faith,
cheated with the senior management or
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Case Analysis
promoters Directors by spoiling the image of organization in market and lost the overall game
of TRUST.
In earlier case analysis also I mentioned that the, employees are the real brand
ambassadors for any organization who speak loud when they leave the organization and
image of an organization depends only on what ex-employee of your organization talks about
your organization.
When it comes to the policy matter, HR must be transparent, while dealing with such type
of situations. Out of the track but would to mention here that being an HR professional, we
always talk about the "confidentiality of matters". But do we as HR Professionals try to dig it
out "What exactly are the things need to be kept confidential? Are these confidential matters
involves the employees policies also?" This is a big question and every HR professional must
give the answer to himself/herself. Here I would like to appreciate my one of the organizations,
who shared each and everything with offer letter, including all policies, which may directly or
indirectly have an impact on employee's compensation.
When a HR professional enters in the organization, every employee see him/her as a
solution provider, but when employees of the organization start seeing him/her as a cheater,
whole objective of setting up HR department in any organization gets defeated. I have seen
many big jargons written like "happy to assist", "HR as a facilitator" in many organisations, but
it is very unfortunate that HR fails to understand the real meaning of HR and fails to play its
original role for what it is meant to be.
It is a clear case of unfairness and cheating with Mr. Devanshu. Now after getting cheated,
no one can work in such organization but also leaving the organization cannot be a solution.
Devanshu must talk to his department head about the episode from very first day of his
interview and interaction with HR representative. Meanwhile, Mr. Devanshu must try to
connect with the HR Head, sitting at corporate office and try to seek his help in this matter. If
things fall in place as desired, he may continue with the organization.
Sometimes, it is also felt that in an eagerness to join the dream job and new organization,
candidates tend to overlook the other aspects of the organization or forget to ask the basic
details about the policies and procedures of the organization, which may ultimately come as
a shock for new joiner.
So following precautions may be taken, when accepting the offer of new
organization:
It is always better to study about the organization before joining. Do not rely upon only
the things written on the Internet about the organization or consultant speaks.
There are many other platforms available now days from where you may check the
credibility of an organization and level of employee friendliness.
Try to connect with the ex-employee of the organization and seek the advice. Again it is not
advisable to depend on only one advice, try to seek as many as you can.
It is always better to clear all the terms and conditions of employment in writing with
organization and after accepting the offer letter, one should resign from present employer.
Do not hesitate about asking your queries, whether it is related to compensation,
reimbursement or other policies matter.
HR representative of any organization must also clear all the policies, procedures and
reimbursement clauses before taking any candidate on board. BM
61 BUSINESS MANAGER

MANAGEMENT & LAW
The
Ambitious
Executive
Author : Rakesh Seth
Publisher : Notion Press,
Old No. 38, New No. 6,
McNichols Road, Chetpet,
Chennai-600 031
Price : Rs. 299/-
The focus of this book is to understand ambitions,
what individuals need to imbibe to build and
manage in the competitive environment.You
should read this book so that you become a
person who believes in planning and achieving the
pre-set goals through grit and determination on a
regular basis.
This book is based on the talents and wisdom of
many people author learnt from and observe over
the course of his life.This book is derivative of his
various real life experiences that he encountered
while working in corporate sectors in various
companies and attempted to pin down those
thoughts and feelings in some structured manner.
It is no secret that life is getting very hectic.The
daily treadmill is accelerating, and we need to run
faster and faster just to stay ahead.The demands of
the competitive marketplace have placed such a
premium on personal achievement that if you do
not achieve your targets, you are phased out. It
ultimately results in a tremendous pressure to
perform, coupled with a sense of overwhelming
insecurity about the future.
Unfortunately, peace, pleasure, and prosperity-3Ps-
are three commodities that seem to be in short
supply today because people sense that they are
not in control of their lives.
Therefore, the ambition level of new executives has
completely changed the way in comparison to the
approach of career paths by conventional
executives. Earlier days, the trend was to seek a
career that was well-defined and stable. But now,
the new generation is willing to pursue
uncertain/unchartered paths.
There are several factors that contribute to an
ambition-self-esteem, high self-perception and
ability to visualize the future in the present.
This book will help you to create the dreams
and will also suggest strategies to realize those
dreams. BM
APRIL 2017
www.businessmanager.in
Book Learning
COMMENTARIES ON
Factories Act, 1948
Authors : V.K. Kharbanda & Vipul Kharbanda
Publisher : Law Publishing House, 39, Sheo Charan
Lal Road, Allahabad-211 003
Price : Rs. 1200/-
Website : www.lphindia.com
It was due to this increase in the number of cases on the Factories Act as well as
the various interpretations given by these cases that the publishers felt the need
to revise and update this commentary on the Factories Act, 1948 with the latest
case laws and amendments.This book contains cases reported till September,
2016 from the major labour law journals of the country and also contains the
major allied legislations such as the Boilers Act, the Child Labour (Prohibition and
Regulation) Act, etc. With a view to reflect latest position of this law, the present
edition of the Factories Act, 1948 has been published.The topics have been
suitably apportioned into proper headings. For facility of proper construction of
the law analogous provisions in the English Act as well as the earlier Acts have
been quoted and discussed.The appendices and detailed index attached to the
book bears useful material and related legislations such as the Boilers Act, Child
Labour (Prohibition & Regulation) Act, Dangerous Machines (Regulation) Act, etc.
Authors have made all efforts to make the book up-to-date and informative. It is
hoped that this work will fulfil and cater to the needs of the Industry, Government
Departments, Bench, the Bar and anyone else dealing with Labour and Industrial
matters. BM
COMMENTARIES ON
Payment of Gratuity
Act, 1972
Authors : V.K. Kharbanda & Vipul Kharbanda
Publisher : Law Publishing House, 39, Sheo Charan
Lal Road, Allahabad-211 003
Price : Rs. 1300/-
Website : www.lphindia.com
The Payment of Gratuity Act, 1972 is one of the most important labour legislation
in India dealing with conditions on which gratuity would be payable to
employees. It is also one of the most fast-changing legislations with a large
number of court decisions constantly adding new legal concepts and issues.
Therefore, there is a need for all concerned to always be abreast on the latest case
laws on this subject.This book Commentaries on Payment of Gratuity Act, 1972
with Rules as amended fulfills this very need. It is an exhaustive commentary
based on Supreme Court and High Court decisions incorporating the latest cases
(upto 2016).The book also contains Payment of Gratuity Rules.
The book will serve its purpose and all seeking knowledge on the subject should
find the book good. BM
62 BUSINESS MANAGER
 www.businessmanager.in

HR NEWS
CMD HLL LifeCare: None out of
13 could make it
On 31st January 2017 an interview for CMD HLL LIFECARE
was scheduled at P.E.S.B. This time there were 13 candidates.
That's the maximum number of candidates interviewed by
P.E.S.B in recent times for a CMD level position in any public
sector unit. This list of 13 candidates included 2 director level
candidates (their own Director (Finance) was a candidate), 2
CMD level candidates of other PSUs and 1candidate happens to
be an I.A.S. officer of Kerala cadre. Other 8 candidates are also
quite senior executives. But surprisingly the Board didn't
recommend any candidate for the position. It is certainly not
believable that there was no one suitable from amongst 13
candidates. Neither in their recommendation P.E.S.B suggested
either to re-advertise the post or to see more candidates as is
normally done when no one is recommended. It is therefore
natural to conclude something is wrong somewhere.
If we analyze the interviews conducted for CMD level
positions during last 8 months we will find a totally different
picture. Prior to the interview of CMD HLL LIFECARE P.E.S.B
had scheduled interviews for CMD of 11 PSUs effective from 1st
June 2016. On 14th June 2016 interview for CMD ECIL was
scheduled but somehow no candidate turned up for the
interview. The board therefore recommended re-advertising
the post. It is of course a different issue that the post has not
been advertised as yet and the post is being taken care of by an
ad-hoc arrangement by giving additional charge to a scientist
of BARC. Barring this solitary case, in rest 10 cases P.E.S.B has
recommended the name of a candidate in each case for
appointment. Out of these 10 companies, only in case of
Hindustan Insecticides Ltd. there were 11 candidates and in
case of BEL , which was scheduled on 13th July there were 9
candidates. In rest 8 cases, P.E.S.B has selected a candidate out
of maximum number of 6 candidates. So much so, in case of
Hindustan Paper Corporation and Scooters India Ltd., P.E.S.B
has selected one out of only two candidates. P.E.S.B in none of
the above cases re-advertised or suggested to see more
candidates. In no case P.E.S.B had said "No candidate found
suitable or recommended ".
In the backdrop of above, not to recommend a candidate for
CMD, HLL Lifecare after interviewing 13 candidates is bound
to invoke dissatisfaction, queries and suspicion. Low turnout at
P.E.S.B itself has already raised the credibility of P.E.S.B but
not recommending a candidate after interviewing 13
candidates will further reinforce the credibility issue.
By- Chinmay Kumar Podder,
Former Executive Director (HR), NINL
HC confirms lifers for 2 trade union
leaders
The Madras High Court upheld the life sentence
awarded by a trial court to two trade union leaders on
charges of murdering vice-president of Pricol Limited in
Coimbatore in 2009. However, the division bench,
comprising Justices S. Nagamuthu and N. Authinathan,
acquitted few others from all charges. The matter
pertains to unrest in Pricol Limited,
Periyanaickenpalayam, Coimbatore on September 21,
2009. During the strife, Roy J George, vice-president, HR
department was fatally attacked by a few workmen. The
company is involved in manufacturing accessories for
two-wheelers including switches, gauges, meters and
valves.
The police registered a case for various offences under
the IPC, including Sec. 302 (murder) and Prevention of
Damages to Public Properties Act.
Behavioural safety conference
held at New Delhi
The First-ever National Conference on the Behaviour
Based Safety (BBS) was organized by the Forum of
Behavioural Safety (BESAFE) at the SCOPE Complex, New
Delhi on 16th January 2017.
The conference was inaugurated by Shri Vinod B. Sant,
the Director General of the National Safety Council (NSC).
More than 100 Life Members, delegates and eminent speakers
from all over the country participated in the conference from
organizations.
The ultimate aim of the Forum is Zero Unsafe Behaviour,
Zero Harm to all: People, Plant, Property and Planet. The
team behind this noble cause is a group of passionate
practicing professionals with long industry exposure, to
name a few, are: Dr. Suresh K. Singh (Indian Oil
Corporation Ltd.), Shri Avinash Harde (Hindustan
Construction Company), Shri SP Garg (Gas Authority of
India), Shri Vijay Bukkawar (Indian Chemical Council),
and Dr. HL Kaila (Professor of Psychology who pioneered
BBS in India).

Tata Motors kicks off VRS

Tata Motors, India's largest automobile maker, has started
rolling out a voluntary retirement scheme (VRS) for its
employees as part of its organisational restructuring exercise.
This is part of a human resources (HR) restructuring drive
that is expected to transform the organisation into a much
leaner company with a flat hierarchical structure. The new
structure will be in place from April 1.
So far, less than 500 executives have been offered VRS, which
roughly includes one year's salary, among other benefits,
sources said. The company, however, did not confirm the
details of the VRS package or how many were offered VRS.
From a 15-16-level hierarchy, the organisation is moving to a
flat five-level hierarchy.

APRIL 2017 63 BUSINESS MANAGER


HR NEWS
Wheel of law completes circle, 13 Maruti
Employees get life imprisonment
Wheel of law moves slowly but grinds well and completes
the circle. This old age saying fits in exactly in maruti case.
After three years of rigorous trial of 148 employees, on 17th
March 2017 additional district and session judge RP Goyal
of gurgaon awarded life imprisonment to 13 former
employees of Maruti, manesar plant, who were found guilty
of murder of Awanish kumar Dev, GM HR, during the fire,
vilolence and arson, that broke out on 18 July 2012. Dev was
burned to death, beaten up and bludgeoned with rods.
Of the 18 ex-workers, who had been
convicted of various other offences like
violence, rioting and attempt to murder, four
have been awarded sentence of 5 years.
The 13 persons who have been handed life
term are Ram Mehar, who was the union
president, Sandeep Dhillon, Ram Bilas,
Sarabjeet Singh, Pawan Kumar, Sohan Kumar,
Pradeep Kumar, Ajmer Singh, Jiya Lal, Amarjeet,
Dhanraj Bhambi, Yogesh Kumar and Pradeep
Gujjar.
On March 10, 2017, Court held these
31employees guilty of different offences
including murder, rioting etc..
Fourteen other convicts are ordered to be
released after paying a fixed amount of Rs.
2,500 as fine. The court termed these 14 as
"undergone accused" as they had already
served a jail term of four and half years, which it
felt was enough punishment.
Violence had erupted at the Manesar factory on July 18,
2012 over disciplinary action against an employee during
which agitated workers went on rampage, smashing
property and setting parts of the factory on fire. Awanish
Kumar Dev GM-HR was burnt alive, his legs were broken and
his charred body could only be identified by tooth next day.
Police arrested 202 employees, out of which 148 were
charged with the offence of murder, attempt to murder,
causing grievous hurt, damaging property, violence, rioting
etc. Nine employees were in jail and 139 were on bail. Court
APRIL 2017
www.businessmanager.in
acquitted 117 for lack of evidence against them in the case.
The judgment has been termed as historic among legal and
HR community as for the first time so many people have
been convicted of mob violence. This was one case in which
so many people were facing trial.
Public prosecutor Anurag Hooda said it was a serious
crime. "The court should not show any mercy to the
accused," he said, demanding harsh punishment. Claiming
that Maruti's stand had been vindicated, company's counsel
Vikas Pahwa said, "The court has sent a strong signal that
workers cannot take law into their hands with violence of
this magnitude, resulting in the killing of a senior
management official and assault on more than 90 officials.
Prima facie the judgment looks good.
However, Employees advocates are not happy with the
judgment. They said that the judgment will be challenged in
high court because it was not proved who set the office on
fire and what the cause of the blaze was. The post-mortem
report says the manager died due to suffocation. The
defense team of senior advocates Rebecca Mammen John, R
S Chema and Vrinda Grover said the fact that 117 workers
had been acquitted of all charges "unequivocally
demolishes the foundation of the prosecution's case". John
said, "Eighteen workers have been convicted only of
grievous hurt and trespass. Thirteen workers have been
convicted of murder. It is important to understand that
these 13 are the office bearers of the union and the main
leaders. They (workers) have been implicated in the case and
management witnesses have deposed against them
because they stand for the rights of workers.
Reacting court judgment, Factory workers of six plants,
including three belonging to car major Maruti Suzuki India,
went on a one-hour tool down strike from 9pm to 10pm on
18th march in order to express resentment over the
conviction of workers.
64 BUSINESS MANAGER