Case Study:

Fortune Group
Alok shook his head when he saw the client getting restless as Prakash bungled again trying
to complete a sales transaction on the new MATRIX software system. AlokDhir is the
manager of the Men's Wear store of Fortune Group well known for their world class retail
store chains. Alok was selected as a management trainee by Fortune at the MBA campus
three years ago and is now one of the younger group managers having over 25 full-time and
part-time employees including two supervisors for the two units - Leisure wear and Formal
wear. Prakash a commerce graduate is 5 years older than Alok with about that many years
more experience than Alok in retail trade. After years of hard work a sales representative
Prakash was rewarded for his excellent people skills and promoted as the supervisor of
Leisure wear unit a year ago. Six months ago Fortune began a systems migration program
to replace the existing decentralized store based computer and information software with
MATRIX, an enterprise wide integrated system. As a result of this migration there were
major changes required in each employee's work, especially those in sales. They had to
learn operating the new system and complete all transactions at point of sale while the
customer waited across the counter. As the implementation date of MATRIX approached an
extensive 3 days training program was organized; first for managers and supervisors and
then for the other sales representatives. Alok and Prakash attended the training together.
The trainers demonstrated and explained every process and transaction in detail, each
participant was given time to practice and a basic user manual provided to each participant.
Alok was happy as Prakash who had not worked much with computers approached the
training with enthusiasm.
It is now over a month since MATRIX was introduced. Alok is disappointed because in spite
of the training and time spent on demo terminals, Prakash has not mastered the new system
and it is affecting his performance as well as the store's customer service. Initially Prakash
sought his assistance many times to complete the same set of transactions. When Alok
asked Prakash to refer to the user manual, Prakash said it was not very useful and he had
misplaced it. Alok frequently observed Prakash getting stuck and using a trial and error
process or seeking help from other sales associates.
Alok is now sensing that Prakash is feeling uncomfortable and stressed. He is not seeking
Alok's help anymore. Prakash's discomfort with the system has added additional burden on
other employees besides affecting customer service. Alok knows he has to take action
quickly. He wants to help but thinks that Prakash also has to take some initiative and show
progress or he may be forced to take some drastic action.
Q. 1. Is this a training or development problem? What do you think?
Ans: This is definitely a training program to inculcate Special software training among the
employees of Fortune retail group. However, the approach of training does not match the
performance level of the employees. There should be a separate training program for the
 supervisors and sales executives as they are the ones who are going to operate the
software and not the managers. So the Training period should be extended for them to a
minimum of 10 learning days. Prakash was an ignorant fellow as he is not well-versed
with new age technologies and so it is difficult for him to understand the software and act
accordingly. If i were in the place of Ashok i would give a final ultimatum to Prakash and
still it doesn't prove fruitful i would have fired him.
Q. 2. What can Alok do to help Prakash?
Ans: It is not a matter of the day for Alok to help Prakash. But he may extend this for some
length of time. He may ask Prakash to highlight the areas where he is not doing enough
or having problems & then say him to take the areas step by step or one after another
during a length of period say for 1 hour for each area of problem or a day for each area
of problem. In this way as an efficient supervisor Alok may help Prakash outcome his
problems & may lead the stores in rhythm of the Fortune Group.

Kiran Mills Ltd.

Kiran Mills was a medium size composite mill with 700 looms and 30,000 spindles. It had
spinning, processing and engineering departments; the heads of these departments, all
technically qualified were within the age group of 35-40 years. Mr. Mishra, the General
Manager, though responsible also for two sister concerns, spent most of his time in the Kiran
Mills and left the day to day administration of the two other mills to their managers. Mr.
Mishra, 45 years old, had taken the degree of M.Sc. (Tech.) and had experience of
management in the same mills for the last 15 years. Policy matters were decides by the
Managing Director, who attended the mill every day.Mr. Mishra with the approval of the
Managing Director, introduced a training programme in the month of September 1978. He
qualified himself as a T.W.I, trainer and worked as a part time training officer in order to
create interest in training activities to the departmental heads, assistants, supervisors and
other office people and hoped that they in their turn would impart the training to their
subordinates. Mr. Mathur, the weaving master, took keen interest in the training which he
had received from the General Manager and he made effective use of it. The General
Manager was pleased that the Weaving Master had adopted the approach of an employee-
centered Supervisor rather than of a Work-Centered Supervisor. Mr. Mathur organised his
work in such a way that he could devote about an hour every day for planning and
conducting training programmes. He believed that training was continuous process. Over a
period of several months, Mr. Mathur had conducted training programmes such as T.W.I,
and Techniques, of Conference Leadership for his supervisors and training in technical
topics and T.W.I, for Jobbers. The General Manager observed that with the introduction of
training programmes, day to day labour problems had been reduced considerably and that
efficiency of the loom-shed rose significantly. There was also some reduction in the
percentage of damage. Mr. Mishra was pleased with Mr. Mathur's performance and gave
 him an extra rise in his salary. The Managing Director's attitude towards the training
programme had been favourable from the beginning.
In March 1980, the Managing Director spoke to Mr. Mishra about his idea of appointing an
Industrial Engineer who could establish proper standards and controls in different
departments of the mill for the purpose of achieving higher productivity. One Mr. Rao a
qualified Industrial Engineer who had recently applied to the Managing Director for a job,
was, in his opinion a suitable person for this assignment. Mr. Mishra accepted the idea and
subsequently Mr. Rao was interviewed by the Managing Director and Mr. Mishra. Mr. Rao
was appointed on a salary scale higher than that of the heads of the departments. In the
month of June 1980 Mr. Rao found that the efficiency of the loom-shed had gone down.
There upon he, with the help of his two Assistant, started investigation in the loom-shed. On
the completion of his investigation, Mr. Rao submitted the following report to the Managing
Director.
"The damage percentage in the loom-shed is high, because too much time is devoted by the
Weaving Master to training and as a result, the supervision work by the supervisors and
jobbers is neglected. Supervision has, therefore, become weak. It is, therefore, suggested
that the Weaving master should be asked to reduce his emphasis on training and
concentrate on supervision."
The Managing Director passed on the report to Mr. Mishra for appropriate action.

Questions:
Q. 1. To what extent, you would agree to Mr. Rao's report?
Ans: Mr. Mishra who was a qualified manager with the degree of M.Sc. Tech and experience
of 15 years in the company was a competent General Manager. He had introduced a
training programme in 1978 and with the help of the weaving master, he organised
conduction of training programmes for supervisors and jobbers in the loom shed. Over
two years, the efficiency of the loom shed rose considerably and the damagepercentage
had gone down. The M.D. had an idea of appointing an industrial engineer Mr. Rao in
March 80. In June 80, Mr. Rao submitted a report, which said that the weaving Master
spends too much time in training which has weakened supervision and the damage
proportion has gone up.This is quite contrary to what happened over the last two years. It
was seen that the weaving Master spent only an hour during the day for training which
seems to have helped all the workers and in fact, efficiency of the loom shed had gone
up during two years. How come suddenly, the efficiency comes down from March to
June 1980? Obviously, Mr. Rao's observations seem to be misdirected. He was
supposed to establish proper standards and controls in different departments for
achieving higher productivity, instead, he has chosen to target. Individuals like the
weaving Master for criticism and showing that, he has done same work as an industrial
engineer. According to me, Mr. Rao's report does not seem to gel with actual facts and
 seems to be motivated because of personal reasons. Therefore, I would not agree with
Mr. Rao's report at all.
Q. 2. What should be the policy of Kiran Mills on training of operative staff and
supervisors?
Ans : Mr. Mishra the General Manager was himself qualified as a T.W.I trainer and worked part
time as a training officer to create interest in training activities to department heads,
assistants, supervisors and other office people. He found a very capable trainer in Mr.
Mathur, the weaving master who would devote one hour to train supervisors and jobbers.
This practice yielded good results with the efficiency of the loom shed going up and the
damage percentage going down. The same approach could have been continued in
other departments too. Instead, the company brought in an outsider Mr. Rao, who was
an industrial engineer to improve things in the factory. When an outsider is brought in to
improve things, people generally do not like it. As a new man keen to show results,
always try to pick holes in an existing set up, he is not liked very much. Further, his
recommendations are likely to be based on short term observations and not an
experience. The M.D. should have suggested to Mr. Sharma to identify suitable people in
each department who would devote an hour like Mr. Mathur for training juniors. This
would have probably created wonders for Kiran Mills and that should have been the
policy of the factory on training operative staff.

Training to a New Employee

Sanjay Nagpal is a new recruit from a reputed management institute recruited as a sales
trainee in a sales office of a large computer hardware firm located in Chennai. Raghvan is
the zone sales manager responsible for overseeing the work of sales officer, field executives
and trainee salesmen numbering over 50 of three areas namely Chennai, Bangalore, and
Trivandrum. The sales growth of the products in his area was highly satisfactory owing to the
developmental initiatives taken by respective State Governments in spreading computer
education. Raghvan had collected several sales reports, catalogues and pamphlets detailing
the types of office equipment sold by the company for Sanjay's reference. After short chat
with Sanjay, Raghvan assisted him to his assigned desk and provided him with the material
collected. Thereafter Raghvan excused himself and did not return Meanwhile, Sanjay
scanned through the material given to him till 5:00pm before leaving office.
Questions:
Q. 1. What do you think about Raghavan's training programme?
Ans : The training method adopted by Raghvan is not apt for a new trainee employee like
Sanjay. Even though from a reputed management institute, Sanjay's skill and knowledge
are limited to his learning in the institute. The material collected in relation to the products
of the company only provides an insight as to what the company sells and not what
 Sanjay is desired to perform as a part of his job. This thus justifies that the training
programme followed by Raghvan doesn't suffice for imbibing the required job instructions
required for performing the job. This type of training may in general be of no benefit to
both Sanjay's performance and Company's productivity and also waste of precious
resource and time.
Q. 2. What type of sale training programme would you suggest?
Ans: The factors that need to be kept in mind while suggesting an apt sales training
programme would be: Sanjay being a newly recruited trainee. The nature of the job
(sales), the level of performance desired, awareness about how to do the job, identifying
the Trainee In this case Sanjay being a new recruit, he must be given an entry-level
training.
A) Identifying the Trainers :
It would be essentially suitable that training must be imparted by immediate
experienced supervisor of the trainee.
B) Method and Technique of Training :
Training may be imparted by means of on -the job methods as Sanjay is from a
management college of good repute where he has already learnt a lot via off- the-job
techniques.
C) Level of learning :
As it is an entry level training more emphasis must be given to development of basic
understanding of the field, becoming acquainted with the language, concepts and
relationships involved in the job.
D) Conduct of training :
Suitably the training programme should be on the job itself so as to provide sufficient
exposure and real time supervision to the trainee.
Q. 3. What method of training would have been best under the circumstances? Would
you consider OJT, simulation or experiential methods?
Ans: The method suitable for training would be On-the-Job Training (OJT). In this method the
trainee would receive firsthand experience of the job conditions. This method is
economical since no additional personnel or facilities are required. The trainee learns on
the actual equipment in use and in the true environment of his job. The trainee also
learns by day-day observation the applications of the rules, regulation and procedures. It
is also appropriate for teaching the skills and knowledge which can be acquired in short
term. Since the nature of the job is of sales, hence hands on experience is a must for
gaining experience of the job. The training must be done in stages in situations varying
from easy to the toughest conditions. This way the trainee will build up his experiences
and learn the decision making process and strategies.
 Is Rajat In Needs Of Remedial Training?
Rajat Sharma has been employed for six months in the accounts section of a large
manufacturing company in Faridabad. A formal investigation is conducted to monitor and
determine the contributions of each employee in the accounts section and check whether
they meet standards. After the investigation it was found that all employees in the accounts
section were meeting the targets that were set. Rajat, an employee in the account section
was an exception to the performance displayed by his colleagues. Along with numerous
errors, Rajat's work is characterized by low performance; often he does 20 percent less than
the other clerks in the department.
Questions:
Q. 1. As Rajat's supervisor can you find out whether the poor performance is due to
poor training or to some other cause?
Ans : Yes, the cause of the poor performance can be well determined as to whether, it is
because of poor training or other causes such as uncongenial work place, low wages or
low motivation. To check whether the poor performance is attributed to poor training, the
reports of his performance/learning during the training must be checked. It is to be
inspected and identify the areas where he had not performed well or did not show good
progress in learning. Then these identified areas must be closely supervised when the
job is performed by Rajat. Mistakes encountered must be closely examined and brought
to his notice along with the corrections that are required. He must also be humbly
prompted to review his own work to find out the mistakes in order to make him realise his
mistakes and provide an opportunity for self-correction. He must be properly supervised
for 2-3 months so to bring about a change in performance. Parallel investigations must
also be done to check factors other than training affecting /demotivating him. Incentives
for improvements in performance can also be introduced to induce genuine interest in
the work
Q. 2. If you find Rajat has been inadequately trained, how do you go about introducing a
remedial training programme?
Ans : Firstly, it is to be checked as to what type of training Rajat had been through in the
organisation. Then the records of the performance/learning in the training are to be
investigated in order to find the "weak" areas. Secondly, an analysis is also to be done
on his colleagues who had received same training as him and determine as to how they
are coping and performing with the training provided. Investigation into the training
records can also help in determining the gap's in the training that may have led to the
present problems. An appropriate plan of action or training has to be in place in order to
fill the gaps identified. The remedial training should basically focus on the gaps observed
in his earlier training and also keeping the focus on the skills and abilities that hold prime-
importance in meeting the set-standards. Remedial training should be oriented in a
 manner such that Rajat would receive Incentives /awards for his improvement in his
work, thus acting as a motivating factor for active participation. The required training
must not be long and should be precisely cut to needs
Q. 3. If he has been with the company six months, what kind of remedial programme
would be best?
Ans : As Rajat has been working in the company for the last six months he must have gained
some necessary experience and skills to perform his job. He must have been provided
with a initial training during the period of his induction into the company. The training
would have helped him understand and better comprehend his job and make him
understand as to be expected of him. If in case due to some reason or the other if the
training wasn't successful or any gaps in learning may have been left in his training, it
must be concentrated upon to fill those required gaps by a remedial training. An
assessment of his training report can well highlight the gaps. The training programme
should be designed in a manner such that it serves the purpose of covering the gaps.
The training necessarily may not be of long period and can also be of on-site in nature
i.e. on the job. This shall help him gain practical experience as he goes through the
training process which shall help him retain and learn faster. A close supervision even
after the training is recommended so as to check whether the performance is sustained
and continuous
Q. 4. Should you discuss the situation with Rajat?
Ans :The magnitude of the problem is compelling and demands Rajat's immediate attention.
Rajat needs to be aware of the situation and the harm being caused, such that he
doesn't perceive close supervision of his work as criticism or reprisal. Discussing the
situation will make him aware of his current position, what's wrong with it and what
remedial action is planned. Rajat's interest and willingness are prerequisites for active
participation in any remedial measures and also to the success or positive outcome of
the steps taken. The above pre-requisites can only be stimulated by having a detailed
discussion on the concerning issue rather than keeping him unaware of the situation and
create a discomforting work environment.

LITCO
LITCO is the name of a small proprietary concern manufacturing plastic buckets of different
sizes. The concern is doing good business and workers are paid fair wages. Total strength
of employees is 85 including three supervisors, one assistant manager and one manager.
The proprietor Mr. Shinde is a businessman cum politician but ensures that the business unit
operates smoothly and makes reasonably good profit. This business unit started operations
in the year 1994. The rules and practices are developed gradually with suitable modifications
 as and when necessary. The employees of the concern are rated by supervisors by means
of graphic scale. The factors to be considered for rating are performance at work, loyalty,
dependability, community activity, initiative, regularity, punctuality, potentiality to develop,
relations with co-workers and creative ability. The rating factors, method of rating, time of
rating, etc. are made clear to workers through notice, circular and departmental meetings.
Yearly increment, promotion and annual prizes are based on the performance of workers as
per this method. This system was accepted by workers for a period of six years since its
introduction in 1996. There was no criticism or opposition to the scheme till 2001. However,
in 2002, the situation changed and the whole performance appraisal system became a
cause of conflict in the labour-management relations. In the year 2002, five employees were
denied annual increment due to their low ratings. They, along with few others, met the owner
Mr. Shinde and expressed their dissatisfaction with the rating they have received. They
argued that some considerations in the ratings are vague and are unfair to workers. They
made reference to "community service" and argue that such service is not a part of their
normal job and what they do off - the job is none of the employer's business. They also
argued that loyalty and relations with co-workers as considerations for rating are confusing.
In addition, they argued that annual increment should not be linked with this performance
appraisal. Annual increment should be given to all workers as a reward for years' service
and for meeting growth much affected when yearly increment of Rs. 100 is denied to them.
For workers, wage payment is the only source of income and yearly increase in the salary is
a source of pleasure to them. They get psychological satisfaction because of such increase.
Workers urge Mr. Shinde to be sympathetic in this regard. One worker also hinted that
workers may be required to form a union if the injustice in regard to performance appraisal is
not removed. This discussion convinced Mr. Shinde and his manager that present rating
system was a dangerous source of friction and that its disadvantages out-weighed its
advantages. Mr. Shinde (being a politician also) noted indirect threat of union formation in
his unit and was cautious in his approach. He preferred dignified retreat. After few days, he
announced the decision to delink annual increment with performance appraisal. However,
the rating system was given continuation with some modifications. Moreover, the possibility
of promotions were rare, the rating system was not likely to create new problems for workers
and employer. This is how Mr. Shinde solved the problem relating to performance appraisal
tactfully and also peacefully. Workers were happy and their respect for Mr. Shinde also
increased to some extent.
Questions:
Q. 1. Do you feel that annual increment should be based on performance appraisal?
Ans: At present, annual increment is given in a routine way to all categories of labour force
though management can link it with performance appraisal. Annual increase in the
salary has economic, social and psychological justification. Its refusal affects workers
and their family members. It also makes workers angry, dissatisfied and non-co-
 operative. Hence, annual increment should be given to all workers and should not be
linked with performance appraisal.
Q. 2. What is your opinion about "community activity" as one consideration in rating
system?
Ans: "Community Activity" as a consideration in the graphic scale appears to be redundant for
appraisal purpose. This issue is not directly concerned with factory work. Secondly,
reliable information on this consideration may not be available. Thirdly, majority of
workers are not participating in this activity and naturally their marking will be "below
average". Finally, there is opposition to this consideration and may lead to controversy if
the management remains adamant on the matter.
Q. 3. Do you agree with the decision taken by Mr.Shinde on the disputed issue? Is it a
practical decision?
Ans : The decision taken by Mr. Shinde on the issue was wise and practical. Increment need
not be linked with performance as it is not a normal practice. Similarly, minor adjustment
in the appraisal system does not defeat its purpose. Omitting one or two considerations
from the rating system will not make the system defective. Moreover, considerations
which are ambiguous should not be selected for appraisal purpose. Mr. Shinde's decision
is a practical one and also useful for cordial industrial relations.
Q. 4. Do you feel that too much importance need not be given to performance
appraisal in small factories/production units.
Ans : Performance appraisal is important and offers many benefits particularly in large
organisation which employs huge manpower. However, in small units, workers are
limited, chances of promotion are very few and there is limited scope for the use of
results of performance appraisal. However, the system should be there as it is one of the
rights of the management. Mr.Shinde has continued the system but too much importance
is not attached to the system. The system is necessary as it keeps a check on the
employees.
Q. 5. What are the possible consequences if Mr. Shinde had refused to amend his
performance appraisal method?
Ans : Mr. Shinde had every right to be firm on the issue of performance appraisal and refuse to
accept the views expressed by workers. However, the possible consequences are likely
to be serious. Here, workers may start an agitation or may not offer necessary co-
operation in the production work. They may form a union in order to fight collectively.
Outside leadership may also come in the picture. The cordial industrial relations may be
replaced by hostile relations. This is as good as inviting new problems. There may be
 stoppage of production and profitability may go down. Taking strong stand means paying
heavy price on minor issue. Mr. Shinde has avoided this situation.

Healthy County Health Department

In late 2002 the Healthy County Health Department convened a wide range of organisations
and entities in order to develop a community health improvement plan. This collaboration
included community representatives from local hospitals, clinics, community-based
organizations, schools, churches as well as the county public health agency. A Healthy
County Community Health Council (the "Council") was established; its goal was to improve
the overall health of the county's population through a community-wide health improvement
plan that would prevent disease, promote physical and mental health, and better the quality
of life within the community. The Council identified common community health values and a
health vision for the large metropolitan population it served. In addition, a mission statement
was drafted for the local public health system.
In order for the Council to obtain the necessary information for the community health
improvement plan, strategies and tools from NACCHO's MAPP (Mobilizing for Action
through Planning and Partnerships) process were used. MAPP includes four assessment
activities:
1) Community Health Status Assessment, which attempts to answer the question, "How
healthy are our residents?" The compilation of local health data and the examination of
changes over time were assessed in comparison with local, state and national level
data and with national health objectives established for the year 2010 through the
Healthy People 2010 process.
2) Forces of Change Assessment. During this assessment a randomly selected group of
participants from the community provided input as to "What is occurring or might occur
that affects the health of our community or the local public health system?" As a result
of this assessment, the important forces of change affecting the community as well as
the potential impacts of those forces.
3) Local Public Health System Assessment, which attempts to answer the question, "How
well are essential public health services being provided to our community?" was
conducted. The collaborative used tools, consisting of standards and indicators,
developed by Public Health Practice Program Office of the Centers for Disease Control
and Prevention to perform this assessment.
4) Community Themes and Strengths Assessment, which seeks to identify "What health
and health-related issues are important to our community?" Both a survey and a focus
group were conducted to examine perceptions of community health and the quality of
life within the community.
 The Council established a subcommittee that was charged with developing an ordered list of
the most important health problems and issues facing the community. The subcommittee
was provided with data and information derived from the four assessments. After the
compilation and analysis stages were completed, the collaborative refined the vision and
mission statements for the community health improvement plan. Health problems and issues
were then prioritized, and goals, objectives and work plans were formulated for the priority
health needs. The end result was a community health improvement plan that identified
priority community health problems and issues, and delineated plans to achieve targets
identified in the plan.
Question:
Q. 1. Identify the target of this performance management application. Whose or what's
performance is being improved?
Ans: This case study focuses on the performance of a local public health system in improving
the health status of the population.
Q. 2. Which of the four components of performance management are evident in this
case study? Which are not?
Ans: All four components were used in the case study. A performance management system is
the continuous use of the 4 performance management components so that they are
integrated into an agency's core operations. Performance management can be carried
out at multiple levels, including the program, organization, community, and state levels.
However it is applied, the performance management cycle is a tool to improve health,
increase efficiency, and create other benefits and value for society.
Q. 3. Does this case study demonstrate the use of performance standards? How?
Ans: a) Performance standards include identifying relevant standards, selecting indicators,
setting goals and targets and communicating expectations. Performance standards
are objective standards or guidelines that are used to assess an organization's
performance. They may be based on national, state or scientific guidelines or be
based on the public's or leaders' expectations.
b) The case study addresses the beginning stages of gathering all stakeholders and
representatives from the community. The collaboration resulted in the formation of a
Community Health Council which communicated its expectations and identified the
mission, vision and goals of this effort.
c) The Council needs to identify relevant standards or indicators that will be used to
assess the performance of the collaborative community health improvement plan.
Standards or indicators may be set based on national, state, or scientific guidelines;
 by benchmarking against similar organization; based on the public's or leaders'
expectations (e.g., 100% access, zero disparities); or other methods.
Q. 4. Does this case study demonstrate the use of performance measurement? How?
Ans : a) Performance measurement is the refining of indicators and defining measure.
Performance measures are quantitative measures of capacities, processes, or
outcomes relevant to the assessment of a performance indicator. It also includes
developing a data system which can collect the data based on the measures.
b) The four MAPP assessments are used as the major source of performance
measures. After targets are established, data or information, often called indicators,
related to those standards are identified and collected standard. The various
indicators collected through the MAPP assessments provide the Council with a
means of measuring performance relative to the targets it has identified.
Q. 5. Does this case study demonstrate the use of reporting performance? How?
Ans : a) The reporting of performance component includes analyzing data, feeding data back
to managers, staff, policy makers, and constituent, and developing a regular reporting
cycle.
b) The data and information derived from the four assessments were collected and
analyzed by the subcommittee appointed by the Council. The data was fed back to
the Council and to the various stakeholders in the community, including the
organizations collaborating through the Council.
c) There was no mention of a regular reporting cycle or determination if targets were
met, goals achieved, or when to re-assess.
Q. 6. Does this case study demonstrate the use of quality improvement? How?
Ans : a) Quality improvement process relies on the use of data for decisions to improve
policies, programs and outcomes, then manage those changes and create a learning
organization.
b) The information provided does not describe what actions were taken to improve
efforts to address specific priority health problems identified in the planning process.
c) There are no processes identified for the plan to ensure that they continually take
actions to improve performance and accountability.
Morgan Stanley
Morgan Stanley is a global financial services provider, headquartered in the United States. It
serves a diversified group of corporations, governments, financial institutions, and
individuals. Morgan Stanley operates in 33 countries around the world, with an approximate
employee workforce of 50,000. The corporation, formed by J.P. Morgan came into existence
in 1935. The main areas of business for the firm are Global Wealth Management,
Institutional Securities and Investment Management. A management crisis in the late 1990s
 saw it lose much talent and competence. In 2008, the Federal Reserve allowed Morgan
Stanley to change its status from investment bank to bank holding company
Question:
Q. 1. What is meant by reward management? In your answer you should identify and
describe the two basic types of pay scheme. In addition, you should explain the
purpose of rewards when administered within organisations? What is pay for?
Ans : Reward management- "Management of pay, benefits and other forms of compensation."
There are two basic types of pay scheme: (1) fixed level of pay whereby wages or
salaries do not vary from one period to the next and (2) performance related pay
The purpose of reward management is to drive organisational performance and influence
employee behaviours for effectiveness and efficiency (work quality, quantity, attitude
towards customers, flexibility, learning, and creativity).
Q. 2. Imagine you were designing a compensation/reward management system for
implementation at Morgan Stanley ?list the primary design criteria that would
influence the structure of the system. You should also discuss the criteria to be
used in determining levels of pay and compensation.
Ans : Internally equitable (relative), externally competitive and personally motivating (the
system should be simple to administer) Pay differentials (criteria determining level of
pay) are often the result of differences with regard to responsibility, qualifications and
performance. In some cases there may be a need to reward scarce skills (market-driven
criteria).
Q. 3. Discuss the importance of pay as a motivator; in your answer you should
comment on intrinsic and extrinsic motivators and incentives (defining key
terms).
Ans : A) Extrinsic rewards :
Valued outcomes or benefits provided by others, such as promotion, pay increases, a
bigger office desk, praise and recognition,
B) Intrinsic rewards :
Valued outcomes or benefits which come from within the individual, such as feelings
of satisfaction, competence, self-esteem and accomplishment (see extrinsic rewards).
C) Incentives :
Devices used to reward managerial behaviour. Researchers and practitioners tend to
be in disagreement about the effectiveness of pay as a motivator. It is clear that
motivation goes beyond pay. It is also clear that the compensation system not only
affects motivation but work satisfaction and turnover intent.
Q. 4. Outline the basis of performance related pay systems and critically evaluate
different forms of performance related pay? Outline the arguments for and against
the use of performance related pay. What mistakes are identified in the case study
film clip and what recommendations are made to rectify them? Why does John
Mack believe compensation is a really difficult area to get right?
Ans: Performance related pay systems seek to reward on the basis of contribution thus
benefiting employers who enjoy higher productivity and employees associated with good
performance. When used properly, they reinforce appropriate behaviours and encourage
a resource-based culture. One primary problem is defining performance properly so that
the organisation rewards results and not simply effort. Performance appraisals are a
method of reviewing the performance and potential of employees is usually undertaken
formally and systematically at regular intervals. Systems may be focused on the
individual or team or even larger groups of employees. General criticisms of performance
related pay include: fairness, biased managerial judgement, a budgetary rather than
motivation focus, demotivation of the majority, union hostility and conflict with the team
philosophy. Such systems may also reward short-term risk-taking to the detriment of
longer term requirements.
Mistakes:
The way we rewarded our people, too many rewarded on a short-term basis.
Recommendations: reward with equity, use claw back mechanisms. Compensation is
difficult due to the war for talent-there is a need to attract and retain employees but this
must be balanced with using rewards appropriately to attain desirable results both in the
short and long term.

Diagnosing the Causes of Poor Performance

Heather works in the training department of a large information technology (IT) organisation.
She is in charge of designing and delivering interpersonal skills training, including
communication skills, networking, and new manager training classes. Heather has excellent
knowledge of how to design training class. She incorporates behavioral modeling and
practice into all of her classes. She has also conducted research on what good
communication consists of, how to network, and what new managers need to know to be
successful. However, individuals who attend Heather's training classes often give her low
ratings, stating that she has a hard time answering specific questions in classes, and that
she does not seem approachable after the classes when individuals want to ask questions.
 Questions:

Q.1. You are Heather's manager. In your opinion, what is causing Heather's poor
performance? Is it due to a deficiency in declarative knowledge or procedural
knowledge?
Ans : Heather's deficiency is in declarative knowledge. It is said that one becomes more skilled
in problem solving when he relies more on procedural knowledge than declarative
knowledge.
Q. 2. What can be done to remedy the performance problem?
Ans : Heather's training session should be more interactive. Rather than using theoretical
model she should make models more practically applicable.

The Business Challenge

The director of a safety and quality control function in a Fortune 50 company contacted us to
request a team building session for a team within his department. It was a team of 11 data
entry technicians whose task was a fairly simple, though critical, step in the company's
monitoring of the quality and safety of their products. There were several problems broiling
around the group, including complaints (from within and outside the team) about distracting
behaviors, personal use of work time, punctuality, inconsistent attendance at departmental
meetings, lack of advancement opportunities and poor performance in terms of both quality
and quantity. The two managers of the group, along with the Director, were worn out and
frustrated with their failed attempts to change these behaviors and redirect the team to
cohesive, successful performance. Having participated in team building sessions we had
facilitated in the past, he had contacted us hoping that we could use a one-day teambuilding
session to get the group's attention, and perhaps align them to a more workable set of
practices and behaviors.
Questions :
Q. 1. Does this group of people actually need to function as a team?
Ans : After some examination, answer turned out to be "no." They needed to have a system for
assigning work, but it really didn't require much communication or collaboration among
the group members to set that up, and all the work was done individually. They were
what we would classify as a "workgroup" not a "team."
Q. 2. All the complaints and behaviors aside, what exactly do you mean by poor
performance?
Ans : It wasn't just a vague sense of poor performance that the Director was describing to us,
but a long-standing, near-complete failure against a very clear metric: only 3 of the 11
individuals regularly met the minimum performance standard of completion of 35 cases
per week. And this was intentionally designed to be a very lenient minimum standard, not
a stretch goal; as context, one group member averaged 60 completed cases per week.
 The group as a whole had been averaging below this minimum standard that
management had set for quantity of work - one individual averaged only 6 completed
cases per week, or 16% of the minimum standard!
With this data, our answer was very simple: we told the Director that we would not do a
team building exercise for this "team". Instead, we gathered the Director and two
managers together and asked them if they were ready to take this "minimum standard"
that had established seriously, and actually hold the members of the workgroup
accountable for reaching it - this would include firing anyone who continued to perform
below the minimum standard. They were eager, even relieved to make this commitment.
We suggested that if they, as managers, stopped worrying about the variety of behaviors
that they'd been focused on, and instead simply focused on enacting clear, previously-
agreed upon consequences, that they would probably bring the team around within a
couple months, or be able to bring in new hires to replace staff who continued to
egregiously under-perform.

B) Wage and Salary Administration:

ABC Electronics Company
ABC Pvt. Ltd. is an electronics company with a workforce of 120 workers having an
engineering division and an assembly division. The engineering division has a total
workforce of 80 workers who are all male workers. The assembly division has a workforce of
40 women workers only. Almost all the workers are the members of the MIDC Workers
Union.
On 31st Dec. 1992 the last settlement on wages and working conditions signed between the
Management and the MIDC Workers Union had expired and the union had terminated that
settlement and submitted afresh charter of demands.
The present wages of the employees was on follows :
1) Engineering Division Minimum Rs. 1800/- per month
Maximum Rs. 2500/- per month
2) Assembly Division Minimum Rs. 1200/- per month
Maximum Rs. 1800/- per month
The union was demanding a rise of Rs. 1000/- per month in the wages of all the 120
employees, and they were also demanding parity in the wages of the assembly division and
the engineering division.
The Personnel Manager called the union office-bearers for negotiations and at the first
meeting explained the basic premises on which negotiations will take place :
a) Management is prepared to concede some wage rise to all the employees.
 b) Parity in the wages between Engineering division and the Assembly division cannot be
agreed to for the following reasons :
i) Work in both the divisions is not the same, Engineering division workers are paid more
because of 'heavier work'.
ii) Women workers of the assembly division are drawing one of the highest wages amongst
women workers in die MIDC area.
The Union office bearers argued that as both men and women workers are their
members, they cannot practice discrimination.
Questions
Q. 1. As a Personnel Manager, how would you prepare for the next round of
negotiations ?
Ans : The present wages of employees are as follows :
A) Engineering Division Rs. 1,800 p. m. min.
Rs. 2,500 p. m. mix.
B) Assembly Division Rs. 1,200 p. m. min.
Rs. 1,800 p. m. max.
The personnel manager placed basic premises on negotiation as follows :
a) The management is prepared to concede some wage rise to all employees.
b) Engineering division workers are paid more because of heavier work while assembly
division workers are paid less, but still the women workers in this company received
better wages than any other women workers in the MIDC area.
The union leader argued that both men and women workers must receive same wages.
In the next round of talks, I have to convince the union people that work in the
engineering and assembly sections deserve different rewards because women cannot
possibly do engineering division jobs to the some efficiency and therefore should draw
lesser rewards. It is the skill of any worker that determines the wages he or she
deserves.
For supporting my view point, I shall bring in experts from the national productivity
council who can explain in scientific terms, the amount of work and the wage relationship
to all the workers.
Further, I would also tabulate and present pay scales to men and women workers in
industries in that particular town in the MIDC area and show how different pay scales for
men and women are justified.
I would also say that if we employ men workers in the assembly section, they would also
get lesser pay than engineering section workers because it is the nature of work that
determines wages.
Q. 2. What do you suggest as the solution to the above problem ?
Ans : As a solution, I would propose the same wage rise of Rs. 300 p. m. for both the section
employees. Further, I would employ 5 men in the assembly section because of increased
workload and pay them the same salary as women workers to emphasize the point that
men and women get the same payment for the same kind of work. Thus, the company
will be shown not to discriminate between men and women for the some kind of work.
I would also display guidelines of National Productivity Council an wage determination
based on skills and their guidelines on gender equality in industries. I would collect as
much information on payment to women workers in different industries in the region so
as to provide a basis for proving the management’s point in this respect.

Madhusudan Company
The Madhusudhan Company was located in a medium-sized industrial city in Maharashtra.
The company employed a labour force of 250 workers in production of some simple
chemicals for which there was a considerable industrial demand. The permanent labour
force was divided into five groups, each under the direction of a foreman. Supervising the
entire labour force was a General Superintendent. Assigned directly out of the General
Superintendent’s Office, was an “Extra Group” which, was assigned daily by the
Superintendent’s Assistant to the departments needing temporary replacement or extra
workers. Sometimes the entire extra group would be assigned to one department. The extra
group was composed of the newest common labourers in the company. This pool of
common labour permitted considerable flexibility of shifting workers to the department
having temporary increased workload. The pool arrangement also permitted greater
flexibility in the size of total labour force, since, if layoffs were necessary, the members of the
extra group were laid off first.
Govinda Valia, 24 years old, was a newly hired member of the extra group. He related the
following experience, which took place during his sixth week on the job.
One day I was assigned with another labour to work in the by-products division under
Jaspal, one of the five foremen. The job was loading salt, which was piled in a warehouse.
The usual method of loading resulted in a wagon of salt being turned out in a day. The
weekly quota called for loading two wagons, which took two days. Well, I saw how inefficient
this method was, so I adopted a new method that helped us turn out two loaded cars that
day. When the foreman came around and saw what I had done, I could see that he was
pleased.
However, not once during that day did he come up and say, ‘O.K.’ men, take a break since
you’re way ahead of the schedule.”
As far as I am concerned, little things like that mean a lot, and I know that the rest of the
men would have appreciated it too. In fact, as far as I remember, Jaspal or any other
foreman never did pat us on the back for doing a good job.
 A week later I was told to work in another department. The group there had a friendly person
named Narayana - we always had something to say to each other after the first time. I
worked in the department in the same group with him. He was an older person who had
been with the company for quite a while.
On this particular day, Narayana walked up to me and said, “I hear you are one of
Jaspal’s men.” (Jaspal was the by-products division foreman). I passed a few remarks about
how it was working under Jaspal.

Then he says, “I know how you loaded that salt wagon out there.”

In a friendly manner he continued, “Why do you have to load two wagons instead of one? What
do you think would happen if one of our older men was expected to do that in the future?”

I was widely embarrassed because I knew there was no need to load salt that fast because
it was not coming in that fast. I realized that, may be, Narayana was right. Narayana also
added during this conversation that the company didn’t appreciate this hard work anyway.
Well, after this happened, I recalled other comments about my working too hard. In fact, on
my first day of work I was put with another new employee to remove mud. We worked a little
while and then my companion said, “Go slow, Govind, we want to have a job to do, don’t
we?”
Questions
Q. 1. Analyse the motivating factors which are operating in the company?
Ans : Madhusudan Company produced same simple chemicals and employed 250 worker
divided into five groups. In addition, these were a pool of daily workers assigned to the
General Superintendent. He could select the required no of daily workers according to
the need of every department and get daily jobs done.
The daily workers could be laid off or employed at the convenience of the management
and therefore were treated rather indifferently by the company. There was no motivation
of any kind for daily workers.
Govind Valia a daily loader could see that in a week only five wagons of salt were being
loaded. He adopted a new method which turned out two wagons a day. According to
Govind this was quite on achievement but the foreman Jaspal did not show any
appreciation though he was quite happy to see Govind’s efficiency. He did not part
Govind on his back nor he load a said word.
There were plenty of daily workers available and as only two wagons needed to be filled
every week, there was no hurry so increased efficiency on the part of Govind would
actually mean lesser employment days for him.
Thus there were no motivations factors in Madhusudan company at all.
Q. 2. Analyse the behaviour of the foreman of Madhusudan Company.
Ans : Govind was working in the bye-products division which was under Jaspal, one of the five
foremen in the Company. When Govind showed a better method to load wagons, Jaspal
liked it but did not show any appreciation or he did not give any break to Govind from the
tiresome work.
The foreman was quite indifferent to Govind because he knew that there can be plenty of
other workers available if Govind leaves the job and even if they work a lot less
inefficiently, it does not make any difference to the company because there are hardly
any expectations out of daily workers like Govind. Narayan another daily worker
confirmed this harsh reality to Govind because he knew the ways of foreman and
supervisors in this company. Jaspal’s behaviour reflects the feudal attitude in Indian
Companies where all supervisory people feel that they have to exploit their subordinates
and get maximum work done with minimum rewards and with little or no appreciation
whatsoever.
Q. 3. What will Govind Valia’s work behaviour in future will be? Why?
Ans : Narayan, the senior daily worker explained to Govind that it was not necessary to load
wagons at first rate because they did not come in at a fast rate. It was enough if they
loaded two wagons in a week. If two wagons are loaded. In one day, there would be no
work left for daily workers.
Then Govind realised that by working hard, he is losing an opportunity to work for more
days and earn more.
When Narayan said to Govind “Go slow, Govind. We want to have a job, don’t we?” then
Govind realised his fallacy. Working hard and showing efficiency would prove counter-
productive in a company like Madhusudan Company.
In future, Govind would work only as much as other daily workers do and would not
make any extra effort show any innovativeness because it was of no use in this
company.
Q. 4. How would you go about doing an appraisal of job efficiency at Madhusudan
Company?
Ans : Madhusudan Company seems to be an orthodox traditional company which does not
have very scientific methods of performance approval.
I would start with setting work standards for all five groups. Every group is supposed to
complete a certain no. of Jobs in a given period to the satisfaction of management. The
standard will be based on work-study analysis carried over a period of one or two years.
If necessary, I would take the help of productivity consultants who would conduct time
motion studies to determine the quantum of work expected out of each group.
I would then, decide on an incentive scheme to motivate workers to exceed their average quota
of work every day.
In addition, I would closely observe the leadership qualities of workers in every group. I
would identify special skills not only in permanent workers but also in daily workers and
try to encourage them by giving incentives and advancement opportunities.
I would make a list of retiring employees and try to accommodate experienced regular
daily workers in the permanent cadre.
This would be my plan in brief for doing a performance appraisal.
Case No. 2
Organisational Discipline
A nationalised road transport corporation introduced an incentive scheme for the bus crew
so as to provide better transport facilities to the maximum number of passengers as there
was no other transport agency operating on the same route. Moreover, this would increase
the revenue of the corporation. In accordance with this scheme, the corporate fixed a certain
amount of the level of revenue in each route as base revenue. If the revenue earned by the
corporation for a particular trip was equal to the base revenue, the conductor and driver of
the bus would be eligible to receive the incentive amount of one percent of the base
revenue. If the revenue exceeded the base amount, the conductor and driver could get
higher percentage on incremental revenue as an incentive bonus.
In a bid to take advantage of the scheme, the bus conductors of almost all the routes started
to overload the buses exceeding double the storage capacity (49 seating capacity and 49
standing passengers). This scheme had been functioning successfully, benefiting the
passengers, the bus crew and particularly the corporation as the cost of operation of the bus
did not increase in proportion to the increase in revenue.
Mr. Ajay had been working as a conductor in the Deccan depot of the road transport
corporation. He was on duty on 19 th September 05 on a route. He had overloaded the bus
almost to double of the seating capacity. Mr. Varun a passenger of that bus did not purchase
a ticket despite repeated enquiries of the conductor because of the heavily overloaded bus
and his own illness.
The conductor was unable to count the passengers because of the overload. Ticket
checking officers stopped the bus, verified tickets of all passengers and found that Mr. Varun
had not purchased a ticket. The officers blamed the conductor for not issuing a ticket and the
passenger for not buying a ticket. Mr. Varun in a written statement said that the conductor
was ill and the bus was overloaded. The conductor did request him to buy a ticket but could
not reach him. He requested that no action should be taken against the conductor. The
checking staff collected the ticket fore and appropriate fine from Mr. Varun. But they also
suspended Ajay the conductor for not issuing a ticket.
 The suspension of the conductor caused an uproar among all the bus workers of the depot.
Drivers and conductors held a meeting and resolved to limit the intake of passengers. The
decision was implemented immediately. However, many passengers were left stranded at
the depot because the buses could take only limited no. of people. There were great
difficulties in traveling from one place to another. Revenue of the depot declined to Rs.
75,000 from Rs. 1,00,000 a day. The suspension of Ajay caused ripples in other depots as
well and there were work-to-rule agitations in other depots too. Viewing the entire situation
management re-examined the whole case and withdrew the suspension order on Mr. Ajay.

Questions
Q. 1. Was the conductor guilty of negligence of duty?
Ans : Yes, going by the rules, the conductor was certainly guilty of duty. He was supposed to
ask every passenger who boarded the bus for a ticket and ensure that he issued a ticket
to every passenger. Over crowding and his own illnesses are excuses which cannot be
accepted in principle. He was found not to issue a ticket to a passenger and thus his guilt
was established by the checking officers. Thus, he was certainly guilty of neglecting his
duty.
Q. 2. Should the corporation officials ignore the pleas and evidences of passengers
traveling in that bus while imposing a penalty ?
Ans : Strictly speaking, there was nothing wrong in the action taken by the checking officers. If
the passenger admitted that it was his own fault that he could not offer money in time to
buy a ticket to the conductor. The checking staff should have accepted the fare and the
fine from him and left the issue at that point. As would eventually happen, the passenger
while alighting at the final destination would have approached the conductor and would
have bought a ticket on his own offer the crowd in the bus got- down. It was rather
premature and hasty on the part of the checking staff to impose a penalty on the
conductor.
Q. 3. Should a genuine mistake call for the drastic punishment of suspension ?
Ans : Theoretically speaking, a mistake or non-compliance of duty is eligible for suspension.
However, practically this is not possible. One has to consider the circumstances of such
a non-compliance, the magnitude of the mistake, possible repercussions of a drastic
action before any harsh decision is taken. The model standing orders under the Bombay
Industrial Employment (Standing Orders) Rules, 1959 specify the acts and omissions as
misconduct for which the charged employee can be punished. The first act of omission in
these model orders is
“Willful in subordination or disobedience (whether alone or in combination with others) of
any lawful and reasonable orders, rule or regulation.”
 In this case, the officers concerned constructed the act of the conductor as willful
disobedience of a reasonable rule and therefore they thought it fit to punish the
conductor.
The question here is that whether the omission of the conductor was a willful act or not
according to whatever is mentioned in the case, it does not look like that the conductor
willfully chase not to issue a ticket to Mr. Varun. He did try but until the time, the checking
staff entered the bus, he was unable to do so because of over crowded conditions in the
bus.
Thus it is not a genuine deliberate mistake. However, if a genuine mistake is deliberately
done with a selfish motive or with a view to favour someone, it cannot be condoned and
a drastic punishment may be necessary.
Q. 4. Should the disciplinary rules be applied for the sake of more discipline or should
they contribute to the goals and objectives of a corporation ?
Ans : Disciplinary actions can be productive if implemented with tact and proper care.
However, excessive actions can be counterproductive. In this connection, the Indian
institute of personnel management says, “In advising management whether to proceed
with a disciplinary case, the personnel officer must give careful consideration to likely
repercussions on discipline and general relationships in the organisation. Even when
there is a prima facie case against an employees, it is to be considered whether an
enquiry with all publicity and excitement it causes is advisable or whether some other
action might prove more effective in improving discipline in the future.” In this case, a
simple action of suspension of a helpless conductor caused a big uproar and resulted in
a daily loss of revenue to the extent of Rs. 25,000 for the company. Certainly, the
disciplinary action did not contribute to the goals and objectives of the company. If a
large fraud was committed by a conductor, may be, a harsh disciplinary action would
make all staff more aware of virtues of honesty and integrity in employment and such
disciplinary action would have resulted in contributing to the goals and objectives of the
organisation.