Human Resource Management – II CBCBA6T12B

Syllabus topics (RTMNU)

• Building Relationships
• Facilitating Legislative Framework
• Trade Unions
• Managing Conflicts
• Disciplinary Process
• Collective Bargaining
• Workers Participation in Management - Concept, Mechanisms and Experiences

Building Relationships (Employee Relations)

Employee (industrial) relations means the relationship between employers, employees, their unions and the government at the workplace. Good relations mean cooperation, trust and peace; poor relations lead to strikes, lockouts and low productivity.

Ways to build good relationships: fair wages and working conditions; two-way communication; grievance redressal system; recognising unions; workers' participation; fair and consistent discipline; welfare and safety measures; training and career growth; respecting dignity of workers.

Importance: industrial peace, higher productivity, lower absenteeism and turnover, quick adoption of change, good image.

Facilitating Legislative Framework

The main laws that shaped industrial relations in India:

• Trade Unions Act, 1926 – registration, rights and immunities of trade unions.
• Industrial Employment (Standing Orders) Act, 1946 – written service rules (classification of workers, working hours, leave, misconduct, discipline).
• Industrial Disputes Act, 1947 – investigation and settlement of disputes; strikes, lockouts, lay-off, retrenchment, closure; works committees.
• Constitution of India – Article 19(1)(c) right to form associations/unions; Article 43A (participation of workers in management).

These are now consolidated in the Industrial Relations Code, 2020 (check latest rules).

Trade Unions

A trade union is a voluntary, continuous association of workers formed to protect and promote their economic and social interests through collective action.

Functions: militant – collective bargaining, strikes to win better wages and conditions; fraternal – welfare, education, legal aid, mutual help; political – representing workers in policy-making.

Registration: any seven or more members may apply; for a union of workers, at least 10% or 100 workers (whichever is less) of the establishment must be members (check latest rules under the IR Code).

Problems of Indian unions: multiplicity of unions, political influence, outside leadership, small size and weak finances, low membership in the unorganised sector, inter-union rivalry.

Managing Conflicts

Industrial conflict/dispute – a disagreement between employers and workers (or among workers) about employment, terms of employment or conditions of work.

Causes: wages and allowances, bonus, working hours, retrenchment, unfair dismissal, poor working conditions, non-recognition of unions, political factors.

Forms: strikes (go-slow, sit-down, token, gherao), lockouts.

Methods of settlement:

1. Bipartite negotiation / collective bargaining.
2. Grievance redressal committee at the workplace.
3. Conciliation – a government conciliation officer helps the parties reach agreement.
4. Voluntary arbitration – parties refer the dispute to an agreed arbitrator.
5. Adjudication – compulsory settlement by Labour Courts and Industrial Tribunals (and National Tribunal).

Disciplinary Process

Discipline means orderly behaviour according to the rules of the organisation. Misconduct examples: theft, fraud, wilful insubordination, habitual absence or late coming, drunkenness, damage to property, sexual harassment.

Steps in disciplinary action (principles of natural justice):

1. Preliminary investigation of the misconduct.
2. Charge-sheet / show-cause notice stating the charges clearly.
3. Considering the employee's explanation.
4. Domestic enquiry by an impartial enquiry officer; employee can cross-examine witnesses and present a defence.
5. Findings of the enquiry officer.
6. Decision and punishment – proportionate to the misconduct: warning, censure, fine, withholding increment, suspension, demotion, discharge or dismissal.
7. Communicating the order; right of appeal.

Hot-stove rule (Douglas McGregor): discipline should be immediate, with prior warning, consistent and impersonal – like touching a hot stove.

Collective Bargaining

Collective bargaining is the process of negotiation between the employer and the representatives of workers (union) to decide wages and terms of employment, ending in a written agreement.

Features: collective, bipartite, continuous, flexible (give and take), voluntary, aims at industrial peace.

Process: preparation (charter of demands) → negotiation → agreement → implementation → follow-up/administration of the agreement.

Levels: plant level, industry level, national level. Importance: democratic, reduces strikes, improves understanding; but it needs strong, representative unions.

Workers' Participation in Management (WPM): Concept, Mechanisms and Experiences

Concept: WPM means giving workers a share in the decision-making of the enterprise through their representatives. It is based on industrial democracy.

Levels/forms: informative (sharing information), consultative (workers' views taken), associative, administrative and decisive participation.

Mechanisms in India:

1. Works committees – under the Industrial Disputes Act for establishments with 100 or more workers; equal representatives of employer and workers.
2. Joint Management Councils (1958).
3. Shop councils and joint councils (1975 scheme).
4. Worker directors on the board (e.g. in public sector banks and some PSUs).
5. Quality circles, suggestion schemes, employee share ownership (ESOPs).

Experiences in India: success has been limited – reasons include multiple and politicised unions, lack of trust, managements' unwillingness to share power, illiteracy and lack of training of workers, and the advisory nature of most bodies. Successful examples are found where management is committed and unions are strong and united.

Likely exam questions

1. (Long, 8/16 marks) What is collective bargaining? Explain its features and process.
2. (Long, 8/16 marks) Explain the concept and mechanisms of workers' participation in management. Review its working in India.
3. (Short, 4 marks) State the functions of trade unions.
4. (Short, 4 marks) Explain the steps in a disciplinary procedure.
5. (Short, 4 marks) State the methods of settling industrial disputes.

Syllabus topics (RTMNU)

• Talent Management: Meaning, definition, significance, process & strategies for talent management
• Artificial Intelligence in HRM: Meaning of AI in HRM, Role of AI in HRM, Advantages of AI in HRM, Challenges Posed by AI in HRM
• HR Analytics: Definition, Meaning, Importance, Key Metrics, Data Requirements and Implementation
• Human Resource Information System (HRIS): Concept, meaning and importance

Talent Management: Meaning, Definition and Significance

Talent management is the planned process of attracting, developing, motivating and retaining high-performing and high-potential employees to meet present and future business needs.

Significance: right people in key positions; competitive advantage; higher productivity and innovation; retention of top performers (lower cost of turnover); leadership pipeline and succession; strong employer brand; better engagement.

Process and Strategies of Talent Management

Process:

1. Planning – identify key positions and talent needs.
2. Attracting – employer branding, recruitment from best sources.
3. Selecting – competency-based selection.
4. Developing – training, coaching, mentoring, job rotation.
5. Retaining – pay, recognition, career growth, engagement.
6. Transitioning – succession planning, promotions, exit interviews.

Strategies: strong employer brand; competency mapping; high-potential (HiPo) programmes; succession planning; performance-linked pay and ESOPs; continuous learning (online courses); flexible and hybrid work; mentoring; employee engagement surveys; diversity and inclusion.

Artificial Intelligence in HRM: Meaning and Role

AI in HRM means the use of computer systems that learn from data (machine learning, natural language processing, chatbots) to perform or support HR tasks.

Role of AI in HRM:

1. Recruitment – resume screening, job-candidate matching, scheduling interviews, AI video-interview analysis.
2. Onboarding – chatbots answer new joiners' questions.
3. Training – personalised learning recommendations.
4. Performance management – continuous feedback, goal tracking.
5. Employee engagement – pulse surveys, sentiment analysis.
6. Attrition prediction – identifying employees likely to leave.
7. HR helpdesk – leave, payroll and policy queries through chatbots.
8. Workforce planning – forecasting manpower needs.

Advantages and Challenges of AI in HRM

HR Analytics: Definition, Meaning and Importance

HR analytics (people analytics) is the collection and analysis of HR data to improve decisions about people and to link HR activities to business results.

Importance: evidence-based HR decisions; better hiring quality; reduced attrition; measuring training return; workforce planning; identifying high performers; linking HR to profits.

Key HR Metrics

Others: offer acceptance rate, employee engagement score, retention rate, promotion rate.

Data Requirements and Implementation of HR Analytics

Data needed: employee master data (age, qualification, tenure), recruitment data, attendance and leave, payroll, performance ratings, training records, engagement surveys, exit data, business data (sales, productivity). Data must be accurate, complete, consistent and kept securely.

Implementation steps: (1) define the business problem (e.g. high attrition); (2) collect and clean data from HRIS; (3) analyse – descriptive, predictive; (4) present insights in dashboards; (5) take action; (6) measure results and repeat. Needs top management support, skilled analysts and good software (Excel, Power BI, HR analytics tools).

Human Resource Information System (HRIS)

HRIS is a computerised system for collecting, storing, managing and reporting information about an organisation's employees and HR activities.

Modules/functions: employee database; recruitment/applicant tracking; attendance and leave; payroll (with PF, ESI, TDS); performance management; training records; employee self-service portal; reports and compliance.

Importance: accurate and up-to-date records; saves time and paperwork; faster payroll; better decisions with reports; statutory compliance; employee self-service; data for HR analytics; data security. Examples: SAP SuccessFactors, Oracle HCM, Zoho People, Keka, greytHR.

Likely exam questions

1. (Long, 8/16 marks) What is talent management? Explain its significance, process and strategies.
2. (Long, 8/16 marks) Explain the role, advantages and challenges of Artificial Intelligence in HRM.
3. (Short, 4 marks) What is HR analytics? State its importance.
4. (Short, 4 marks) Explain any four key HR metrics with formulas.
5. (Short, 4 marks) What is HRIS? State its importance.

Syllabus topics (RTMNU)

• Payment of Wages Act, 1936: Minimum wages, deductions, and payment process
• Bonus Act, 1965: Eligibility, calculation, and payment of bonus
• Gratuity and Provident Fund Laws: The Payment of Gratuity Act, 1972, and the Employee Provident Fund Act, 1952
• Maternity Benefits Act, 1961: Rights related to maternity leave and benefits

Payment of Wages Act, 1936

Object: to ensure that wages are paid to employees on time, in the proper form and without unauthorised deductions.

Applicability: factories, railways, and notified industrial and other establishments; employees earning wages up to ₹24,000 per month (notified in 2017).

Minimum wages: the Minimum Wages Act, 1948 required governments to fix minimum rates of wages for scheduled employments; wages paid under the Payment of Wages Act cannot be below these. Under the Code on Wages, minimum wages apply to all employees and the Central Government fixes a floor wage – check latest rates.

Payment process:

1. Responsibility – the employer (manager of the factory) is responsible for payment (Sec 3).
2. Wage period – fixed by the employer; must not exceed one month (Sec 4).
3. Time of payment (Sec 5) – before the 7th day after the wage period ends where fewer than 1,000 persons are employed, and before the 10th day in other cases. On termination, within the second working day.
4. Mode (Sec 6) – in current coin or currency notes, or by cheque or credit to the bank account.
5. Payment on a working day.

Authorised deductions (Sec 7): fines; absence from duty; damage to or loss of goods entrusted; house accommodation; amenities and services provided; recovery of advances and loans; income tax; deductions by court order; provident fund; LIC premium; co-operative society dues; contributions to PM's Relief Fund with consent.

Limits: total deductions must not exceed 50% of wages (75% where deductions include payments to co-operative societies). Fines (Sec 8) only for acts listed in a notice approved by the government, after giving a hearing; not more than 3% of wages for the period; not on persons below 15 years; recovered within 90 days.

Payment of Bonus Act, 1965

Object: to provide for payment of bonus to employees on the basis of profits or productivity.

Applicability: every factory and every establishment employing 20 or more persons on any day in an accounting year.

Eligibility: an employee drawing salary or wages up to ₹21,000 per month who has worked for at least 30 working days in the year.

Disqualification: dismissal for fraud, riotous or violent behaviour on the premises, or theft, misappropriation or sabotage of property.

Calculation:

• Bonus is calculated on salary of ₹7,000 per month or the minimum wage for the employment, whichever is higher (for employees earning above this, the ceiling is used).
• Minimum bonus: 8.33% of salary or ₹100, whichever is higher – payable even if there is no profit.
• Maximum bonus: 20% of salary.
• Bonus between 8.33% and 20% depends on allocable surplus (generally 60% of available surplus); excess or shortfall is carried forward through set-on and set-off for up to four years.

Illustration: An employee earns ₹15,000 per month; minimum wage for his job is ₹9,000. Bonus base = higher of ₹7,000 and ₹9,000 = ₹9,000 per month = ₹1,08,000 a year. Minimum bonus = 8.33% × 1,08,000 = ₹8,996 (rounded). Maximum bonus = 20% × 1,08,000 = ₹21,600.

Time of payment: within 8 months from the close of the accounting year (or within one month of a dispute award).

Payment of Gratuity Act, 1972

Gratuity is a lump-sum payment made by the employer to an employee as a reward for long service when employment ends.

Applicability: factories, mines, oilfields, plantations, ports, railways, shops and establishments employing 10 or more persons.

Eligibility: payable on superannuation, retirement, resignation, death or disablement, after at least 5 years of continuous service (the 5-year condition does not apply in case of death or disablement). Under the Code on Social Security, fixed-term employees become eligible after one year – check latest.

Illustration: Last drawn basic + DA ₹26,000; service 20 years 7 months (counted as 21 years). Gratuity = 26,000 × 15 ÷ 26 × 21 = ₹3,15,000.

Ceiling: ₹20 lakh (since 2018 – check latest). Payment within 30 days of becoming payable; otherwise interest is payable. Gratuity may be forfeited (wholly or partly) for termination due to wilful damage, riotous conduct or an offence involving moral turpitude.

Employees' Provident Funds and Miscellaneous Provisions Act, 1952

Object: compulsory savings for employees' retirement, administered by the Employees' Provident Fund Organisation (EPFO).

Applicability: establishments employing 20 or more persons; compulsory for employees with basic + DA up to ₹15,000 per month (others may join voluntarily).

Schemes: Employees' Provident Fund Scheme 1952, Employees' Pension Scheme 1995 (EPS), Employees' Deposit Linked Insurance Scheme 1976 (EDLI).

Contributions: employee 12% of basic + DA; employer 12%, of which 8.33% (on wages up to ₹15,000, i.e. max ₹1,250) goes to EPS and the rest to EPF; employer also pays EDLI and administrative charges.

Illustration: Basic + DA ₹15,000: employee ₹1,800 to EPF; employer ₹1,800 = ₹1,250 to EPS + ₹550 to EPF.

Interest on EPF is declared every year – check the latest EPFO rate. Withdrawals are allowed for specified purposes and on retirement; the UAN (Universal Account Number) makes the account portable.

Maternity Benefit Act, 1961

Applicability: factories, mines, plantations, and shops and establishments employing 10 or more persons.

Eligibility: a woman who has worked for at least 80 days in the 12 months before the expected delivery.

Rights and benefits (after the 2017 amendment):

1. Paid maternity leave of 26 weeks (up to 8 weeks before delivery) for the first two children; 12 weeks from the third child.
2. 12 weeks for a woman adopting a child below 3 months and for a commissioning mother.
3. Leave for miscarriage (6 weeks) and for illness arising from pregnancy (up to 1 month extra).
4. Payment at the rate of the average daily wage for the period of absence.
5. Medical bonus if no free pre-natal and post-natal care is provided (amount notified – check latest).
6. Crèche facility in establishments with 50 or more employees; four visits a day allowed.
7. Option of work from home after the leave, where the nature of work allows.
8. No dismissal or change of conditions to her disadvantage during maternity leave; no heavy work in the month before leave.

Likely exam questions

1. (Long, 8/16 marks) Explain the provisions of the Payment of Wages Act, 1936 regarding wage period, time and mode of payment, and authorised deductions.
2. (Long, 8/16 marks) Explain the main provisions of the Payment of Gratuity Act, 1972 and the EPF Act, 1952. Calculate gratuity for an employee with last drawn wages of ₹30,000 and 15 years 8 months of service.
3. (Short, 4 marks) State the eligibility for bonus and the minimum and maximum bonus under the Payment of Bonus Act, 1965.
4. (Short, 4 marks) State the maternity benefits available under the Maternity Benefit Act, 1961.
5. (Short, 4 marks) What are the contribution rates under the EPF scheme?

Syllabus topics (RTMNU)

• Labour Welfare Legislation: National and state-level laws on worker welfare
• Social Security: Employees State Insurance Act (ESI), 1948, and the Employees' Provident Fund (EPF) Act, 1952
• Discrimination and Harassment Laws: Prevention of Sexual Harassment at the Workplace (POSH) Act, 2013
• Termination of Employment: Laws regarding termination, retrenchment, and lay-offs under the Industrial Disputes Act, 1947

Labour Welfare Legislation: National and State Level

Labour welfare means facilities and services provided to workers, beyond wages, for their comfort, health and well-being.

National laws:

• Factories Act, 1948 – welfare provisions: washing facilities; facilities for storing and drying clothes; sitting arrangements; first-aid boxes (one per 150 workers) and ambulance room (500+ workers); canteen (250+ workers); shelters, rest rooms and lunch rooms (150+ workers); crèche (30+ women workers); welfare officer (500+ workers).
• Mines Act, 1952, Plantations Labour Act, 1951, Contract Labour (Regulation and Abolition) Act, 1970, Building and Other Construction Workers Act, 1996 (welfare boards and cess), Beedi and cine workers' welfare fund Acts.

State-level laws (Maharashtra): the Maharashtra Labour Welfare Fund Act, 1953 – the Maharashtra Labour Welfare Board runs welfare centres, scholarships, sports and cultural activities funded by employer and employee contributions; the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 – working hours, holidays, leave and safety for shop employees; state construction workers' welfare boards.

Importance: healthier, more satisfied and productive workers; lower absenteeism; better industrial relations.

Social Security: Employees' State Insurance Act, 1948

Object: to provide medical care and cash benefits to employees in case of sickness, maternity, employment injury and death. Administered by the Employees' State Insurance Corporation (ESIC).

Applicability: factories and notified establishments with 10 or more employees (in most states); employees earning up to ₹21,000 per month (₹25,000 for persons with disability) – check latest.

Contribution: employer 3.25% and employee 0.75% of wages (from July 2019); employees earning a very low daily average wage are exempt from their share.

EPF Act, 1952: provides provident fund, pension (EPS 1995) and insurance (EDLI) – contributions of 12% each by employer and employee on basic + DA (see Unit III). Together, ESI and EPF form the main social security system for organised-sector workers.

POSH Act, 2013

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 protects women against sexual harassment at all workplaces, public or private, organised or unorganised. It followed the Supreme Court's Vishaka v. State of Rajasthan (1997) guidelines.

Sexual harassment includes unwelcome physical contact and advances, a demand or request for sexual favours, sexually coloured remarks, showing pornography, or any other unwelcome physical, verbal or non-verbal conduct of a sexual nature.

Internal Committee (IC): every employer with 10 or more employees must form one – presiding officer (a senior woman employee), at least two employee members, and one external member from an NGO or person familiar with women's issues; at least half the members must be women; term up to 3 years.

Local Committee: formed by the District Officer for workplaces with fewer than 10 employees or where the complaint is against the employer.

Procedure: written complaint within 3 months of the incident (extendable by 3 months) → conciliation if the woman requests (no monetary settlement) → inquiry completed within 90 days → report within 10 days → employer acts on the recommendations within 60 days. Interim relief such as transfer or leave may be given during inquiry. Confidentiality must be maintained.

Employer's duties: safe working environment; display consequences of harassment and IC details; awareness and training programmes; assist in inquiry; include the number of cases in the annual report.

Penalty: fine up to ₹50,000 for non-compliance; double penalty and possible cancellation of licence or registration for repeat offence.

Termination, Lay-off and Retrenchment under the Industrial Disputes Act, 1947

Termination of employment can be by resignation, superannuation, discharge, dismissal for proven misconduct (after domestic enquiry), retrenchment or closure.

Lay-off [Sec 2(kkk)]: failure or inability of the employer, due to shortage of coal, power or raw material, accumulation of stock, breakdown of machinery or natural calamity, to give employment to a workman on the rolls. Compensation (Sec 25C): 50% of basic wages + DA for the days laid off (generally up to 45 days in 12 months); for workmen with at least one year's continuous service.

Retrenchment [Sec 2(oo)]: termination of service for any reason other than punishment by disciplinary action. It does not include voluntary retirement, superannuation, non-renewal of a fixed-term contract, or termination due to continued ill-health.

Conditions for retrenchment (Sec 25F) of a workman with at least one year's continuous service:

1. One month's written notice with reasons, or wages for the notice period.
2. Retrenchment compensation of 15 days' average pay for every completed year of continuous service (or part over 6 months).
3. Notice to the appropriate government.

Other rules: "last come, first go" (Sec 25G); preference in re-employment to retrenched workmen (Sec 25H). For establishments with 100 or more workmen (Chapter V-B), prior permission of the government was needed for lay-off, retrenchment and closure (Sec 25M, 25N, 25O).

Illustration: A workman with average pay ₹26,000 per month and 10 years 8 months' service (count 11 years). Retrenchment compensation = 26,000 × 15 ÷ 26 × 11 = ₹1,65,000, plus one month's notice pay.

Likely exam questions

1. (Long, 8/16 marks) Explain the provisions of the Employees' State Insurance Act, 1948 regarding applicability, contribution and benefits.
2. (Long, 8/16 marks) Explain the provisions of the POSH Act, 2013 regarding the Internal Committee, complaint and inquiry procedure, and duties of employers.
3. (Short, 4 marks) Distinguish between lay-off and retrenchment.
4. (Short, 4 marks) State the conditions precedent to retrenchment under Section 25F of the Industrial Disputes Act.
5. (Short, 4 marks) State the welfare provisions under the Factories Act, 1948.