UGC NET/JRF EXAM, JULY-2022 Labour and Social Welfare

According to Robert Owen, investing in human resources is better than investing in other assets. He advocated that employees should be working because they are interested in it rather than being forced. He also propounded that there should be a harmonious relationship between managers and employees in order to improve the efficacy of production.

Managers must make workers aware of the organization's expectations and support them in meeting those expectations. His philosophy and ideas are considered as a fore-runner to the development of behavioral approach of management.

The word "strategy" is derived from the Greek word "strategos"; stratus (meaning army) and "ago" (meaning leading/moving). Strategy is an action that managers take to attain one or more of the organization's goals.

Strategy can also be defined as "A general direction set for the company and its various components to achieve a desired state in the future. Strategy results from the detailed strategic planning process".

Strategy is the blueprint of decisions in an organization that shows its objectives and goals, reduces the key policies, and plans for achieving these goals, and defines the business the company is to carry on, the type of economic and human organization it wants to be, and the contribution it plans to make to its shareholders, customers and society at large.

Recognition is satisfier. According to Herzberg, motivating factors (also called satisfiers) are primarily intrinsic job elements that lead to satisfaction, such as achievement, recognition, the (nature of) work itself, responsibility, advancement, and growth.

Hertzberg's two-factor Theory

Hertzberg classified the needs into two broad categories namely hygiene factors and motivating factors.

Hygiene factors are needed to make sure that an employee is not dissatisfied. Motivation factors are needed for ensuring employee satisfaction and employee's
motivation for higher performance.

The mere presence of hygiene factors does not guarantee motivation, and the presence of motivation factors in the absence of hygiene factors also does not work.

Directional plans are flexible plans that set out general guidelines. Such plans are preferable in a dynamic environment where management must be flexible in order to respond to unexpected changes.

Talent management is the holistic, integrated and results and goal-oriented process of planning, recruiting, selecting, developing, managing, and compensating employees. Talent management means getting the right people (in terms of competencies) in the right jobs, at the right time, doing their jobs correctly.

Outsourcing and offshoring are often used synonymously, however, the terms in fact have two very different meanings and implications. Outsourcing is when a company negotiates a contract with a third party to perform a specific function.

When outsourcing a process or operation, it is vital to find a company or person that specializes in the task at hand. However, offshoring is when a company sends in-house jobs to be performed in another country.

Competency-based pay is a pay structure that compensates employees based on their skill set, knowledge, and experience rather than their job title or position.

A competencybased pay plan encourages employees to reach the pay rate that they want by taking charge of improving their skills and work.

Theories or Approaches of International Compensation

• Localisation Approach: Under Localisation approach, MNC determines compensation on the basis of salary levels for similar jobs in comparable organisations in the host country.

• Negotiation or Bargaining Approach: Under this approach, MNCs determine compensation packages through mutual negotiations between the employee and employer.

• Lump Sum Approach: Under this approach, MNC determine the compensation as a lump sum amount which include basic salary and all kinds of allowances and monetary value of all benefits.

• Buffet Approach: Under buffet approach, MNCs provide less cash and more benefits in compensation package. Sometimes expatriates also prefer this method to reduce tax liability and save more so as to repatriate the savings.

• Cluster Systems Approach: MNCs categorise countries or cities into clusters based on common factors like cost of living or hardship or danger levels. Company determines more or less same compensation for the jobs within same cluster of cities or countries.

• Global Approach: Under global approach, MNCs determine uniform pay scales for such jobs throughout all countries of operation.

• Performance based compensation approach: Under this approach, a minimum base salary is guaranteed to meet basic needs of employees, over and above base salary, employees get the opportunity to earn high salaries as per their performance irrespective of the nationality.

• Balance Sheet Approach: Under this approach, MNCs try to balance the home country salary and inconveniences and hardships faced by the expatriates in the host country by providing high salary and other benefits and allowances etc.

HRD deals with competence building, culture building and commitment building. Competence and commitment can be built on a continuous basis in a certain type of culture. Hence, creating a culture becomes important in an organization. A culture having the characteristics as defined above is known as OCTAPACE Culture.

O - Openness
C - Collaboration
T - Trust
A - Autonomy
P - Pro-Active
A - Authenticity
C - Confrontation
E - Experimentation