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    Case Study14

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    KanakaMaha Lakshmi
    The company launched a new product requiring additional machinery, manpower, and training costs for new employees. Due to heavy investments in the new project, interest and depreciation eliminated profits for the year. As a result, employees were only eligible for the statutory minimum bonus instead of the usual 20% bonus. This caused a dispute between employees who viewed bonus payments as reflecting productivity versus management who saw it as finance-oriented. To resolve the conflict, the management needed to explain the lack of profits to demotivated employees and consider bonuses based on both productivity and profit-sharing to incentivize workers while acknowledging financial constraints.

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    Case Study14

    Uploaded by

    KanakaMaha Lakshmi
    57 views5 pages
    The company launched a new product requiring additional machinery, manpower, and training costs for new employees. Due to heavy investments in the new project, interest and depreciation eliminated profits for the year. As a result, employees were only eligible for the statutory minimum bonus instead of the usual 20% bonus. This caused a dispute between employees who viewed bonus payments as reflecting productivity versus management who saw it as finance-oriented. To resolve the conflict, the management needed to explain the lack of profits to demotivated employees and consider bonuses based on both productivity and profit-sharing to incentivize workers while acknowledging financial constraints.

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    CASE STUDY14

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    The company launched a new product requiring additional machinery, manpower, and training costs for new employees. Due to heavy investments in the new project, interest and depreciation eliminated profits for the year. As a result, employees were only eligible for the statutory minimum bonus instead of the usual 20% bonus. This caused a dispute between employees who viewed bonus payments as reflecting productivity versus management who saw it as finance-oriented. To resolve the conflict, the management needed to explain the lack of profits to demotivated employees and consider bonuses based on both productivity and profit-sharing to incentivize workers while acknowledging financial constraints.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    57 views5 pages

    Case Study14

    Uploaded by

    KanakaMaha Lakshmi
    The company launched a new product requiring additional machinery, manpower, and training costs for new employees. Due to heavy investments in the new project, interest and depreciation eliminated profits for the year. As a result, employees were only eligible for the statutory minimum bonus instead of the usual 20% bonus. This caused a dispute between employees who viewed bonus payments as reflecting productivity versus management who saw it as finance-oriented. To resolve the conflict, the management needed to explain the lack of profits to demotivated employees and consider bonuses based on both productivity and profit-sharing to incentivize workers while acknowledging financial constraints.

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    You are on page 1of 5

    CASE STUDY – 14

    TITLE: Failure of human resource planning


    BRIEF INTRODUCTION OF CASE:

    Human Resource Planning or Manpower Planning (HRP) is the process of systematically

    reviewing HR requirements to ensure that the required number of employees with the

    required skills is available when they are needed. HRP is the process by which an

    organization ensures that it has the right number and kind of people, at the right place, at the

    right time, capable of effectively and efficiently completing those tasks that will help the

    organization achieve its overall objectives.

    To reduce the costs associated with personnel by proper planning.

    To determine the future skill requirements of the organization.

    To plan careers for individual employee.

    Providing a better view of HR dimensions to top management.

    Determining the training and development needs of employees.

    PP Ltd. is a profit-making firm. To retain its status in the market the management stressed

    and monitored quality and productivity from the initial stage itself. An individual incentive

    scheme has been in place for 20 years. During the last decade, the company had to launch

    new products thanks to the proliferation of electronic systems. The new product entailed

    additional investments in machineries and on additional manpower. The new comers were

    raw hands requiring training at extra cost.

    Certain bonus payments made to employees, particularly executives, would be according to

    our concept, partly wages and partly a share in profits.


    MAJOR AND MINOR FACTS OF CASE:

    1.The new product entailed additional investments in machineries and on additional

    manpower. 2.The new comers were raw hands requiring training at extra cost.

    3.During the year, due to heavy investment on the new project, the interest charges and
    depreciation completely wiped out the profit.

    4. This means only the statutory minimum bonus of 8.33% of surplus was to be offered as

    against the usual 20% that the workers are used to receive in the last several years.

    5. The management needs to ensure maximum cooperation from employees to maximize


    productivity.

    6. There was a dispute that bonus payment is finance oriented and it does not necessarily
    reflect the productivity of the employees

    SUGGETIONS AND RECOMMANDATIONS OF CASE:

    To meet organizational goals, human resource planning seeks to ensure that the

    organization’s demand for individuals at any particular time will be just met by available

    human resources.

    First, human resources are costly and it may be difficult to justify the expense of excess

    personnel. There are sounder and more cost-effective options available to personnel planners

    in business firms.

    Second, excess people are not engaged in productive work, and are likely to be bored and

    frustrated by the lack of anything constructive to do.


    Third, since human resources, particularly skilled and professional people, may be in short

    supply, taking productive workers out of the economy’s labour pool may be considered

    socially unacceptable.

    QUESTION AND ANSWERS:

    1. Do you agree with the personnel officer?

    YES, it will surely see demotivate the employees because the company was not in a

    position to give proper salary to the employees so that management has to explain the

    situation to the employees as there is no profits hence profits are low.  If there are no

    profits to be distributed and the workers have been expecting them after having

    received them for a period of years in cash, morale is certain to be lowered. profit

    sharing can deliver significant benefits to employees, through higher earnings and

    employment stability, and to employers, through higher workplace productivity,

    which again supports higher employee earnings.

    2. Arrive at the settlement considering the conflicting ideas of


    productivity-linked and profit-sharing bases of bonus?

    Based on this conflicting idea of productivity linked and profit-sharing bases of

    bonus completely effect to the workers who are working under the company.to settlement of

    this issue the management give the favourable reasons to the employees.as we know that

    profit sharing means that some portion of amount giving to organizational employees. Profit

    sharing can lead to higher productivity and thus to higher firm profitability and employee

    wages. It may also enhance employment stability by enabling firms to adjust wages during

    downturns rather than lay off workers. To improve the product or service quality, to increase

    the productivity and performance of the organization. Workers cannot be motivated solely by
    economic rewards and more important motivators are job security, recognition, right to

    express their opinion on matters related to them.

    CONCLUSION:

    According to this case, the main thing is profit sharing may result in some workers benefiting

    from the effort of others without themselves exerting greater effort and Profit sharing may

    increase compensation risks for employees by making earnings more variable. Profit sharing

    is thought to affect firm productivity in three main ways: by making wages more flexible in

    response to the financial conditions of the firm by substituting profit sharing payments for

    fixed wages; by attracting, developing, and retaining higher quality employees; and by

    serving as an incentive mechanism for aligning the interests of workers with those of the

    firm.

    With regards
    B k mahalakshmi (lecturer in management)
    ADCGPT VIZAG BRANCH

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