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The Indian Institute of Business Management & Studies
SUBJECT: Human Resource Management Marks:100
Note: Solve any 4 Cases Study’s
CASE: I Enterprise Builds On People
When most people think of car-rental firms, the names of Hertz and Avis usually come to mind. But in
the last few years, Enterprise Rent-A-ar has overtaken !oth of these industry "iants, and today it
stands as !oth the lar"est and the most profita!le !usiness in the car-rental industry. #n $%%&, for
instance, the firm had sales in e'cess of ().* !illion and employed over +%,%%% people.
,ack -aylor started Enterprise in .t. /ouis in &0+1. -aylor had a uni2ue strate"y in mind for
Enterprise, and that strate"y played a key role in the firm3s initial success. 4ost car-rental firms like
Hertz and Avis !ase most of their locations in or near airports, train stations, and other transportation
hu!s. -hese firms see their customers as !usiness travellers and people who fly for vacation and then
need transportation at the end of their fli"ht. But Enterprise went after a different customer. #t sou"ht to
rent cars to individuals whose own cars are !ein" repaired or who are takin" a drivin" vacation.
-he firm "ot its start !y workin" with insurance companies. A standard feature in many automo!ile
insurance policies is the provision of a rental car when one3s personal car has !een in an accident or
has !een stolen. 5irms like Hertz and Avis char"e relatively hi"h daily rates !ecause their customers
need the convenience of !ein" near an airport and6or they are havin" their e'penses paid !y their
employer. -hese rates are often hi"her than insurance companies are willin" to pay, so customers who
these firms end up payin" part of the rental !ills themselves. #n addition, their locations are also often
inconvenient for people seekin" a replacement car while theirs is in the shop.
But Enterprise located stores in downtown and su!ur!an areas, where local residents actually live.
-he firm also provides local pickup and delivery service in most areas. #t also ne"otiates e'clusive
contract arran"ements with local insurance a"ents. -hey "et the a"ent3s referral !usiness while
"uaranteein" lower rates that are more in line with what insurance covers.
#n recent years, Enterprise has started to e'pand its market !ase !y pursuin" a two-pron"ed "rowth
strate"y. 5irst, the firm has started openin" airport locations to compete with Hertz and Avis more
directly. But their tar"et is still the occasional renter than the fre2uent !usiness traveller. .econd, the
firm also !e"an to e'pand into international markets and today has rental offices in the 7nited
8in"dom, #reland and 9ermany.
Another key to Enterprise3s success has !een its human resource strate"y. -he firm tar"ets a certain
kind of individual to hire: its preferred new employee is a colle"e "raduate from !ottom half of
"raduatin" class, and prefera!ly one who was an athlete or who was otherwise actively involved in
campus social activities. -he rationale for this unusual academic standard is actually 2uite simple.
Enterprise mana"ers do not !elieve that especially hi"h levels of achievements are necessary to
perform well in the car-rental industry, !ut havin" a colle"e de"ree nevertheless demonstrates
intelli"ence and motivation. #n addition, since interpersonal relations are important to its !usiness,
Enterprise wants people who were social directors or hi"h-rankin" officers of social or"anisations such
as fraternities or sororities. Athletes are also desira!le !ecause of their competitiveness.
;nce hired, new employees at Enterprise are often shocked at the performance e'pectations placed
on them !y the firm. -hey "enerally work lon", "ruelin" hours for relatively low pay.
And all Enterprise mana"ers are e'pected to <ump in and help wash or vacuum cars when a rental
a"ency "ets !acked up. All Enterprise mana"ers must wear coordinated dress shirts and ties and can
have facial hair only when =medically necessary>. And women must wear skirts no shorter than two
inches a!ove their knees or creased pants.
&
The Indian Institute of Business Management & Studies
SUBJECT: Human Resource Management Marks:100
.o what are the incentives for workin" at Enterprise? 5or one thin", it3s an unfortunate fact of life
that colle"e "raduates with low "rades often stru""le to find work. -hus, a <o! at Enterprise is still
!etter than no <o! at all. -he firm does not hire outsiders@every position is filled !y promotin"
someone already inside the company. -hus, Enterprise employees know that if they work hard and do
their !est, they may very well succeed in movin" hi"her up the corporate ladder at a "rowin" and
successful firm.
Question:
&. Would Enterprise3s approach human resource mana"ement work in other industries?
$. Aoes Enterprise face any risks from its human resource strate"y?
*. Would you want to work for Enterprise? Why or why not?
$
The Indian Institute of Business Management & Studies
SUBJECT: Human Resource Management Marks:100
CASE: II Doing Te Dirty !or"
Business ma"azines and newspapers re"ularly pu!lish articles a!out the chan"in" nature of work in the
7nited .tates and a!out how many <o!s are !ein" chan"ed. #ndeed, !ecause so much has !een made of
the shift toward service-sector and professional <o!s, many people assumed that the num!er of
unpleasant an undesira!le <o!s has declined.
#n fact, nothin" could !e further from the truth. 4illions of Americans work in "leamin" air-
conditioned facilities, !ut many others work in dirty, "rimy, and unsafe settin"s. 5or e'ample, many
<o!s in the recyclin" industry re2uire workers to sort throu"h movin" conveyors of trash, pullin" out
those items that can !e recycled. ;ther relatively unattractive <o!s include cleanin" hospital restrooms,
washin" dishes in a restaurant, and handlin" to'ic waste.
onsider the <o!s in a chicken-processin" facility. 4uch like a manufacturin" assem!ly line, a
chicken-processin" facility is or"anised around a movin" conveyor system. Workers call it the chain.
#n reality, it3s a steel ca!le with lar"e clips that carries dead chickens down what mi"ht !e called a
=disassem!ly line.> .tandin" alon" this line are dozens of workers who do, in fact, take the !irds apart
as they pass.
Even the titles of the <o!s are unsavory. Amon" the first set of <o!s alon" the chain is the skinner.
.kinners use sharp instruments to cut and pull the skin off the dead chicken. -owards the middle of the
line are the "ut pullers. -hese workers reach inside the chicken carcasses and remove the intestines and
other or"ans. At the end of the line are the "izzard cutters, who tackle the more difficult or"ans
attached to the inside of the chicken3s carcass. -hese or"ans have to !e individually cut and removed
for disposal.
-he work is o!viously distasteful, and the pace of the work is unrelentin". ;n a "ood day the chain
moves an avera"e of ninety chickens a minute for nine hours. And the workers are essentially held
captive !y the movin" chain. 5or e'ample, no one can vacate a post to use the !athroom or for other
reasons without the permission of the supervisor. #n some plants, takin" an unauthorised !athroom
!reak can result in suspension without pay. But the noise in a typical chicken-processin" plant is so
loud that the supervisor can3t hear someone callin" for relief unless the person happens to !e standin"
close !y.
,o!s such as these on the chicken-processin" line are actually !ecomin" increasin"ly common.
5uelled !y Americans3 "rowin" appetites for lean, easy-to-cook meat, the num!er of poultry workers
has almost dou!led since &0B%, and today they constitute a work force of around a 2uarter of a million
people. #ndeed, the chicken-processin" industry has !ecome a ma<or component of the state economies
of 9eor"ia, Corth arolina, 4ississippi, Arkansas, and Ala!ama.
Besides !ein" unpleasant and dirty, many <o!s in a chicken-processin" plant are dan"erous and
unhealthy. .ome workers, for e'ample, have to fi"ht the live !irds when they are first hun" on the
chains. -hese workers are routinely scratched and pecked !y the chickens. And the air inside a typical
chicken-processin" plant is difficult to !reathe. Workers are usually supplied with paper masks, !ut
most don3t use them !ecause they are hot and confinin".
And the work space itself is so ti"ht that the workers often cut themselves@and sometimes their
coworkers@with the knives, scissors, and other instruments they use to perform their <o!s. #ndeed,
poultry processin" ranks third amon" industries in the 7nited .tates for cumulative trauma in<uries
such as carpet tunnel syndrome. -he inevita!le chicken feathers, faeces, and !lood also contri!ute to
the hazardous and unpleasant work environment.
Question:
&. How relevant are the concepts of competencies to the <o!s in a chicken-processin" plant?
$. How mi"ht you try to improve the <o!s in a chicken-processin" plant?
*. Are dirty, dan"erous, and unpleasant <o!s an inevita!le part of any economy?
*
The Indian Institute of Business Management & Studies
SUBJECT: Human Resource Management Marks:100
CASE: III On Pegging Pay to Per#or$an%e
=As you are aware, the 9overnment of #ndia has removed the cappin" on salaries of directors and has
left the matter of their compensation to !e decided !y shareholders. -his is indeed a welcome step,>
said .amuel 4enezes, president A!hayankar, /td., openin" the meetin" of the mana"in" committee
convened to discuss the elements of the company3s new plan for middle mana"ers.
A!hayankar was am en"ineerin" firm with a turnover of Rs )%% crore last year and an employee
stren"th of &B,%%. -wo years a"o, as a se2uel to li!eralisation at the macroeconomic level, the company
had restructured its operations from functional teams to product teams. -he chan"e had helped speed
up transactional times and reduce systemic inefficiencies, leadin" to a healthy drive towards
performance.
=# think it is only lo"ical that performance should hereafter !e linked to pay,> continued 4enezes.
=A scheme in which over D% per cent of salary will !e related to annual profits has !een evolved for
e'ecutives a!ove the vice-president3s level and it will !e implemented after "ettin" shareholders
approval. As far as the shopfloor staff is concerned, a system of incentive-linked monthly productivity
!onus has !een in place for years and it serves the purpose of rewardin" "ood work at the assem!ly
line. #n any case, a !ulk of its salary will have to continue to !e "overned !y "ood old values like
hierarchy, rank, seniority and attendance. But it is the middle mana"ement which poses a real dilemma.
How does one evaluate its performance? 4ore importantly, how can one ensure that mana"ers are not
shortchan"ed !ut "et what they truly deserve?>
=;ur vice-president EHRAF, Ravi Carayanan, has now a plan ready in this re"ard. He has had
personal discussions with all the &$+ middle mana"ers individually over the last few weeks and the
plan is !ased on their feed!ack. #f there are no ma<or disa"reements on the plan, we can put it into
effect from ne't month. Ravi, may # now ask you to take the floor and make your presentation?>
-he li"hts in the conference room dimmed and the screen on the podium lit up. =-he plan # am
"oin" to unfold,> said Carayanan, pointin" to the data that surfaced on the screen, =is desi"ned to
enhance team-work and provide incentives for constant improvement and e'cellence amon" middle-
level mana"ers. Briefly, the pay will !e split into two components. -he first consists of 1+ per cent of
the ori"inal salary and will !e determined, as !efore, !y factors of internal e2uity comprisin" what .am
referred to as "ood old values. #t will !e a fi'ed component.>
=-he second component of $+ per cent,> he went on, =will !e fle'i!le. #t will depend on the a!ility
of each product team as a whole to show a minimum of + per cent improvement in five areas every
month@product 2uality, cost control, speed of delivery, financial performance of the division to which
the product !elon"s and, finally, compliance with safety and environmental norms. -he five areas will
have ratin" of *%, $+, $%, &+, and &% per cent respectively.
=-his, "entlemen, is the !road premise. -he rest is a matter of detail which will !e worked out after
some finetunin". Any 2uestions?>
As the li"hts reappeared, 9autam 9hosh, vice-president ERGAF, said, =# don3t like it. And # will tell
you why. -eamwork as a criterion is okay !ut it also has its pitfalls. -he people # take on and develop
are "ood at what they do. -heir research skills are individualistic. Why should their pay depend on the
performance of other mem!ers of the product team? -he new pay plan makes them team players first
and scientists ne't. #t does not seem ri"ht.>
=-hat is a "ood one, 9autam,> said Carayanan. =Any other 2uestions? # think # will take them all
to"ether.>
=# have no pro!lems with the scheme and # think it is fine. But <ust for the sake of ar"ument, let me
take 9autam3s point further without meanin" to pick holes in the plan,> said Avinash .arin, vice-
president EsalesF. =/ook at my dispatch division. 4y people there have reduced the shippin" time from
D
The Indian Institute of Business Management & Studies
SUBJECT: Human Resource Management Marks:100
four hours to one over the last si' months. But what have they "ot? Cothin". Why? Because the other
mem!ers of the team are not measurin" up.>
=# think that is a situation which is !ound to prevail until everyone falls in line,> intervened Hipul
Aesai, vice president EfinanceF. =-here would always !e temporary pro!lems in implementin" anythin"
new. -he 2uestion is whether our lon" term o!<ectives is ri"ht. -o the e'tend that we are tryin" to
promote teamwork, # think we are on the ri"ht track. However, # wish to raise a point. -here are many
e'ternal factors which impin"e on !oth individual and collective performance. 5or instance, the cost of
a raw material may suddenly "o up in the market affectin" product profita!ility. Why should the
concerned product team !e penalised for somethin" !eyond its control?>
=# have an o!servation to make too, Ravi,> said 4enezes, =Iou would recall the survey conducted
!y a !usiness fortni"htly on J-he ten companies #ndian mana"ers fancy most as a workin" place3.
A!hayankar "ot top !illin"s there. We have !een the trendsetters in e'ecutive compensation in #ndian
industry. We have !een payin" the !est. Will your plan ensure that it remains that way?>
As he took the floor a"ain, the dominant thou"ht in Carayanan3s mind was that if his plan were to
!e put into place, A!hayankar would set another new trend in e'ecutive compensation.
Question:
But how should he see it throu"h?
+
The Indian Institute of Business Management & Studies
SUBJECT: Human Resource Management Marks:100
CASE: I& Crisis Blo'n Over
Covem!er *%, &001 "oes down in the history of a Ban"alore-!ased electric company as the day
no!ody wantin" it to recur !ut everyone recollectin" it with sense of pride.
#t was a festive day for all the 1%%-plus employees. 5estoons were strun" all over, !anners were put
up: !anana trunks and leaves adorned the factory "ate, instead of the usual red fla"s: and loud speakers
were !larin" 8annada son"s. #t was day the employees chose to cele!rate 8annada Ra<yothsava,
annual feature of all 8arnataka-!ased or"anisations. -he function was to start at D p.m. and every!ody
was ea"erly waitin" for the !i" event to take place.
But the event, !ud"eted at Rs &,%%,%%% did not take place. At around $ p.m., there was a "hastly
accident in the machine shop. 4urthy was cau"ht in the vertical turret lathe and was wounded fatally.
His end came in the am!ulance on the way to hospital.
-he mana"ement sou"ht union help, and the union leaders did respond with a positive attitude.
-hey did not want to fish in trou!led waters.
.eries of meetin"s were held !etween the union leaders and the mana"ement. -he discussions
centred around two ma<or issues@EiF restorin" normalcy, and EiiF determinin" the amount of
compensation to !e paid to the dependants of 4urthy.
/uckily for the mana"ement, the accident took place on a .aturday. -he ne't day was a weekly
holiday and this helped the tension to diffuse to a lar"e e'tent. -he funeral of the deceased took place
on .unday without any hitch. -he mana"ement hoped that thin"s would !e normal on 4onday
mornin".
But the hope was !elied. -he workers refused to resume work. A"ain the mana"ement approached
the union for help. 7nion leaders advised the workers to resume work in al departments e'cept in the
machine shop, and the su""estions was accepted !y all.
-wo weeks went !y, no!ody entered the machine shop, thou"h work in other places resumed.
7nion leaders came with a new idea to the mana"ement@to perform a poo<a to ward off any evil that
had !efallen on the lathe. -he mana"ement accepted the idea and homa was performed in the machine
shop for a!out five hours commencin" early in the mornin". -his helped to some e'tent. -he workers
started operations on all other machines in the machine shop e'cept on the fateful lathe. #t took two full
months and a lot of persuasion from the union leaders for the workers to switch on the lathe.
-he crisis was !lown over, thanks to the responsi!le role played !y the union leaders and their
fellow workers. Ceither the mana"ement nor the workers wish that such an incident should recur.
As the wa"es of the deceased "rossed Rs ),+%% per month, 4urthy was not covered under the E.#
Act. 4ana"ement had to pay compensation. A"e and e'perience of the victim were taken into account
to arrive at Rs &,B1,%%% which was the amount to !e paya!le to the wife of the deceased. -o this was
added Rs $,+%,%%% at the intervention of the union leaders. #n addition, the widow was paid a "ratuity
and a monthly pension of Rs D,*%%. And no!ody3s wa"es were cut for the days not worked.
4urthy3s death witnessed an unusual !ehavior on the part of the workers and their leaders, and
ma"nanimous "esture from the mana"ement. #t is a pride moment in the life of the factory.
Question:
&. Ao you think that the Ban"alore-!ased company had practised participative mana"ement?
$. #f your answer is yes, with what method of participation Eyou have read in this chapterF do you
relate the a!ove case?
*. #f you were the union leader, would your !ehaviour have !een different? #f yes, what would it
!e?
)
The Indian Institute of Business Management & Studies
SUBJECT: Human Resource Management Marks:100
CASE: & A Case o# Burnout
When 4ahesh <oined KIL Bank Eprivate sectorF in &0B+, he had one clear "oal@to prove his mettle.
He did prove himself and has !een promoted five times since his entry into the !ank. ompared to
others, his pro"ress has !een fastest. urrently, his <o! demands that 4ahesh should work &% hours a
day with practically no holidays. At least two day in a week, 4ahesh is re2uired to travel.
Meers and su!ordinates at the !ank have appreciation for 4ahesh. -hey don3t "rud"e the ascension
achieved !y 4ahesh, thou"h there are some who wish they too had !een promoted as well.
-he post of 9eneral 4ana"er fell vacant. ;ne should work as 94 for a couple of years if he were
to clim! up to the top of the ladder, 4ahesh applied for the post alon" with others in the !ank. -he
hairman assured 4ahesh that the post would !e his.
A sudden development took place which almost wrecked 4ahesh3s chances. -he !ank has the
practice of su!<ectin" all its e'ecutives to medical check-up once in a year. -he medical reports "o
strai"ht to the hairman who would initiate remedials where necessary. -hou"h 4ahesh was only *+,
he too, was re2uired to under"o the test.
-he hairman of the !ank received a copy of 4ahesh3s physical e'amination results, alon" with a
note from the doctor. -he note e'plained that 4ahesh was seriously overworked, and recommended
that he !e "iven an immediate four-week vacation. -he doctor also recommended that 4ahesh3s
workload must !e reduced and he must take physical e'ercise every day. -he note warned that if
4ahesh did not care for advice, he would !e in for heart trou!le in another si' months.
After readin" the doctor3s note, the hairman sat !ack in his chair, and started !roodin" over. -hree
issues were uppermost in his mind@EiF How would 4ahesh take this news? EiiF How many others do
have similar fitness pro!lems? EiiiF .ince the environment in the !ank helps create the pro!lem, what
could he do to alleviate it? -he idea of holdin" a stress-mana"ement pro"ramme flashed in his mind
and suddenly he instructed his secretary to set up a meetin" with the doctor and some key staff
mem!ers, at the earliest.
Question:
&. #f the news is !roken to 4ahesh, how would he react?
$. #f you were "ivin" advice to the hairman on this matter, what would you recommend?
1
The Indian Institute of Business Management & Studies
SUBJECT: Human Resource Management Marks:100
CASE: &I (!ose Side are you on) Any'ay*+
#t was past D pm and Murushottam 4ahesh was still at his shopfloor office. -he small !ut ele"ant office
was a perk he was entitled to after he had !een nominated to the !oard of Horizon #ndustries EMF /td.,
as workman-director si' months a"o. His shift "enerally ended at * pm and he would !e home !y late
evenin". But that day, he still had lon" hours ahead of him.
8shirsa"ar had !een with Horizon for over twenty years. .tartin" off as a su!stitute mill-hand in
the paint shop at one of the company3s manufacturin" facilities, he had !een made permanent on the
<o! five years later. He had no formal education. He felt this was a handicap, !ut he made up for it with
a willin"ness to learn and a certain enthusiasm on the <o!. He was soon marked !y the works mana"er
as someone to watch out for. .imultaneously, 8shirsa"ar also came to the attention of the president of
the Horizon Employees3 7nion who drafted him into union activities.
Even while he "ot promoted twice durin" the period to !ecome the head colour mi'er last year,
8shirsa"ar had "radually moved up the union hierarchy and had !een thrice elected secretary of the
union. /a!our-mana"ement relations at Horizon were not always cordial. -his was lar"ely !ecause the
company had not !een recordin" a consistently "ood performance. -here were fre2uent cuts in
production every year !ecause of "o-slows and strikes !y workmen@most of them related to wa"e
hikes and !onus payments. With a view to ensurin" a !etter understandin" on the part of la!our, the
pro!lems of company mana"ement, the Horizon !oard, led !y chairman and mana"in" director
Aninash haturvedi, !e"an to toy with idea of takin" on a workman on the !oard. What started off as a
hesitant move snow!alled, after a series of !rainstormin" sessions with e'ecutives and meetin"s with
the union leaders, into a situation in which 8shirsa"ar found himself catapulted to the Horizon !oard
as work-man-director.
#t was an untested "round for the company. But the novelty of it all e'cited !oth the mana"ement
and the la!our force. -he !oard mem!ers@all functional heads went out of their way to make
8shirsa"ar comforta!le and the latter also responded 2uite well. He "ot used to the am!ience of the
!oardroom and the sense of power it conveyed. .i"nificantly, he was soon at home with the
perspectives of top mana"ement and !e"an to see each issue from !oth sides.
#t was smooth "oin" until the union presented a week !efore the monthly !oard meetin", its charter
of demands, one of which was a *% per cent across-the !oard hike in wa"es. -he matter was taken up
at the !oard meetin" as part of a special a"enda.
=/ook at what your people are askin" for,> said haturvedi, addressin" 8shirsa"ar with a sarcasm
that no one in the !oard missed. =Iou know the precarious finances of the company. How could you !e
a party to a demand that can3t !e met? Iou !etter e'plain to them how ridiculous the demands are,> he
said.
=# don3t think they can all !e dismissed as ridiculous,> said 8shirsa"ar. =And the !oard can surely
consider the alternatives. We owe at least that much to the union.> But haturvedi ad<ourned the
meetin" in a huff, mentionin", once to 8shirsa"ar that he should =advise the union properly>.
When 8shirsa"ar told the e'ecutive committee mem!ers of the union that the !oard was simply not
prepared to even consider the demands, he immediately sensed the hostility in the room. =Iou are a
sell out,> one of them said. =Who do you really represent@us or them?> asked another.
=Here comes the crunch,> thou"ht 8shirsa"ar. And however hard he tried to e'plain, he felt he was
talkin" to a wall.
A victim of divided loyalities, he himself was una!le to understand whose side he was on. Merhaps
the !est course would !e to resi"n from the !oard. Merhaps he should resi"n !oth from the !oard and
the union. ;r may !e resi"n from Horizon itself and seek a <o! elsewhere. But, he felt, sittin" in his
office a little later, =none of it could solve the pro!lem.>
Question:
&. What should he do?
B

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